When she was good she was very very good…

Stories about Ireland are leading both the Ft.com and WSJ.com.

WSJ:

Ireland’s deepening troubles raise doubts about the wisdom of the stringent fiscal austerity measures that the former Celtic Tiger and other European countries have put in place, which effectively hamper consumers and take cash out of the economy.

At the same time, Ireland’s gloomy prospects mean the government may have to make even deeper cuts this winter to reduce its budget deficit, which is expected to surpass 25% of GDP this year, the biggest in the 16-nation euro area by that measure. The possible doubling in the deficit—now about 12% of GDP—is due largely to the cost of bailing out troubled banks.

FT:

News that Ireland’s GDP fell 1.2 per cent in the second quarter added to the anxiety, as did rumours of a default by Allied Irish Banks. It should be stressed there has been nothing to suggest the latter is anything other than market scuttlebutt.

The markets are confused by Allied Irish Banks (AIB, known as AIB) and Anglo Irish Bank (‘AIB’ known as Anglo)?

Jesus lads, even a name change, just for the next day or so?

'Fading fast'

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.

"One day it's fine, the next it's black…"

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.

Dick Roche’s representations

Sunday Times journalist Mark Tighe has published some interesting documents concerning Minister of State for European Affairs, Dick Roche. The correspondence details Mr Roche making representations relating to a tender for patient transport services for the HSE. As Mark explains:

The Wicklow firm that Roche lobbied for is run by Pat and Irene Sweeney in Arklow. Pat Sweeney has been a town councillor in Arklow for Fianna Fail while Irene, his wife, ran unsuccessfully for Fianna Fail in last year’s local elections.

Roche wrote to Brendan Drumm, chief executive of the HSE, and the HSE’s board to criticise the “fundamentally flawed” HSE tender process for taxi services in which the Sweeney’s failed to win a contract.

Ms Sweeney was also appointed to the board of the EPA. Mr Roche claims to have been acting on behalf of constituents, but they are constituents who were clearly party political, and Mr Roche was trying to interfere in the tender process on their behalf. This type of behaviour from a politician is sadly, likely all too common – political loyalty above serving all of the people.



John McManus on CIÉ

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…

Digest – September 19 2010

Here ye, hear ye… yadda yadda yadda…

HOME

Sara Burke on HSE spending on agency nurses and recruitment moratoriums…

The C&AG cites the HSE’s own internal audit which shows that agency staff exceed the cost of employing nursing staff by 36.5% and he clearly implies that this is not the most efficient use of tight resources. Yet internal HSE figures for 2010 show that up to July of this year just under €30 million has been spent on agency nursing and €37 million on other agency staff, doctors, allied health profs etc..

This practice continues because if health managers want to keep services open they have no other choice to keep services safe, but it clearly highlights the blunt instrument that the moratorium is and the constraints its putting on the health service. It impacts on the quality of nursing care but also we are also seeing its impact on closed wards and reduced services.

Read this by Shane Ross: Humiliated, not humbled.

Anglo’s bosses immediately stood on their heads and pledged to promote the dreaded “wind-down” — the solution that they had been bad mouthing less than 24 hours earlier.

On Tuesday their mission was to keep Anglo alive; on Wednesday, to kill it.

Dukes lamely pleaded that the final solution was a “variation” on Anglo’s plan. Which it was not.

Will we now see the resignation of non-executive directors Dukes, Kennedy, Keane and Eames? Their pipe dream is in tatters. Rejected by the markets, the Commission, the Government — and undoubtedly by the people.

Not a chance.

The non-executives are humiliated but not humbled. Nothing has changed. Bankers sit tight, stand on their heads and take the money.

New location, old culture.

Miriam Cotton on women in politics, gender and merit.

John McHale on the mechanics of bond buy-backs.

Gerard O’Neill on illiberal democracy via Spiked! magazine.

WORLD Continue reading “Digest – September 19 2010”

Put down that cup of tea…

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.

Deliberately making news of news?

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…

Boone and Johnson on Ireland, again

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.