Sunday, November 30, 2008

ABBA for President (No. 2)

In today’s Sunday Times, Matt Cooper raises the awful possibility of Berie Ahern in the park in 2011.

This “campaign” was launched a couple of months ago when Cecilia Ahern expressed the view that her father would make a fine president.

We’ve now seen the Bertie series on RTE and the Drumcondra mafia has been exposed as a smug and unpleasant bunch of chancers.

The prospect of this lot partying up in the Aras doesn’t bear thinking about: “Jaysus lads, we done it! Hey gherkin,(presidential ADC) tell Fagan’s to send up a barrel of Bass and a couple of cases of Piat d’Or pronto and then eff off. Anything in uniform makes us nervous.”

And we’d have the spectacle of Bertie taking his current mot abroad on state visits. It was embarrassing enough when he did it as Taoiseach, we should never tolerate it again.

So it’s ABBA for President.
Anyone But Bertie Ahern.

Saturday, November 29, 2008

Stopping the Barbarians at the gate?

I see in the papers that that one of the US private equity firms looking over the Irish banks is KKR( Kohlberg Kravis Roberts), who first came to public attention through their 1988 takeover of RJR Nabisco, in what was, at that time, the largest leveraged takeover in US corporate history.

The deal has become familiar to millions through the book & film “Barbarians at the Gate”.

The basic structure of such leveraged buyouts is that the buyer uses the assets of the target company as collateral, borrowing money against those assets in order to buy them. The general approach is to maximise the amount borrowed and minimise the amount of one’s own capital tied up in the deal.

Then typically, acquisition is quickly followed by slash, burn and asset strip. Reduce costs as quickly as possible, close loss-making or marginally profitable units, dispose of non-core activities and pay down the debt as quickly as possible. Get the business as lean as possible and sell it on for a handsome profit within 3-5 years.

Seeing that KKR name and remembering the movie, it put a mad idea into my head so I went to see my local Bank of Ireland manager.

“Look” I said to him “you fellows need a white knight. If the bank is prepared to lend me €2bn, non-recourse of course, I’ll invest it in the bank and that’ll take all the heat off. You guys can easily raise that money on the international money markets because you’ve got a Government guarantee. I’ll give you the shares I buy as collateral for the loan. With a bit of luck we’ll have turned the corner on the recession and the property bubble bust by the time the Govt guarantee runs out and my loan needs to be refinanced. If not, worst case scenario is the Govt ends up with my shares – still a much better outcome than having those US barbarians on the share register, don’t you think?”

Well I didn’t really know what to expect, but the BOI seem quite interested in my proposition and I’m expecting a positive decision from them within 7 days.

In fact, it all went so well that I decided to pitch the same idea to AIB, Anglo and PermanentTSB. As with BOI, I’ve gotten a very positive response from them all and should know within weeks which, if not all, are willing to play ball.

By Christmas, I may well be the owner of the 90%+ of the Irish banking system. Wouldn’t that be one hell of a do? I better start trying to lose a bit of weight – I’ll want to look good in the Louis Copeland tin of fruit for all those media appearances.

I can already see the headlines in the FT and the Wall St Journal:
Mollox 1 Barbarians 0.

The Government clutching at PR straws.

On Friday morning I heard Plutarchos Sakellaris, vice-president of the European Investment Bank (EIB), interviewed on RTE where he confirmed that four Irish banks are actively negotiating with EIB for access to a pan-European €15 billion fund for lending to small and medium enterprises (SMEs).

It seems that Finance Minister Brian Lenihan also heard that interview because he announced that same evening that he had asked the banks to submit to him their plans for making funds available to the SME sector. This ministerial initiative has received considerable coverage on RTE over the weekend.

It all smacks of opportunistic PR, with the minister attempting to claim credit for an initiative already in train. I suppose desperate times call for desperate PR measures.

Wednesday, November 26, 2008

Sunday Tribune Restaurant Reviews

I usually read the restaurant reviews in The Sunday Tribune magazine and have been impressed by the generous tipping regime of their current reviewer, Katy McGuinness. A minimum of 20% seems to be the norm, even where the service has been the subject of critical comment in the review. She recently reviewed Shebeen Chic in the company of two friends, was critical of the food, the service and the décor, yet added a €50 tip to a €230 bill.

