Best country of the week
Malta.
Quinn: You are living in a flat in Malta so you can reduce your tax bill on hundreds of millions of dollars.
O’Brien: I don’t work in Ireland – 95 per cent of my businesses are scattered around the world from Fiji to the Caribbean.
The High Court defamation case involving businessman Denis O’Brien concluded this week, with a win for Denis and damages of €150,000. The Mail newspaper may appeal, but will be facing some meaty legal costs after it failed to defend its article on Denis and his efforts in the aftermath of the Haiti earthquake in 2010. During the hearing, Denis left himself exposed on the witness stand, and explained to the barrister for Associated Newspapers, Oisin Quinn, why he lived in Malta. Not for tax reasons, it seems, but because it is convenient to Denis’s business interests.
Awwwh of the Week
In Leitrim, the Irish Society for the Prevention of Cruelty to Animals rescued 140 dogs from a private household. There was going to be an appeal on here for readers to contact the ISPCA to offer homes to the poor fellows, but as of Thursday evening, just three remained homeless it seems. Still, might be worth a call to the ISPCA anyway, if you can give a home to these or others.
Quote of the Week
“I disagree strongly about the principle of unionist unity and I don’t want to be a part of that” John McAllister, former deputy leader of the Ulster Unionist Party after the decision of the UUP and the now more powerful Democratic Unionist Party to field a single candidate in the Mid-Ulster by-election in March 2013.
Seems like a new party is on the cards in Northern Ireland, with two high profile former UUP members “likely to form a new party”. With “Democratic”, “Progressive”, “Ulster”, “Traditional”, “Real” already taken, finding a new name might not be all that straightforward.
Cunning plan of the Week
You may have noticed that the Independent newspapers online have a new format. The Indo, the Sindo, the Bel Tel, the Herald and regional papers now appear to have the same style template for their websites. The Sunday World remains unchanged for the time being. Some like the new style, some don’t. There doesn’t appear to have been any improvement to the quality or breadth or speed with which news is presented. But what has had quite a number of people scratching their heads is that it is no longer possible to pick up the newspapers’ new output using search engines. Strange because that means that these newspapers are deliberately cutting down their audience, and the basic business model of these papers has been to drive readership which attracts advertisers which pays for everything. IN&M give away more free copies of their papers than competitors such as the Sunday Business Post, the Examiner and the Irish Times. But now, the company is reducing its audience from search engines. How strange.
However, it is picking up onsite clicks by forcing readers to click the “more” button – highlighted above – to view the second half of a story. It is also forcing more advertising on you, and by the end of this week, most people will want to throttle someone from UPC for their infuriating repeat advertisements.
IN&M’s share price languishes below 4c valuing the company at €21m, down 80% from this time last year when the company was being de-OReillyed. There is still no buyer of the group’s South African papers and there is trouble afoot in Australia/New Zealand with calls for the removal of its CEO, Brett Chenoweth. And on top of it all, it has €400m of bank debt to be refinanced imminently.
Cunning plans will be required.
Net Present Value of the Week
So, how much was the deal with the ECB on the promissory note worth? We have a range of values. Unsurprisngly, An Taoiseach Enda Kenny is most ambitious with saying it is worth €20bn. Davy says €5-6bn . Professor Karl Whelan, the economics lecturer at University College Dublin and Forbes contributor, says about €6bn too. But what about the assumptions underpinning the deal? Will the ECB allow us to access funds at its main interest rate, presently 0.75% for a full 15 years. Or might we find ourselves having to refinance the bonds on the open market, sooner rather than later? That seems to be the weakest point in the promissory note deal, and noises yesterday from the Germans (unsurprising) and a statement from the ECB president to “examine the deal further” (surprising) might indicate the trajectory to future friction.
Where is the Beef of the Week
Our klutz of an agriculture minister, Simon Coveney still seems to be doing his best to undermine our beef industry, and the latest wheeze as this week draws to a close is to call it all a “mislabeling” issue. But it’s not. Back at the end of January, Minister Coveney was saying “This confirms previous results that the raw material from Poland is the source of equine DNA content in certain beef burgers.” Back then it was the furriners’ fault, mostly the Poles. But it’s not. And there are now EU-wide proposals to test food more intensively for horse meat, so as to draw a line under a scandal and that will be the end of the matter. But it’s not.
The rewards available to criminals for substituting horse for beef are around €3 per kilo. A typical adult horse weighs 500 kg, though when you exclude bone and other inedible parts, you’re probably left with about 250 kg that can be used as food. For traders who might have picked up an unwanted horse for €10, as claimed by the UK’s Opposition environment spokesperson this week, the opportunities are better than the drugs trade. And if people don’t know the difference between horse and cow, then what matter? But it’s far from a victimless crime, it threatens Irish farming and jobs, and it probably threatens health because criminals are not likely to have our health to the fore of their considerations, so we might all be ingesting horse medicines or diseases which are harmful.
The problem now, is that with a focus on horse meat, the criminals are likely to relent and keep their horse meat in cold storage until the heat dies down. Or turn to other substitutions.
