Extract from a blogpost earlier this week – who would have thought that all three distractions would happily occur today
I stand to be corrected on this but the last politically-connected arrest in the State was on 9th December 2011 when former Anglo chairman, Sean Fitzpatrick was re-arrested. By “politically-connected”, I mean Anglo is 100% owned by the State and its activities which led to a €29bn bailout from the State, certainly give the State a particular involvement with the bank. The previous politically-connected arrest was on 1st November 2011 when former Anglo finance director, Willie McAteer was re-arrested. That was on the eve of the controversial payment of USD 1bn (€730m) to unsecured, unguaranteed bondholders. Back in 2010, there were remarks at how convenient it was that Sean Fitzpatrick was arrested on 18th March, during then-Taoiseach Brian Cowen’s trip to Washington for St Patrick’s Day where it was coincidentally helpful to be able to show that Ireland was being tough in investigating its disastrous banking collapse. It’s not as if there are politically-connected arrests every week or month in Ireland, so there might be eyebrows raised today at the arrest of former Fianna Fail TD, and subsequently senator, Ivor Callely in connection with claims for mobile phone expenses whilst he was in office. I think it fair to say the public did not appreciate reports of the senator’s expenses in 2010 and his fighting his disciplinary hearing at the Oireachtas. So politically-connected and involving a member of the Opposition, and dare I say popular – killing three birds with the one stone, wags might suggest this evening over a pint.
Promissory notes were also firmly back in the spotlight earlier today when An Taoiseach Enda Kenny told the Dail that not only were there ongoing technical discussions but it had been the initiative of the Troika to draft a joint set of proposals on dealing with IBRC’s (IBRC is the Irish Bank Resolution Corporation and is the merged entity representing what was Anglo and Irish Nationwide Building Society) €30bn-odd of promissory notes. This proactivity on the part of the Troika is curious because when asked about the promissory notes at the press conference inDublinlast week, the IMF said the Government had merely “requested discussions”. Also it seems obvious that nothing tangible arose yesterday in the meeting between Minister for Finance, Michael Noonan and ECB president Mario Draghi, otherwise Minister Noonan would be broadcasting it from the rooftops.
And as for bread and circuses, this afternoon the embattled – following a farcical stymieing of the commercial property market in 2011 and defeat of a poorly drafted referendum proposal – Minister for Justice, Equality and Defence, Alan Shatter published the draft heads of a new bill aimed at “addressing the financial difficulties of general insolvency; mortgage debt and negative equity” The heads of the bill are here and the ministerial press release is here. The heads are 164 pages long and are still being studied, but it is difficult to avoid the perception at present that the bill offers “debt relief for all”.
And lastly, we had a couple of political interventions today criticising opposition to paying the Anglo bond. Junior minister at the Department of Finance, Brian Hayes accused critics of living in “la-la land” and indeed he managed to resurrect the j’accuse of the last Government of saying critics whose opposed Government strategy were “talking down Ireland” An Taoiseach told the Dail that “to say you don’t pay is nonsensical” This comes on the back of transport minister Leo Varadkar accusing critics of being “misinformed or mischievous” though there is some evidence that the minister himself is “misinformed”. As for “mischievous”, that would be a scurrilous suggestion to level at the Minister. And no doubt it is no more than happy coincidence that the above took place on the same day that insolventIreland paid €1,250m (1% of GNP) to bondholders in a defunct bank.
I leave you with a view of what IBRC’s debts are doing to Ireland.
(Graphic above produced by Japlandic.com, contact here)
NAMA Wine Lake 
Ignore the maturity extension achieved by Ireland (NTMA) today – the roll out of 30% of bonds maturing in 2014 to 2015 – first actions of the Irish Government in the bond space in a considerable amount of time (and done at additional costs of 115bps).
But that is a positive story – not really suited to the graphic.
@jj, our bond yields have indeed been coming down of late, and I note that we are now at levels last seen on 4th November 2010, just before the bailout but after the escalation which is widely believed to have been prompted by the Merkozy confab in Deauville in October 2010. The decline is welcome. We were at 14% last July but much of the decline then happened in Aug/Sep and we have hovered between 7.3-8.5% since. 7.3% on long term large sums is not viewed as sustainable. So we have a ways to go.
With respect to today’s NTMA announcement, it’s welcome but extending debt by one year and paying 5.15% for it (we were paying 4.5% for 2012, 2013) is not in itself convincing. Though if the NTMA gets off another few auctions then that view might change.
You might be interested in Colm McCarthy’s view of today’s announcement here
http://www.irisheconomy.ie/index.php/2012/01/25/getting-back-in-the-bond-market/
“Investors were offered the opportunity of exchanging their holdings of the existing 2014 bond for a new 4.5% Treasury Bond maturing in February 2015. Following strong interest in the bond exchange offer some €3.53 billion, or 30 per cent, of the 2014 bonds will be switched into the new 2015 bonds.”
http://www.ntma.ie/home.php
30% uptake for additional 100 basis points…..strong interest is 30%!
The Irish govt. has been quite active in the bond markets,in fact just today they retired,paid in full 1,250,000,000 of Anglo bonds!
The Treasury receivership should do it! Injunction in Four Courts tomorrow morning.
Shame really that REO sold its stake in TRT,looks like some value there.But as NWL pointed out on other post completed the ‘ring fencing’ of assets in China.
@John, the latest Treasury machinations are detailed on here. As WSTT says, there’s a hearing tomorrow morning to stop NAMA’s receivership with Ernst and Young and PwC. Looks like the game of chicken is in its final phase & NAMA wasn’t bluffing.
https://namawinelake.wordpress.com/2012/01/12/nama-and-treasury-holdings-are-they-playing-a-game-of-chicken/
Nice blog as usual NWL. Picture is a bit tasteless though imo. Is anything sacred? Probably not.
@NWL thanks for that,perhaps the other lenders were not as forbearing, looks like a preemptive strike.
Just before REO was scheduled to release its annual report too,we know the acquisition loan at BPS increased by 64,000,000.Was some of that used to keep the other lenders at bay?
NAMA represents ONE of Treasury/REO’s lenders,one wonders if Irish taxpayers money was used to keep other lenders current,while NAMA was agonizing over what to do.REO has been hopeless insolvent for considerable time.
With Regards to Treasury About time they brought back to earth,Just shows again that Nobody in this Process is Untouchable,Treasury thought they where and looks like they have paid the Price,Although Blame for outcome lies with Senior Management of Company who are still living in the Past.
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