This week (23rd Nov) she reviewed The Pig’s Ear, on Nassua St, in the company of her editor. The combined bill for the pair amounted to €126.40 to which she added a, for her, miserly 12% (€15) tip. The total amounted €141.40, an unusually modest outlay for this particular reviewer.

Yet she commented in her review that “when a casual early evening Tuesday supper for two costs €70 a head, there is clearly something amiss”. Isn’t it amazing how one’s perceptions and opinions can be influenced by the company one keeps?

Perhaps Fás isn’t alone in needing to review its expenses policy?

Tuesday, November 25, 2008

Sauvignon Blanc - Shelbourne style

Recent media reports about the legal action by the owners of the Shelbourne Hotel to remove the management company reminded me of my only visit to the hotel, a couple of months ago, since it re-opened.

The wife and I met her brother, Joe, in the front bar. We sat on stools at one of the high tables and waited for service. The bar area, which also serves food, was surprisingly empty for 1.15pm – prime lunchtime.

Service was slow and, when the waitress dropped her tray with a loud clatter while serving people at a nearby table, Joe got up and went to the bar to order a pint of Guinness and two sauvignon blancs.

Joe returned with a puzzled look on his face – “she asked if I wanted ice & lemon in the wine” he reported. All was explained when the waitress delivered the drinks – the pint of Guinness and two 7-Ups.

We laughed and explained the mistake to the waitress. She laughed and told us, in was heavily accented English, that the barmaid was both a bit deaf and didn’t have good English.

We concluded that, in this supposedly 5-star hotel, here was one explanation for the lack of customers in this landmark and centrally located hotel at lunchtime. It certainly didn’t augur well for the financial return on the huge money (c. €250m) spent on buying and refurbishing the place.

So it didn’t come as a major surprise to see that the hotel management is facing a possible eviction order.

Monday, November 24, 2008

Banking on the Barbarians?

The Irish Times has a couple of interesting and divergent takes on the proposed investment of US private equity groups in the Irish banks.

On page one, Simon Carswell (financial correspondent) describes it as “the Irish-led consortium of private investment firms seeking to buy into Bank of Ireland and possibly Irish Life Permanent“. On page 18 John McManus (business editor) sees the situation somewhat differently: “the barbarians are at the gates with their cheque books”.

Carswell reports the declared willingness of the Mallabraca consortium to lend up to €60bn to small businesses over 5 years through the banks. That may sound promising but surely there’s a reality check needed from Carswell? In a recession the increased risk of company failures and further bad debts will influence the actual volume of credit made available. No-one is going to throw finance at badly run or failing businesses.

McManus, on the other hand, reminds us that “you only have to take a cursory look at Eircom - and the destruction wrought by two bouts of private equity ownership”. It’s worth recalling that the initial privatisation battle was won by the Irish-led Valentia consortium, put together by Sir Anthony O’Reilly. The Fianna Fail Government at the time introduced special tax legislation to allow O’Reilly’s debt-laden bid to succeed.

So “Irish-led” does not necessarily translate into “barbarian-free”!

Until the economy comes out of recession, the main thrust of any private equity investors will be to cut costs as ruthlessly as possible and John McManus concludes his opinion piece with a very apt description of what is likely to come next: “One would not want to be a rural TD facing an election while fighting to save the local Bank of Ireland branch as Carlyle, JC Flowers and the like start cashing out”.
I'm with McManus on this one.

Friday, November 14, 2008

Sorting out this mess of a budget.

The Government seems determined to pursue the line that their current poll ratings are a result of a communications problem: to wit, we, the taxpayers, have failed to grasp the scale of the economic downturn and the consequent need to make painful budgetary cuts.

They are right that there is a communications failure, but that failure is mainly that the Government is not listening. We, the taxpayers, were well prepared for painful measures but they, the Government, chose many wrong targets and options. Targeting the over-70s for medical cards, imposing a 1% levy on those earning the minimum wage, penalising infants starting school and depriving 12-year old girls of a potentially life-saving vaccine was not what any of us was expecting. Surely the opinion polls are telling them that?

The budget was a classic mish-mash of mickey mouse measures with no coherent theme or evidence of any vision for economic recovery or for our society. Would the country be better served if they shelved their October “back of envelope” effort and produced a properly thought-out December budget, as originally scheduled?

