One of the side effects of the recent banking crisis has been to expose most clearly the innate tabloid nature of “talk” radio and the virtually complete absence of editorial control at RTE radio, the taxpayer funded and supposedly “public service” national broadcaster.
It’s like the feeding frenzy one sees on UK tv when a politician is wounded and the wolf-pack descends on his/her home baying for blood. “Will you resign today?” any wet-behind-the-ears cub reporter demands of a career politician with perhaps 20-30 years service. Blood-lust and seeking to make a headline replace any human consideration for the plight of the target (or his/her family) who may well be guilty of no more than a minor indiscretion or misdemeanour.
Hardly a programme passes without the presenter calling for the heads of the bankers (or, lately, the odd bishop) – the streets should be echoing to the sound of the tumbrils rattling to the guillotine, most suitably located in College Green, perhaps?
Nowhere is this more evident than on RTE Radio 1 where, from 7am (Morning Ireland) to 7pm (Drivetime) one can expect an “expert” opinion to be voiced on every programme (except, perhaps Ronan Collins from 12-1).
No politician, economist, broker or fellow media “talking head” guest can feature on an RTE “news” programme without being asked why the heads haven’t rolled in the big banks.
Much of the commentary is shallow and populist in nature (Shane Ross-type) and adds little or nothing to the public understanding of the complex and diverse origins of the problem, the multiplicity of players involved (including our own Govt) or the absence of certainty of success for any particular course of action.
It does, however, serve to stoke the fires of resentment in the general public and thus feed the beast that is talk radio – generating phone-calls, emails & texts to fill the broadcasters void and make their lives that much easier. Joe Duffy is probably the best example of how easy it is to feed off public anger, fanned by colleagues on other programmes. I hope Joe sends a very good “Xmas Box” to other presenters by way of thanks for their ongoing help.
Editorial Control (or rather its absence) in RTE
This brings me to the sensitive topic of editorial control and how one might implement something meaningful in an organisation whose culture doesn’t even understand, never mind tolerate, the concept.
As my current gripe relates to coverage of the banking crisis, it brought to mind the mandatory “health warnings” attached to all radio ads for financial products e.g. “values may go down as well as up”, “XX is regulated by.., etc”.
What if RTE was also required to attach a “health warning” to programmes, advising listeners of the limitations of what they may now be about to hear.
For example the Derek Mooney programme might be prefaced by the following health warning:
“Listeners are advised that Derek Mooney is not an expert on agriculture, banking, commerce, driving, education, food, green issues, health services, holiday travel, international events, insurance, justice system, loan arrangements, medical matters, noxious waste, opulence, politics, quandaries of any kind, relationships, religion, sex, stock markets, transport, tourism, urban renewal, voluntary agencies, welfare, x-rated topics, youth matters, zeitgeists of any kind or, indeed, a wide range of other topics.”
Pretty soon it should become obvious to RTE that such a warning would be
(a) very long and
(b) detrimental to any remaining vestige of credibility of the presenter.
RTE would inevitably be faced with two choices, perhaps opting to adopt both:
(a) limit the topic list for Mooney and enforce it and/or
(b) force Mooney to undergo a wide-ranging education programme.
Many RTE programmes could be much improved by such a regime.
Tuesday, December 30, 2008
Bank bailout - Ireland v. UK
There has been much misinformed media commentary on the failure of the Irish Govt to take ordinary shares in the Irish banks, unlike their UK counterpart.
The reality is that the UK government invested, in the first instance, in preference shares and only acquired ordinary shares as a result of acting as underwriter to major rights issues for RBS, Lloyds-TSB & HBOS.
For example, RBS sought to raise £20bn in new capital - £5bn in preference shares taken directly by the UK government and a £15bn rights issue to existing shareholders, the latter underwritten by the Government. When the majority of existing shareholders failed to exercise their rights, the government ended up buying most of those new shares and became the majority 60% shareholder in RBS. Does anyone actually believe that this was the outcome the UK government desired?
Lloyds-TSB & HBOS sought a total investment of £17bn between ordinary & preference shares and, as with RBS, the UK government ended up with most of the new ordinary shares and currently holds 40% of the stock.
Both AIB and BOI have indicated that they are likely to seek to raise additional capital through a rights issue, with the Irish government acting as underwriter. Should existing shareholders fail to take up their rights, it’s highly likely that the government will become the largest, if not the majority, shareholder in both banks.
In addition, should AIB, Anglo or BOI be unable to pay the annual coupon of the preference shares bought by the Government, the missed dividend must be paid in new ordinary shares at the currently prevailing market price.
The reality is that the UK government invested, in the first instance, in preference shares and only acquired ordinary shares as a result of acting as underwriter to major rights issues for RBS, Lloyds-TSB & HBOS.
