Author Archive | Mack

Modern life is fragile

Fintan O’Toole – The chance of six specific Irish horses winning at Cheltenham on the same day last week was 1.5 million to one. But it happened. Or.. The probability of the results of the Euro 2012 qualifiers being exactly as they will turn out to be is extremely low. But it will happen. Or.. more…

Ireland and default again

Yves Smith has a thought provoking article on her Naked Capitalism blog that I’ve only just got around to reading. It includes a useful, if cyncial, analysis of the raison d’être of the current stress tests / banking investigation being undertaken by BlackRock. Earth to base, this is a garbage in, garbage out exercise You more…

“We are in some pickle now”

Vincent Browne tracks the history of Ireland’s banking crisis in yesterday’s Sunday Business Post, ending with what must be the biggest understatement of the new millennium (see title). He argues that the EU will not countenance a restructuring / default of debts run up Ireland’s banks. But getting rid of some or all Of the more…

Breaking news: Belfast plane crashes at Cork airport

An RTE news story indicates that they have unconfirmed reports of 8 fatalities after a plane from Belfast crashed at Cork airport. Update – six confirmed fatalities, six people injured. From the report The Manx2 commuter flight, with 10 passengers and two crew, was en route from Belfast when it crashed in heavy fog at more…

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Eastern promises

It would appear that our Asian friends have confidence (and an interest) in the survival of the European project. Japan and China will help fund the European Financial Stability Fund that will be used to bailout European banks,  sorry,  I mean Ireland. With Japan pledging to buy 20% or more of the bonds that will more…

The European view on insolvency

The new proposed European Stability Mechanism looks like it will come into force via a change to The Lisbon Treaty, and will avoid facing public vote by referendum. It provides a process for sharing losses with sovereign creditors in the case of national insolvency. (More details on that below). In yesterday’s FT, Lorenzo Bini Smaghi, more…

Ireland can’t afford to bail out European banks

I think this point is worth highlighting more clearly. Below – Simon Johnson ex-CEO of the IMF – on who is owed money by the Irish banks German banks are owed $139 billion, which is 4.2 percent of German G.D.P. British banks are owed $131 billion, or about 5 percent of Britain’s G.D.P. French banks more…

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Euro Crisis : History repeats

The Guardian report that – the Portuguese prime minister José Sócrates insists Portugal is under no pressue from EU states to accept a euro bailout. Meanwhile After Financial Times Deutschland reported eurozone nations and the European Central Bank were urging Portugal to follow Ireland and capitulate to financial aid, the office of the Portuguese prime more…

Europe gets serious. May double the EFSF, may burn bank senior bond holders

The Wall Street Journal are speculating that the size of the EFSF may double to almost €1trn, if German opposition can be overcome. This is an effort to assure markets that Europe can bail out Spain if neccessary. Doubling the EFSF’s capacity to €880 billion would remove any doubt about whether the facility has enough more…

Il sorpasso

Due to below par second qaurter Japanese GDP growth, China has overtaken Japan to become the worlds second largest economy. Bloomberg report China surpassed Japan as the world’s second-largest economy last quarter, capping the nation’s three- decade rise from Communist isolation to emerging superpower. Japan’s nominal gross domestic product for the second quarter totaled $1.288 more…

The coming collapse of the Irish middle class

In the her excellent lecture on “The coming collapse of the American Middle Class”, Harvard professor Elizabeth Warren investigates the stagnation in real median wages in the United States since 1970, and highlights the massive amount of extra-risk assumed by families in moving from one to two income households (The Two Income Trap). It’s probably more…

Quis custodiet ipsos custodes (after they retire)?

Nassim Taleb has a thought provoking blog on the subject of gamekeepers turned poachers at the Huffington Post. Specifically he deals with regulators who use their in-depth knowledge of government regulations to secure extremely well paid employment, helping firms sail as close to the regulatory wind as possible, upon leaving public service. At Davos last more…

Why Ireland can’t borrow to stimulate

Karl Whelan explains why a Keynesian stimulus package isn’t feasible for Ireland in a blog post at Irish Economy – By the way, it gives me no joy whatsoever to write this. I would love to be in a position to recommend fiscal stimulus. The vast majority of us dismal mainstream economists believe that fiscal more…

US Ratings Agencies : Um.. please don’t use our ratings

So, just as Ireland get’s downgraded by Moody’s, the Financial Reform Bill in the USA throws a spanner in the works, potentially making the agencies liable for inaccurate ratings. Their response – ‘stop using them please’. From the Wall Street Journal (via Naked Capitalism) The nation’s three dominant credit-ratings providers have made an urgent new more…

After the storm

The Croke Park deal should ensure that Irish public sector workers are spared any further pay cuts. Perhaps worth reflecting, after a painful couple of years, that according to the OECD, Irish state workers are still among the best rewarded in the world. The Sunday Business Post report on a survey by Forfas and the more…

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Dublin : What a difference 30 years makes!

If you are depressed by the economy today, Damian Corless’ look back at life in the Irish capital 30 years ago should cheer you up no end. If the past is a different country, Dublin in the summer of 1980 was Gaza with added rock festivals. There was nothing romantic about the foul smell wafting more…

Global Crisis: Write-off or inflate debt away says Steve Keen

Aussie economist Steve Keen, host of the excellent Debt Deflation blog, has long argued that our current – record high – debt-to-gdp ratios are the real cause of the crisis. As the debt is still there, the crisis is still here. He offers a realistic assessment of our options – Having got ourselves into a more…

Recovery in action? As Intel post best ever quarterly results

Businesses are upgrading their IT infrastructure, Intel reported monster Q2 earnings yesterday – the best in it’s 42 year history. From Daily Finance Technology bellwether Intel (INTC) blew past Wall Street expectations Tuesday, reporting the best quarter in its 42-year history on strong corporate IT demand. The chip giant’s results give investors a cause for more…