Terminator 3. The Return of Morgan Kelly

The great man has been quiet for quite some time. Let us recap his legacy. Morgan Kelly is only known to the public for around:

3 or 4 Irish Times articles between 2007 and 2011. He has not written an Article for 3 years but the ones he wrote were devastatingly well written as well as entirely correct. I think he only wrote 4 in total.
1 appearance at the Kenmare Economics shindig around 2009/10
3 or so appearances on the likes of Prime Time during that time.

And then a long silence of 3 years. Until now that is.

irishtimes.com/business/econ … -1.1718156

This appearance was recorded and the meeja got their hands on it in recent days.

SME’s owe around €50bn between them, 75% of private sector employment is in the SME sector. Of the €50bn around €30bn of the total of €50bn of debt is property related debt. Much of that €30bn is interest only extend and pretend sort of debt.

I feel another Irish Times article coming on I do. No doubt our government hopes most sincerely that it will not appear before the local elections are over and I suspect that the EBC has no wish to read one of Morgans articles as they will not doubt get a deserved lash or 3 themselves. :slight_smile: :slight_smile:

Can we get Brendan Keenan to refute MK’s numbers, (without an evidence), & tell us all how Irish SME’s only have an insignificant amount of debt ???

Official Government response below, apparently I (as a taxpayer) am going to yet again answer Irelands Call

Ireland’s Call

Come the day
And come the hour
Come the power and the glory
We have come to answer
Our country’s call…
From the four proud provinces of Ireland


Ireland, Ireland
Together standing tall
Shoulder to shoulder
We’ll answer Ireland’s call.

From the mighty
Glens of Antrim
From the rugged hills of Galway
From the walls of Limerick
And Dublin Bay
From the four proud provinces of Ireland


Hearts of steel
And heads unbowing
Vowing never to be broken
We will fight, until
We can fight no more…
For the four proud provinces of Ireland.

Talk is available online youtube.com/watch?v=8LCofep … ata_player
Its a great, if not somewhat depressing, talk.

Even though it was ‘only’ a talk to a student society, this video has attracted media attention this morning. Morning Ireland had somebody on (journalist from Independent?) who had little to contribute except to question how a politically-unconnected academic like Kelly could have insider knowledge about the workings of the ECB. They later had a spokesperon from ISME who was happy that Kelly had raised the issue (elephant) of SME debt.

Nobody addressed Kelly’s recommendation that any debt write-downs be done publicly and with complete transparency. As it stands, according to Kelly, the banks can at their discretion write down the loans of distressed borrowers in secrecy. I share Kelly’s concern that the criteria for these write-downs are not public. Ideally the beneficiaries should be public too, although this might cause embarrassment if done in an insensitive way. Since I’m helping to foot the bill of these write-downs it’s only fair that I see how my charity is being shared out.

Satoshi and then Kelly, the prophets have returned! :stuck_out_tongue:

In my honest opinion, MK got too much credit for calling the bust.
It was already underway when he wrote his famous article and simply echoed the general opinion of the pin at the time.

Nevertheless, he wrote it when the only other show on the road was McWilliams and that should be commended.

I found his latest utterings simply reflective of my own thoughts - a wall of cash was thrown at the problem.
But it was not used to solve the problem, only soften the symptoms.

The problem is still out there to be tackled.

It was interesting to learn of the non-core business SME debt.
Although it was something I was aware of, the percentage in property surprised me.
I suspect a huge amount of this mortgage is carried within pensions.
Could anyone tell me if this poses an additional problem when repossessing ?

Just to add something to the SME debt issue.
A lot of my clients would be in this position.
But most are coming up to normal (65-68) retirement age.
Whilst I know many (all ?) will be forced to work beyond this, the questionable ability to repay into their 70’s must prey on the banks minds.

It would make it easier to repossess in that it makes sense for the holder to stop paying into the fund (stop throwing good money after bad). There’s no recourse to the individual. My pensions guy was telling me about a bunch of BTLs in the UK where he simply told the purchaser to stop paying into it, the shortfall falls on the mortgage provider and they can go jump.

I don’t know if it [the liability] would transfer across different funds held by an individual but I suspect not.

