Political activists aren't they great

This is so far gone that you'd have to believe that he is working for the Obama camp!

Sort of reminds me of the freakology that these loo-las get up to.

Is this a pyramid imploding?

Are we looking at the wrong comparsion? The media talk over the past few weeks has been looking at the 1929 wall street crash.

But seemingly this has the potential to be a fundamental collapse of the entire financial system. The International Monetary Fund warns of a "systemic meltdown".

Given that effectively what has occurred is that the property market pyramid scheme has collapsed perhaps we need to think beyond some problems with the banks, people losing money in stocks and a slowdown - but try and imagine what a full melt down means.

For a start paper money of whatever sort loses all value. If there is a global meltdown, there will be no hard currency to revert to. We will be reduced to barter.

I was twice in countries when the local currency lost all value. In Romania in 1990, I once went to the doctor and paid her with a bottle of "western" shampoo and in Yugoslavia in the mid 1990s when the inflation rate was so high, that Marlboro and Kent cigarettes was what you bought with your dinar as a form of stable currency.

But more interesting I spent some time working in Albania following the implosion that country had when a variety of pyramid schemes collapsed. The outcome of that was economic, social and political anarchy. UN food aid was needed to keep people nourished and the Italian army and navy and the OSCE was needed to restore some semblance of security.

The question is whether the shenanigans going on in the financial industry are the start of the collapse of a global pyramid scheme and much more than a issue of confidence. If so then its difficult to see who or what will be able to come to the assistance of a USA and Europe without a reliable currency and angry citizenship.

Psycho Palin

The globes greatest potential danger, Sarah Palin, has been found guilty by lawmakers in Alaska of abusing her power in a vindictive case of familial revenge.

Great.

Whether this will make a difference to the rednecked, racist, homophobic, gun lusting, god bothering, deytukkyerrjerbs, Fox News lobotomised American "patriots" that is her support base is doubtful.

No doubt Plain and her republican party lizards will spin it as a conspiracy by the liberal media.

Black Friday??

In a few hours the the Irish Stock Market, ISEQ, will open with an index price of in the upper 2k range. For a host of reasons I think today will see the ISEQ absolutely tank. The bail out, once copied, has not added the necessary confidence. The ECB rate cut is a nice little snifter for consumers but for corporate lending adds little.

Watch movement with the big four Irish banks. The contrasting shifts in Anglo Irish and BoI shares late yesterday suggest takeover chatter has spilled into investor speculation.

What to do, well. Auditors from outside this country should be sent in to the banks to examine the loan books and try get a true values of the balance sheets in the institutions. Only then can recapitalisation occur as the companies value will be clear (or clearer anyway).

Given the failure of the regulator and the Central Bank and the general stench of cronyism that pervades Irish life an audit done by the Central Bank or Dept of Finance is not going to engender confidence that's is needed.

The bail out to where?

Where is this all going. Ireland, followed by Greece and now one of the big Euro four, Germany.

Watch the Irish banking stocks tomorrow, I expect drops, as their unique competitive advantage from last tuesday disappears.

Here's whats most worrying about this; it is plainly obvious that at least one of the six guaranteed Irish institutions is a basket case - weighed down with loans tied up in deprecating property.

Its increasingly difficult to see how their collapse, or lets say, their end of being an independent company, can be avoided. The benefit of the Irish bail out was that, overnight, bogey Irish institutions became globally unique (with exception of Northern Rock).

But now that the Germans, Greeks and presumably the other Euro countries by the end of the week, are also guaranteeing deposits, their USP disappears. At this point they will be naked to the market and off we go again, collapse in share price and flight of capital irrespective of Ireland's guarantee. Remember confidence is an emotion.

I have no doubt that the end of this week will deliver a longer term indicative verdict on the Irish Banks future.

p.s. - From Finfacts.com. Worth a read.

Door..shutting..horse..after...barn etc

I must say I find this odd. In todays Irish Times, ICTU boss, David Begg has a passionate, informed and well written topical critique of the global banking system and model of capitalism. There is nothing in the article I disagree with he sums up the mud we are in.

"Let us be absolutely clear. This crisis was caused by greed and recklessness in our own country, on Wall Street, in London and in other major financial centres. Senior executives permitted speculation on a huge scale on investments they ill understood. Speculators have exacerbated the serious rises in fuel, food and raw materials.

The losers are many and include workers in the industry and, more generally, pensioners, families, firms seeking investment capital, and all of us as taxpayers now bailing out banks. It will take years to recover the money - if we manage to do so - and our future ability to fund high-quality public services is now jeopardised."

Excellent - this needs to be stated repeatedly in black and white. And Begg is a well connected and a player in power circles in this country.

But.....

He is also been a Director of the Irish Central Bank for the past thirteen years!

By no means do I think Begg is at fault for the banking crisis in Ireland but what I would like to know is what exactly he did during all those years to try and prevent the inevitable results of the greed that he writes of.

There is no point of a senior Union leader being on the Board of the Central Bank in Ireland if they are not there to keep an eye on precisely what he despairs of. He has been at the heart of the Irish Banking System, he had held this powerful position for 13 years and yet now, way too late, shouts Fire.

Windfall tax needed on banks

The people who we should seek not to reward or protect in the Irish bail out are the executive and management of the banks and developers with outstanding loans sitting on lands banks and unsold properties. Properties unsold because they won't lower the prices. A comfortable enough position they find themselves in because the banks are refusing to call in the loans.

However there is another group of people that are currently benefiting massively from the bail out.

The new shareholders of Bank of Ireland, Allied Irish Bank, Anglo Irish Bank and the others. Since the furtive conclave on Monday morning of bankers and the Government that cobbled together the plan, there has been a four fold increase in the volume of these banks shares traded.

In the past three days Anglo Irish share price has more than doubled, Bank of Ireland has risen from €3.26 to nearly a fiver and Allied Irish Bank has seen a nearly 50% rise.

The "deal" that the Irish Government put together ensures, that by not taking an equity stake in the banks, that the state will not garner any of the hundreds of millions in value that the Irish taxpayers have added to the value of the banks.

Its safe to assume that some of the most recent trades are new. They bought into a risk free investment. Yet the Irish taxpayers are the ones underwriting this.

What needs to be done is the introduction of a targeted capital gains tax on bank shares to accompany the bill. As the legalisation stands the profit on any capital gains is merely 20%.

For the banks lets increase this to 50% for the lifetime of the state guarantee.

The bail out is appartenly only about liquidity. If so and also to reduce the short term speculation and bring stability to the share price lets see a chunky tax introduced that ensures the Irish state itself can directly benefit from our taxpayers insurance policy.