And So It Begins.

Short post today, as I believe that quite soon Ireland will have no access to the Internet anyway. So what's the point? The flame of our independence is now flickering, sputtering in the darkness of our own incompetence and inability. Are we concerned? Apparently not, as the Irish media is primarily concerned with the Pope's visit to the UK, the remaining fallout from Portergate, and with the discovery of Radon in 600 Irish homes.

Meanwhile, the world media is also keeping its beady eye on Ireland, but they seem to have different interest to our local newshounds. They don't give a damn about Biffo anymore, having obviously deduced that he is not worthy of attention, and they care little for what the Pope's visit means for Ireland, or anywhere else for that matter. They do, however, care about the fact that the Government is on the cusp of calling the IMF in, and that our bond spreads have shot to over 6.3%.

If you look at the link above to the Irish 10 year bond price tracker, you will see, in the little graph at the top of the page, an analysis of the performance of Irish bonds over the last year (i.e. how much we are being charged for a loan). Two spikes are prominent - one in May, and one now. The one in May was caused by general concerns plaguing the Eurozone over the likelihood of a Greek default. The spike now, however, is all down to market sentiment regarding Ireland.

Simply put, the markets are as frightened now as they were in the midst of Greece's troubles (and the world can see that Greece is a basket-case) but this time, the terror driving our cost of borrowing is solely caused by the management of the Irish economy and banking sector, or lack thereof. We cannot blame this on foreigners - not the Greeks, not the Germans, not even the Brits.

We are about to see a homegrown crisis of Hellenic proportions.

I'm going to buy a shotgun, a tent, and some canned food over the weekend.

Leaf in the stream

I have a newsflash for you Ireland: we are not at the centre of the world. I know, I was shocked too! Apparently, that bowl of shamrocks Biffo gave Obama last St. Patrick's Day doesn't even have a special place of honour beside the presidential bed; nor does Obama give it a little pat each night before falling asleep, whispering "I love you Ireland".

Having adjusted to the fact that Ireland is not the nation on everyone's lips, and that indeed many Americans don't know where we are, and that many Brits think we still belong to them, I realise now that such anonymity on the global stage is no bad thing. Sometimes. After all, up till now our bluffing regarding the state of our financial affairs has been accepted (hook, line and sinker one might say) by the international press and, more importantly, by the bond markets. Its hardly surprising really; after all, outside of Ireland there is noone analysing the Irish economy as a full-time job. At best, our financial announcements get a quarter of an hour on the desk of the Moody's analyst who handles the smaller Euro economies, snugly tucked between a report by the Maltese central bank, and an article on the financial situation in Slovenia.

Unsurprisingly then, our bluster about "taking the tough decisions" has been accepted on face value, as no one has had the time or inclination to look behind our words. If the general information available on Ireland was positive (given the circumstances) it was broadly accepted internationally that Ireland was on the road to recovery.

However, with more negative reports emanating from our shores - as they now are - we find ourselves in a pickle. No one is taking the time to see if things in Ireland are truly as bad as the bond markets think, and consequently, it is generally accepted that Ireland is in trouble. This leads to a vicious downgrading spiral as Irish debt becomes more expensive to fund because everyone knows that Irish debt is expensive to fund. And because it is accepted that Ireland's economy has some serious structural flaws, even if we do address things, no one will believe us!

Nothing better sums up how general market ignorance about Ireland has turned from an opportunity to a threat like the recent column by Ambrose Evans-Pritchard in the Daily Telegraph. An expert on all things financial, AEP notes how Anglo-Irish Bank is a serious threat to Ireland's long-term financial stability. He notes that the €25 billion provided by the state to bail-out the banks has almost all gone to Anglo, who he refers to throughout the article as AIB (Anglo-Irish Bank), generally painting the bank in a bad light.

Only problem is that AIB is actually Allied Irish Bank which, unlike Anglo, has not been nationalised, and is still quoted on the stock market. Whether AEP's switcheroo has had an impact on AIB's share price is hard to say, as they were already in the toilet has helped push AIB's shares even further into the toilet is hard to tell. However, if even one of the sharpest financial commentators around can only allocate a cursory level of research to Ireland's financial situation, what chance have we of getting a fair hearing from the big cats of the global markets jungle? EDIT - Central Bank Governor Patrick Honohan notes commentators confusion regarding AIB/Anglo an issue.

