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IN THIS ISSUE: Irish Earthquake; Spanish Tsunami; The Turn of the Tide???; Mick Wallace Metaphors; Housing – The Higher Math Exam; Flipping Property; Never Give Away Your Curtains; Irish Banks Stink; You’ll Never Beat the Irish; Life Goes On; Blackberries

IRISH EARTHQUAKE

The month began with a magnitude 4 earthquake off the west coast of Ireland. It was powerful enough to rattle windows and cause undulations in cups of tea along the Atlantic seaboard. Scientists calculated that the quake generated enough energy to create a tsunami almost a full inch tall. You can imagine the destruction as the ocean surged inland drowning half a dozen ant colonies.

Back in 1984, there was a 5.5 quake off the east coast of Ireland. That last one was strong enough to provoke my mother-in-law to call us in shake prone California and boast about the experience.

If the schedule holds, we’re due another in 2040, by which time perhaps the Euro crisis may be sorted. Thanks to links sent by helpful newsletter subscribers, I’ve been reading detailed cautions about Spain’s problems for more than a year. With this kind of early warning system available to its central bankers, the Eurozone has prepared feverishly, erecting financial safety walls that could safely contain a one inch financial tsunami.

The photo shows an Irish Tsunami in full spate.

SPANISH TSUNAMI

This one’s a mite higher, the fiscal equivalent of a hundred foot wave.

After years of botched and uselessly gentle stress tests, no one’s really sure how much uncollectable debt sits on the books of Spanish banks. The government says 64 billion and has requested one hundred billion euro for good measure. But, exactly how high this Spanish Tsunami really reaches is anybody’s guess. Perhaps it’s tall enough to inundate Italy with its additional trillions of debt.

With monetary law and order submerged, looters – also known as ‘The Markets’ – have run amok. The interest rates on Spanish bonds doubled in a mere fortnight. A pledge of 100 billion in aid from the EU and ECB actually made the situation worse!

The Spanish government recognised the utter futility of turning bad bank loans into sovereign debt. Unlike our stupids, Spain balked at the prospect of inflicting bankster debt on ordinary citizens and further ruining its national credit rating. But, banks can drown more easily than nations and Spain’s bankers loaded up on so much dead weight in the last decade that no one wants to bet on them without a strong incentive. That incentive, of course, is extortionate interest rates.

Toward the end of the month, Cyprus also requested a bailout for their banks. Greek Cypriot banks invested heavily in Greek bonds. Big mistake! The country needs between 6 and 10 billion euro out of a total annual economy worth 17.3 billion. These days 10 billion in debt seems to be the equivalent of a day’s lark at Disney World, what the Irish call ‘pin money’.

THE TURN OF THE TIDE???

Totally unexpectedly, the leaders of the EU – meaning Angela Merkel of Germany – finally did something at their sheduled summit meeting during the last days of the month. So low were expectations that the surprise agreement reached by this lackluster crew caused markets to react with a euphoric jump in the value of the Euro. We’ll have to wait to see how long this optimism lasts, but at last reality seems to have seeped into EU discussions.

Specific details will be thrashed out in the coming months, but crucially there was an agreement that sovereign debt MUST be separated from bank debt. Money can be lent to banks directly and Ireland is specifically included in any retroactive adjustments. The Irish Foreign Minister promises that this agrement will make the load on Irish taxpayers easier. And the unsustainably high national debt will fall. The EU leaders also agreed to several measures designed to stimulate Europe’s moribund economies.

The media’s analysis: Germany and France have always been the key drivers of the European Union. But, France’s newly elected President joined with Spain and Italy and basically put it to Angela – change direction or the Euro is finished. The interpretation in Germany is that it took till 4am in the morning for the rest of Europe’s leaders to wear her down. A more complimentary alternative is that Germany’s remarkable leader recognised that the time for dramatic action was at hand.

Since well before Christmas last, economists have been using the term ‘end game’ to describe the Euro’s state of play. The latest phrase, as the Euro boat drifted and the roar of the incoming tidal wave grew louder, became ‘moment of truth.’ So far, the currency has been amazingly resilient. Maybe, just maybe, we’ll avoid the messy breakup that seemed inevitable.

Finally, a positive note. Germany has moved. Now there is some hope for the currency and the Union.

THE METAPHOR CONTINUES

Ireland’s most colourful parliamentary deputy also turned out to be, forgive me, fiscally underwater. Mick Wallace, he of the long, curly blond hair and pink shirts, was elected to the Dail/Parliament as an independent last year. Mick was a builder of much renown because of his unstinting generosity with kids’ sports and local soccer teams.

Mick admitted that he knowingly submitted a false tax return when his company ran into difficulty back when the construction industry took a nose dive. Subsequently, his firm went bust. So, Mick’s 2.1 million dollar settlement with the Revenue Commissioners won’t be repaid any time soon. The delinquent Deputy agreed to dock his Dail salary by 50pc to repay this debt. If the people of his constituency re-elect him for the next 45 years, he’ll have cleared the lot.

What’s breathtaking to me is that the man would run for public office knowing that this might come to light. What is it with grandiose chancers? And why do such characters so often gravitate to politics?

The Irish have always had a soft spot for the lovable rogue, the character whose heart is in the right place even if his pocketbook or unmentionable bits are not. I guess it’s a sign of my 37 years of association with the island that I still think kindly of Mick. But vote for him?

HIGHER MATHS EXAM

Educational reformers are always calling for the curriculum to be "relevant". Here’s a relevant sample from this year’s high school graduation Leaving Certificate Higher Math paper.

" A property is said to be in “negative equity” if the person owes more on the mortgage than the property is worth. A report about mortgaged properties in Ireland in December 2010 has the following information:

Of the 475,136 properties examined, 145,414 of them were in negative equity. Of the ones in negative equity, 11,644 were in arrears. There were 317,355 properties that were neither in arrears nor in negative equity.

(i) What is the probability that a property selected at random (from all those examined) will be in negative equity?"

The problem with this question, besides the tricky little fact that the numbers in arrears are total smoke screen and should be ignored, is that it’s seriously out of date. Irrelevant.

The number of mortgage holders in arrears now tops 107,000 – some 14pc of the market and nearly a ten-fold increase since the Maths paper numbers were relevant. The nation’s largest bank, AIB, puts their own arrears at 16pc.The credit agency Moody’s used these figures to argue that Irish house prices, down 50pc since their height, will fall another 20pc.

FLIPPED

But, another study noted that the pent up demand is so great among thirty-somethings that there could be a rapid upward spurt in prices if the banks ever start being banks again. And, for the first time in five years, house prices rose last month. Caveats – so few houses are exchanging hands that this statistic is suspect and statistically insignificant. It may signify bottom, or like so many other so-called turning points, merely a lull in the fall.

Another positive note: Independent newspaper examined the Central Bank’s figures and concluded that "the number of borrowers unable to pay their mortgages is far lower than the official figures suggest." http://www.independent.ie/national-news/central-bank-figures-overstating-number-in-mortgage-crisis-3147111.html

If you’re thinking of buying a house, there are really two markets. Dublin and Cork – and everywhere else. In the two cities, vacancy rates are down but the rest of the nation lags. Outside the main cities, there are a quarter million vacant houses currently unsold and there are at least a quarter million more that will hit the market immediately if prices take an upward tick. By some estimates, Ireland has a forty year surplus of housing stock.

Prognosticators’ advice remains the same: buy if you get a very good deal and plan to stay put for the next decade or two and, big if, if you can find a bank willing to lend you the money. If you’re planning to ‘flip’ your housing investment in the next few years, then you’ve probably flipped out.

The two biggest Irish property and rental sites are http://www.daft.ie and http://www.myhome.ie

NEVER GIVE AWAY YOUR CURTAINS

With the banks such a mess, where should you put your money? Under the mattress is so obvious a target for thieves that some people have turned ingenious. For instance, there is the woman who sewed thousands of Euro into her curtains.

Unfortunately, the drapes were given to a local charity shop. Now there’s a great argument for buying "vintage".

Lucky woman. Observant staff found the stash and put out a call over the public airwaves. The woman was reunited with her curtains. But, it raises the issue, yet again, of exactly where to hide your nest egg. Here’s an article that examines the options under the zippy title " Where will your nest egg be safe as euro teeters on edge of meltdown?" http://www.independent.ie/opinion/analysis/stephen-kinsella-where-will-your-nest-egg-be-safe-as-euro-teeters-on-edge-of-meltdown-3143806.html

Here’s a clue: US bonds. But, read the article.

"IRISH BANKS STINK"

Ulster Bank, part of the spectacularly loss making Royal Bank of Scotland, gave lots of people the chance to practice for a total shut-down of financial institutions. Thanks to a computer glitch, the firm stopped processing transactions for the better part of two weeks – and it’s not fixed completely as I send this out.

Anyone living from check to check now had to add several weeks to their wait. The other banks offered short-term, interest free overdraft facilities for Ulster Bank customers and Ulster branches throughout the country stayed open right through the weekend. The bank assures everyone that no customers will lose out from the snafu.

One columnist summed everything up in one pithy line: "Irish banks stink."

Let me repeat my bank closure – and earthquake! – survival advice. Put some extra money in the cookie jar, lay in extra bags of pasta or rice and some canned goods, keep a car tank at least half full, and try to keep a few days extra supply of key medicines and heating fuel around the place. Some bottled water is essential and there’s no doubt that if it all goes blooey, you’ll appreciate an extra few rolls of toilet paper.

YOU’LL NEVER BEAT THE IRISH

Them’s the words of the soccer chant: "You’ll never beat the Irish!" Unfortunately, in the Euro Football Championships, everyone did.

Croatia vs. the boys in green: 3 to 1. Spain versus the unbeatable Irish: 4 to 0. Italy against the Irish team which had racked up 14 unbeaten games to get into the tournament: 2 to 0.

Heading into the games, the nation was longing for victory. Tens of thousands of fans headed to Poland for the qualifiers and everyone was hoping for a great series of bashes. And, in the end, it was the fans who did the country proud with everyone agreeing that when it comes to party time, absolutely no one beats the Irish.

When all hope was gone in the last minutes against the must-win game against Spain, the tens of thousands of Irish fans who’d headed off to Poland burst into song. The Fields of Athenry was never more affecting. http://www.youtube.com/watch?v=jVE3CEeoLl0

LIFE GOES ON

Hey, no one’s starving. Tens of thousands of fans can manage a vacation in Poland. The kids still go to school, sports games fill the airwaves and local hurling pitches, the shops are still open, the tea still strong. Of more immediate day to day concern than economics – this was the wettest June on record. There was widespread flooding – no metaphor intended.

Life goes on – quite literally. Ireland continues to have the highest birth rate in the European Union. Not only that, there were 17,000 more births in 2010 than a decade earlier. The Irish can boast that they’re the "best fans in Europe" but that’s not all they’re good at.

ZINGERS

Irish Language Summer Schools are Ireland’s summer camps. Mornings are spent in study, the afternoons and evenings involve recreational activities – all in the Irish language. But, sometimes… http://thedailyedge.thejournal.ie/video-500-gaeltacht-students-in-a-giant-festival-of-colour-500405-Jun2012/

Clonakilty, County Cork – a river runs down Main Street. http://www.youtube.com/watch?v=Sdg71hEhT2s

Sponsors:
Number 31 – a very special Dublin Bed and Breakfast – http://number31.ie
Gold Coast Golf Resort – A County Waterford hotel and self catering accommodations – http://www.goldcoastgolfresort.com

CORRECTIONS

I’m getting as bad as the banksters. Last issue I reported that a stock broker went bankrupt when it turned out that the 2.6 billion euro they’d put on the plus side of the ledger really belonged on the debit side. No, it was only a 2.6 million error, not billions. Sure, that changes everything. Now we can understand why this fundamental error occurred. How could anyone expect them to keep track of such a small sum? A few million? Pheh. Mailroom salaries.

An official correction: The last government bought 55 million Euro worth of electronic voting machines which were promptly shown to be totally, devastatingly unreliable and easily hackable. Millions more were spent storing these election stealers until finally, at last, they’ve been sold for scrap. Value – 70 thousand.