For example, RBS sought to raise £20bn in new capital - £5bn in preference shares taken directly by the UK government and a £15bn rights issue to existing shareholders, the latter underwritten by the Government. When the majority of existing shareholders failed to exercise their rights, the government ended up buying most of those new shares and became the majority 60% shareholder in RBS. Does anyone actually believe that this was the outcome the UK government desired?
Lloyds-TSB & HBOS sought a total investment of £17bn between ordinary & preference shares and, as with RBS, the UK government ended up with most of the new ordinary shares and currently holds 40% of the stock.
Both AIB and BOI have indicated that they are likely to seek to raise additional capital through a rights issue, with the Irish government acting as underwriter. Should existing shareholders fail to take up their rights, it’s highly likely that the government will become the largest, if not the majority, shareholder in both banks.
In addition, should AIB, Anglo or BOI be unable to pay the annual coupon of the preference shares bought by the Government, the missed dividend must be paid in new ordinary shares at the currently prevailing market price.
Sunday, December 28, 2008
Next - the Insurance Pyramid Scheme?
There have been a number of high profile pyramid schemes exposed in recent weeks. Internationally the Bernard Madoff scam which seems to have cost its investors up to $50bn. At home, the Breffni O’Brien scheme seems to be missing as much as €20m – more modest perhaps but involving a small number of investors who can probably ill-afford the deception.
Pyramid schemes have a long history and a simple attraction for investors – they appeal to people who expect high guaranteed returns with little or no risk. This combination is, unfortunately, not generally available. The schemes promise high returns and actually deliver them to early investors. They rely on this perceived high performance to pull in new investors to keep the cashflow strong. However, what’s actually happening is that the money put in by new investors is being used to pay “dividends” and /or capital to earlier investors. This “return” to investors has little, if anything, to do with actual investment income or capital gain earned by the scheme.
Pyramid schemes are naturally illegal and Messrs. Madoff & O’Brien can expect to do jail time for their financial exploits, though one suspects the US system will deal much more harshly with such frauds than the Irish legal system is likely to.
Insurance companies are, on the other hand, quite legal, but are open to being effectively operated as pyramid schemes unless they are closely supervised and scrutinised.
Insurance companies operate on the basis of collecting insurance premiums today to pay for insured events arising at some time in the future. This gives large insurance companies a huge cash float which they can invest to earn a return in the interim. Assuming the company’s investment strategy is sound, the bulk of the company’s profits are likely to come from this investment income, rather than any actual surplus of premium income over claim payouts.
In the current investment climate, with stock markets & property all showing major losses on a worldwide basis, it’s highly likely that any investment fund with an aggressive approach is currently nursing substantial losses in the past 12-18 months. Funds which invested in bank shares, property companies, building materials etc etc will be very badly hit.
So it could be that some insurance companies are effectively in “negative equity” on their funds set aside to meet future claims. This means that existing outstanding claims will also have to be partially met from the premium incomes being generated from new and existing clients, which are intended to cover future, rather than historic, claims. To keep the ball rolling, so to speak, such an insurance company has to maximise new business inflows and, to do this, will probably have to quote the most competitive rates in the insurance market. Which will, in turn, increase the negative gap between income inflows and future liabilities arising from claims.
Ultimately, unless there’s a dramatic turnaround in investment returns, the wheels will come off and the insurance company will go bust – leaving its policy-holders without cover and legitimate claimants unpaid.
Sounds like a pyramid insurance scheme to me.
So who are the most aggressively priced insurance companies in the Irish market and what have they invested their surplus funds in e.g. if Quinn Insurances, FBD, Hibernian etc have made substantial investments in Irish banks e.g. Anglo?
Internationally, where has Warren Buffet’s Berkshire Hathaway (owner of some of the largest US insurance companies) invested the surplus cashflow thrown off by those companies?
All we need to follow the international banking crisis is a similar collapse in the international insurance market. The complexity of the huge re-insurance side of the business means that, in the event of a loss of confidence, it will be virtually impossible to establish clearly who’s carrying what risk and how reliable any company’s re-insurance contracts are when it comes to settling liabilities.
Pyramid schemes have a long history and a simple attraction for investors – they appeal to people who expect high guaranteed returns with little or no risk. This combination is, unfortunately, not generally available. The schemes promise high returns and actually deliver them to early investors. They rely on this perceived high performance to pull in new investors to keep the cashflow strong. However, what’s actually happening is that the money put in by new investors is being used to pay “dividends” and /or capital to earlier investors. This “return” to investors has little, if anything, to do with actual investment income or capital gain earned by the scheme.