Endgame Ireland

Ladies and gentlemen, start your fans...as a noxious substance is about to hit them. We are in endgame, in my learned opinion ( how learned you ask? Well I've read at least 3 books on economics, one of which was quite expensive. Expensive automatically means its better).

Ok, so I'm not learned. But many other people are, and they are beginning to notice things like the head of our Central Bank, Patrick Honohan, referring to the spreads on our bonds (vs the German rate, now a 3% difference) as ridiculous. In other words, when we go to borrow money from foreigners (bloody foreigners, coming over here and lending us money!) we have to pay interest rates which are "ridiculous". This is now an actual economic term in Ireland.

A number of problems are about to rear their ugly heads. A bank guarantee offered by the Irish government is going to run out at the end of September, when we will get to see whether investors truly trust the banks. I'm betting that they don't. Whats more, the debts of the stinkiest of Irish banks, the nationalised Anglo-Irish, are currently considered separate to the state's balance sheet, as the EU sees these debts as viable business assets. But that might (indeed, almost certainly) will change. When that happens, Irish debt will reach around 112% of GNP. That's right, we'll be Greece without the sun or the millenia of civilisation.

But don't worry people, our government has two clever ideas. The first is that they've gone on holidays. Hooray for holidays!

The second: let me introduce you to our crack suicide squad. Suicide squad, deploy!

They walk among us...

If you're Irish, you'll know what I'm talking about. You'll be out in the pub, or at work, or in college, and having a great laugh, talking about football or travel or whatever. Then talk will, inevitably, turn to the economy, and the usual grim tales of dole queues or emigration. And that's when one of your friends, someone you know and love (let's call him Jimmy, for arguments sake), someone who you thought you could trust with your life, will come out with one of the lines:

"Still, it has to be expected, what with the global situation."

Or

"Well, ever since Lehman's brothers, you know, the whole world has been suffering".

Or

"No one saw it coming".

Or

"We're all to blame"/ "No one person is to blame".

A chill shiver will run through you. My God! you'll think, He's one of them! Jimmy, noooo! You're a ...you're a...

Fianna Failer!

Yes, those little lies are always a dead give away: I mean, who really thinks we have 300,000 empty houses just because of Lehman's Brothers? Who honestly believes that we have 13.7% unemployed purely because of the global economic situation? Of course, when times were good, it was all down to the inspired leadership of El Berto and his gang; but now, it's as if the Irish government were only there for ceremonial purposes, and the real decisions are being made elsewhere. Well, thanks to FF, that vision of a powerless Ireland might soon come true (I've started practicing my German already: Ich mochte gerne ein kaise kuchen bitte)

This is not a tirade against Fianna Failers generally - listen, some of my best friends are Fianna Fail members. I even feel sorry for most FF members or supporters, who shuffle, embarassed, when you mention the economy, before they quickly change the subject. They're as much a victim as anyone; I mean after all, we all suffer from this mess, but they actually voted for it!

No, I'm terrified by the hardcore, the Fianna Failer with a capital FF. The ones who, even now, think that Biffo is the best choice for Taoiseach. I mean, seriously, 18% of us still think this dude is leadership material:
What was being smoked during that survey?

Such blind loyalty worries me, not simply because it suggests a stunning lack of imagination. It's also profoundly unpatriotic. Loving your country is like your love for your wife/husband/boyfried/girlfriend/ significant life partner/whatever. My wife, so she tells me, loves me, and I have a legal contract saying that this emotion is eternal and unending. She loves me despite the fact that I do little to no housework, and despite the fact that I sit on my ass in front of the telly/Playstation during most of my free time. Her love, unconditional though it allegedly is, doesn't mean that she doesn't want me to help clean a little, or get up and go for a quick jog round the block. She loves me that much, she wants me to improve myself - she knows what I am capable of.