BLACKBERRIES

Some gardeners insist on weeding or digging in mulch and other such nonsense. I have even observed neighbours working so hard in their gardens that moisture has risen upon their foreheads. Clearly, these folks are raising the wrong crop.

My advice is to grow prodigious amounts of ‘rubus fruticosis’, the gentleman farmer’s friend. Luckily, the species thrives in Ireland and grows in all types of Irish soils, in hedgerows, woods, wasteland, in fact anywhere it gets half a chance. The plant is vigorous and annual growth of over 9 metres has been recorded.

The diligent fruticosis farmer should begin each season by ensuring that a favourite seating apparatus is fully functional. If necessary, clean it thoroughly and add fresh padding. Then fill a tall glass with a favourite beverage. Sit. Drink. For a bumper crop, repeat this procedure daily.

In particular, there’s no need to dig in new specimens. Fruticosis reproduces primarily by extending offshoots and these, after taking root, extend further still. Each newly established plant is genetically identical to the parent so a single ‘individual’ can spread over miles of countryside. Such a unique strain of fruticosis must compete with its neighbours and it will succeed only if it can outgrow them or if it is superbly adapted to its own small niche.

If you closely inspect a thriving copse of fruticosis, you will note much variation – some plants feature thick cables, others delicate leaves and thin stems. These are not just older and younger versions of the same plant but genetically separate subspecies. The whole mass thrives precisely because each plant is intimately customised to its own wee cranny.

However, you don’t want to inspect these robust masses of fruticosis too closely because they have noticeably sharp barbs. Non-botanists often refer to these spiny points as thorns. This is incorrect – they are ‘prickles’. Similar errors are made by non-specialists when they label the fruiting body of fruticosis as a berry. Botanically, it is termed an "aggregate fruit", composed of "small drupelets." Drupelets each contain their own seed, so the plant exponentially increases its chances of successful reproduction because the fruit contains so many seedlets.

These ‘aggregate fruits’ grow only from secondary buds, never from the primary stem. This is why the wise fruticosis farmer does not interfere with the plant’s growth patterns. Cut back a stem and you risk losing that year’s crop. No, the best way to encourage a bountiful harvest is to grow fruticosis along hedges with a fine southern exposure and leave them alone till cropping time.

They reach full flavour in late August and early September and can be gathered then by farm labourers. Mature drupelets have a shine of ripe perfection much sought by veteran pickers. It should be noted that young fruticosis pickers are not averse to sampling the tangy product and total yield often suffers thereby.

Some areas are particularly noted for their fruitage. The Irish word for berry is smear – as in jam thickly spread on toast. In my own area, we have the township of Coolnasmear named for its famous ‘smeara dubha’. But, ‘rubus fruticosis’ grows just about everywhere in Ireland. Aspiring farmers take note – here is the perfect crop.

STEREOTYPES

Heaven Is Where:
The French are the chefs
The Italians are the lovers
The British are the police
The Germans are the mechanics
And the Swiss make everything run on time

Hell is Where:
The British are the chefs
The Swiss are the lovers
The French are the mechanics
The Italians make everything run on time
And the Germans are the police

This old joke has loads of variations. Simply insert the nationality and prejudice of your choice. It comes to mind because Europe is returning to type as the endless Euro crisis cruises endlessly along. The Greeks are passionate and violent – just as Homer and Herodotus portrayed them. The Germans insist everyone must follow strict rules – theirs! The British are blowing raspberries at the rest of the continent. The French are making a show of themselves.

And the Irish celebrate life while passively resisting the exactions of the landlords and the landlords’ agents. The latest set of landlords are the troika of central bankers and bureaucrats in charge of Ireland’s money, the EU-IMF-ECB. The local agent is the Irish government. The latter, bowing to the lords’ demand, has decreed a 100 Euro household charge. This is acknowledged to be the first step toward a full property tax.

Every Irish household, roughly 1.7 million of them, received a leaflet reminding us this tax is due by end of March. Yet, halfway there, less than 100,000 households had paid up. The Campaign Against Household & Water Taxes was jubilant. They say that non-payment is a good way to tell the troika to eff off. If their interpretation is correct, then there’s a lot of effin’ and offin’ going on.

BORRRRRING….

Financial crisis? That’s so 2008. 2009. 2010. 2011. 2012…

We’re all bored to death of it and the media has begun to reflect the zeitgeist. We’re back to car crashes on the front pages.

Personally, I think it’s down to SAD – Seasonal Affective Disorder. Not getting enough sunlight during the long, grey Irish winter leaves the whole place SAD. The syndrome starts in November when budget leaks top the news and continues through January and February when Christmas postparty depression rules.

Come the spring, roughly St. Patrick’s Day, there’s a fine stretch to the evenings and the national mood picks up. That’s been the way of it every year since the mess began. Saint Patrick chases away not only snakes but also the blues.

REFERENDUM

The precious right of the people to vote directly on EU treaties is exercised by only one nation in the European Union. Clue – that country’s iconography includes rainbows and pots of gold. Leprechauns everywhere rejoiced when the Attorney General reaffirmed this right and decreed ‘ a referendum was needed because the treaty was “outside the EU treaty architecture” mentioned in the Constitution.’

This is THEEEE issue of the year. For an excellent Q&A summary, go to the Irish Times at http://www.irishtimes.com/newspaper/ireland/2012/0301/1224312583348.html I’ll cover this one in greater detail as the big day approaches. The voting date has not yet been set.

ZINGERS

A joke doing the rounds – A Greek, an Irishman and a Portuguese go into a bar and order a drink. Who picks up the bill? A German. (In fact, the Irish people are propping up the German banks who made losing loans to Irish banks. But, jokes do not carry truth in lending small print.)

My daughter sent me this: "How amazing is our president?!?" In this old YouTube clip, Michael D Higgins lambasts a Tea Party representative in most unparliamentary language. Of course, this was before he became President. Wait til the very end for a measure of the man’s passion. http://youtu.be/B5OWRRJh-PI

"And President Higgins even keeps our tea at the perfect temperature! Is there nothing the man can’t do?" http://on.fb.me/x33kLO

IMMORTAL WORDS

"No Taxation Without Representation." Two centuries after becoming a rallying cry, American schoolchildren still study these illustrious words. They inspired a revolution.

This month, the people of Europe were similarly moved. The chairman of euro finance ministers upheld the divine right of bankers when he insisted that Greece must fulfil the obligations agreed by its racked, hanged and quartered Parliament. And here are the words that will inspire financiers unto eternity:

"There will be No Disbursement Without Implementation." Immortal!

RATS

We read this past month that the state is paying many of the developers who brought us low two hundred grand a year to manage their bankrupt properties. This comes on top of revelations of breaches of government pay caps for some favoured advisers and bankers.

Compare and contrast: imprison a rat in a clear plastic tube that can only be nudged open from the outside. Then give a cage-mate this choice – open a tube with a fragrant chunk of chocolate or free the trapped comrade. More often than not the rats choose to free each other rather than hog the stash of goodies. Rats, in other words, are capable of empathy.

This report in the prestigious journal ‘Science’ should give us all hope. If rats can be so selfless, perhaps executives of bailed out organisations insistent on perks and bonuses can rise to the moral heights achieved by rodents.

MY LOCAL GIANT

Everyone knows Irish giants are a cantankerous lot. Sure, didn’t Fionn mac Cumhail (Finn MacCoul) build the basalt columns we call the Giant’s Causeway in Northern Ireland just so he could grapple with a Scottish giant? And after an English giant carried away a woman who had caught Fionn’s eye, wasn’t he so enraged that he scooped up a mighty handful of stones and turf and hurled it after the departing thief. Unfortunately, it was dark so Fionn’s toss missed and it plonked instead into the Irish Sea. Today we call Fionn’s pile of peat and stone the Isle of Man. The space from which the scoop was taken filled with rain and stream water and now its known as Lough Neagh, the biggest lake in Ireland.

Fionn must have made journeys all over the island because many high peaks are named after him: Seefin, or the Seat of Fionn. But, Fionn wasn’t the only gargantuan presence in Ireland. In my parish, there was a local giant named Dermot, after whom it’s said a local river was named.

The story told about Dermot is that one day he was sitting on a local peak and skimming stones around the parish. Suddenly, Dermot spotted a large giant atop a mountain in a nearby range also tossing boulders. Words were exchanged, one thing led to another and Dermot decided to show this interloper who was the mightiest giant around.

So Dermot picked up a huge boulder and hurled it at the rival giant. Twenty miles it sailed before the giant on the other side of the county plucked it from the air in his enormous fist. Boulder in hand, this fellow wound up and with all his might sent it hurtling back at Dermot.

But, despite his best effort, the other lad couldn’t quite reach Dermot. The boulder fell short, landing with a thud in a field at the base of the mountain where it broke in two. There it sits to this day. Perhaps this is why the shoulder of the local hill just above the standing stones became Cnoc a Chomórtais, the Hill of the Contest. Dermot was the victor and the other giant slunk away in disgrace.

These weren’t the only standing stones attributed to Dermot. There was also Diarmaid Liath – “Grey Dermot”. This large pillar stone stood on a small mound overlooking a local river until it was moved in recent years. It sits now in the graveyard at a nearby Church. The rock which Dermot so easily tossed about required the combined efforts of a large crew of volunteers, diggers and trailers to move to its present location. There locals can admire the giant’s plaything. It’s gigantic!

THE SCIENCE OF THE MORNING AFTER

Your inner ear resembles a roller coaster devised by a carnival ride engineer. Tubes swoop this way and that while the bottom half looks like a snail shell. This snail part is the cochlea, the hearing end of your inner ear. Ignore this spiral and examine the fair ground ride gone wild at the top.

Three tubes rise precipitously in different directions before plunging back toward what look like a pair of bulging eyeballs. These semi-circular canals are filled with a gel. Shake this gel excessively and you get dizzy. Yep – this is the body’s balancing system. All those twists and turns help you tell if you’re taking a nosedive or leaping skyward.

Unfortunately, your inner roller coasters can be fooled. An infection of the inner ear can throw off the whole system. So can alcohol.

Alcohol is lighter than semi-circular tube goop. Infuse your bloodstream with plenty of alcohol and it begins to diffuse into the inner ear, displacing the heavier gel. Get enough alcohol sloshing around the semi-circular canals, moving back and forth, up and down, side to side… you’re lucky if you retain enough balance to hang onto the sides of a porcelain throne.

Worse, the rule is ‘last in, last out’. By the morning after, your liver metabolises most of the alcohol in your bloodstream. But, the inner ear is still a floating punchbowl. Back the alcohol goes, reversing out of the inner ear. As it diffuses back across the membranes into the bloodstream, the gel starts moving again. Whoooops – here we go a second time.

There are many traditional Irish cures for a hangover. There’s the full Irish breakfast – bacon, sausages, black and white pudding, mushrooms, fried tomato, fried eggs, soda bread, toast, baked beans and lashings of tea. Then there’s a dip in the sea – another heartstopping remedy. There’s the two raw eggs for breakfast and lunch cure, the lieing in bed all day wrapped in a duvet watching old movies therapy and the two aspirin every four hours and drink lots of water antidote. The famed ‘hair-of-the-dog’ management system involves extensive self-medication.

Each time-honoured treatment has its champions. Science, however, has identified only one sure methodology to treat mornings after. Shun nights before.

BACK TO THE FUTURE

Jobs. Ireland is fixated on them.

Back several hundred moons ago when I was in high school, my debating team wrestled with the topic of automation. Machines and even robots would soon be doing most of the work, we argued. In the utopian future, a few workers would oversee the mechanical contraptions, and most of us would enjoy increased leisure and time to ourselves.

Freed of the drudgery of mere work, we’d be able to devote our minds to higher things. With our machines doing the heavy lifting, human beings would have time to do as we pleased. This would not be a threat to workers and their unions, but the exact opposite, the final triumph of man over want and need. Work? Who would need to work with everything mechanised.