The main opposition parties have promised support for the right corrective measures. Here's an opportunity for the Government to test their resolve.

Thursday, November 13, 2008

Pres & Glasthule residents done by Dunne?

As a past pupil of Presentation College , Glasthule, I would like to express my concern and disappointment about the sale of the former Pres sports grounds on Hudson Rd to Ben Dunne, who proposes to build a fitness centre there.

It’s not that I have any particular objection to fitness centres, but anyone who has seen Mr Dunne recently could hardly argue that he is one of his own best customers. I have little doubt that, in the foreseeable future, this site will be put to a more financially productive, and probably less acceptable, commercial use.

In October last we spent a few days in the Abbeyglen Hotel in Clifden. The afternoon of our last full day there, a banner was hung above the main entrance – something to do with a Ben Dunne Gym in Clifden. On a spin in the car out to the Connemara Golf Club in Ballyconneely, we noticed a helicopter parked – with GYM-H stencilled on the tail. Then we saw Ben Dunne playing golf, a large, overly rotund figure getting out of a golf-cart and hitting a fairway wood.

Later that evening his helicopter did indeed land outside our hotel. As we had my elderly mother in tow, we didn’t stay late in the bar. The following morning at breakfast, who appeared but the bould Ben. He loaded a plate with fried food and regaled other diners with a story of his 3am session in the bar and a monumental hangover. Then he insisted on having Flora, rather than the standard butter on offer, for his "lashings of hot toast". He announced that his doctor had told him to cut out the drink and the butter, and "one out of two wasn’t bad".

I don’t know what age Ben is, but he’s unlikely to enjoy a ripe old age, the way he’s looking/going. Anyone assuming that he, or his proposed fitness centre, will be around in 10 years time is fooling themselves.

The only question about the long-term use of those playing fields is this: will it be LIDL or Aldi?

Shane Ross exposes himself!

Finally, Shane Ross comes clean!

On RTE’s Morning Ireland today, Ross admitted he didn’t understand some of what BOI CEO Brian Goggin had said in an earlier interview, regarding the bank’s half-year results, because “ he disguised it in language no layman could understand”.

But Shane Ross isn’t supposed to be a layman, he’s the business editor of the Sunday Independent and a regular loudmouth commentator on radio & tv, supposedly a business specialist, as he was with on RTE this morning.

I’ve always regarded Ross as a light-weight populist chancer when it comes to business journalism. Now he’s finally admitted it live on air.

It’s only a myth that Caligula made his horse a roman consul. But it’s a fact that Trinity College elected a horse’s ass a senator!

Trinity students and graduates please note.

Saturday, November 08, 2008

Wanted: Dunphy's bite back.

Eamon Dunphy’s weekly programme has just started on RTE.

Each week he interviews some well known politician, businessman or celebrity for the guts of an hour. It’s supposed to be in-depth stuff but Dunphy usually manages to give his guests a complete tongue-bath by the end of the show.

Lest we forget, Dunphy was a much feared interviewer in his TodayFM heyday. Now his interviewees face all the menace of the Andrex puppy.

Go back on the drink, Eamon, please.

Wednesday, November 05, 2008

Barack Obama - Offaly's 2nd current world statesman

Barack Obama’s election as next President of the USA is a welcome and truly extraordinary event – almost no matter how his term in office actually turns out in practice.

Less than 50 years ago, negroes were still legally deprived of many basic civil rights in many US states, so this is a genuinely seminal moment in the history of the USA, probably almost unimaginable for many living African-americans.

On the radio tonight I listened to U2’s “(Pride) In the name of love” – their 1984 tribute to Martin Luther King who was murdered in 1968. For all the ordure heaped on Bono for his good works, this is a song which, both musically and morally, delivers on highly challenging aspirations.

It will be interesting to see how, in the coming years, the example of President Obama, an educated, articulate, well-grounded black man, is reflected in the young black population. Let’s hope for the best.

Currently, black male role models appear to consist only of bling-draped rappers and sports stars, blabbering a largely unintelligible rap patois which mainly focuses on sexism and violence (let’s hope Obama never feels the need to tell us anything about his “bitch”), coupled with ill-matched and badly fitting clothing, particularly the desire to show knicker elastic above jean waistline. Can’t these “stars” afford jeans that actually fit??