Pyramid schemes are naturally illegal and Messrs. Madoff & O’Brien can expect to do jail time for their financial exploits, though one suspects the US system will deal much more harshly with such frauds than the Irish legal system is likely to.
Insurance companies are, on the other hand, quite legal, but are open to being effectively operated as pyramid schemes unless they are closely supervised and scrutinised.
Insurance companies operate on the basis of collecting insurance premiums today to pay for insured events arising at some time in the future. This gives large insurance companies a huge cash float which they can invest to earn a return in the interim. Assuming the company’s investment strategy is sound, the bulk of the company’s profits are likely to come from this investment income, rather than any actual surplus of premium income over claim payouts.
In the current investment climate, with stock markets & property all showing major losses on a worldwide basis, it’s highly likely that any investment fund with an aggressive approach is currently nursing substantial losses in the past 12-18 months. Funds which invested in bank shares, property companies, building materials etc etc will be very badly hit.
So it could be that some insurance companies are effectively in “negative equity” on their funds set aside to meet future claims. This means that existing outstanding claims will also have to be partially met from the premium incomes being generated from new and existing clients, which are intended to cover future, rather than historic, claims. To keep the ball rolling, so to speak, such an insurance company has to maximise new business inflows and, to do this, will probably have to quote the most competitive rates in the insurance market. Which will, in turn, increase the negative gap between income inflows and future liabilities arising from claims.
Ultimately, unless there’s a dramatic turnaround in investment returns, the wheels will come off and the insurance company will go bust – leaving its policy-holders without cover and legitimate claimants unpaid.
Sounds like a pyramid insurance scheme to me.
So who are the most aggressively priced insurance companies in the Irish market and what have they invested their surplus funds in e.g. if Quinn Insurances, FBD, Hibernian etc have made substantial investments in Irish banks e.g. Anglo?
Internationally, where has Warren Buffet’s Berkshire Hathaway (owner of some of the largest US insurance companies) invested the surplus cashflow thrown off by those companies?
All we need to follow the international banking crisis is a similar collapse in the international insurance market. The complexity of the huge re-insurance side of the business means that, in the event of a loss of confidence, it will be virtually impossible to establish clearly who’s carrying what risk and how reliable any company’s re-insurance contracts are when it comes to settling liabilities.
Thursday, December 25, 2008
Wednesday, December 24, 2008
Casting "Greens - the movie".
Watching Energy Minister Eamon Ryan on tv today, it struck me that if they ever make “Greens – the movie” they’ll have to get Nicholas Cage to play him. No-one does tortured sincerity like Cage – though Ryan could give him lessons. Honestly, sincerely!
Environment Minister Gormley might be played by Jim Carrey, though Carrey would have to restrict his performance to a two-faced effort.
Jon Pertwee could play Mary White in a reprise of his Worzel Gummidge persona, he may still have some of the costumes handy.
That leaves Paul Gogarty (as himself?), Trevor Sargent (Bruce Willis, in vegetarian mode?) and Ciaran Cuffe (Andy Serkis as Gollum with clothes?).
Any suggestions?
Environment Minister Gormley might be played by Jim Carrey, though Carrey would have to restrict his performance to a two-faced effort.
Jon Pertwee could play Mary White in a reprise of his Worzel Gummidge persona, he may still have some of the costumes handy.
That leaves Paul Gogarty (as himself?), Trevor Sargent (Bruce Willis, in vegetarian mode?) and Ciaran Cuffe (Andy Serkis as Gollum with clothes?).
Any suggestions?
Tuesday, December 23, 2008
The Catholic Church & Sex
The Pope is at it again and the gay community worldwide is up in arms.
Apparently his “end of year” homily can be interpreted to mean that saving mankind from homosexuality is as important as saving the planet environmentally.
I’ve not bothered to read the offending script – but I have heard some of the media debates and the claims made by the catholic side that the Pope never said this, with the gays saying that it’s the only interpretation one can take from his sometimes oblique comments.
There’s no doubt about two things: Firstly the hostile position of the church with regards to homosexuality and, secondly, the highly insensitive, even if technically legal, language the Vatican routinely employs when discussing the topic.
One interview yesterday clarified, for me, the main problem the church faces in this “battle”. Matt Cooper on TodayFM was interviewing a catholic clergyman about the pope’s reported comments and the church’s position on homosexuality. The cleric explained that the church doesn’t condemn homosexuals, it’s homosexual acts which it finds objectionable. “What’s the difference?” asked a confused-sounding Cooper.
Therein lies the main problem for the church and it’s bigger than the gay community. It relates to all sexual activity – whether straight, gay or transgender.
Liberal western society no longer sees a distinction between the sexual orientation and the sexual act. We are now all deemed to be “sexual animals” - if you’re not expressing your sexuality in a physical way, you are not living a full life.