Well, I’m still waiting. It’s true that labour saving devices have changed the way we toil. To take but one example, a single farmer manages herds that would have taken a team to handle a few years ago. But, I have not yet observed any of my hard working farm neighbours lying abed till noon while robots milk the cows. Secretaries still secretary, and teaching machines have not yet displaced classroom pedagogues.

It’s all very disappointing. I was expecting that by this stage we’d be spending our afternoons composing sonnets or painting watercolours while sipping tea poured by our household robots. Quite the opposite has happened – contraptions haven’t freed us, just made us available 24/7!

Call me old fashioned. I still like the concept: our machines do the work while people skite around in flying cars. So, I call for a radical rethink. It’s time to go back to the future when jobs weren’t the goal. Once upon a time we aspired to no jobs!

PECUNIARY MECHANISMS

Europe’s leaders appear to agree with me about the need to shed jobs. Here’s a suitably monetised sentence that I think nicely describes the official position.

EU leaders agreed this past month to increased fiduciary regulation of member state budgetary processes via systematized pecuniary standards requiring prudential fiscal oversight via assessable financial mechanisms.

Nonsense. But, no more nonsensical than what was agreed in summit by 25 of the 27 EU leaders. Tight targets will restrict the amount of debt allowed in annual budgets. That’s a worthy goal, but right now only mighty Luxembourg meets the targets. We are all to aspire to be good Luxembourgeois.

Until the very moment in 2008 when Ireland’s impossibly stupid former rulers nationalised all bank debts, Ireland hit the targets as well. In other words, these rules would not have prevented the Irish meltdown. These new rules do not address the central issue – the unsustainable debt overhang from that drastic decision and similar ones throughout the EU.

These rules impose further austerities on European citizens at the very time when it is clear that austerity is driving European economies ever downward. Oh, the leaders made the usual noises about providing jobs and they set aside some money for training. But, this agreement looks very like a jobs robber.

Ireland may, or may not, get to hold a referendum on the agreement. The current government was heartened by the first poll on the matter showing that a majority of citizens will probably vote yes on tighter EU oversight of Irish budgets. This amazes me since every anecdote I’ve heard or read suggests the exact opposite.

Why would the Irish people vote yes? The EU has made it clear that they’ll turn off the money taps and allow Ireland to default on its debts if it doesn’t sign up by July. Many noted economists declare that Ireland would be better off to take such a hit, slough off the unsustainable debt that is sinking the country and then come roaring back within a couple of years. A lot of folks apparently regard that as an economic experiment too far.

MERRY GO ROUND

Europe’s Catastrophic Blunderers, the ECB, may just have blundered into a temporary solution for Europe’s borrowing crunch.

In the last newsletter I reported how the European Central Bank tried to increase bank liquidity by offering 3 year loans at 1pc interest. The ECB was surprised by the response: worried banks drew down half a trillion euro in less than a week. The regional banks had no real use for this money so they immediately deposited it back with the ECB, earning one quarter of one percent.

Well, the banks found a more profitable use for these funds. They’ve invested in European national bonds. This means that Italian banks are buying Italian government debt with money provided by the ECB. Instead of an anaemic one quarter of one percent interest, the banks now making seven and eight percent with the borrowed funds.

Result: bank balance sheets are in healthier shape and so are Italian bonds. It’s the same for all the troubled European bond markets. The flood of ECB money is driving down bond prices. For the first time since the Irish bailout, Ireland’s bonds are selling for less than 6pc.

While their initial press release expressed surprise at the scale of bank drawdowns, now the ECB intimates, wink wink nod nod, that this was really their plan all along. Whatever, for now it’s working. Forbidden by their charter to intervene in primary bond markets, the ECB is letting regional banks do their work for them. The tidal wave of ECB money is, probably to the Central Bank’s own surprise, taking the pressure off.

All of which illustrates just how crazy the whole system has gotten. The ECB invents funds backed by bankrupt nations to give to bankrupt banks to prop up the bankrupt nations who stand behind the ECB….

ZINGERS

A 1.2 billion euro house

The Irish village that said ‘no’ to austerity

Great Irish writer John Banville on the emigration of the Irish

Number 31 – A great place to stay when visiting Dublin

BELLS

Church bells reverberate across the Irish countryside. The sound we hear these days is mostly generated electronically and requires no bell towers or ropes or sacristans to pull them. No matter. The tolling hours are the product of sixteen centuries of worship and invention.

Early Christians did not ring bells. Nor did they draw attention to their gatherings. There were too many hungry lions in the amphitheatres of the Roman Empire. Only after Constantine’s conversion in the fourth century could Christians openly proclaim their religion.

The first use of bells by the Church dates to the fifth century. Saint Paulinus, the Bishop of Nola – a town not far from Naples in Italy – needed some method to call monks from their far flung tasks and summon them to worship. Nola had been a centre of bronze casting for many centuries, so the bishop had at hand the necessary expertise to solve his problem. Some unsung smith must have developed the solution: a hand held bell. Rung rhythmically, the bell pealed a call to prayer.

The use of these bells caught on rapidly. Within decades missionaries bound for Ireland considered bells essential equipment. The first Irish missionary in the records, Saint Declan, forgot to bring his when crossing from Wales to County Waterford. But, his prayers were answered when a large boulder carrying the bell caught up with his ship and then led him to what is now the town of Ardmore. Thus did the first church bell, in Irish a clog, arrive in the island.

Patrick and his disciples constantly used bells. Whenever a new church was formed, the disciple in charge was presented with one. In Connaught alone, it is recorded, Patrick handed out more than fifty bells. Three household smiths had as their primary duty the making of these hand held instruments.

Patrick’s own bell survives. This small clog measures 6 and 7/8 inches tall and was made of two iron plates hammered into a rectangular shape. The rounded corners were riveted together before the bell was dipped into melted bronze. Patrick’s Clog-an-uudhachta, or the ‘Bell of the Testament (so called because it was willed by the saint to one of his disciples), can be viewed along with its more splendid and costly later medieval shrine at the National Museum on Kildare Street in Dublin.

Naturally, so important a relic comes with a tale. One storyteller assures us that "of all sounds in the world, it seems the tinkling of a consecrated bell is the most intolerable to a demon; and the silvery tones of this particular bell… had more terror for our Irish reptiles than all the other bells of the country set ringing together."

These ringing bells kept getting bigger and deeper in tone. The great Gothic cathedrals and enormous stone monasteries of the high middle ages required louder and larger bells. Casting these great bells was a cutting edge technology. Ironically, one reason Europe took an early lead in the development of cannon was that the necessary metallurgic expertise was already in place.

Many ancient churches preserve bell towers. In my own little parish, a church erected during this period boasts a double bellcote. A bellcote is a small framework for hanging one or more bells in churches with no bell tower. So, we can be sure that even in this back-of-beyonds area locals heard church bells pealing over the countryside for hundreds of years.

Bonnnng. Bonnng. Bonnng…

The bells call. Time is passing. Remember what is important. Come to prayer… Come to prayer.

INDOMITABLE

Most visitors to Ireland come across the final verses of Yeats’ last poem. "Under bare Ben Bulben’s head, In Drumcliff churchyard Yeats is laid." Midst current predicaments, the less known fifth stanza bears repeating. These lines contain the great writer’s admonition to future Irish poets – and to the Irish people.

"Sing the peasantry, and then
Hard-riding country gentlemen,
The holiness of monks, and after
Porter-drinkers’ randy laughter;
Sing the lords and ladies gay
That were beaten into the clay
Through seven heroic centuries;
Cast your mind on other days
That we in coming days may be
Still the indomitable Irishry."

IN THIS ISSUE: Wonderful Possibilities; Taste of Ireland; News by the Numbers; Counting Beans; The ECB Dishes Out the Beans; Ireland’s Zelig Kicked Upstairs; What is Griskin?

WONDERFUL POSSIBILITIES

Four guys downstairs in a Dublin flat, four girls upstairs. And that, succinctly, is how I ended up married to an Irish lass, with two acres in a rural parish, a mortgage, two cars, two kids, the lot.

But, back when I met my future bride, her family naturally was concerned. Who was this stranger and was he some kind of white slaver out to kidnap their daughter?

They were right to be concerned, because I did indeed shanghai their lovely colleen, sweeping her away to a mountain village in California. Despite attending the wedding, the familial fears were only allayed when she returned home for a long vacation less than a year after departing Irish airspace.

Their temporary loss turned out to be Ireland’s gain. For my new bride was a high school teacher and in America she confronted challenges that had not yet touched the Emerald Isle. Rude students, parents more concerned with their offspring’s athletic prowess than their ability to read, even a colleague who ran a real estate operation from his classroom while his students completed endless work sheets – these were not challenges which had arisen in the parochial schools of her youth and early career.

My Irish innocent learned to cope. Long before such problems hit Irish shores, she mastered classroom discipline. She learned how to deal with angry parents and fellow teachers. She gained expertise that transformed her teaching, that transcended her convent school upbringing.

We returned to Ireland nearly 20 years ago and since that time more than a thousand Irish students have gained the benefit of her teaching. My wife’s American experiences directly translated into a plus for Ireland.

Last year the better part of 100,000 Irish men and women emigrated. Out into the world they went, to see new sights and learn new ways of doing things. Eventually, many will return to Ireland, bringing with them increased know-how and enriching Irish society with their insights.

In the long run, I am very confident of Ireland’s future. President Michael D Higgins expressed it well in his inaugural speech:

"I enter the ninth Presidency with a sense of humility, but also with confidence in the great capacity of our people, the people of Ireland, not only to transcend present difficulties but to realise all of the wonderful possibilities that I believe await us in the years ahead…

Muintir na hÉireann, ar aghaidh linn le chéile leis an dóchas agus an misneach sin a bhí is ba choir a bheith i gcónaí in ár gcroí."

(Irish people, we continue together with the hope and the courage that was and should always be in our hearts.)

AND RETURN THEY WILL

In the coming year, many of us will visit these overseas emigres. And when we do, we won’t be allowed to forget the essentials: Cadbury’s chocolates; rashers along with white and black pudding; Irish oatmeal; Oxo bouillon cubes; Irish Breakfast Tea and above all Tayto’s Cheese and Onion flavoured potato chips.

The Cadbury’s packs flat, the Oxo takes up no room and the tea and oatmeal chunk down in their own corner of the suitcase. The meat is best picked up in duty free to avoid security and lost luggage issues. Which leaves the Tayto’s. Try to get a pack of delicate crisps through airport baggage handling – it can’t be done. Unless, of course, the recipient is happy to receive cheese and onion flavoured crumbs.

So return they will! How else can they get those crisps?

Dara O’Briain Irish comedian on Taytos
http://www.youtube.com/watch?v=MNSIV_nDeMo

NEWS BY NUMBERS

186. For the first time ever, the number of road traffic deaths fell below 200 this past year. This downward trend has continued for six straight years. This is down from the all time high of 650 in 1972 – when, incidentally, there were far, far fewer cars. The key has been enforcement – enforcement of drink driving laws above all, the introduction of speed cameras, a societal attitude change toward drunk drivers, better roads and bi-annual car tests.

5 billion. That’s the number of litres of milk produced by Ireland’s 1.1 million milk cows. Farmers, particularly dairy farmers, are celebrating another banner year. The national goal is to ramp up production by 50pc to 7.7 billion litres in 2015, the year the quota system ends. The big question is what effect this intensified production will have on the ecosystem.

An Irish cattle mart – a must see tourist attraction.
http://www.youtube.com/watch?v=_P4Yg53uGKg

1.3pc. That is the number of successful asylum applications in Ireland, by a long shot the lowest rate in the EU. The European average is 27pc. In 2011, a total of 3,700 asylum applicants were turned away at the airports and ferry ports, while 1,250 applicants were allowed in. Of this winnowed group, there were 17 successful applications.

39. Murders fell from 53 in 2010 to this year’s low. Why? The Gardai/police are winning more battles and recession has cut cocaine sales. With less money to play for, gangland murders have dropped. You’d think the fighting would get more vicious, but that’s not what the crime reporters tell us.

63 billion. The amount Ireland owes for supporting its criminal banks.

2. The number of people arrested so far in connection with this banking mess. Both were released within hours. Here’s a phrase that sums up the bankers’ protected status: one of the men was "arrested by appointment". How genteel.

