Press Conference of the Week
I’m still scratching my head, and I don’t think I’m the only one. At the ECB press conference on Thursday, the president Mario Draghi was predictably asked about developments in Cyprus. But not once was he asked how much support was now being provided by the ECB to Cypriot banks. Just before the original bailout proposal mid-March 2013, the ECB is understood to have loaned €9-10bn to Cypriot banks. Then there was the scarifying proposal to tax all deposits, even small ones, at 6.75-9.9%. And the banks were closed for 12 days. And then we learned that credit card spending didn’t count as a deposit withdrawal, so you could have bought a Lamborghini on your credit card for €300,000 whilst the banks were closed and then told the bank that your €400,000 deposit was completely safe because once you deducted the €300,000 credit card charge, your deposit was below €100,000!
But not one questioner asked Mario about the level of ECB support, so we’re still in the dark about where we are on the graph of ECB financial support intersecting with danger-level support to banks so illiquid that they are doomed to insolvency. The Irish Times reporter was present and confused the bejaysus out of the Italian with a rambling question, which looks clearer on paper than it was when asked. And you had keyboard warriors turning up for the first time, with questions asked on behalf of ZeroHedge to which an exasperated Mario responded
“You are asking questions that are so hypothetical that I do not have an answer to them. However, I may actually have a partial answer. These questions are formulated by people who vastly underestimate what the euro means for the Europeans and for the euro area. They vastly underestimate the amount of political capital that has been invested in the euro. And so, they keep on asking questions like “if the euro breaks down” and “if a country leaves the euro area tomorrow”. The euro is not like a sliding door, it is a very important thing; it is a project in the European Union. So, that is why you will have a very hard time asking people like me “what would happen if?” There is no plan B. In addition, I think the ECB has shown its determination to fight any redenomination risk, and OMTs, with their precise rules, are there for this purpose. So, that is the answer to the first question. The second question was about ELA, but again, it is related to “if Cyprus leaves” and we do not have that in mind. There is no plan B.”
Philanthropist of the Week
“Seed capital for the project is being provided by international real estate investment and services company, Kennedy Wilson on a philanthropic basis.” Dublin City Council announcing a €60m development of Parnell Square into a “cultural quarter”
It seems that Denis O’Brien has a competitor in the cut throat world of international philanthropy. Yesterday, Dublin City Council announced that our new best friends, Californian real estate investment company, Kennedy Wilson is providing €2.5m seed money “on a philanthropic basis” for the €60m redevelopment of the north part of Parnell Square, in Dublin city centre into a cultural quarter. Kennedy Wilson has been buying Irish property and loans at a rate of knots in the last two years and now sits atop a portfolio that includes the Allianz building off Barrow Street – the 210 apartments in the donut shaped development in the old gasworks for which it paid around €40m and it bought for €108m the loan underpinning Liam Carroll’s State Street building and adjoining land on the south quays in Dublin’s docklands. According to the Clinton Trust, Denis J O’Brien is a contributor of USD1-5m in 2012 and Denis was described in court filings reported on here as “leading Irish entrepreneur and philanthropist”
Image of the Week
In keeping with the religious context of filing for bankruptcy late on Good Friday, Sean Dunne used language last heard in Galway in 1979 when he addressed “People of Ireland” in an open mike platform provided by the Sunday Independent last weekend (even a blog wouldn’t be that generous, editorially). The image of Sean in his three-piece suit and Barney-the-Dinosaur tie amidst the skyscrapers on Fifth Avenue didn’t win him sympathy, but then again, why should Sean be seeking sympathy from a country which hasn’t yet learned to handle business failure. Sean’s claim, though, that taxes and levies paid during a lifetime of property development meant he was even-stevens with the nation despite a €185m judgment in favour of NAMA, did rankle with people generally.
(Graphic above produced by Japlandic.com, contact here)
Schematic of the Week
This is how the IMF represented the promissory note deal effected in February 2013. You can clearly see the €27bn of promissory notes which we were due to pay down over the next 18 years, and these have been replaced with a mix of sovereign bonds and NAMA bonds. The NAMA bonds are an advance payment for loans that may be coming NAMA’s way later in the year. If David Hall’s challenge to the legality of the promissory notes were to have succeeded, then the decision to exchange sovereign bonds for illegal promissory notes may go down as the worst single economic decision in the history of the State.
Game of the Week
RTE Bingo. This is a brand new game and involves players printing off their own bingo cards by going to the websites of the main talent agencies in Ireland and printing off a list of the “stars” represented by that specific agent, for example, Noel Kelly manages many of Ireland’s top stars. You then watch your favorite RTE shows to see what “star” has another “star” from the same stable on their show. The show was inspired by Ryan Tubridy, pictured below next to what his agent would love to be his future incarnation, Henry Kelly who used work for the BBC as a presenter and DJ – kinda what Ryan does now in fact. Last week, Ryan presented the Late Late show as usual on RTE 1 and it is the first time in many years that I have seen it, partly because RTE had a couple of days previously released its presenters’ salary details which showed Ryan now on €495,000. And lo and behold, amongst the various advertorials for records and gigs, some other presenter turned up who didn’t seem all that newsworthy and certainly didn’t seem to be plugging anything in particular, and it turns out that Maura Derrane is a stablemate of Ryan’s at Noel Kelly management. Someplace, Noel Kelly must have been rubbing his hands with a €495,000 presenter on national TV promoting another of his presenters, making it easier for him to negotiate both their contracts on which he gets an estimated 15%. There’s no fixed prize for getting a full house, but morally you might consider the talent agency owes you something.
Car of the Week
The Volkswagen Golf was the best-selling car in Ireland during the first three months of 2013, according to the Society of the Irish Motor Industry, which issued a statement this week revealing that new car sales were down 14% in Q1,2013 compared to the same period last year. Sales in the month of March 2013 were down 10%. The best-selling marques were Volkswagen, Toyota and Ford and the best-selling models, the Golf, Nissan Qashqai and Ford Focus.
Word of the Week
“Marriage” (©, used with permission from Susan Philips who claimed the word belonged to her during a debate on gay marriage on RTE Prime Time this week). Putting gay marriage on the same footing as traditional marriage is a knotty issue is many countries, the US, the UK and now Ireland. Here, the Government had thought it had kicked the issue into the long grass by passing the parcel to the Constitutional Convention, but it looks as if it will be reporting its recommendations on the matter imminently, and with a (small) majority nationally in support of gay marriage, it seems that we are to have change here soon. And as elsewhere, there is resistance and during the week, we were treated to the kind of debate which might become commonplace in the not-too-distant future. The matter was discussed on RTE’s Prime Time, available here on RTE Player, in which “political analyst, community activist, agribusinesswoman” and now, opposer of gay marriage, Susan Philips memorably claimed marriage as “our word”, presumably meaning traditional couples.