For the church, the act is the thing. Its condemnation of sexual acts between homosexuals is entirely consistent with its condemnation of sex outside marriage for heterosexuals and its demand for celibacy from its own clergy. (Though its language regarding homosexuality is routinely brutal and offensive when contrasted with any views it expresses on other sexual topics.)
However, liberal western society accepts sex as being nothing particularly sacrosanct. It’s somewhere in the realm of a sign of affection (not necessarily love), an entertainment, a leisure activity or even a form of exercise. As presented in the media (or, indeed, for much of the population) sex seems to have little to do with a long-term relationship or commitment.
The rise and acceptance of the so-called “sex industry” is a clear indicator of what is happening. When you get regular reports of people-trafficking into brothels with little apparent police action or public outcry, lap-dancing bars opening in rural “cities” etc, you know that sex is now a commodity/leisure activity of no great consequence. (Which must have consequences for the legal gravity of rape as a crime. Why should it now be punished at a tariff any greater than that applied to a serious physical assault?)
I’m not clear how much of this "liberal progression" is a willing choice of participants and how much is forced on people who want to be seen to conform to changing mores. Are parents always indifferently happy to their daughters living with boyfriends, and vice versa? Are parents always happy when presented with a grandchild whose parents aren’t married, or may no longer be together? If I had daughters I suspect (ok I know) I’d be strongly disapproving of their cohabitation and/or unmarried mother status.
Unless western society decides that the pendulum has swung too far to the liberal side and starts to move back to a more conservative attitude to sex, the church will continue to be “the voice of one crying in the wilderness”.
One cannot blame the church for maintaining its own moral position with regard to sex (of all kinds), even if it appears increasingly out of step with the world and its own membership, but one can demand that it speaks much more sensitively (i.e. far less offensively) to its own homosexual minority.
Apparently his “end of year” homily can be interpreted to mean that saving mankind from homosexuality is as important as saving the planet environmentally.
I’ve not bothered to read the offending script – but I have heard some of the media debates and the claims made by the catholic side that the Pope never said this, with the gays saying that it’s the only interpretation one can take from his sometimes oblique comments.
There’s no doubt about two things: Firstly the hostile position of the church with regards to homosexuality and, secondly, the highly insensitive, even if technically legal, language the Vatican routinely employs when discussing the topic.
One interview yesterday clarified, for me, the main problem the church faces in this “battle”. Matt Cooper on TodayFM was interviewing a catholic clergyman about the pope’s reported comments and the church’s position on homosexuality. The cleric explained that the church doesn’t condemn homosexuals, it’s homosexual acts which it finds objectionable. “What’s the difference?” asked a confused-sounding Cooper.
Therein lies the main problem for the church and it’s bigger than the gay community. It relates to all sexual activity – whether straight, gay or transgender.
Liberal western society no longer sees a distinction between the sexual orientation and the sexual act. We are now all deemed to be “sexual animals” - if you’re not expressing your sexuality in a physical way, you are not living a full life.
For the church, the act is the thing. Its condemnation of sexual acts between homosexuals is entirely consistent with its condemnation of sex outside marriage for heterosexuals and its demand for celibacy from its own clergy. (Though its language regarding homosexuality is routinely brutal and offensive when contrasted with any views it expresses on other sexual topics.)
However, liberal western society accepts sex as being nothing particularly sacrosanct. It’s somewhere in the realm of a sign of affection (not necessarily love), an entertainment, a leisure activity or even a form of exercise. As presented in the media (or, indeed, for much of the population) sex seems to have little to do with a long-term relationship or commitment.
The rise and acceptance of the so-called “sex industry” is a clear indicator of what is happening. When you get regular reports of people-trafficking into brothels with little apparent police action or public outcry, lap-dancing bars opening in rural “cities” etc, you know that sex is now a commodity/leisure activity of no great consequence. (Which must have consequences for the legal gravity of rape as a crime. Why should it now be punished at a tariff any greater than that applied to a serious physical assault?)
I’m not clear how much of this "liberal progression" is a willing choice of participants and how much is forced on people who want to be seen to conform to changing mores. Are parents always indifferently happy to their daughters living with boyfriends, and vice versa? Are parents always happy when presented with a grandchild whose parents aren’t married, or may no longer be together? If I had daughters I suspect (ok I know) I’d be strongly disapproving of their cohabitation and/or unmarried mother status.
Unless western society decides that the pendulum has swung too far to the liberal side and starts to move back to a more conservative attitude to sex, the church will continue to be “the voice of one crying in the wilderness”.
One cannot blame the church for maintaining its own moral position with regard to sex (of all kinds), even if it appears increasingly out of step with the world and its own membership, but one can demand that it speaks much more sensitively (i.e. far less offensively) to its own homosexual minority.