100. A property tax of 100 Euro has been assessed on all residences in the country. The catch for the government is that there is no compilation of who owns what. Home owners have to register themselves and self assess. A group of parliamentary independents has urged home owners to ignore the tax.

18. Singer Sinead O’Connor made the front pages of all the Irish papers when she married her fourth husband in a pink open-top convertible in Las Vegas. The marriage lasted 18 days. Sinead swore she’d never marry again, but after a separation lasting 10 days, the happy couple were back together. Sinead explained that "her caveman had come around to get her".

COUNTING BEANS

Open a bag of dried beans and begin counting. One, Two, Three, Four… Wait – there’s too many of them – I lost count.

If you’re going to count beans accurately, you must pay close attention. Those who spend their lives paying close attention to beans soon learn to separate them into piles, or they put them in little clay bowls. Ten beans to the bowl, then count your bowls. Done.

We call this "a counting". And though most of us scratch our heads in wonder, there are people who love "a counting." Beans and bowls and bushels and barrels – a counting they shall go.

Countants, for by such a name are they known, are much respected for their skills at bean and barrel counting. They find themselves consulted on many diverse matters requiring arcane knowledge. Though not noted for their playfulness, Countants do love to play Hide The Bean with one another. He who can hide the greatest number of beans from other Countants is highly regarded and well rewarded.

The one thing that’ll ruin a Countant’s day is to interrupt him-her in the midst of complex numerical manipulations. It’s no good asking a Countant to look up from his bowls and bushels and admire the grand vista spread before his vision. Countants count, and messy stuff like human behaviour must be reduced to similar consistencies, modelled, calculated and… counted.

Black swan events, panic, democracy, liberty and faith cannot be computed. They literally don’t count – so countants don’t bother. Irrational human behaviour is simply not their area of expertise. Beans – that’s what they know.

The last thing you want to do – EVER! – is put bean counters in charge of public policy. A society concerned with more than beans properly leaves key decisions in the hands of the people’s representatives. Europe’s problem, Ireland’s problem, is that the bean counters have a death grip on public policy.

The continent of Europe is well supplied with Countants. It remains to be seen if it can produce the necessary people’s representatives.

DISHING OUT THE BEANS

The European Central Bank, the villain in Europe’s endless drama, is the world’s leading example of why bean counting does not prepare its practitioners to deal with human psychology or even basic economics.

Take Mrs. Murphy as an example. Every week like clockwork she stops into her local bank branch and withdraws 200 Euro for the week’s groceries. The bank is prepared for this predictable behaviour and makes sure the necessary cash is on hand. But, this week Mrs. Murphy is throwing a birthday party for her young Jimmy so she needs extra money for party hats and balloons and a bottle of Jameson’s whiskey to calm her husband’s celebration-shattered nerves. Unexpectedly the bank needs an extra 100 euro on hand.

The bank manager keeps enough extra funds to handle such unpredictable events, but this evening he needs to borrow more so that the next day’s business can continue. So, he puts on his hat and coat and visits the bank down the road. "Can I please borrow enough money to get to the end of the week?" he asks. In a normal world, his neighbouring bank manager says, "Of course."

This inter-bank lending is the fluid that keeps the whole banking system liquid. Money sloshes back and forth between the banks to smooth out all the birthday parties in Europe.

But, if the lending bank figures it’s going to be left high and dry, it won’t lend money to its neighbour. And, this is what has happened throughout Europe. The regional bankers know better than the dimwits at the ECB that they’re in trouble and they know that Europe’s so-called stress tests were useless piffle. So, they won’t lend to each other because they can’t trust their fellows to repay them.

The ECB decided to pour extra money into this inter-bank loan market to get it flowing again. So, the Central Bank opened its vaults and offered money to any bank needing a temporary loan. Regional banks were told they could borrow funds for up to three years at 1pc.

Surprise! It only took a week for the local and regional bankers to lighten the ECB of half a trillion Euro. This was magnitudes more than the ECB forecast. And, another surprise, these local bankers still refused to lend to each other. Instead, they deposited the money back with the ECB, earning only one quarter of 1pc.

Now, why would banks borrow money they don’t really need and pay four times what they’re earning in interest to do so? Duhhh… even the dunderheads at the ECB should be able to figure this one out. The banks are looking a few weeks down the road and what they see are possibilities of apocalypse. They see that Mrs. Murphy might come into her local bank and clear out enough money for all ten of her kids to have birthday bashes. And when Mrs. Reilly sees her neighbour withdrawing money, she might get worried and take out enough for some festivities of her own. Ditto Mr. Walsh, Ms. Kelly, the young Byrne lad….

The bankers are worried and, quite rationally, they’re not taking the long view. They just want to be able to survive a tsunami. They want Aswan Dams worth of money on their books. And now here’s the ECB offering local bankers funds that they don’t have to worry about paying back for three whole years. You bet they filled their buckets to overflowing.

This was totally predictable behaviour. Yet, the ECB had no idea that it would happen. They’re still focused on the beans, not the people who grow or utilise the beans. The ECB can’t even predict the eminently predictable behaviour of their own kind of people. Yet, they insist on telling the European peasantry how to act, what they must cut, and which governments must kowtow and how deeply they must bend their heads.

To repeat a line from an earlier newsletter: ECB – Europe’s Catastrophic Blunderers.

UPDATE – IRELAND’S ZELIG KICKED UPSTAIRS

In the last issue, I detailed the disastrous career of Kevin Cardiff, one of the key architects of Ireland’s current problems. The new government was determined to dislodge him from his position as Secretary of the Department of Finance by foisting him on the EU. But, Cardiff’s reputation had preceded him and he was voted down by the European committee examining his credentials.

The Irish government twisted arms and promised who knows what, and in the end they succeeded in dumping him upstairs at the European Court of Auditors. Why they couldn’t fire him is beyond me, but he’s safely out of their hair now that the entire Parliament voted him into his quarter of a million year job. He’s Europe’s problem now. God help Germany and the rest of them.

WHAT IS GRISKIN?

How much do you know about traditional Irish cooking?

1. What is Griskin?
2. Why should you kill a Goose in the morning?
3. Brotchan Roy is a broth made from what grain?
4. What do we call Flummery today?
5. Where would you get Sids?
6. What are "Shell Eggs"?

1. Griskin is the lean part of a loin of pork or lamb. Less fat meant less tasty, so when the ‘big house’ butchered a lamb or pig, they’d share out the griskin, spare-ribs or scrag-end of the neck with poorer neighbours. These less desirable cuts were added to the cooking pot along with spuds and onions. Thus Irish stew was born.

2. The careful cook killed the goose in the morning so that it wasn’t hungry. The bird was shut in an empty shed the night before so that its crop was empty. Immediately plucked, the longer pinions were left untouched. These made an excellent brush for the top of the stove. Hung by its feet for a week, the bird was then ready to be cleaned. After plucking the preserved pinions and drawing out the crop from the neck, the cook was supposed to "put in the first fingers of the right hand and loosen the ‘insides’ as far down as you can reach." After that, it really got messy.

3. Brotchan Roy was made by frying flake oatmeal till it was toasty, then adding liquid – meat or vegetable stock or milk if you had it, water if you didn’t. Stirred, then boiled, the chef then added add leeks, salt and spices and simmered the dish for half an hour. This meatless dish formed a major part of the diet of the ancient Irish.

4. The old word for jellies, or jello, was ‘flummery’. Boiled calf’s foot stock was the setting agent. A typical recipe of the 1700′s called for "bitter" and "sweet" almonds to be placed in a basin, then doused with boiling water to make the skins come off. After blanching, the almonds were crushed in a marble mortar, then the calf’s foot stock was added. Sweetened with "loaf sugar" and mixed with thick cream, flummery made a tasty dessert.

5. Sids are the inner husks of the oat grain. In some locales, the miller would carefully retain the sids. Mixed with oatmeal and buttermilk and left to stand in lukewarm water for two days and nights, the soured mixture was strained and left to settle. The sediment was called the "sowans" and the clear top the "swats". The cook would pour off the clear liquid and boil the sowans with fresh water. "In olden days people with ‘bad stomachs’ sometimes lived on a diet of sowans which was reputed to cure them."

6. During the rationing of World War II, Northern Irish families received an average of one ‘fresh’ egg per week. These were called ‘shell eggs’ to delineate them from dried eggs. A popular recipe of the times suggested using reconstituted eggs in a batter of milk and seasonings. Left over sandwiches would be dipped in this batter, then fried in lard.

These examples come from the wonderfully entertaining "The Cookin’ Woman" by Florence Irwin and published in 1949. Florence lived in County Down, so you’re forgiven if you scored less than perfectly. No doubt, those of you from different locales could teach Florence a trick or two of your own.

Scott

Special Report
Wednesday, 7th December 2011 – Pearl Harbor Day

SCREWED ON RIGHT

I’ll keep these short. But, this is a historically important moment and there’s news worth knowing.

The recently delivered Irish budget cut a grant for disabled teenagers. There were good technical reasons that the government cited, but the public, the back benchers, the media absolutely crucified them.

To their credit, the government immediately rowed backwards. There will be no cuts in spending for the disabled. This sure beats the week of crisis the last set of stupids put us through when they cut old age pensions. Eventually those dunderheads caved and retreated after concocting a strange face saving ‘compromise’.

So, the Irish have established their bottom line. Whatever happens, protect the disabled and the elderly.

This is a society with its priorities screwed on right.

D-DAY

The crucial summit of European leaders starts in just a few hours – Thursday the 15th. The pressure is on, with bond rating agencies ready to issue downgrades if they don’t like what they hear. What the money boys want is for the Germans to pick up the bill and they don’t care about anything else. The rest is just details.

The Germans remind us that the world ignored them while they went through seven years of bottomless pit time when they absorbed the East after the Wall fell. They learned their lesson the hard way and don’t see why they should take the hit for the party boys who played yahoo this last decade.

First, a detail. No way is this summit ending on the scheduled Friday. It goes without saying that it will go to Sunday night. If they leak promising news, they might get Monday. But, that’s probably about it. Tuesday???

Just a reminder. If it all goes wrong, the Euro is finished. Knock-on repercussions will be the bursting of any bubble out there. By far the world’s biggest bubble is China. A titanic crash looms.

IS IT SUSTAINABLE

If we get through this one, the basic problem will remain. The current system ain’t workin. It’s not sustainable to have 99pc picking up the tab for 1pc. It’s not sustainable to throw the earth’s natural systems out of whack.

It it ain’t sustainable, it won’t last. Watchwords for the 21st century.

Scott
http://www.movetoireland.com

Special Report – Tuesday, 6th December

EMERALD EARTHQUAKE

Ireland does not have earthquakes. There’s the occasional minor tremblor every decade or three, but the place is geologically stable. So I never thought my earthquake disaster preparedness would come in handy.

The basic rules of earthquake survival are to build wood structures that can sway when the earth ripples. Have on hand two weeks of food and water. A camping stove is a useful implement, a first aid kit a must. I knew this because I looked out my back window at the San Andreas Fault in California. If it can sink San Francisco and Los Angeles, then I figured I’d better take some basic precautions.

It never ceases to amaze me how willfully ignorant some folks insist on remaining. Knowing that the most dangerous earthquake fault in North America sits the other side of their patios causes most folks to deliberately turn away. Que sera sera, whatever will be…

Sorry, that’s not me. So, I’m giving you fair warning that I’m going to talk disaster preparedness. Go bury your head in the sand now.

Still with me? Then let’s talk Euro, the financial equivalent of the San Andreas Fault.

THE FAULT LINE

Europe is rapidly slowing to a halt. In Ireland over the last week two huge business deals fell through because the overseas backers felt it was too much of a gamble to invest in the Eurozone. One set of investors was North American, the other Chinese. The money guys are closing the taps and whatever happens will come before too long. Many economists say we won’t make it past Christmas.

There’s an upcoming summit of EU leaders this December 8th and 9th. This will mark the 15th or 16th or some such ridiculous number of times that the lads have met to sort out the Euro problem. The problem is that credit has dried up and several sovereign governments look likely to default on their debts without a huge transfusion of cash.