There was a twist to the scandal at the end of this week when it turned out that Irish food giant Greencore was selling horse contaminated products. The agriculture minister’s brother, Patrick is the boss at Greencore and eyebrows were raised at the development and the Minister’s klutzy handling of the scandal, though no-one is suggesting that Minister Coveney placed family interests above his professional duty, but the optics look all wrong.
Loose thread of the Week
“When speaking to people in Davos, the issue of the opening up of Myanmar, the former Burma, arose. It is a country of which we do not have great knowledge, although there were real connections between Ireland and Burma as it was called. That country of 60 million has a huge range of natural resources, yet some 58 million of its people have never had access to communications. That country will move from what might be termed ground zero to cloud computing and cloud access straight away. The scale of the investment there will be enormous.” An Taoiseach Enda Kenny speaking in the Dail this week. If appearing on the podium of the New York Stock Exchange with Denis O’Brien caused a brouhaha, and if Denis O’Brien attending the Global Irish Network event in Dublin Castle in October 2011 caused ructions and walk-outs, then what will be the fall-out if it is confirmed that An Taoiseach was in Davos promoting the business interests of Denis O’Brien in a country with an appalling human rights record?
Will this loose thread be pulled at?
Banker of the Week
John Reynolds, CEO of KBC Ireland
We suffer so badly from Small Dog Syndrome in this State that we sometimes forget that we are not alone in shouldering debt relating to our banks. The Belgian government has bailed out KBC to the tune of billions so far, and we learned during the week, that in Ireland, we will continue to benefit from the munificence of the Belgian people. During the week, KBC announced its preliminary results for 2012 and the annual loss (after impairments) rose to €306m in 2012 from €269m in 2011. The parent company shoveled in €300m in bailout to the Irish unit for the first nine months of 2012. The outlook is not great and examining its loan book for the past five years – see graph below – indicates the Irish unit will need another €1-2bn in the next 3-4 years to cover losses on SME and personal/home loans. All of which must make its Irish CEO, John Reynolds – who has a career with KBC before becoming its CEO in May 2009 – one helluva banker to continue to receive such support from the Belgian parent, and the Belgian government.
Headscratcher of the Week
We don’t know how ex-NAMA employee Kevin Nowlan got on in Connecticut yesterday as he was “deposed” by lawyers representing Gayle and Sean Dunne. The deposition involves Kevin giving a statement about matters relevant to NAMA’s case against the Dunnes, and then submitting himself to questioning by the Dunnes’ lawyers. Hopefully Kevin managed to manouevre the snowbound north east US, and is safely en route home to work in his new role at WK Nowlan, which is branching out into the asset management business. According to Simon Carswell in the Irish Times today, the deposition will have lasted some eight hours.
What has some scratching their heads is why Kevin flew all the way to the US and didn’t just head down to the US Embassy in Ballsbridge which seems to be available for such legal procedures. Ah well, hopefully he picked up some cheap duty free.
NAMA Wine Lake 
” I dont work in ireland”etc.,Denis O Brien did not actually say he lived in Malta-did he????Very shrewd. From the evidence given at that trial I ended up confused as to whether he lived in that flat in Malta or in Portugal
The indo site is appalling. I can only see their problems getting a whole lot worse as a result of this site which is already alienating a whole lot of people. It is crammed with advertisements, unacceptably SLOW hard to negotiate and hard to read.
I can comment on a forest fire in Chile but am not allowed to comment on the vast majority of articles to do with Irish politics, Croke park agreements or for instance, the ECB’s attitudes to Irish promissory notes.
Those in charge at the Irish Independent now seem to regard the community of ‘indo’s bloggers’ as more of a ‘community of troublemakers’ who need to be put in their place. A lot of commentators have simply shifted off to other sites or just given up! More will be re-joining the Irish Times commentariat as they have been told in no uncertain terms, “not wanted or required” around here. You would swear it could afford to shed readers, their efforts are totally at odds to the financial position of the company and indeed the financial stability of the company.
If this is part of their steps towards putting the paper behind a fire wall they will be lucky to sell any papers and will be sorely disappointed by the results. There was absolutely no effort made to consult with readers of the paper the whole thing is an exercise in arrogance.
Poor auld Simon Coveney. This could have been a relatively good news story for him, ‘Ireland uncovers Europe Wide criminal scam’ if he wasn’t out like a hare trying to ‘draw a line’ under the whole thing i.e. Make assumptions and blame other countries. How many lines has he attempted now?
WTF is that clown doing incurring exhobirant expenses flying to NY.
Skype,FaceTime or Meeting To Go.
Wifi and a phone,he’s on US soul at the embassy governed by US law….pis**ng away money…..no accountability.
Did he order a movie to amuse himself,have a few meetings in the big apple with potential investors…can we have look at his iternary.
After all the poor knackered Irish taxpayer payed for Kevin’s networking trip to Greenwich and NY….sweet.
Re blaming those pesky Poles for the horse meat in our beef products:
Does anyone know who owns the factory in Poland which supplied the horse meat?
