Another year down… a happy new year to everyone!
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Excellent article and easy to read,thanks for the link Gavin.
“Rather it is whether the Irish government’s commitments to bank bond holders when added to its existing spend-ing commitments, will overwhelm the ﬁscal capacity of the Irish state, forcing outside entities such as the IMF and EU to intervene and impose a resolution on the Irish banking system.”
It seems to me that the question answers itself.
Only outside imposition(IMF/EU) can eliminate all the waste and bloated pensions in public institutions,for example.
Fianna Fail are,so far, only fudging and tinkering with the catastrophe they have created.
I was astonished that already retired civil servants ,with their enormous (by private sector standards) pensions, were virtually unscathed in the last budget.
No government has the balls to instigate the showdown and consequent strikes/ public unrest, that seriously angering the public service unions will provoke. Only an IMF style intervention and withdrawing the ECB credit facilities to pay their wages will soften their coughs.
It should happen sooner rather than later.
Now that the only conscientious politician in a rotten political party- which always takes the path of expediency and personal survival at any cost- is seriously ill, perhaps matters will come to a head in 2010.
Empty hotels countrywide plus increased landing charges at our major airports and travel taxes on tourists may benefit Kerry airport for a while,but this government is totally bankrupt.
Thinking outside their “keep increasing taxes” box mentality is an impossibility. They are paralysed like a bunch of rabbits caught in the headlights of a juggernaut.
remember Fannie & Freddie? like the irish Zombie banks they are alive (and thriving).
However the USA federal government has a deeper pocket than Brian Lenehan
“Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) have often been described as wards of the state. Amble southwest from D.C. and you’ll find this term defined by the Texas Department of Assistive and Rehabilitative Services as “a child who, as determined by the State where the child resides, is a foster child, is a ward of the State, or is in the custody of a public child welfare agency.”
The third option is probably the best way to describe the present-day Fannie and Freddie. The two mortgage agencies absolutely blundered through the housing bubble and financial crisis that followed, and as a result the government took these poor, misguided children under its wing. Unfortunately for shareholders, Uncle Sam is pretty much seeing to it that the blundering continues.
In a recently released SEC document, Fannie Mae outlined the goals that officers would have to meet to qualify for “long-term incentive awards.” No. 1 on the list says it all:
[B]eing a recognized leader in the housing recovery by providing liquidity to the mortgage market and helping to prevent foreclosures (which includes objectives relating to volume of borrowers assisted, administration of the Making Home Affordable Program and market share)
In plain English that says that Fannie’s officers will be rewarded based on whether the company continues to run itself like a charitable government organization rather than a profit-seeking private company. And don’t worry, those officers will have plenty of taxpayer money to play around with to meet that goal. Earlier this week the Treasury lifted its cap on how much it will throw at Fannie and Freddie from $400 billion to … um … infinity.
This is all great news for the heads of Fannie and Freddie, because losing money is typically much easier than making money. And while everyone rips their hair out over the compensation packages at Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), and Citigroup (NYSE: C), the Fannie and Freddie CEOs each received packages amounting to an annualized $6 million in 2009 for their companies’ value-destroying performances.
And don’t worry, those big pay packages aren’t at risk from the companies’ lousy stocks. Apparently, the Fannie and Freddie officers have realized the bleak future for the shares and have opted to take their pay in 100% cash.
So what does this all add up to? We’ve got two companies that are primarily owned by the government, being pushed to provide liquidity to the mortgage market whether or not it’s in the companies’ best interests, and top executives probably wouldn’t blow their noses on the stock certificates. And there are people actually buying this stock?”
Perhaps Seanie & Fingers will look for work in the USA while awaiting the long term deliberations of the Gardai and Paul Appleby..
Gavin thanks for all the great work done in 2009 and look forward to the same in 2010, will be sending you an electronic brown envelope when I get back to Dublin to help with your work!
And to you too, my friend. Keep on stirring.
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