The only ones with that sort of money to throw around are the Germans. And they don’t want to be lumbered with the debts of Berlusconi’s Italy, let alone those of Spain and Portugal and Greece and Ireland and now Belgium is looking weak…

Angela Merkel insists Germany will not prop up these peripheral profligates with a Eurobond. What’s a Eurobond? It’s a financial tool designed to ease money out of the pockets of the Germans and into the hands of the periphery.

If Merkel walks away from some form of German guarantee – call it what you will – then the risks of buying European debt will be reflected in the usurious rates that these nations will have to pay their neighbourhood loan sharks. The shylocks will demand a knee cap or a pound of flesh and pretty soon the price will get too steep for even the most daring borrower. Instead, they’ll default.

This is what the economists say will happen. This is what Europe’s Commissioner for Economic and Monetary Affairs Olli Rehn meant when he said “We have 10 days to save the Euro.” The ten days are just about up because that summit I mentioned a few paragraphs back is coming right up. This week. Now!

In preparation, Angela Merkel and Nicolas Sarkozy have had more assignations than a college couple. They’re thrashing out some kind of compromise that will be presented the rest of the Eurozone leaders this week.

Merkel has her own political problems. She has to sell any agreement to bail out the feckless PIIGS to her own people and she won’t be able to do that if they haven’t signed up to tighter fiscal controls. She wants a new European Union with new treaties ensuring that this mess doesn’t happen again.

My bet is that the situation is so clearly desperate that Angie will get what she wants. The summit will probably stretch into Saturday and Sunday. If everyone agrees to kowtow to Germany’s plan, the Euro will hold. For now.

If ever there was a time to kick the can down the road, this is it! In two years, Italy could get its act together, Ireland could kick into gear, anything might happen.

THE RUMBLE

But, if Angela doesn’t get what she needs to bring her people with her, then she’ll walk out that summit door and the Euro will collapse. It might take a week or two, but I’d bet on a fairly instant reaction. Anyone with significant holdings of peripheral debt will try to get their money out because they know they’re not going to get paid the full amount. Beyond that, I leave it to the economists to lay out the scenarios.

Common sense says Angela won’t walk away. But, it’s come down to that. A single person walking out the wrong door could sink the Euro.

THE EARTHQUAKE KIT

People everywhere have the same reaction to a disaster.

1. Pick up the kids from school.
2. Head for the grocery store and buy anything you can lay your hands on.
3. Fill up the gas tank.
4. Go to the bank and/or ATM and get your hands on as much money as you can.

I watched this happen with the Cuban Missle Crisis in 1961 – before ATM’s existed, mind you – and again and again after natural disasters. We all watched it happen when war threatened the Iraqis and most recently after the earthquake and tsunami in Japan.

The collapse of a multinational currency is likely to produce a similar response. My advice is to pray it won’t happen but to be prepared, just as for an earthquake. I do NOT advocate cashing out and buying gold or taking similar huge moves. When everyone comes out of that summit all smiles you’ll feel pretty foolish.

I am no fortune teller. I bet the Euro will be “saved”, at least long enough to limp along a few more months. So, speak to your financial adviser before doing anything drastic.

What I’m talking about is getting your euro-quake kit together. The premise is that, just like in a tremblor, you only have to hold on long enough for help to reach you. After a few fearful days, everything will settle down again. It’s just that the world will be different. Think New York one week after 9-11. Nothing is the same – everything’s the same.

What I’m recommending is being able to hold on for one week. That’s a safe margin for governments to shut down the banks, re-issue some new form of national currency and for some sort of normalcy to return.

So, here are the basics of the kit.

Lay in a few extra gallons of water.
Keep the cars full of petrol during this week. When they drop below 2/3rd full, get a top up.
Stock some extra food – enough to get through a week. Don’t do exotic – just normal stuff.
Top up home heating oil if it’s lower than halfway.
Buy some extra bags of coal.
Make sure there’s extra toilet paper, sanitary pads, and such.
Fill medicine prescriptions promptly.
Put some cash in the cookie jar – lower denominations like 10′s and 20′s.

If commerce comes to a complete halt for a few days and no one is willing to accept money because they have no idea what that money is really worth – then you have to be able to ride out a few days of “bank holiday”.

There are going to be lines of worried people if the worst comes to pass. You don’t want to be part of that scene. You want to be home. It will sort itself out at the most basic level – I need formula and diapers for my baby, open that store! – after a few days.

Don’t go crazy. Just be prepared.

EARTHQUAKE PROOFING YOUR SAVINGS

Unfortunately, if Angela chooses Door Number One when she needed to pick Door Number Two, it’s going to be a LOT harder to preserve your savings.

What happens if the banks collapse and the government’s deposit insurance is needed? Here’s an instructive lesson from November 2009. A private Dutch bank, DSB, failed after a spooked public withdrew nearly three quarters of a billion Euro in just 12 days. You can read about it at the BBC site – http://news.bbc.co.uk/2/hi/business/8323991.stm Commentators say that this bank’s situation was unique.

Most savers were caught short. They got only an initial payment of €3,000 per depositor. The rest was tied up in litigation and red tape. As in the Dutch situation, it could take a while to get your hands on your money. How long can you hold your breath?

If there’s a run on the banks and a full scale panic, what they’re likely to do around Europe is close all the banks for 3 to 5 days. During that time all cash in the vaults will probably be stamped with a physical, ink stamp designating it as Nua Punt or somesuch. That’s what the economists interviewed tell us. Then, the banks will re-open after 3 to 5 days and the public will be able to withdraw funds but now only Nua Punt. All the monies in accounts in Ireland – and this includes Ulster Bank, Rabobank, and Danske Bank – will be denominated in Nua Punt – or whatever they call such a reestablished Irish currency.

If the Irish government is unable to fulfill its guarantee, they’ll put brakes on withdrawals just as happened DSB bank in Holland. At that point, it would be good to have money in Ulster Bank or RaboDirect or Danske Bank, which are guaranteed by England, Holland and Denmark. Such funds might be more accessible if the contagion hasn’t spread as deeply to these societies. Maybe. But, no matter what, all Euro in any of these banks operating in Ireland will now be denominated as Nua Punt.

The real problem is that the Nua Punt will be guaranteed by a government which is so deep in debt that it will never climb out, and no Eurozone to backstop it. So, the value of the Nua Punt will drop in comparison to the New Deutschmark and the British pound and the dollar and the yen and remimbi. It is from these nations that the bulk of Irish imports comes. If the Nua Punt falls in value by 50pc, then suddenly all goods from these countries will cost the Irish 50% more.

And since Ireland imports most of what is consumed here, there will be a HUGE spike in the cost of living. People will stop buying pretty much everything that isn’t essential. The internal economy will probably take a nose-dive.

However, companies making exports will enjoy bumper business since our products will be cheaper. Whether that will result in more jobs is an open question since we’ve seen the world’s wealth be hijacked by an increasingly small percentage of earthlings.

Those Irish people who have had the foresight to pile up their funds in cash will probably get hit as well. These folks will want to travel to Germany to hand in their 10,000 euro in 50 euro notes in exchange for German New Deutschmarks. But, I’ve seen in the Netherlands how access to the banks is tightly controlled and I have to assume such controls would be put in place everywhere.

For example, there could be a rule that anything more than 1,000 euro can only be cashed out in a bank in your home country. Present ID please. Or, you may cash old notes only where you have an account. So, if you already have a German account, then you’re okay but someone off the street is not. In the Netherlands I know that the only way you can open and maintain a bank account is to prove that you are a resident of the Netherlands. If Germany has such rules or institutes them, then the game is up. There will be short term loopholes, but I wouldn’t count on cash Euro notes being a safe haven.

The crash of the Euro would be such a tremendous event that I think no place could count itself safe from contagion. Antarctica maybe. I’ll bet on the Irish to keep their feet on the ground in the midst of this catastrophe, but the same will be happening all over Europe. Within days that will feed through to the bubble Chinese economy which is decelerating rapidly as is. The US might like to think it won’t be affected, but US banks, overextended hedge funds, sovereign debt gamblers will all take enormous hits.

APOCALYPTO?

How realistic is this little game? Like I said, it’s come down to a single person making a decision yea or nay. Right now! This week! I do believe the answer will be yea – but I’m willing to buy an extra bag of coal this week and get my prescriptions filled a few days early.

There’s no harm in being prepared. Especially when the rumbling is so very loud.

THE IRISH BUDGET

For two days the two Finance Ministers pummelled us with cuts in services and increased taxes. Two newspaper headlines catch the zeitgeist: Debt by a Thousand Cuts and Don’t be Old, Poor or Sick.

As is bog standard at these events, everyone interviewed was angry and full of complaints. The two cuts that really hit hard were big slashes in supports for single parents and teens with disabilities. It all might have gone down more palatably if the Ministers took a whopping salary cut themselves. And it certainly doesn’t look good that the Taoiseach/Chief lobbied to raise the pay of an old pal, even though this breached the government’s own salary caps.

This crowd’s honeymoon is over. The feeling is “Meet the new boss, Same as the old boss.” And all this imposed hardship will raise less than Ireland will pay out this year to hedge funds who bought totally unsecured bonds in the nationalised Irish banks. And we get to do this same thing next year and the year after that and yet again – and again.

The only cut about which there is national unity is to stop paying unsecured bond holders. We’re set to pay these billionaire gamblers more than this entire budget exercise will produce in the coming year. The political pressure for such basic fairness will build and build. Whether it will make a blind bit of difference I can’t say.

A New York Times article explains the difficulties people are facing. The article finishes with a question: “Why Ireland would want to spend its time being a model student in the context of the broader European mishandling of the situation, I don’t know.” Good question.

http://www.nytimes.com/2011/12/06/business/global/despite-praise-for-its-austerity-ireland-and-its-people-are-being-battered.html

You can read endless detailed discussions of what it all means at the three national papers:
www.irishtimes.com
www.independent.ie
www.examiner.ie

Scott
http://www.movetoireland.com

IN THIS ISSUE: Da Euro; Zingers; Amsterdam on the Liffey; Riches to Rags; Zelig Ireland; Wading In; Trap; The Hairy Irish

OY GUT

Oh Lord, not again! Da Euro.

So, what happens next? If it comes to it, a central core of continental nations will probably maintain the currency amongst themselves. Those who do will have to sign up to a much stricter fiscal union THEY tell us. THEY is Angela Merkel and Nicolas Sarkozy since the supposed democratic institutions of the European Union seem to have gone walkabout.

One of these fine years, the voters may or may not get a chance to have a say. I bet that no matter the risks involved, many people will take the opportunity to stick it to the guys on top.

Ireland? The Republic has an unsustainable debt if the world economy goes south and the western world slides into recession, or eeek! depression. The happy spots are agriculture and other export oriented businesses, but the internal economy is struggling. The media is filled with desperate stories, particularly now that the coming year’s national Budget is due. Dooom and glooooooom.  

The audience awaits the thrilling conclusion with baited breath. Will it be as bad as it sounds? How many of us will slide into arrears in coming months? How come all those election promises made only 9 months ago have been abandoned?

Oh, geez louise! Turn off that news! Close that computer and step outside. Take a breath of air. Go on – won’t cost you a cent. Take a short walk. No one’s charging for that – yet. Isn’t it great to be alive in ‘interesting times’? Isn’t it great to be alive – full stop.

ZINGERS

I heartily recommend the following:

For a laugh:
World Economy Collapse explained in 3 minutes at http://www.youtube.com/watch?v=LyePCRkq620

For the truth:
BBC Speechless As Trader Tells Truth: "The Collapse Is Coming…And Goldman Rules The World" http://www.youtube.com/watch?v=lqN3amj6AcE

For an amazing scene in the European Parliament:
http://www.youtube.com/watch?v=61XmlUcAze0

AMSTERDAM ON THE LIFFEY

A Danish consultancy firm indexed the most bike friendly cities in the world. Predictably, Amsterdam topped the list closely followed by Copenhagen. But, surprise! Dublin scored high.