New fashion trend for World leaders
The recent trend for world leaders to allow themselves to be photographed topless must surely be putting pressure on Biffo Cowen to do the same.
It’s not a pleasant thought, and it won’t be a pretty sight, but perhaps if Biffo’s advisers get him a better pair of togs he won’t look quite as unsightly as Brezhnev.
Though I’m not betting on that!
Monday, December 15, 2008
Lame duck Dux ducks
But how did Plunkett get onto the podium, when he can't even get into a Lotto photo?
Sunday, December 14, 2008
Put the bite back into restaurant reviews.
AA Gill reviews Richard Corrigan’s latest London eaterie, Corrigan’s Mayfair, in today’s Sunday Times.
http://www.timesonline.co.uk/tol/life_and_style/food_and_drink/eating_out/a_a_gill/article5306823.ece
The review makes it clear that Gill is a genuine fan of Corrigan and he’s highly enthused by this latest culinary venture. He awards it 4 (out of 5) stars, a high mark from Mr Gill who’s not averse to awarding scores of one or two.
However, he did hit one bum note on the menu which is described hilariously, I think, as follows:
“Corrigan has occasional moments where the enthusiasm gets the better of him, and there was a fashion disaster. This was the linguine cooked in red wine, pecorino and bone marrow. It looked, smelt and tasted not a little like, not a bit like, not almost like, but precisely and exactly like drunk’s puke. I didn’t finish it. I didn’t want to meet it twice.”
Doesn’t it just make you pine for the return of Helen Lucy Burke’s razor sharp pen & tongue?
http://www.timesonline.co.uk/tol/life_and_style/food_and_drink/eating_out/a_a_gill/article5306823.ece
The review makes it clear that Gill is a genuine fan of Corrigan and he’s highly enthused by this latest culinary venture. He awards it 4 (out of 5) stars, a high mark from Mr Gill who’s not averse to awarding scores of one or two.
However, he did hit one bum note on the menu which is described hilariously, I think, as follows:
“Corrigan has occasional moments where the enthusiasm gets the better of him, and there was a fashion disaster. This was the linguine cooked in red wine, pecorino and bone marrow. It looked, smelt and tasted not a little like, not a bit like, not almost like, but precisely and exactly like drunk’s puke. I didn’t finish it. I didn’t want to meet it twice.”
Doesn’t it just make you pine for the return of Helen Lucy Burke’s razor sharp pen & tongue?
Thursday, December 11, 2008
Someone should smart meter the Greens
The installation of smart electricity meters in every home in the country has perhaps been Green Party Minister for Energy Eamon Ryan’s biggest idea since he became minister 18 months ago. He rarely misses an opportunity to plug the initiative (pardon the pun).
In today’s Irish Times, Harry McGee reports on the appearance yesterday of the ESB’s chairman Lochlann Quinn and chief executive Padraig McManus before the Dail All Party Committee on Communications & Energy.
http://www.irishtimes.com/newspaper/ireland/2008/1211/1228864662534.html
“Senior executives of the ESB indicated publicly for the first time yesterday that the technology was not yet fully proven and that the case had not yet been made that such a substantial investment would result in commensurate savings.”
Mr McManus “said that the utility needed to take a prudent approach before making such a huge investment. That is why smart meters were being piloted over 18 months.”
“Mr Quinn added that rolling out smart meters would cost €1 billion and that would go on all consumers' bills.”
Thank god for a bit of prudence in the ESB on this one.
But isn't it just typical of the Greens – loudly promoting unproven, untested solutions. Throwing ESB/customer money at it to create the illusion that the planet is being saved and therefore Green sell-outs on social and ethical policies can be justified to their electorate.
In today’s Irish Times, Harry McGee reports on the appearance yesterday of the ESB’s chairman Lochlann Quinn and chief executive Padraig McManus before the Dail All Party Committee on Communications & Energy.
http://www.irishtimes.com/newspaper/ireland/2008/1211/1228864662534.html
“Senior executives of the ESB indicated publicly for the first time yesterday that the technology was not yet fully proven and that the case had not yet been made that such a substantial investment would result in commensurate savings.”
Mr McManus “said that the utility needed to take a prudent approach before making such a huge investment. That is why smart meters were being piloted over 18 months.”
“Mr Quinn added that rolling out smart meters would cost €1 billion and that would go on all consumers' bills.”
Thank god for a bit of prudence in the ESB on this one.
But isn't it just typical of the Greens – loudly promoting unproven, untested solutions. Throwing ESB/customer money at it to create the illusion that the planet is being saved and therefore Green sell-outs on social and ethical policies can be justified to their electorate.
