See today’s, Friday 20th August, Irish Examiner, ANALYSIS 13 article title:- Time to rethink bank rescue plan (pending link… anyone got a link for this article?)
Greetings to all at the Property Pin,
Hope you’re all keeping well and enjoying the summer. Just thought I’d keep you in the news loop, so to speak.
Yesterday, I heard a Drivetime interview clip between Brian Lenihan and RTE’s David Murphy. Mr Lenihan continues to lead the country like the Pied Piper in a sleep walk trance towards financial destruction. His plausibly packaged sound-bites could never fool a competent experienced financial professional. He might fool the public, but he doesn’t fool me or you or Constantin Gurdgiev or Brian Lucey or Karl Whelan or David McWilliams or indeed any other independent, non-compromised honest economist or financial analyst with integrity.
When we hear that Bank of Scotland (Ireland) is being pulled out of Ireland by its parent Lloyds Bank Group we should be able to see what Lloyds Bank sees, viz a Zombie Irish Banking Sector and a “blown” economy. I appeal to the Irish people to wake up and see that we’re being led by an incompetent government into a worsening financial morass.
On the micro level, take the following true case of the high earning (€175k pa salaries), KPMG Chartered Accountant qualified, young (31 / 30 yr old) couple holding top level senior executive positions in international companies based in Dublin who were refused a modest (€290k) no-brainer mortgage loan (to buy a house valued at €480k) from AIB only earlier this week! The couple have net after tax income of €9,000 per month. Repayments on a 35 year mortgage of €290k after interest relief would be approx €850 per month . The couple have no other borrowings. They only have a lease/HP agreement on a €20,000 car. They and their parents have been ideal customers of AIB for more than a generation. That example just exposes AIB Group for the pathetic under-capitalised position it’s in.
Moving from Micro to Macro and on to the Big Picture level, this country is in a deepening financial shambles led by an incompetent government. The madness and incompetence must be stopped and there is a far better and sounder alternative.
The attached Op-Ed article entitled Misleading Reporting and Mounting Loan Losses at the Irish Banks spells out a pragmatic Bank Re-Capitalisation Action Plan which should be adopted straightaway. The article has been published today, Friday 20th August, in the Irish Examiner in ANALYSIS 13 under headline:- Time to rethink bank rescue plan
In addition to the article’s listed instances of misleading reporting …isn’t it appalling to be left wondering if our Government may have cast the shadow of interference over our independent Central Bank Governor by using him to “feed” into the public domain the “news” that INBS loan losses had risen from €2.7bn to €3.2bn (in fact Honohan’s scripted speech on page 5 actually stated €4bn). It looks as if Honahan may have been leaned on / “coached” to announce this “news” publicly for the 1st time in a speech at a university in Beijing during the holiday month of August. Does our government now take us all for complete fools? The absurdity is that INBS’s loan losses are de facto not less than €6bn! This is demonstrable beyond doubt yet this information has been suppressed.
I wrote my article in order to get to the truth and set out the facts. All loan losses figures mentioned have been proven by reference to the loan portfolios of the respective banks. In addition I have presented them to the Oireachtas Joint Finance and Public Service Committee. And those facts speak for themselves. There’s no opinion about them …they’re just plain facts…and those facts are indisputable …When facts are properly martialled and analysed then the solution becomes self-evident. That’s why the Re-capitalisation Action Plan outlined in the Op-Ed article is the honest correct approach to mending the Banking Sector. In due course international markets will respect that.
Keep up the great work at the Property Pin.
By the way, there’s another excellent article by Jim Power on the closure of BoSI and the impact of same on the Banking Sector and the mess the Banking Sector is in. This article is on page 18 in the Business Section of today’s Irish Examiner and it would also be worth posting on the Pin.
Every good wishes,
And best regards, Peter