Morgan Kelly

I can’t really add much to Mr Kelly’s excellent analysis. What it says to me is that the next 12 to 18 months are going to be among the most difficult, if not the most difficult, time this country has faced. I encourage everyone to read the entire document.

I will emphasise his conclusion:

Despite having pushed the Irish state close to, and quite possibly beyond, the limits ofits fiscal capacity with the NAMA scheme, the Irish banks remain as zombies whose only priority is to reduce their debt, and who face complete destruction from mortgage losses. The issue therefore is not whether the Irish bank bailout will restore the Irish banks sothat they can function as independent commercial entities: it cannot. 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.

The Irish Credit Bubble (UCD)

[cross posted to thestory.ie]


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3 responses to “Morgan Kelly”

  1. Gombeen Man avatar

    Thanks for posting Gavin.

    I have to day, the recent forecasts from the ERSI (predicting slow recovery in 2010) don’t seem to be based on any kind of reality at all.

    Unemployment is increasing, emigration in back, people are paying more tax and taking pay cuts, the public finances are coming under increasing pressure, and we have (already) paid too much for the banks’ debts. Plus we are still building apartments that no-one wants to live in. How in God’s name can there therefore be a recovery.

    I think Morgan Kelly has a much better grasp of things…

    Cheers.

    Gombeen Man

  2. pol haydon avatar

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  3. Tech Gadget avatar

    @pol haydon
    Not too bad blog!