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Denigration of politics and politicians a natural consequence of political catastrophe

January 13, 2013 by namawinelake

HowLong

The Japanese have a tendency to produce fictional radiation-inspired monsters; the Germans have, what we might view as, an irrational fear of inflation, the Poles ban police raids in the middle of the night because of their echoes of communism and totalitarianism – amusing to see them before a “bust” peering at their watches to make sure they don’t break the door down before 6am! If you’ve ever been involved in a serious car crash, you might know it can take some time before you’re comfortable back behind the wheel.

Individuals, groups of individuals and nations suffer trauma during national catastrophes and it takes some time for normality to return.

In Ireland, in September 2008, our politicians, whom we trust to manage the country, bankrupted the country over the course of a few hours, a few flicks of a pen with minimal direct oversight by our elected representatives.

Since then, people who had nothing to do with property and banking found themselves the victims of the consequences, with their living standards threatened so as to bail out banks, which to most people are no more than a utility – they keep your cash safe and pay you interest and allow you to make payments from your own cash, and they might give you a loan, a utility.

But, people who knew nothing of bondholders, haircuts, debt sustainability, deficits, the IMF have became passing experts in subjects that they assumed the politicians were keeping on top of.

Just five years later, a politician – and an arch-politician at that – complains about the general denigration of politics. I wonder when the Japanese will stop creating Godzillas or when the Germans will loosen the purse-strings and permit 2%-plus inflation – it’s been about a century since the original catastrophes unfolded.

Why should Pat Rabbitte think the intense and robust analysis of politics and politicians, and challenge to political decisions, will end any time soon?

And when the Government does anything sudden and significant, like selling €1bn of its investment in Bank of Ireland this week, it should expect the most robust questioning. From some of the commentary this week, you might think that the €1bn sale of the so-called “Contingent Capital Notes” in Bank of Ireland was a complete gift horse and that any challenge or questioning of the manner in which the sale took place – the engagement of the “professionals”, their fees, the price achieved and whether it might have been a little better – then somehow, to even ask these questions, is to undermine trust in the Minister for Finance, the Department of Finance, the NTMA, or the group of companies that facilitated the disposal of €1bn of our national wealth.

The Dail resumes this coming Wednesday, and it is to be hoped that our 166 TDs scrutinize the €1bn transaction. It may have been a good or even great deal, there are usually lessons to be learned from large transactions, it is conceivable there might have been failings in the execution of the deal. Regardless, we owe it to ourselves to scrutinize the deal in fine detail.

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Posted in Banks, Greece, IMF, Irish economy, NAMA, Politics | 12 Comments

12 Responses

  1. on January 13, 2013 at 8:23 pm who_shot_the_tiger

    Here’s the deal, Pat. If you have real problems in you life, then tell us about them, but if you’re just whinging, then quit yapping about it and get on the job you were elected to do. As Minister for Communications, put the real facts out there and let people decide – rather than crying about what the media is saying. Other than the spin that you feed them, they never had much to say in any event.

    Pat reminds me of the 900 year old alien Dr. Who, the semi absurdist, mad-genius time traveler in a galaxy-hopping police telephone box; making new friends every time he surveys the planet he’s just arrived on. He reflects an era so insane that the best we can do to come to terms with the sticky dilemma (no pun intended) of where he’s coming from now is to take a deep breath and go to the weirdest part of our own brain.

    Pat wants us all to think “government think” and act like the aliens on the planet Comatoze (Don’t Google it, I just made it up) who are ruled by an authoritarian dictator in the form of a giant pulsating brain that mentally directs all their actions. Even the kids at play step out of their homes simultaneously and bounce their balls in unison. They have been so brainwashed that they have morphed into mind controlled and flesh covered pistons in a big machine. They no longer behave as individuals.

    What Pat and the rest of our homebred puppet political leaders need to realise is that the basic tenet of the civil rights of man; “all men are created equal” does not mean that all our lives should follow the same path and nor does it mean that we should all think the same thoughts and believe the words of the giant pulsating brain in the EU that tells us what to think and do.

    There is a difference between fascism and democracy. And what being created equal means is that no-one can claim a right to take our shoes and hobble us along our life’s path – least of any clown of a politician.

    Pat would do better by his electorate if he conveyed to his political masters in the Troika and the EU the words of Patrick McGoohan’s Number Six in the Prisoner, that the Irish people “will not be pushed, filed, stamped indexed, briefed, debriefed or numbered”…….

    Is it already too late? Not if enough say, “My life is my own”.


  2. on January 14, 2013 at 1:28 am What Goes Up...

    It was a liquidity issue… (except it wasn’t)

    It was Lehmans… (except it wasn’t)

    It was the ECB… (except it wasn’t)

    We’re not Iceland…

    The banks are recapitalised…. (except they’re not)

    House prices are stabilising… (except they’re not)

    We’re not Greece…

    NAMA WILL work… (except it won’t)

    The ATMs WON’T work… (except they will)

    We’re not Iceland… We’re not Greece…

    And finally…

    We all partied… (except we didn’t)

    It’s not the lies that get you in the end… it’s the truth.


  3. on January 14, 2013 at 2:13 am OMF

    Respect is earned. Irish politicians refuse to even try.


