Month: September 2010

I hope to write something worthwhile later tonight. Until then I shall continue outsourcing comment to FT Alphaville.

In addition to what’s now being called the ‘Irish Panic’ — after the market punched Ireland credit default swaps in the face on Thursday, following fears that Anglo Irish will be brought down by its subordinated debt — here’s another Gaelic headache…

It must be some sort of economic indicator when a small country’s bloggers begin regularly outsourcing comment to the Financial Times. Suggested names for said indicator gratefully received via postcard or comment.

This was published nearly a week back but it’s still worth a read.

QUALIFIED solicitors and accountants have been applying for some of the 25 positions that have been advertised at the refurbished Supermacs fast food restaurant in Kilkenny.

Supermacs human resources manager, Jacintha Greene told the Kilkenny People that due to the calibre of the people applying, compiling a shortlist had become “a bit of a nightmare.”

She said that she had received applications from people with masters level qualifications in law and finance, even qualified solicitors and accountants.

Props to the sub on the headline.

There was a similar scene filmed for a 1985/86/87 news report, I recall, with a law graduate looking for a job in the [then] new McDonalds on the Navan Road in Cabra. I’ve two gummy bears and a melted Wham bar for anyone who can locate the footage.

With news stories like that and reports like this by Mr Singh The Clash’s questions remain relevant for far too many people my age.

Best leave two hours for Reeling in the Years 2010, Mr Scheduler.

CIÉ is funky.

The issue was so serious that CIÉ deemed that it merited an investigation in 2009 by external consultants Baker Tilly Ryan and Glennon. However, it did not think it worth keeping the department in the loop about the problem and more seriously, the executive chairman of the company, John Lynch, did not mention the issue in his annual statement on compliance by the company to the department. When tackled on the issue Mr Lynch acknowledged his mistake and explained that “as the issues arising were being dealt with, he felt that there was no need to make specific mention in that regard”.

[…] But the real problem – the failure of the CIÉ board and its executive chairman to disclose what at the very least was an embarrassing problem that did not reflect well on them – to its shareholder is not so easily fixed.

It might be possible to dismiss the issue as a once off, but for the fact that the C&AG’s limited enough study found other serious governance failures.

According to the report CIÉ was a month and a half late submitting its unaudited interim accounts to the department in 2009. It was also late with its draft unaudited annual accounts and over two months late in the submission to Government of its annual report and accounts.

The other issue raised by the C&AG was the failure of Lynch to submit his chairman’s report for 2009 under the 2009 Code of Practice for the Governance of State Bodies. He submitted it instead under the older 2001 code of practice and when requested to resubmit it under the new code, he did so in July 2010.

I’ve previously blogged on the Baker Tilly Report here in some detail. The only digital copy is available at that link if you wish to have a gander. John Lynch has got the odd mention or two around these parts also.

FOOTNOTE: CIÉ is not under FOI. I don’t know why either, guess various ministers never got around to it. The State is the sole owner. It’s a statutory corporation…

Irish bonds are at a new record high (6.250). Really should be watching closely today.

Update: Oh dear, AIB.

Update II: Alphaville again.

Update III: Alphaville again, again. See quote below.

Update IV: Record closing high today, having reached record trading high. Now lead story on FT.com. ECB intervened to prop us up. If you can’t access the story at that link head to Google and search “Irish bonds fall on bail-out fears”, then click through.

If the Irish real estate crash goes on, and the recovery rates on bank assets weaken – the Irish state is vulnerable because it’s pegged its support to certain levels of recovery in bank assets.

It’s a very uncertain process — but a dangerous one, because the extent of the bank rescue so far doesn’t give the Irish government much more room in 2011. So when you see things like this from the IMF on the wires:

RTRS-IRISH AUTHORITIES CONTINUING SUPPORT FOR BANKING SYSTEM HELPS MAINTAIN FINANCIAL STABILITY- IMF SPOKESPERSONRTRS-IRISH AUTHORITIES CONTINUING SUPPORT FOR BANKING SYSTEM HELPS MAINTAIN FINANCIAL STABILITY- IMF SPOKESPERSON

Know that this ‘continuing support’ is the entire problem.

Stuff you might find interesting to watch

Bloomberg; Irish ten year bond graph.

(Here’s the last year. See that high, team?)

This Property Pin Thread.

Comment on Twitter; Bondwatch. Ciara O’Brien of the Irish Times Online Business Desk.

And maybe the reasons why it kicked off? Alphaville picked up on this Barclay’s report (with the headline ‘Irish Government debt needs you’), which was then picked up by Zerohedge (‘Ireland Negotiating With Bondholders Over Anglo Irish Default, As Country Prepares To Call In IMF’) and the national papers this morning. Resulting in negative sentiment and ‘Irish panic‘.

—

Of course these new record highs are simply part of the ebbs and flows of the markets. Aren’t they?

Eek.

There are days when you just want to give up.

Madam, – Are Irish politicians and the Irish media living in cloud-cuckoo-land that they would damage our image further for the sake of headlines or political point-scoring?

Brian Cowen was, of course, wrong to agree to an interview he was not ready for. It was an error of judgment, but to deliberately turn it into a world news event while the eyes of the world are focused on us and the state of our economy is a far greater error of judgment. – Yours, etc,

RICHARD McNAMARA,

Castleknock, Dublin 15.

“Shhhh… If we all stay quiet about that interview heard by 600,000 people we’ll be grand. Someone turn off the interwebs there, don’t let word get off-shore. Pretend to be asleep, all of ye! And keep those journalists off the airwaves, for jaysis’sake!”

Of course, it’s Simon Coveneny and the hacks’ fault that France 24 is broadcasting stuff like the report below (WARNING: contains moments of waffling estate agent and Alan Dukes) to an international viewership.

Or was that recorded pre-Morning Ireland? Indeed it was…

Click these here words to pass through the intertubes and find your way to the latest analysis of the Irish economic situation by the above named individuals. The pair had other posts on the same topic here, (May) and here (September). They seem to have a more rounded understanding of the Irish situation than many other international commentators.

But markets today think there is a 50% chance that Greece will default within the next five years – and a 25% chance that Ireland will do so. The reason is simple: both Greece and Ireland are likely insolvent.

While the Greek fiscal fiasco is now common knowledge, Ireland’s problems are deeper and less widely understood. In a nutshell: Ireland’s policymakers failed to supervise their banks, and watched (or cheered) from the sidelines as a debt-fueled spending binge generated the “Celtic miracle,” whereby Ireland grew faster than all other EU members and Dublin real estate became some of the most expensive in the world.

[…] To halt this downward spiral, Ireland’s risk of insolvency needs to be put to rest. Either banks need to default on their senior obligations, or the government will need to default alongside the banks.

For those who don’t know, Johnson is ex-Chief Economist at the IMF, Boone is Chairman of Effective Intervention at the London School of Economics’ Center for Economic Performance. The recently published a book on the crash called ‘13 Bankers‘ and they run the widely-read blog Baseline Scenario.

There be a smart man.

Gerard Cunningham.

Especially on the Noel Whelan footnote.