Rent a bike in Amsterdam to see how it should be done. Bike lanes carry the majority of the city’s internal traffic. They are coloured red and feature their own traffic lights and rules of the road. You can sail through the busiest intersections and streets of the city in safety.

Dublin, on the other hand, boasts a handful of bike lanes, most of which run only a few hundred yards. Cyclists have to squeeze themselves into the open millimetres between traffic and parked cars. But… increasing numbers of daredevils seem willing to risk life and limb. Bicyclists are now part of the Dublin scene.

The city has successfully promoted a citywide rental scheme called ‘dublinbikes’ – www.dublinbikes.ie  – with 44 stands of bikes which anyone can use. Simply purchase a 3 day rental ticket using your credit card, unlock the vehicle of your choice, and away with ye. Return the bike at any stand. The project has been so successful that they’ve had to add hundreds more bikes.

Now, the next four biggest cities are planning to roll out their own versions. Cork, Galway, Limerick and Waterford are all in various stages of that process. This is a total win. Fitness, less pollution and traffic, Darwinian selection for exceptionally fast reflexes – the benefits are myriad.

RICHES TO RAGS

A few years ago, businessman Sean Quinn was the country’s wealthiest individual. He was said to be worth 5 billion euro. But, Sean bet the farm on the world’s worst bank – Anglo Irish. Oooch! His total net worth, he claims, is now a little over 14,000 euro.

Faced with personal liabilities of over 2 billion, Sean pulled a good one. Ireland has archaic bankruptcy laws which the government has not been very quick about amending. Under these ancient rules, creditors can impound a bankrupt’s earnings for a full twelve years. So, Sean filed for bankruptcy in Northern Ireland where a single year suffices to clear your name. Natch, his Irish creditors, me and my neighbours who now own his worthless paper via our nationalised banks, are contesting this action.

Court filings by our banks detail how Sean passed on his assets to family members. It is alleged that a young nephew bought one of Sean’s companies for 1,000 euro. That was a pretty good deal for the lad  because at the time the company held more than 4,500,000 in cash and owned a building in Russia worth 180 million euro.

It’s obvious that Sean is a man who’s not afraid to play with more zeroes than my calculator can handle. And, he’s a good family man.

ZELIG IRELAND

Woody Allen made a movie about a gent called Zelig who always turned up at major events. Ireland’s own Zelig is a guy most of us never heard of before called Kevin Cardiff, current head of the Department of Finance. Kevin, it turns out, was there on the infamous night in 2008 when the Irish government made the historically stupid decision to guarantee the criminal enterprises mislabelled as Irish banks. He still passionately defends that judgment. He would do that since, Zelig style, his job at the Department of Finance was to keep tabs on the banks.

Kev then played a key role in the disastrous EU-IMF bailout agreement which saddled the Irish people with unsustainable high interest rates and the full burden of paying for hedge fund gambles gone bad. After such a stellar showing, he was promoted to head the Department of Finance. He was in charge when the Department misplaced 3.6 billion euro – an oversight which came to light this past month.

According to newspaper reports, the new government decided Kevin had to go. What to do? The genteel rules of the Irish civil service require that top level bungling be rewarded with cushy jobs in Europe. Kick him upstairs to a well paid job on the European Court of Auditors was the decision. The irony of that post’s title was lost on nobody.  However, the guy already in possession of this job lobbed a few well aimed email grenades at key European level decision makers and Kev made history once again. He is only the second guy to be turned down by a European parliamentary committee for this job.

Still, the government insists he’s their man. And they’re willing to call in all of Ireland’s favours and throw all their chips on the table for their choice. Anything, apparently, to get rid of the guy. In the meantime, he’s back in charge of the Department of Finance. Oh goody!

WADING IN

Some people just jump into a pool of cold water. Better to get the shock over with, they figure.  Me? I wade in slowly up to my belly button. Then I gently wipe cold water on my arms, then my face, my stomach, my hair….

The Irish government is breaking precedent when it delivers its budget this year. On day one of a two day wade-in, the Minister of Finance will deliver his bad news. But, that only takes us to the belly button stage. On day two, the Minister for Public Reform will rub our faces and hair in the rest of it.

While the details are still secret, the gist is this: raise taxes and cut services. If there’s anything of particularly ghastly note, I’ll send out a special bulletin in early December.

TRAP

Warsaw. Kiev. Gdansk. Lvov. These are the places for the Irish to be in 2012. And, for once, this is good news!

For the first time in a decade, the Irish qualified for a major international football championship. Our soccer team will be travelling to Poland and the Ukraine next summer for the European soccer championships. The financial bonanza  – TV rights, airline tickets, hotel bookings, souvenir purchases, and, of course, pub sales – is figured at more than 100 million euro.

The architect of this triumph is Giovanni Trapattoni, the Irish team manager. You’ll have noticed that Trapattoni is not your typical Irish last name. Trap is Italian and his English has improved markedly in the two years he’s been at the helm – http://www.youtube.com/watch?v=tPAJomPCdZs. His contract has been renewed for two more years in the hopes that he’ll lead the Irish team to an equally successful World Cup campaign in 2014.

Rio. Sao Paolo. Brasilia. Manaus. These are the places for the Irish to be in 2014.

THE HAIRY IRISH

The Irish diaspora has been around for a very long time.  Descendants of earlier waves of Irish emigrants live in the UK, Australia, the Americas and all over Europe. Last year alone, more than 76,000 people left Irish shores to make their lives abroad in far flung corners as diverse as Dubai, China and Canada.

This past month, scientists identified the most ferociously hairy Irish emigrants of them all. After extracting and analysing the mitochondrial DNA of 242 lineages, the research team reported that all polar bears alive today are descended from a single female brown bear that lived in Ireland.

Polar bears are Irish!

At the height of the last ice age tens of thousands of years ago, glacial ice made Ireland accessible to polar bears. Here, some northern wanderers bred with a resident populace of brown bears. One of the resulting cubs became "a polar bear matriarch" while the descendants of all other maternal lines died off. In other words, the addition of Irish genes enabled one line of polar bears to survive while the rest disappeared. Good genes!

Muintir na hEireann apparently now includes polar residents. As for the teams facing Ireland in the upcoming European Football Championship, you have been warned. Rawwwrrrrr!

Scott

ASK A MONKEY

Even a monkey knows what’s fair. Monkeys trained to ‘shop’ for food by using tokens to make their ‘purchases’ hate to deal with cheaters. So, if a ‘seller’ offers the monkeys two pieces of apple for a coin but then gives them only one piece, they stop buying from him. Instead, they prefer to make their purchases from the honest guy who only offers one apple for one coin but is trustworthy.

These monkeys split from the line that produced homo sapiens some 35 million years ago. So, for at least that long evolution has taught the primate brain to recognise "fair" from "unfair" social transactions. I’ll pick nits from your back, but I expect some nitpicking in return.

The worldwide movement for fairness spread from Wall Street to Dublin. Now, the entire country of Ireland is wondering whether to join in.

The deal to "save the euro" included negotiations with the wealthy gamblers who bet on Greece. The gamblers, who dignify themselves with the title ‘Bank’, were forced to agree a 50pc markdown. This is a reasonable compromise. Everyone knows we’ve got a mess on our hands, the banks are part of it, so everyone should take the hit equally. That’s reasonable. That’s fair.

But Ireland? Go sit down and shut up! And above all, keep paying those hedge funds who bought unsecured bonds from criminally negligent Anglo Irish bank. Give these gamblers their full Shakespearian pound! So, this very week when they demand 700 million euro for their completely unsecured gamble, give it to them. You haven’t got the money? Just close some more hospital wards.

Even a monkey would laugh.

IN THE INTEREST OF…

To be fair, the government points out that the Irish are great at getting what they want by schmoozing. The present lot never stop reminding us that it was the previous set of democratically elected simpletons who took on this obligation and we elected them to make that decision and that’s how Parliamentary democracy works. Our stupids bought this pup and there’s no return policy.

So now we have to decide to default on a small percentage of the total payback or become Greece. And, if we play by the rules of sovereign debt then there are many benefits.

First, we distance ourselves from that Mediterranean mess – Berlusconi and Greece and hundreds of miles of empty houses along the Spanish seacoast. Then, we get a raft of small concessions from the troika – the EU, European Central Bank and International Monetary Fund. These gimme’s, many of them already granted, make carrying the debt almost possible. This reassures the money guys that Ireland honours its obligations.

And then??? And then we hope the big lads conclude that Ireland is getting its act together and, equally important, the dough boys see that are no riots in the street and that we’re a stable democracy, trustworthy to the point of folly. And it would be a foolish plutocrat who failed to note the carrot that the Irish are dangling as a lure – a world class 12.5pc business tax rate. With a bit of push from government salesmen many of these well resourced movers and shakers might just spend some serious money in Ireland. (See Enterprise Ireland’s latest TV ad: http://www.youtube.com/watch?v=kk4DEn16Gy8 ) And that money will create jobs. More employment equals increased tax receipts equals easier debt management.

And we take control, once again, of our national destiny.

So the Irish government’s approach is nuanced, but aims to get to the same place as Greece – with a manageable level of debt. The question, of course, is whether this subtle approach will work. Worldwide recession would certainly dampen hopes. The newly announced referendum in Greece, greatly to be applauded from a fairness point of view, introduces another layer of uncertainty.

And another question remains. If its fair for unwise investors to take their share of the loss in Greece, then why not in Ireland? If you don’t know the answer, ask a monkey.

JUSTICE

And what about Anglo Irish Bank? The Irish people, me and my neighbours, we own this 30 billion euro worse-than-useless millstone. First step, ditch the name.

So, Anglo Irish Bank has been renamed Irish Bank Resolution Corporation.

While they resolve away, the rest of us continue to enjoy the sports and neighbourhood get togethers and chats with people outside of church and in the shops and get on with it. Whatever it may bring.

Happily, it seems we’re learning. The race for the Irish presidency, which threatened to become a beauty show, ended up with a truly Presidential winner.

HOW LONG?

"At what point can a man leave his past behind?" On this question, asked by a radio commentator, turned the election for President of Ireland.

Take Sinn Fein candidate Martin McGuinness’ long involvement with the Provisional IRA. At what point do the Irish people acknowledge that the man has moved on; that he was a key player in the Northern Peace Process; and that his careful relationship with former opponents helped smooth the transition to peace and democracy. (Not that I voted for him, mind you.)

Or look at Mary Davis, the distinguished organiser of the Special Olympics in Ireland. She’s a very capable woman. Having proved her competency, government agencies and a bank asked her to serve as a director on their boards. Mary served honorably and correctly in her several directorships – and was part of the board that approved disastrous 100pc mortgage loans. Irish heroine to ‘Quango Queen’ in a week.

Senator David Norris wrote a series of letters seeking clemency for a former partner convicted of pedophilia. This decent and buoyant man was diminished. Rosemary Dana Scallon, a talented singer and former member of the European parliament, turned out to be mired in an ugly family dispute. You just couldn’t help feeling sorry.

Gay Mitchell was the candidate of the largest Irish political party, Fine Gael. But, the public is fed up with politicians. He stepped off the presidential diving board into an empty pool. Splat! Instantly and continuously. The man ran a no-holds-barred political campaign for a populace that can’t stand ‘politics as usual’. We did learn he’s a brilliant speaker and commentator but that put no water in the tub.

THE CONTENDERS

Which left Michael D. Higgins, poet and former Minister of Culture, high and dry. ‘High’ as in when he used to write for Hot Press, the rock magazine, he was known to enjoy the occasional toke. Michael D’s been up front about this for decades. In fact, these youthful escapades should have helped him, because the only serious complaint against this brilliant man is that he’s seventy years old, and God help him, he looks like he’s seventy. For a generation raised on the telly, there is no greater sin.

Let me see… anyone left? Oh, yes, Sean Gallagher, who I think, is a successful businessman. He’s claimed a lot of things that may or may not be. One thing he didn’t claim was to be a Fianna Failer, the party which scrooched Ireland. This ‘independent’ resigned from the party’s executive board only a few months ago, barely before the election that threw Fianna Fail out of power.