So roll on January and the inauguration of President Obama. Big promises to keep, and miles to go before he sleeps. The best of luck to him.

PS: The other world leader with family roots is Offaly is, of course, Ireland's Taoiseach Brian Cowen, aka BIFFO.
In Obama's case, BIFFO stands for "Black impressive fellow from Offaly". Cowen's variant is somewhat less polite.

Monday, November 03, 2008

Sean O'Rourke disses Enda Kenny - again.

Sean O’Rourke has always failed to hide his contempt for Fine Gael leader Enda Kenny. This is probably because he makes no effort to do so.

On RTE's “The Week in Politics” last night when he challenged Kenny with the unsubstantiated anecdotal claim that even long-standing FG supporters roll their eyes to heaven at the thought of Kenny as Taoiseach.

O’Rourke followed this up with speculation that the FG backroom suits might approach Kenny before the next election and ask him to step down as leader.

Surely it is the function of the FG party to select its leader, not the role of RTE or Sean O’Rourke, who exceeded even his own high standard of disrespect and rudeness last night.

I don’t know what O’Rourke’s objective is or what his personal political affiliations are, other than his complete antipathy when it comes to Enda Kenny.

But let the FG party and the electorate decide the fate of Enda Kenny and let O’Rourke learn some bloody manners.

Footnote: I've sent the above complaint to Sean O'Rourke and RTE.

Sunday, November 02, 2008

Getting it up for over-40 men!

It may be because I’m in the target age group, but I’m conscious of hearing a plethora of radio ads in the past month on the subjects of "Erectile Dysfunction" and "Testosterone Deficiency" in the over-40 male population. The claim is that 50% of us are suffering from some degree of droop.

It’s a surprise to hear ads relating to what is supposedly a male health issue – the health media is traditionally dominated by female concerns and complaints. Indeed, it has been a cause for complaint that male health matters seem to come a very poor second to those of women.

It strikes me that “erectile dysfunction” may not be on the list of dangerous diseases; I find it hard (no pun intended) to believe that it’s a life-threatening condition. Why aren’t other major men’s health concerns e.g. heart disease, blood pressure, cholesterol, obesity, Type 2 diabetes, colon and prostate cancers etc. etc. the subject of such intensive advertising campaigns?

Is it just possible that this ad campaign may not be intended for the benefit of men at all, but rather it is aimed at fixing a female complaint: they’re not getting enough sex. Middle-aged women, the long-time wives of those over-40s men, are avid viewers of “Sex in the City” and consumers of mountains of chick-lit novels. All of these share a common theme – sexual satisfaction is the right of women – “because you’re worth it”.

However, before any of those 50% of 40+ male sufferers of erectile dysfunction are subjected to any form of medication or medical treatment, I demand that they be subjected to a simple test:
Place the subject, naked, alone in a bedroom with a nubile, naked 18-year old au pair. I’ll wager that most of them will have a miraculous and immediate recovery.

Which reaction may, of course, raise awkward questions, and possibly nothing else, in the marital bed.

On Her Majesty's Service - Halifax, Ulster Bank etc

Following the decision not to participate in the Government Guarantee scheme, Halifax/Bank of Scotland (HBOS) ran full page press ads during the week to reassure customers and to promise to utilise the freedom from the scheme constraints to bring innovative and better value products to the Irish market.

The latter point was the key message from motor-mouth Mark Duffy, HBOS MD in Ireland, in a series of media interviews following the announcement of the decision not to participate.

It’s worth recalling that HBOS, both here and in UK, would now be defunct if the UK government had not stepped in to save that bank. It is still likely that the UK Government will end up as the largest shareholder in a combined Lloyds-TSB/HBOS merged bank.

When the Irish Government announced the bank guarantee scheme, originally confined to six Irish-owned institutions, the UK government protested to Dublin that it would seriously disadvantage UK banks operating in Ireland, while simultaneously giving an unfair advantage to Irish banks operating in the UK market.

Is it safe to assume that the Irish government will be raising similar concerns with their UK counterparts, particularly if Ulster Bank/First Active also opt to stay outside the scheme?

In effect, two UK state-owned banks, themselves recent casualties of the financial services meltdown, will be handed a competitive advantage in the Irish market, potentially damaging the recovery prospects for the Irish financial system.

Blog Archive