And so the blind loyalty that leads a rump of FF supporters to put party ahead of nation is in direct opposition to what that party, THE REPUBLICAN PARTY, is meant to stand for. FF should be the party that challenges Ireland, that looks our problems dead in the eye and says "We can beat this." FF should not be about cover-ups, it should not be about excuses - it should lead the rest of society in making the sacrifices needed for economic recovery, by cutting the wages of TDs and Senators, and culling the useless quangoes which are staffed by FF appointees.

Instead of slavishly covering for the gentleman above, perhaps we need to start looking for someone a bit more like:
Sean Lemass, one of the finest Taoisigh ever, and a man Fianna Failers (including my grandmother!) can be justly proud of.

The British Are Coming! The British Are Coming...

...with a lower corporation tax rate for Northern Ireland. That loud banging you can hear is the last nail being hammered into the coffin of the Republic's economy. Currently, the North has the same rate as the rest of the UK, i.e. 28%, versus the Republic's 12.5%. I think it's safe to assume that the Stormont administration will push for a rate as close to the Republic's as possible, and London will give it to them, as hopefully it will get private sector business in Northern Ireland moving and reduce the almighty strain the 6 counties place on the national purse.

So then, let's see, we will have two economies competing with one another, with comparable corporation tax rates, one with a minimum wage of £5.80 per hour , the other with a minimum wage of €8.65 per hour (£7.20). Plus, energy is cheaper in the North.

Hm, I wonder who will win?

That's Right Israel - Both Tanks!

One of the tabloids summed it up best in its headline "You Mossad Be Joking, Biffo." Our Dear Leader, Brian Cowen, known to the faithful and not-so-faithful as "Biffo" (Big Intereseting Fine Fellow from Offally... or maybe the IFF stands for something different?) has decided that enough is enough: if Israel harms Irish citizens on the MV Rachel Corrie, an Irish-owned vessel that is about to breach the Gaza blockade, there will be "serious consequences."

I love my country, and greatly respect our Defence Forces, but "serious consequences" are not really something we specialise in; military might has never been a major priority of the Irish. Even if we compare our naval forces (those of an island nation in the Atlantic) with Israel (not exactly famed for its naval prowess, whatever about its army and air force) we don't exactly meet the mark. Just as an example - number of Israeli submarines: 3, number of Irish submarines: 0.

The question remains, then, as to whether Biffo... I mean the Taoiseach, meant economic sanctions when he spoke darkly of Israel's fate should it dare to oppose our Celtic might. Again, I would expect that the Israelis would probably be more concerned about threats from the EU generally, rather than Ireland in particular, despite the multiple, incredibly valuable, well-known and much vaunted Irelandio - Israelianio trade agreements.

Unless, given the fact that the Irish economy is still tanking, Fianna Fail and our Taoiseach are casting around, desperately, for someone to focus the public's attention on, in case Seoisamh Public notices again that our country is falling apart. You have to hand it to the Israelis - whenever you need a scapegoat, they're right on hand!

The End is Night Part III: The Island of No Jobs

The Live Register jumped a staggering 6,600 in May, making a mockery of the government's claim that we have "turned a corner". Such optimism is at best dangerous, at worst treasonous, in the current economic climate. How can an Irish government be so irresponsible as to actually claim that our economy has bottomed out and will soon start the long haul back to some semblance of real growth when multi-nationals lik HP seem set to cut jobs here? How has our economy turned the corner when we still have more than 300,000 houses unoccupied in this country, 32,300 people in arrears on their mortgage (not including the 15 odd thousand who are paying only with government support), and the prospects of ECB rate rises in at least the next five to ten years? How can our economy be on the rebound when we are borrowing €500 million a week, and as the maestro David McWilliams notes, the global markets may soon cut off our supply of credit?

It is becoming increasingly clear that this government is simply kicking to touch, playing for time and hoping that they can avoid as many cuts as possible before the next General Election in 2012. They can then hand the entire mess over to Fine Gael and Labour, who will be blamed by an amnesiac electorate for having to take truly tough decisions, before Fianna Fail can swan into power again, surfing on a wave of pork-barrell promises.

I do not hate Fianna Fail, the Republican Party, the party of Sean Lemass, the party of the urban worker and the rural labourer. But I hate this government, deeply, totally, instinctively, as they have put the selfish interests of the newly-monied and propertied ahead of the common good. There is nothing more vile or harmful to a society, and especially to a Republic, then "socialism for the rich, and capitalism for the poor". Sadly, this has now become Ireland's official state ideology.