Fianna Fail, so dejected they didn’t even nominate one of their own for the race, suddenly found itself with a stealth candidate. Already a minor celebrity from his weekly appearances on an economic game show, Gallagher is in his forties, has a karate black belt and he looks vigorous. He spoke convincingly about jobs and garnering foreign investment. Unfortunately, perhaps, the Presidency is a powerless and completely honorary position with no direct power to shape the economy.

THE FINAL DAYS

After Sean Gallagher suddenly vaulted to the top of the polls, the revelations and accusations of influence peddling came thick and fast. Once again we heard the dreaded names we had thought were nailed inside their coffins: larcenous Charlie Haughey, bribe taking Ray Burke, greedy Bertie Ahern…

Oh no! The thought of years and years more of hearing about Fianna Failure’s endless transgressions… we just lived through a decade of that! Not again!

That was it. More than a quarter of the electorate switched their votes right after a last-minute, highly dramatic TV debate. And Michael D, a safe pair of hands, garnered the bulk of these. Michael D. Higgins is the next President of Ireland.

Goneirí an t’adh leis. Good luck to him – and the rest of us, too.

Must-see Viewing: here’s the three minutes of TV debate that won the election for Michael D – http://www.youtube.com/watch?v=gTMzZAtlLt4

CHANGING THE CONSTITUTION

With the nation glued to the presidential soap opera, waiting for the next cliff-hanging revelation, we got blindsided.

The government suddenly announced that in two weeks we’d also be voting on two changes to the constitution.

Amending the constitution in Ireland is not that unusual an event. Every couple of years another abortion referendum comes down the pike. There have been recent votes on citizenship questions and some other fairly technical provisions. So, it’s not like the epic battles and Civil Wars that it takes to add an amendment to the American constitution.

Still, two weeks?

JUDGES’ PAY

First, there was judges’ pay. Judges’ salaries are constitutionally protected and can’t be cut by the Dail/Parliament. You need an independent judiciary.

But, why shouldn’t this very well paid elite share the burdens of tougher economic times? How can judges rule fairly when they’re sheltered from the very vicissitudes that fill their courts with problem cases?

Opponents argued against weakening one of the pillars of democracy. The courts, they reminded us, are a nation’s insurance against tyranny and any assertion of control by the legislature and executive is undesirable.

In short, this was an argument about money and power – another soap opera staple. This one passed handily and judges’ gargantuan salaries will now be merely titanic.

ASKING QUESTIONS

The other constitutional issue was about parliamentary oversight. This has been hedged about with so many restrictions that Dail inquiries have become impossible. Top civil servants have refused to show up to the hearings and lawyers solicit vast sums to keep their clients above the law. Tribunals into political corruption have taken 15 years and hundreds of millions of euros to produce… mehh.

There’s got to be a better way. The government’s proposed solution was to give the politicians unprecedented powers of enquiry and the ability to name a guilty party.

Which might work a treat. But, we’ve seen what happens when you give politicians carte blanche. Give this set more power and the chances for abuse are not just theoretical.

The question is, which is worse? No oversight and the current mess, or more oversight powers to politicians like those who got us into the current mess?

Hold your nose, mark your ballot yes or no… and the answer the electorate gave was "No". We’ll give you our votes, but no way do we trust ye!

INDIAN SUMMER

Take all the rain that falls in a normal one month period and dump it in a 24 hour period on the floodplains of north Dublin. Just for good measure, build hundreds of homes and the country’s largest shopping mall on these perilous lowlands. What you get is "a hundred year flood" – the worst case scenario used for zoning decisions by Dublin County Council.

Ooops.

Watch the rampaging waters: http://www.thejournal.ie/watch-videos-of-the-severe-flooding-across-dublin-262579-Oct2011

These end-of-month weepings were balanced by a brilliant indian summer for most of the country back a few weeks ago when October’s promise still shone with bright sunlight.

GOOSE HARVEST

Of course, there is no such thing in Irish tradition as an "Indian Summer". There is, instead, Samhradh Féil’ Mhichíl – The summer of the festival of Michael. Archangel Michael’s day is celebrated on the 29th of September and in Ireland it marked the end of the harvest and ‘fómhar na ngéadhna’ – the goose harvest.

It was the Normans who imported Michaelsmass traditions to Ireland. On this day, rents and accounts for the entire summer were settled. This brought people to town, a fact which the politicians did not ignore. So, it was on Michael’s Day that many towns elected their mayor. Families with poor harvests hired out as servants so hiring fairs were yet another Michael’s Day necessity.

Now that winter loomed, farmers with a few extra cattle and sheep to sell also joined the throng. Others brought their geese to market and settled their debts with fat birds and bales of downy feathers. The traditional Michael’s Day dinner was, of course, goose. This was an important part of the day, akin to the Thanksgiving turkey, and it was common for landlords to provide geese to the poor.

Bawling herds, flapping geese, the bigwigs in their electioneering finery, landlord’s agents in the pubs, crowds and fairs and food stalls and the smell of cow dung and roast goose – this was a Big Day!

October 2011. We celebrated Samhradh Féil’ Mhichíl this year in real Irish style – with the traditional raising of the umbrellas.

Scott

IN THIS ISSUE: The Dark Energy of Money; Entangled Markets; The Infinitude of Corruption; Leveraging Phony Baloney Money; Dazzling Lethargy – the Irish Housing Market; Jumbletown; Race for President; Curing the Afflicted

We are the dregs of the universe.

In the past decade, astronomers realized that galaxies are flying away from each other at an ever increasing rate. More puzzling yet, this expansion follows a few billion years of slowing down.

What the heck? Is the universe pulsing? What’s driving this expansion? No one knows. So, the term "dark energy" has entered the lexicon. Between them, dark energy and dark matter account for 96pc of our universe. The stars, the planets, interstellar gases – everything that we see or have ever measured – make up only 4pc of what’s out there.

It’s just like money.

The total world economy, the real stuff that we can touch like cocoa beans and gold and football tickets, the combined pay checks and pension incomes of the planet’s population, all the cash in everyone’s pocket and money in our bank accounts, all are dwarfed by the titanic credit plays of hedge funds and bankers.

Some figures: the total product of the world economy – all the real stuff that we can touch and measure – comes to 18 trillion dollars each year. That’s 18,000 billions of money. The national debt of the United States which is reckoned to be a huge danger to the world economy is estimated at about 15 trillion.

Peanuts! The Credit Default Swap universe alone is worth 33 trillion dollars. And just as we begin to wrap our heads around trillions, now we’ve got to learn about quadrillions because that’s the worth of the vast machinations called Derivatives. The total value of all the credit driven, unregulated, money raking gambles devised by the lads on Wall Street now total more than one quadrillion dollars. That’s 1,000 trillions or one million billion.

If you’ve ever wondered how hedge fund managers can pay themselves hundreds of millions annually, here’s the answer. They’re tapping into the derivative dark energy which is driving the financial universe.

ENTANGLEMENT

Equally unnerving to scientists is entanglement, another unexplained mystery. When two subatomic particles are entangled, they communicate instantly no matter the distance. A photon on one side of the Milky Way instantly knows what’s happening to an entangled partner on the far side of the Andromeda galaxy.

Kind of like money markets.

Thus, when Greece catches a cold, Ireland and Italy instantly reach for a hanky. And Greece, it’s now clear, is terminally ill. Which is why Europe has broken out in cold sweats.

The stories out of Greece detail a society in crisis. The big problem, we now know, is corruption on a par with Afghanistan. Do you want to pass your driver’s test? Forget the rules of the road, what you need is cash. Want a job with the civil service? Then you’d better know someone who knows someone. Everyone with money cheats on their taxes. And on and on.

Can the Greeks get their act together? And how much Euro lolly will it take to get them back onto their feet? Ask the people of Sierra Leone.

INFINITUDE

Sierra Leone was the scene of a fierce civil war in the closing years of the 20th century. Eventually, the UN cobbled together a peace which was enforced by UN troops. An Irish regiment formed a key part of this peace keeping force and their time in Africa was documented by an Irish photographer.

He shot one of the most astounding photos I have ever seen. This photo showed a rusting navy patrol boat lying on a beach. This ship cost many millions of dollars, paid for by well meaning foreign governments to enable the Sierra Leoneans to patrol their own waters and contain piracy.

The leader of the country appointed his nephew as captain and this family member made a rather elementary mistake. He didn’t bother refilling the petrol tank. He took his multimillion dollar toy out for a ride until it ran out of gas, whereupon it drifted onto the sands. There it lay for years, rusting away.

That’s corruption! A boat worth millions wrecked for lack of a hundred dollars worth of fuel and the care a sixteen year old would give a used car.

There is no bottom to a corrupt society. You can pour billions down the hole and end up with nothing. Just look at Ireland under its last government! Dozens of billions blown into oblivion.

Hopefully, the Greeks, like the Sierra Leonean survivors, can revolutionize themselves from the inside out. If not, no amount of money will end their problems.

THE DARK ENERGY OF ENTANGLED INFINITUDE

And so we come to the current muddle. The first two tranches of money from Europe to Greece came with so many strings that the Greek economy has contracted by huge percentages. Their situation has gotten worse.

Greece owes 300 billion euro, a tiny drop compared to the 33,000 billion Credit Default Swap market which is only a splash in the total derivatives market of 1,000,000 billion. But, CDS’s and all the rest are built on slippery sands of vast gamblings. It’s in the title: ‘Credit’ Swaps.

This is all phoney baloney money, a few cents on the dollar. Dark energy. At the merest hint of a risk, off it goes to someplace else before the broker makes a margin call and demands more dosh. The velocity of money has sped up literally to the speed of light, the time it takes electrons to float through the internet.

The world economy is floating on hot air and fast money. We’re all entangled, and with Europe totally entwined, all it takes to set the wheels rolling downhill is a bit of Greece.

IF YOU CAN’T BEAT THEM

So what’s the solution?

Well, there’s Joseph Stalin’s treatment: round up everyone with money and also their families and anyone who owns property and throw in the farmers and intellectuals and journalists and politicians and military professionals for good measure and send the whole lot to Siberia.

The current set of EU leaders, however, did not choose this route. Instead, concluding that they can’t beat the markets, they’re talking about joining them. Problems? Just put it on the credit card like everyone else.

Just don’t call it debt. Call it leveraging so that it’s all okay. So, there’s talk about "leveraging" the current European bailout fund of 440 billion euro to magically turn it into 3 or 4 trillion. Brilliant!

Hey, isn’t that how we got into this mess in the first place?

DAZZLING LETHARGY

So what’s the opposite of dark energy?

The Irish housing market.

Instead of uncontained expansion, Irish property prices continue to contract at an accelerating pace. A year ago, the rate of price drops was 11pc. This year the fall has been 14pc. Dublin apartment prices have hit new new lows, dropping 57pc since Celtic Tiger energy drove them upward. The third in a series of well publicized auctions of properties from around the nation sold less than two thirds of the offerings. New mortgages are at record low numbers.

Irish property resembles another astronomic process – the black hole.

I’ll repeat yet again my long term prediction: until property drops back to a sustainable level, the fall will continue. You’ll know we’re at that price horizon when houses cost no more than the decades old lending formulae: 2 and 1/2 times the main earners income plus 1 times a partner’s income. With average industrial wages generously figured at 40,000 euro that works out to about 160,000 for the median house price including a 10 to 20pc down payment. In other words, roughly half the homes in Ireland will sell for less than 160 grand.

Throw in bankrupt banks, continuing uncertainty about the currency and world economy, rising taxes and commodity prices, high unemployment, falling or stagnant wages and huge levels of family and national debt – well, we ain’t there yet.

The National Asset Management Agency, the previous government’s totally failed solution to the banking crisis, spent tens of billions picking up rum properties from Ireland’s busted banks. Stuck with this huge, mostly unsalable inventory, they’re proposing a gimmick to jump start the property market. The agency – that is, the Irish taxpayer – will loan the money to buyers of its commercial properties. And we, I mean the Agency, will guarantee these loans against a 20pc further drop in the market.

Investors with spare cash they’re willing to snug away for a few years might find some deals here. But, this agency’s history with Irish property is one of unremitting failure. Likely, all they’re doing is delaying the necessary fall in prices to truly affordable levels and they’re doing it at further cost to the long suffering tax payer.