  4. on January 15, 2013 at 3:19 pm john gallaher

    There was a lively and robust exchange on irisheconomy.ie about this.
    However, i have been ‘blocked/censored’ by the moderator- i think i was too obnoxious/rude/insulting…’drunk’ actually no but…typical ‘new yawker”
    Either way here is the actual coco that i have repeatedly attempted to link at that site.
    NWL not trying ‘drag’ you into this fight so here it is…

    If anyone who i ‘insulted’ or ‘upset’ over there reads this my sincere apologies,im no longer allow post.
    NWL interesting section on issuer buying it and also veto power of current holders etc.
    Any interest can post a summary/review.

    Click to access Euro%201000000000%2010%20per%20cent%20convertible%20contingent%20capital%20tier%202%20notes%20due%202016%20Prospectus(1).pdf

    Anyone requiring a crash course i strongly recommend this.

    Click to access fs_paper16.pdf

    Be afraid very afraid …here is he minister on the sale…come on down the price is right…scary stuff.

    http://www.merrionstreet.ie/index.php/2013/01/sale-of-states-e1-billion-holding-in-bank-of-ireland-contingent-capital-notes/


    • on January 15, 2013 at 3:35 pm Dorothy Jones

      They blocked you? Ah no; ’twas the best comment exchange on Irish Economy for ages! Amidst upturned bar stools requesting beleaguered colleagues to figure out the 18 month % return as a favour. ….Klasse :)


  5. on January 15, 2013 at 3:38 pm john gallaher

    yep blocked done dusted……strip clubs too :)


    • on January 15, 2013 at 3:52 pm Dorothy Jones

      Well stick around; btw ‘dem Zampolli tigers turn up? Sorry @nwl’ I’ll be quiet now..


  6. on January 15, 2013 at 4:23 pm john gallaher

    @Dorothy thanks,actually a fascinating topic.The ‘notes’ themselves are very funky ,i was getting ‘killed’ trying to find comp.’s or a metric to establish if it was a ‘good’ deal for Irish citizens.
    Never got to post my comments in the end,no one here in NY could answer it..because its such a small market with little or no transactions.They are ‘hybrid capital’,I would more impressed if they had sold some AIB or better yet all of the Coco’s.Or why not a ‘mix’ but to flog the family silver in one go !

    Seamus Coffey is the moderator on that thread,claims in a post above that the remaining coco’s ‘may’ be worth par.Given that you just got a ‘mark’ from the b of i sale…..
    Either way the Irish govt just sold 1 BILLION of state assets to………ah therein lies the rub no one knows yet…its a secret….’word’ is the current US owners of b of I.You can be sure its not say a sovereign wealth fund.
    More to follow but the notes allow the holder the govt. to determine this..as they have veto.Pg 11 and 12.

    In fact the always excellent x indo journo,Laura Noonan alluded to the mysterious buyers…why the secrecy…it a ONE BILLION state asset that was sold,yeah yeah you got the money back big deal.Serious implications for the remaining coco’s held by the govt. on behalf of Irish citizens.

    “Bank of Ireland announced on Wednesday morning that private investors, including some existing stockholders, had agreed to take at least half the 1 billion euros of the CoCos the state has held since a sector-wide recapitalisation in 2011.”

    http://www.reuters.com/article/2013/01/09/bankofireland-placement-idUSL5E9C92LQ20130109


  7. on January 15, 2013 at 4:27 pm Dorothy Jones

    @jg..apropo cocos,this from today’s IT:
    http://www.irishtimes.com/newspaper/finance/2013/0114/1224328802562.html


  8. on January 16, 2013 at 12:13 am who_shot_the_tiger

    @JG, Word on the tennis courts down south is that the buyer is Wilbur Ross.


  9. on January 16, 2013 at 12:33 am John Gallaher

    @WSTT,hi WSTT and also thanks Dorothy for the link and kind words,strange place the “irisheconomy”…..agree with above but the notes have extremely interesting provisions on the issuer buying them…stay tuned full review/analysis of note tomorrow-link above.
    Hope you good,lunch offer in NY still stands all best as always WSTT.


  10. on January 17, 2013 at 5:35 pm john gallaher

    ‘I never guess. It is a shocking habit,—destructive to the logical faculty.’
    Sherlock Holmes

    The ‘sale’ of the BofI CoCo note has all the ingredients of a good thriller,persons unknown buying them…key public servant jumping ship.

    Reviewed the prospectus-link above-specifically regarding the seller/govt.’s rights to sell it and find out who the buyer is.
    The laws governing this ‘hybrid capital’ are Irish,and I’m NOT a lawyer or expert in Irish securities law.

    regarding US ‘persons’ buying them. pg4.

    “The CCNs have not been and will not be registered under the United States Securities Act 1933, as amended (the “Securities Act”), and are subject to U.S. tax law requirements. Subject to certain exceptions, CCNs may not be offered, sold or delivered within the United States or to U.S. persons.”

    right of first refusal.pg 11 &12.

    “the Initial Holder will provide at least 15 Business Days notice to the Issuer of any proposed Third Party Sale or such longer period as may be approved in writing by the Initial Holder. During such period, the Issuer may solicit other third parties to whom the entire principal amount of the CCNs may be sold at an equivalent or higher price than the Initial Holder would receive for any proposed Third Party Sale.”

    was the above evoked ?

    here is the key provision-pg12.
    “Notwithstanding paragraph (b) above, the Initial Holder shall have absolute discretion as to whether to sell CCNs, to whom it may sell the CCNs and the terms of any such sale.”

    regarding the issuer/bofI buying the CNN note pg 21.

    “None of the Issuer, any Group Company or its Subsidiaries may purchase, redeem, buy back or otherwise acquire any of the CCNs prior to the Maturity Date.”

    also pg’s 35 and 48 reiterate the above,



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