The Rise of the Thinking Man's Shinner ... Purely Anecdotal

At a relatively recent party (of the shin-dig rather than political variety) I spent quite a long period debating Ireland's economic position with two members of Sinn Fein. The two individuals could not have been more different. Shinner Type A was what I would refer to as a "stereotypical Sinn Fein supporter" when it came to economics. His solutions to our current crisis were:

1) Tax bankers and financial workers heavily, and put a salary cap of €100,000 on all financial workers

2) Develop Ireland's universities as a means to economic progress (he couldn't elucidate what, precisely, he meant by this. I would assume he meant as centres of research excellence).

3) Follow something called the "Swedish model", which means encouraging the growth of jobs in "Human Resources" and "the Green Sector" while simultaneously discouraging Multi-Nationals from establishing in Ireland. Who we would be providing "Human Resources" services to without the Multi-Nationals was not made clear. But apparently, this helped Sweden develop from "a bunch of pirates in the 19th Century into the best economy in the world". Seriously...pirates.

Shinner Type B was...very impressive. Socialist, yet not brusquely so, with all the taxes and terminology couched in terms of social justice. When I asked him about how high taxes would dampen entrepreunerial ambition, and discourage new jobs he... agreed with me! He then went on to say how Sinn Fein should focus on taxing fixed wealth, such as property, and concentrate more on the conspicouous signs of wealth rather than discouraging workers and employers to chase greater earnings/profits.

Now, did I agree with Shinner type B all the way...no, of course not. I am, after all, very right-wing (thank God!). But what impressed me was how tailored and measured the message became as he spoke to me. This was not "red revolution" simply for the sake of adolescent rebellion; this was a targetted, considered and thoughtful approach. Does this represent a new line by Sinn Fein, where they might actually consider wooing the middle-class vote, prying voters away from Labour? Or was this guy just a one-off amid the hordes of angry young men (and women), clad in Che Guevara t-shirts and spouting canned phrases extolling a "socialist republic"? Only time will tell, but if Sinn Fein could offer a real socialist alternative, simultaneously offering something to the hard-pressed working class while promising left-leaning middle class voters better returns on taxes (i.e. a breaking of the grip of the allegedly socialist Unions), they might be on to a winner.

Weirdly prescient? Or just a really corny short story?

Last October I entered a short story competition ran by the Sunday Tribune, in conjunction with Dublin City Council, which was in honour of Bram Stoker. The aim was to begin a short story with a line from Dracula "His eyes blazed with a sort of demoniac fury, and he suddenly made a grab at my throat." Below is my effort (shockingly, I didn't win. I'm sure you must be finding it difficult to contain your outrage at this injustice).

To be fair, while the writing is hammy and cliche-ridden, it was prescient, considering the events outside the Dail last week during the Right to Work protest . This week's protest passed peacefully, but will we see a repeat outpouring of the people's righteous anger next week? Or was the disturbance only a one-off minor kerfuffle caused by some bearded lefties with too much time on their hands? And will the Gardai remain loyal to the government, or will they begin to have their doubts too?

One Step Away

His eyes blazed with a sort of demoniac fury, and he suddenly made a grab at my throat. I flicked up my shield, and through its clear plastic I saw his fingers jar painfully on the hard surface, while my other hand brought down the baton with a solid crack on his skull. The thud of metal on bone shocked me, even on this extraordinary day, and my gloved hand began to slide from the baton’s handle, as his blood slipped between my fingers.
The slightly balding, middle-aged man, dressed sensibly against the cold in a warm overcoat and wool jumper, collapsed heavily back into the mob, hands raised to his fatherly face. He mouthed a soft whimper, inaudible through the roar of the crowd, and then he was gone, his place filled now by another enraged bourgeois rioter; all their respectability washed away in this overwhelming tide of anger.
“Christ” I gasped, less a curse than a prayer for deliverance from my own brutality and the catastrophe I was watching unfold before me; the complete collapse of a nation, the dissolution of a society. To my left I sensed Pauli tense as yet another bottle swung through the air, arcing towards his shield, while Macker to my right heaved against the press of incensed bodies, trying to clear some small space for himself in this sea of rage.
Just a week ago, I would have addressed these people as “Sir” or “Madam” if I had stopped them on the street, now I was drumming them back with almost medieval violence. We were besieged by the most unlikely army; battalions of nurses, architects and IT engineers were hurling themselves against our line, trying to break through and scale the railings behind us. It would have been absurd, were it not for the underlying desperation that drove them; they knew that all was lost, they sought no compensation, no handouts; they merely wanted to hold someone to account, to savor one final, defiantly human act of justice.
Bobbing along the surface of the mob came a lamppost, long, thin metal driftwood in the sea of despair, and we steeled ourselves for its impact.