You can read an excellent analysis of NAMA’s latest boondoggle at http://www.askaboutmoney.com/showthread.php?t=161034 And the biggest Irish property site is daft.ie

JUMBLETOWN.IE

It’s been a gloomy summer, the coldest in 50 years. For some, it’s been much worse. Numbers attending homeless shelters have risen dramatically while organisation resources have not kept pace. Unemployment stands at 14.4pc and long term unemployment – more than a year out of work – nearly doubled to 7.3pc. Construction and food services took the biggest hit, but transport and industry bucked the trend by growing.

Which means, mind you, that 85pc are still working. And there are growing numbers of people turning to their own resources. A couple of friends are living the peasant life, 21st century style. Before the bust did for them, they were running a promising high tech start-up and doing much consulting work. Now they’re busier than ever, hatching chickens and collecting eggs, remodelling their house themselves and weeding the raised bed veggies.

Happy? Never more so. What more could anyone want? Apart from a new conservatory and kitchen cabinets. So, naturally they checked out www.jumbletown.ie . This is a site dedicated to matching buyers and sellers, except the sellers don’t want money and the buyers don’t have any. Instead of just throwing out old stuff, the "sellers" advertise their old treasures for free on jumbletown.ie. The "buyers" haul it away, and everyone wins.

The site’s motto: "Someone, Somewhere, Wants it!"

The new-used jumbletown kitchen is lovely, though some left opening doors had to be flipped and remounted. The new-used jumbletown conservatory windows are stacked in a shed, waiting their turn amidst the abundant work.

All a reminder that money doesn’t buy happiness, nor is it always necessary for kitchens either.

THE RACE FOR PRESIDENT

The election for President of Ireland is less than a month away. An unprecedented seven candidates are vying for this largely figurehead position. All are exceptional individuals, but two of the candidates are controversial.

First, there’s the most prominent gay politician in Ireland, David Norris. A famed Joyce scholar and perennial chat show guest, Norris bowed out of the race when questions rose about letters he wrote to the Israeli government. Norris sought clemency for his former partner who was convicted of having sex with an underage youth. But, like the dancers in the ballad Lanigan’s Ball, it was "out again, in again". So, Norris is back in the race, the issue of those letters plaguing him at every stop.

Equally interesting, the former IRA member and current Deputy First Minister of Northern Ireland, threw his hat into the crowded ring. He, too, is plagued by questions, this time about the IRA’s murderous history before he spearheaded the Peace Process. Martin McGuinness is expected to do fairly well, building on his party’s 10pc vote in the last Irish election.

Most interesting of all is who is NOT in the race. Fianna Fail, the disgraced party which ran the country for 80 years until it ran it into the ground, will not put forward any candidate. These guys are so toxic, they feared that a poor showing would disgrace them further. This is the first national election with no Fianna Fail candidate since the 1920′s.

Follow the race on the Irish media:

The three big newspapers:

http://www.independent.ie | http://www.irishtimes.com | http://www.examiner.ie

TV and Radio

http://www.rte.ie – the national broadcaster.

Search Engine

http://www.google.ie and press the link entitled News at the upper left corner. Google Ireland compiles many up-to-date sources of Irish news.

CURING THE AFFLICTED

A huge percentage of the Irish population have severe ear problems. You see sufferers everywhere. The symptoms of the disease are easily recognised. Patients clap a hand to their ear and talk to themselves as they walk down public streets.

Ensconced in their vehicles, the same victims remain fixated on their aural problems. Obviously, their disorder is very distracting. The latest figures available from the Road Safety Authority indicate that this is the second most common penalty point ailment.

A treatment is proposed. Buy three thousand more traffic cameras to gaze at passing vehicles. Fine anyone infected with the malady with an automatic €500 fine. Not only will the Irish government balance their budget in a single month, but amazingly, the invalids will be instantly cured of their affliction.

Another miracle of modern medicine.

Scott

IN THIS ISSUE:The End Game for the Euro; Integrate or Disintegrate; Gog and Magog?; Uncle President; Worst Investment of the Year; Cooking Programmes

THE END GAME

You can’t listen to a Eurozone economist these past two months without hearing these three words: ‘The End Game’.

Thus is the future of the Euro reduced to a game of chess. The Queen – Germany’s Angela Merkel – and the would-be King – France’s Nicolas Sarkozy – want to move freely about the board, but they’re boxed in by their own team. On the Euro chessboard, everyone’s at least a knight.

Except for the PIIGS – Portugal, Ireland, Italy, Greece and Spain – the pawns who’ve hauled up the drawbridges and hope the markets think they’re castles.

So, is it really the END? Will the Euro survive?

INTEGRATE OR DISINTEGRATE

All commentators assure us that the choices are to give the European Union more powers over national budgets and economic policies – or Euro go bye bye. I’ve read dozens of articles blaming the continent’s leaders for taking half measures when everyone knows what has to be done – a totally centralized Europe that issues its own money in the form of Eurobonds.

Everyone knows this but the voters of Europe. I can speak for myself – there’s no way I’m ever voting again to give these guys one ounce more of power than I already stupidly threw their way.

The EU will never, ever get another treaty through the Irish people during this generation. And anyone thinking the German people are willing to finance bunga bunga parties or continue to bail out Greece so that public workers can retire at 57 while the Germans continue working into their 60′s to pay for someone else’s good life – well, they could only be economists.

The politicians have taken half measures because anyone taking more will be out of office.

So, here it is. If the choice is integrate or disintegrate, the people of Europe choose the latter. All the discussion so far has been about monetary policy and the hedge fund puppeteers demand the answer that gives them the fattest bonuses. Screw them!

And don’t take it from me. Christian Wulff, Germany’s president, warned that Europe’s rush towards fiscal union strikes at the "very core" of democracy. "Decisions have to be made in parliament in a liberal democracy. That is where legitimacy lies," he said.

MY CALL

For what it’s worth, I think some form of Euro will survive. Germany and its satellite economies – Austria, the Netherlands and Luxembourg will form the backbone. France, Belgium and Finland are probably safe. Everyone else is a big question mark except Greece which will crash out of the Euro soon. Possibly so will the rest of the PIIGS and the recent Euro entrants such as Cyprus, Slovakia, Slovenia, Estonia and Malta.

Would you schtupp money at beggars like Ireland, Berlusconi’s Italy and newbies like Cyprus when the world system teeters? Ha!

If it all falls apart, Ireland will probably end up back on the punt/pound. Initially, one Irish Pound will trade for one former Euro. But, about one microsecond later the new currency will drop off a cliff. How low will it go? No one can say.

What we do know is that Ireland is broke, that it’s making adjustments but they won’t come anywhere near completion before ‘the end game’ plays out. All that money in Irish banks will be worth some fraction of its current value when the bottom of that cliff is reached.

In short, I predict the apocalypse, Armageddon, the coming of Gog and Magog, the opening of the seventh seal and the dance of the eighth turtle. Or, per usual, we’ll blunder through. Who knows? The only sure thing is that some Wall Street vultures will be smiling, no matter what happens.

UNCLE PRESIDENT

Who’d want to be The Queen for seven years? Forget about the good parts like jetting off to the Highlands for a lovely week’s vacation. Nope, all you get are the endlessly boring duties like attending interminable formal functions. Would you sign up for seven years of graduation ceremonies and formal speechifying? And if you stub your toe in public, no blinding and f’ing allowed!

A fair number of high achievers would like nothing better than such a life of sacrifice and public dedication. The Irish constitution provides just such an elected position. It’s called the Presidency of Ireland. This is a largely ceremonial job with only one significant power – that of the bully pulpit. What you say – after appropriate government inspection and censoring – is broadcast to your fellow citizens and to world leaders.

The Presidency used to be a sinecure for retired male politicians. That changed in 1992 when Mary Robinson stunned the nation by securing the women’s vote to vault into the President’s mansion – Aras an Uachtarain located in Dublin’s largest park. She was followed by the current incumbent Mary McAleese who earned such respect that no one even ran against her for her second term. Behind the scenes President McAleese, who was born and raised in Northern Ireland, and her husband became vital conduits of northern views to the south and vice versa. The two of them were crucial to the eventual success of the Peace Process.

After 21 years of the two Marys, anyone coveting this highly symbolic office has high heels to fill. The early front runner was the nation’s best known James Joyce scholar, media commentator, and gay rights activist, David Norris. But, his campaign imploded in spectacular fashion. The current front runner is Michael D. Higgins, former Minister of Culture and poet.

Some people began to cast around for alternatives and asked a celebrity candidate to run. Enter everyone’s favourite uncle, Gay Byrne. Gaybo, as he’s universally known, dominated Irish airwaves for decades. His morning radio and Friday Late Late TV shows were the highest rated broadcasts in their respective mediums. When it was suggested that Gaybo would make a great President of Ireland, the popular response was Yes.

Gay Byrne, a healthy 77 years old, decided not to run after consulting with family. But not before he got off this zinger that a sitting President would be forbidden to say. When a reporter asked him about Europe’s crisis, he answered ""We crossed the Rubicon when we joined the single currency. I think there is no backing out now but it is a mad, mad world and we are being run by mad people in Brussels."

Not very politic! Which, of course, is precisely the point. With Gay Byrne out and the nation’s favourite sportscaster also out, the choices are still legion. The race is on.

WORST INVESTMENT OF THE YEAR

What has been the worst Irish investment of 2011? Stocks are down and so are houses. The Euro is wobbling and don’t even mention the banks.

But, there’s really no contest. By far the worst investment of the year was charcoal. The backyard barbecue faces extinction. July was cold and wet, the first weeks of August even worse. The backyard barbista is a species in serious decline.

It is, however, a great year to be a cabbage. Winter’s long freeze followed by the coldest summer weather in 50 years has done for the cabbage’s worst enemy, Cabbage White butterflies. In 2010, these flutterers abounded. The Green Veined White, one of five white species found in Ireland, was the most common butterfly to be found on the island. But, this year, numbers have fallen by an order of magnitude in my neck of the island. Ditto the Small and Large Whites. I haven’t even seen a Wood White or Brimstone.

Traditional gardeners know that Cabbage Whites deserve their name. These formerly abundant insects love nothing more than to lay their eggs midst Brassicas like native cress or neat rows of garden cabbages. There’s nothing like a good bit of Brassica to keep junior contented and fat. But, fat caterpillars make for rotten vegetables.

With Cabbage White numbers down so drastically, their prey are flourishing. Ecologists recognise that there are cycles of predator-prey interaction. When, for example, the wolves die off, deer abound. New generations of wolves flourish because they now have plenty to eat. Growing numbers of wolves eat ever more deer until there are too few prey to sustain the hungry lupine populace. The wolves starve, the pressure comes off the deer and the seesaw tilts in their favour.

Similarly, we can expect the drop-off in Whites to spur an explosion of greens. Next year we should look for cabbages to expand their range and increase in numbers. Ireland will be inundated with cabaisti.

Thanks, however, to this warning the Irish people can be prepared. Now is the time to lay in extra corn beef and potatoes and to stockpile cole slaw recipes. With luck, we’ll be eating slaw at next year’s barbecues.

COOKING PROGRAMMES

Is it true that the more you watch cooking programmes, the less likely you are to cook?

Contemplating a table groaning with scones and fairy cakes, barm brack and apple tarts at any significant community do, it’s obvious that not all have abandoned the Aga Cooker for the TV. Or maybe it’s just that traditional cooking programmes were more effective than their modern descendants.

Back in the day, Irish chefs knew how to actively involve trainees. One young cook would be assigned the task of sifting the flour, another would beat the butter and all would fight for the privilege of licking the spoon. Thus audience participation was encouraged during each ‘demonstration’. And when the presentation was finished, each participant would receive their own individual portion as part of a ‘tasting’. Old time chefs knew that if they fed their audience well, they would tune in regularly.

Of course, there were celebrity chefs just like now. It was like switching the channel. The apprentices eagerly anticipated such ‘specials’ and the celeb cooks actually had a title. They were called "Grandma".

Scott

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