Lisbon II - the headaches begin.
The thought of another divisive Lisbon Treaty campaign is giving me a headache already.
Assuming it’s the same text, with declarations attached and a promise to incorporate those declarations in the next EU Treaty, we’ll undoubtedly be subjected to the same conspiracy theories and threats – by both sides, though mainly the NO side. (I voted Yes first time, and will again.).
Presumably aircraft leasing mogul Ulick McEvaddy will again offer his assessment that the treaty is unintelligible gobbledygook and should be rewritten in plain English which the ordinary citizen can understand, as if this was the simplest of tasks.
If McEvaddy does surface, I hope someone in the media asks him for a copy of one of his company’s pro-forma aircraft leasing contracts and let us see just how plain and simple that is.
Then ask him if he’d expect one of his clients to sign one of these lease agreements without first having it vetted by an accountant and a lawyer? Or would he himself sign such an agreement without first getting professional advice?
I’ll bet the answer is no. If it’s not, he’s dealing with fools.
Assuming it’s the same text, with declarations attached and a promise to incorporate those declarations in the next EU Treaty, we’ll undoubtedly be subjected to the same conspiracy theories and threats – by both sides, though mainly the NO side. (I voted Yes first time, and will again.).
Presumably aircraft leasing mogul Ulick McEvaddy will again offer his assessment that the treaty is unintelligible gobbledygook and should be rewritten in plain English which the ordinary citizen can understand, as if this was the simplest of tasks.
If McEvaddy does surface, I hope someone in the media asks him for a copy of one of his company’s pro-forma aircraft leasing contracts and let us see just how plain and simple that is.
Then ask him if he’d expect one of his clients to sign one of these lease agreements without first having it vetted by an accountant and a lawyer? Or would he himself sign such an agreement without first getting professional advice?
I’ll bet the answer is no. If it’s not, he’s dealing with fools.
Wednesday, December 10, 2008
Tackling Feral Children
The callous murder of 50-year old East Wall resident Aidan O’Kane has led to media reports which refer to the murderers as “children”. That may be the legal definition based on age, but this is just the latest and most extreme outrage perpetrated by gangs of anti-social young thugs who seem able to terrorise neighbourhoods with impunity and with no credible legal deterrent. The general public feels helpless, not knowing how to deal with these “feral children”, despite this being a problem that has been widely recognised and growing for several years.
Former Minister for Justice Michael McDowell proposed the introduction of electronic tagging but, to date, nothing appears to have been done in this regard. Objectors to this scheme point out that it generally hasn’t had the desired impact in the UK and that such tagging risks becoming a badge of honour among these young thugs.
Could a variant of the UK scheme make a tagging scheme here something that these youths would wish to avoid, rather than becoming something to brag about?
If you attempt to leave a shop without the electronic tag being removed from an item of clothing, it sets off an alarm at the door. Why can’t we reverse this process and design a system where an offender’s electronic tag sets off the alarm when he/she attempts to enter a shopping centre, shop, cinema, pub, club, public building etc etc.? If entry to most such places was barred to tagged offenders, it might just take the hard-man gloss off having to carry the tag. It might also become a bit of a bore to hang around with a tagged friend who can’t get into such places.
Obviously tackling the underlying social problems will require a multi-faceted carrot & stick approach, of which tagging would be just one small element. But we need to make sure that the stick is effective when we choose to use it.
Former Minister for Justice Michael McDowell proposed the introduction of electronic tagging but, to date, nothing appears to have been done in this regard. Objectors to this scheme point out that it generally hasn’t had the desired impact in the UK and that such tagging risks becoming a badge of honour among these young thugs.
Could a variant of the UK scheme make a tagging scheme here something that these youths would wish to avoid, rather than becoming something to brag about?
If you attempt to leave a shop without the electronic tag being removed from an item of clothing, it sets off an alarm at the door. Why can’t we reverse this process and design a system where an offender’s electronic tag sets off the alarm when he/she attempts to enter a shopping centre, shop, cinema, pub, club, public building etc etc.? If entry to most such places was barred to tagged offenders, it might just take the hard-man gloss off having to carry the tag. It might also become a bit of a bore to hang around with a tagged friend who can’t get into such places.
Obviously tackling the underlying social problems will require a multi-faceted carrot & stick approach, of which tagging would be just one small element. But we need to make sure that the stick is effective when we choose to use it.
Saturday, December 06, 2008
Irish Banks - do they need to be recapitalised?
Do the Irish banks actually need recapitalisation? Do we really need consolidation in the financial services market in Ireland?