“Fall back lads!” I heard the Sergeant order from the rear, and our line folded in on itself, each guard slipping in turn through the gate behind us, backwards, always facing the mob, until we could slam the narrow metal door against the howling of the horde, and breathe deeply in this brief moment of relief, as the lamppost clattered impotently against the railings surrounding the gate.
Staring through the bars at the twisted faces and raised fists, I pondered the events of this past week, the week that had ruined my homeland. For months, we had survived with a half-million unemployed, their long lines of wasted ability and still-born opportunity streaming into the welfare offices. We had struggled on after the U.S. firms had pulled out, searching for profit in Poland ’s Limerick or China ’s Kildare. Somehow, we had even continued after the collapse of our banks, as one by one the Irish financial houses were crushed by the weight of their own lies.
Yet last week, the Europeans told us there was simply not enough to go round, someone in this ever-closer union would have to lose out. The final decision came down to a choice between saving Greece or saving us. Greece won.
We had dropped so far in the world’s eyes, first through our hubris and self-congratulation, and then through our chicanery and book-cooking, that we were considered more risky than a country that once had a junta, less commercially viable than a country where anarchists are part of the political mainstream.
And so Brussels pulled the plug; no more pay for our nurses and teachers, who were asked to be patriotic and work for free. We could not feed our prisoners, so the jails were emptied and the convicts let loose onto the streets. The hospitals went dark; the buses sat, decaying, in their stations; the desperate lines outside the embassies of the rich grew longer, as thousands hoped for escape in Australia , Canada or the U.S. And still, the government did nothing; they did not plan, they did not promise, and worst of all, they did not lead.
So it was inaction, rather than action, which had set flame to fuse, which had roused this righteous anger among the ordinarily meek, an anger which must be vented, must be sated by some small act of vengeance.
I stood behind those railings, watching my lovely city burn, seeing the crowd boil with rage, and wondered at what point would duty be overtaken by justice? When would I throw down my shield and join the ranks of the betrayed?

Pfizer - the end is not nigh!

Now, I am as grumpy a doom-monger as you are likely to meet. I mean, I really will not buy a house in Ireland till someone offers to pay me to take it off their hands; that's how pessimistic I am about the property market, chances of recovery etc.

But even I can't help but feel that the gloom merchants have spun into overdrive on the back of Pfizer's recent announcement of redundancies (275 confirmed and up to 800 potential) in Cork Dun Laoghaire and Kildare

From what I can see, these redundancies are purely on the back of:

1) The merger between Pfizer and Wyeth, and the consequent rationalisation of their workforces, assets etc.

2) Pfizer ensuring that it is lean enough to compete as it's branded drugs (most especially Lipitor) are soon to come off patent and face competition from generic brands capable of offering consumers the exact same health benefits.

Of course, 800 jobs fleeing the Irish economy at this point in time is bad news, and the personal impact is immeasuarable for those who have just been made redundant or are under threat, but the jobs that remain are more secure, and I suspect will be higher up the value chain. What's more, Pfizer's Ireland operations are now well placed to compete for higher-end jobs, especially in the area of R&D.

The real tragedy is not that Pfizer is leaving, but that successive Irish governments did not seize the chance to grow domestic pharma companies on the back of Pfizer's business here. Such an indigenous company would, if successful, not only offer more Life Sciences jobs in Ireland, but would also contribute significantly to our export earnings.

After all, as we know, pharm is "recession proof". OK, not strictly true, but even on the back of the Wyeth acquisition, Pfizer still posted profits of $4.88 billion.