If the equity was there or thereabouts and the bank wanted to repossess but the individual wanted to wait for “recovery” ( :unamused: ) I suspect the bank would have a strong hand*

Thanks for that.

note [re. pension stuff]
for Irish stuff (the basic stuff anyway) the max LTV was 75% and the term was max 15 years - which may have made the frothier investments less ‘doable’ at the time - and an investment taken out in 2006 should have a lowish LTV at this stage

Did they have to be I&C or could they be IO ?

Newstalk just covered this with their business reporter and Ross Maguire (who else) of New Beginnings.

Ian Guider said it was true about the big debts but as the banks had’nt foreclosed on mortgages, than they probably would’nt do so on SME’s either as job losses are bad for politicians. So Kelly is doom mongering up the wrong tree here he said.
Maguire said he deals with lots of entrepreneurs! who’s businesses made property plays and now have huge debts. Basically, these debts need to be seperated from the business and written off. Then the business can start hiring again and our country’s problems will be solved.
Johnathan Healy, the presenter, said write offs had to be the way forward as the banks had thrown money at these innocents, and they would’nt be in such debt only for that!

Thats the template argument right there that all the establishment will have …so another arse hammering for the taxpayer coming down the lines, but I guess we all knew this anyways

pretty sure the former - Interest and Capital.

I never heard otherwise and it wouldn’t really be prudent to expect a lump at 15 Years.


For Bernard McNamara typesyou may have been talking about a different type of Fund though

irishtimes.com/business/sect … -1.1020470

MK absolutely did not echo the opinion here, or anywhere else as a matter of fact. He was working on a totally unrelated matter and happened to comment on what was happening in Ireland. He did not comment because it was Ireland, he merely presented his opinion, based on his experience , based on facts pertaining to other countries and what they went through.

He was slated for it. The Media followed him, they began to dig into his personal life, they followed him bringing his kids to school, naming the school they went to and so on.

He and his family received a serious backlash, the media tried to do a number on him and he withdrew. I for one could not blame him.
Now he has dropped the latest “bombshell” onto the “intelligent” and onto the “media” and even though I have heard broadcasters cite this as “a dose of reality”, they are still critical of him for “not defending his stance”.
He’s not presenting a stance, he’s presenting what “normally” happens.
He’s presenting what may happen if what “normally” happens doesn’t happen.
He’s not putting himself in the firing line again.

I can personally tell you that as he did not like it the first time, he wouldn’t leave himself open to it a second time.

I have huge respect for him, not only does he refuse to engage with the assholes who run mainstreiam media, in doing so, he leaves them floundering like a goldfish in a bowl with a leak - and that is what they fucking deserve.

It is what it is…

  • 1 onestepbehind. Morgan Kelly also had articles about his and his wife’s salaries printed in the news papers and (according to the grapevine within the university sector) his employer was subject to significant pressure (unsuccessful) from ‘senior figures’ within the Cowan government.

Usual Irish story. Media opinion swings like a flock of swallows, everyone in the same direction, dissenting voices are mistrusted and subject to the usual approach to public debate in Ireland - plan the man not the ball.

Besides, MK has a full time job in a sector which, he points out himself, is chronically understaffed with academics at least. Why should he spend his time in the RTE studios?

On every other occasion in which he has intervened in the media debate he has published a full academic working paper which sets out his analysis in detail and is freely available for the general public to download for free and take or leave. I assume he will do the same on this occassion?

I’d say that pisses the journalists off royally.
A dry piece of analysis for them to pore over. What they want is a phone call or interview that’ll give them a soundbite they can just regurgitate and hang “colour” on, but instead he gives them the workings and leaves it with them to critique the analysis.

I think you misunderstood the point I was making.
My criticism was more on the media’s (hindsighted) lauding of his 2007 article.
MK has my full respect, of course.

As I mentioned only last year, my view was that he did some research, popped his head up from the pulpit, preached the good word and sat back down again.

Did he actually get lauded by the media? (media other than ThePropertyPin.com, NamaWinelake, et al)

Only after events dear boy proved him right…

+2 mocame and onestepbehind

Public discourse is often cheapened by the media here with a focus on the personalities (or ‘agendas’) of proponents rather than the issues they raise. Kelly was a victim of this first time around and his courage in speaking up is to be admired, whatever about the merits of his arguments. Justice Peter Kelly was another one who got both barrels for doing the right thing.

It’s not easy to pigeonhole Morgan Kelly personally and that might explain why a lot of the public analysis is flappy floundering flailing and flaccid.