In Friday’s (5th) Irish Times, Michael Casey, former chief economist with the Central Bank and a former member of the board of the International Monetary Fund, wrote an interesting opinion piece.
http://www.irishtimes.com/newspaper/opinion/2008/1205/1228337449605.html
Casey basically posed the questions outlined above. He pointed out that PWC inspectors had done a detailed examination of the loans books of each bank and given their individual capital adequacy levels a clean bill of health under current levels of loan impairment and, indeed, under a number of increased stress tests – albeit the levels of additional stress have not been publicly quantified.
He also pointed out that capital adequacy will, or should, not lead banks to make bad loans to companies struggling in a recession. The UK banks have been significantly recapitalised by the UK taxpayer, yet the SME & mortgage markets there continue to complain about the willingness of banks to lend.
Casey poses the question: “Is it conceivable that the Government wants the banks' capital to be more than adequate, as is now the case in the UK? What does "more than adequate" even mean? Is there a belief that additional - and unnecessary - capital is required to restore investor confidence in the banks?” This appears to be the perceived wisdom among the business commentariat in our media (much of which is woefully underqualified to comment).
He also concludes with, what I regard as, a perceptive comment: “In short, the consultants, Central Bank, Financial Regulator and the entire establishment, including the banks themselves, have now told us that there are no problems of liquidity or of capital. Why then are the meetings with the Government continuing? Either the good news is not quite so good or is there something else we are not being told about? It may all simply reflect a natural human desire to be seen to be doing something.”
Co-incidentally, (also on Friday 5th Dec) Goodbody Stockbrokers published a briefing note which reported that Standard & Poors (S&P), one of the major international rating agencies, “produced a report, which highlights “significant inconsistencies” in how banks account for risks and how much capital they hold under Basel II, making it very difficult to compare banks capital adequacy levels.”
http://www.goodbody.ie/news/morn.html
It seems that S&P surveyed c.50 European banks and found that various interpretations of the Basel rules regarding capital adequacy can produce “four-fold differences in risk weights for the same underlying risks”. In other words, banks in the UK, Spain and some Nordic countries have used less conservative estimates of risk than those applied by the Irish banks and a direct comparison between stated Irish and UK capital adequacy ratios is probably invalid.
The Goodbody briefing note concludes that “although the market undoubtedly now requires banks to hold a higher level of capital, it seems unfair that they would also be expected to increase their capital ratios to the same extent as their UK peers.”
Meanwhile, the private equity sharks are cruising while the politicians, the media and the populace are all demanding that the bankers get in the water. (Indeed, the politicians are delighted to have the bankers as a lightning rod to deflect blame for our current economic problems. No mention is ever made of the fact that every budget is the past 10-15 years has contained measures to encourage developers, investors and, particularly, first time buyers to get into the property market.)
Perceived wisdom can be the most dangerous, least informed thought process with the greatest capacity for long-term, perhaps terminal, damage.
If the Irish banks are, in haste,
(a) forced into the arms of private equity at knock-down prices, or
(b) forced into unnecessary consolidations which make the market less competitive
we may all live to regret it at leisure.
In Friday’s (5th) Irish Times, Michael Casey, former chief economist with the Central Bank and a former member of the board of the International Monetary Fund, wrote an interesting opinion piece.
http://www.irishtimes.com/newspaper/opinion/2008/1205/1228337449605.html
Casey basically posed the questions outlined above. He pointed out that PWC inspectors had done a detailed examination of the loans books of each bank and given their individual capital adequacy levels a clean bill of health under current levels of loan impairment and, indeed, under a number of increased stress tests – albeit the levels of additional stress have not been publicly quantified.
He also pointed out that capital adequacy will, or should, not lead banks to make bad loans to companies struggling in a recession. The UK banks have been significantly recapitalised by the UK taxpayer, yet the SME & mortgage markets there continue to complain about the willingness of banks to lend.
Casey poses the question: “Is it conceivable that the Government wants the banks' capital to be more than adequate, as is now the case in the UK? What does "more than adequate" even mean? Is there a belief that additional - and unnecessary - capital is required to restore investor confidence in the banks?” This appears to be the perceived wisdom among the business commentariat in our media (much of which is woefully underqualified to comment).
He also concludes with, what I regard as, a perceptive comment: “In short, the consultants, Central Bank, Financial Regulator and the entire establishment, including the banks themselves, have now told us that there are no problems of liquidity or of capital. Why then are the meetings with the Government continuing? Either the good news is not quite so good or is there something else we are not being told about? It may all simply reflect a natural human desire to be seen to be doing something.”