Coz…
I was speaking to an official in the agri industry yesterday, and he said it’s a certain Irish man who’s the head honcho of this Polish plant.
So Kevin got in the night before…if that crackerjack journo SC is now covering the rather mundane trivialities of this case in such detail,perhaps he could answer a few questions or at least pose them.
Did Kev pay for his driver and car or use the subway…to Greenwich …probably by car.
Was he accompied by his own lawyer?
Did NAMA send anyone ?
Listen,NAMA for f**ka sake next time a two bit local law firm ask to depose an x employee.
Make him walk..taxi it to the US Embassy.
They can fly over or …..gosh …Skype it even.
@NWL
Excellent graph from KBC.
A comparative graph from all of the covered banks would make interesting reading. But looking at the graph, I would not share your confidence that any bank, faced with such a trend, could rationally consider a long term future in such circumstances.
Bottom line is, as I read the graph, a total loan book of ~15bn, 50% performing and 50% impaired. More importantly, the trend from performing to non performing is pretty shocking. The bank has by force of circumstances clearly turned into a debt collecting agency.
One of the main events of the week happened, in the Beach Club in Palm Beach, Florida (of all places!) on Friday last, when Wilbur Ross did a lap of honour in front of his investors and members of the Ireland-U.S. Council.
About 70 people turned out to hear Ross’ thoughts on the Irish economy.
Ross was congratulated for his “vote of confidence” in Ireland and patted on the back for enriching his investors those who bought stock in the Bank of Ireland a year ago and who saw the share price rise by 35 percent since then.
As reported in the Florida press:
“Ross quoted economist Milton Friedman at the start of his talk.
“Friedman famously said, ‘If you put the government in charge of the Sahara Desert, it wouldn’t take long until there was a shortage of sand.’ I agree with his general assessment of government’s ability to run anything, but I think that the present Irish government is an exception to that rule,” he said. (Well he would, wouldn’t he?)
The previous government clearly failed to recognize that something was amiss in the country, Ross said, citing statistics that led to Ireland’s economic bubble bursting.
Austerity measures, such as reducing the cost of civil service, enforced by the new government have helped stimulate the Irish economy, he said. Mortgage tax and income tax exemptions as well as a new carbon tax have aided the recovery effort.
Prime Minister Enda Kenny also has been active in soliciting foreign direct investment in Irish companies.
“One-seventh of all the jobs in Ireland are now associated with foreign direct investment,” Ross said.
Ireland’s industrial base also is in good shape, he said. Pharmaceuticals rank as the country’s most important industry, with agriculture, medical devices, Internet gaming and betting, global aircraft leasing and back-office financial services as other major contributors to the 2012 net trade balance of about 5 percent of gross domestic product or eight-billion euros, an all-time record.
“Low tax rates encourage foreign investment,” Ross said.
The picture isn’t all sunny, however. Unemployment declined only slightly, from 15 percent in February to 14.6 percent in December, due mostly to the decline in construction. Christmas sales were weak and home prices rose only slightly, he said.
Ross disagrees with projections that home prices will slide 20 percent more and that employment and overall economic growth are not in the cards.
“GDP is officially forecast to grow by 1.1 percent in 2013; this should stabilize if not slightly improve unemployment,” he said. He also sees promise in “affordable” home prices, and increased savings rates and bond issues, that make banks, including the Bank of Ireland, more able to fund mortgages with long-term liabilities.
“(Last year) was a transitional year for Bank of Ireland and 2013 will be as well,” Ross said. He projects that changes in banking regulations and costs, a smaller workforce and rising interest rates will further benefit the bank’s bottom line in 2014-15.”
As Ireland watches the firesale of its assets and loses for the third time as the growth in those assets go to the vultures in rose tinted glasses before being extracted from the economy and repatriated to the USA, it’s time to pass the sick-bag.
@WSTT, thanks. Oddly, the only information that is amiss in Wilbur’s assessment is the house prices one.
“Christmas sales were weak and home prices rose only slightly”
We have the statistics for 2012 from the CSO
https://namawinelake.wordpress.com/2013/01/22/property-prices-still-falling-with-dublin-houses-suffering-most-december-2012-cso-index-published/
These show declines across the board of 4.5% nationally, 2.5% in Dublin and 6.1% outside Dublin.
December 2012 recorded declines nationally and in Dublin.
Odd that he was so spot-on with other data and information, but not this.
Bertie got a standing ovation in DC, Cowen got to boast live with Wolf Blitzzer on CNN, and Enda got to shake Obama’s hand in Dublin. Don’t say they Americans aren’t grateful for all your sacrifice, come on now, what more do yez want.
Maybe Depidy Martin will get to be on the Simpsons in a couple of years, but only if yez are good, mind you no one would unserschtand d’aul accent an’ all, …could be funny though.
It’s not like the Irish show any respect to the US, with the likes of Vincent Brown calling Obama ‘an agent of death to thousands of children’ in the national paper of record….., so what d do yez expect….a hand out?