Co-incidentally, (also on Friday 5th Dec) Goodbody Stockbrokers published a briefing note which reported that Standard & Poors (S&P), one of the major international rating agencies, “produced a report, which highlights “significant inconsistencies” in how banks account for risks and how much capital they hold under Basel II, making it very difficult to compare banks capital adequacy levels.”
http://www.goodbody.ie/news/morn.html
It seems that S&P surveyed c.50 European banks and found that various interpretations of the Basel rules regarding capital adequacy can produce “four-fold differences in risk weights for the same underlying risks”. In other words, banks in the UK, Spain and some Nordic countries have used less conservative estimates of risk than those applied by the Irish banks and a direct comparison between stated Irish and UK capital adequacy ratios is probably invalid.
The Goodbody briefing note concludes that “although the market undoubtedly now requires banks to hold a higher level of capital, it seems unfair that they would also be expected to increase their capital ratios to the same extent as their UK peers.”
Meanwhile, the private equity sharks are cruising while the politicians, the media and the populace are all demanding that the bankers get in the water. (Indeed, the politicians are delighted to have the bankers as a lightning rod to deflect blame for our current economic problems. No mention is ever made of the fact that every budget is the past 10-15 years has contained measures to encourage developers, investors and, particularly, first time buyers to get into the property market.)
Perceived wisdom can be the most dangerous, least informed thought process with the greatest capacity for long-term, perhaps terminal, damage.
If the Irish banks are, in haste,
(a) forced into the arms of private equity at knock-down prices, or
(b) forced into unnecessary consolidations which make the market less competitive
we may all live to regret it at leisure.
Thursday, December 04, 2008
Who can speak for the Greens?
Who is authorised to speak for the Greens?
In the recent controversy over Fás chief Exec Roddy Molloy, the Greens denied a media report that they had expressed confidence in Roddy Doyle. They got a retraction on RTE’s Morning Ireland to that effect.
In a subsequent radio debate, Green Cllr Niall O’Brolchain was adamant that “no elected representative” of the party had made such a statement of support.
However, the Indo’s Fionnan Sheahan claimed that the Govt Press secretary assigned to the Greens had made such a statement to the poll corrs, and he offered to produce many witnesses. Sheahan pointed out that this particular official is briefed by the two Green ministers and is mandated to speak on their behalf.
Today’s Morning Ireland interviewed Green Senator Dan Boyle who proposed an extended deferral of the public service pay element of the National Pay Agreement, while that same programme reported a Government denial that it is seeking such a deferral.
If this turns out to require yet another Green u-turn, will we be told that “no elected representative” of the Greens ever made such a call? After all Dan Boyle has been elected to nothing.
Having been rejected by the Cork electorate, he’s only in the Seanad as a Taoiseach’s nominee.
In the recent controversy over Fás chief Exec Roddy Molloy, the Greens denied a media report that they had expressed confidence in Roddy Doyle. They got a retraction on RTE’s Morning Ireland to that effect.
In a subsequent radio debate, Green Cllr Niall O’Brolchain was adamant that “no elected representative” of the party had made such a statement of support.
However, the Indo’s Fionnan Sheahan claimed that the Govt Press secretary assigned to the Greens had made such a statement to the poll corrs, and he offered to produce many witnesses. Sheahan pointed out that this particular official is briefed by the two Green ministers and is mandated to speak on their behalf.
Today’s Morning Ireland interviewed Green Senator Dan Boyle who proposed an extended deferral of the public service pay element of the National Pay Agreement, while that same programme reported a Government denial that it is seeking such a deferral.
If this turns out to require yet another Green u-turn, will we be told that “no elected representative” of the Greens ever made such a call? After all Dan Boyle has been elected to nothing.
Having been rejected by the Cork electorate, he’s only in the Seanad as a Taoiseach’s nominee.
Tuesday, December 02, 2008
Freezing guinness
In tandem with their decision to freeze the price of the pint, is there any chance publicans might unfreeze the pint of Guinness?
The practice in recent years of chilling the famous stout to lager-like temperatures is akin to serving good red wine from the fridge. Usually a mistake.
When I challenged my local publican about this a couple of months ago, he responded “I don’t come in here to get hassled”. Helpful.
And there was me thinking I was the one who’d taken early retirement.
I've communicated by views directly to Guinness, but I'm not holding my breath. Their latest advertising campaign was themed "fridge magnet". They've clearly taken chilling to heart.
Footnote: Section in italics published as a letter in the Irish Times.
The practice in recent years of chilling the famous stout to lager-like temperatures is akin to serving good red wine from the fridge. Usually a mistake.
When I challenged my local publican about this a couple of months ago, he responded “I don’t come in here to get hassled”. Helpful.
And there was me thinking I was the one who’d taken early retirement.
I've communicated by views directly to Guinness, but I'm not holding my breath. Their latest advertising campaign was themed "fridge magnet". They've clearly taken chilling to heart.
Footnote: Section in italics published as a letter in the Irish Times.
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