Heading for a bankruptcy hat trick

I couldn't find the article online, but there are a couple of sentences that say so much about our banking problems. It's a long piece from this week's Sunday Times on property developer, Paddy Kelly.

Last week Kelly told a Commercial Court that he was considering bankruptcy, but here are the two sentences that caught my eye.

Through various partnerships, project companies and investment vehicles in Ireland, Europe and America, it is widely estimated that Kelly owes Anglo Irish Bank alone in excess of €700m. The Co. Laois-born developer, who has twice gone bust in the past, says that he simply got tired of trying to hide his difficulties and the massive problems within the Irish property sector.

Anything there catch your eye? How 'bout ... twice gone bust in the past?

I know a little bit about banking and I know a little bit about risk. And, to my mind, someone who has twice gone bust in the past might be just a little too risky to lend anything more than, I don't know, €250m or so? Honestly, it's just so stupid.

Oh yeah, don't miss that little "alone" in there. The Sunday Times is leaving open the question of whether Kelly owes money to any of the other banks. Uggh.

Geithner did it

I like this from the Sydney Morning Herald. Tim Geithner is the cause. He's the one who started the ball rolling towards the financial meltdown we're experiencing now. It all goes back to how he with the IMF dealt with Indonesia's problems (and , according to Australia's former Prime Minister, Paul Keating.

China, in particular, drew hard conclusions from the IMF's mishandling of the Asian crisis. It decided that it would never allow itself to be dependent on the IMF, or the US, or the West generally, for its international solvency. Instead, it would build the biggest war chest the world had ever seen.

Keating continued: "This has all been noted inside the State Council of China and by the Politburo. And it's one of the reasons, perhaps the principal reason, why convertibility of the renminbi remains off the agenda for China, and it's why through a series of exchange-rate interventions each day that they've built these massive reserves.

Keating went on to argue that, by frightening the Chinese into building their vast $US2 trillion foreign reserves, Geithner was responsible for the build-up of tremendous imbalance in the world financial system. This imbalance, in turn, according to Keating, contributed to the global financial crisis which has since devastated the world economy.

China invested most of its reserves in US debt markets. Keating again: "So we have this massive recycling of funds into the system by [the former US Federal Reserve chairman Alan] Greenspan's monetary policy so even if you are greedy Dick Fuld [the former head of the collapsed investment bank Lehman Brothers] or you are hopeless Charles Prince at Citibank, you're being told there's an endless supply of money at a low interest rate and no inflation. So of course the system geared up to spend it.

"That is the fundamental cause of the problem - the imbalance is the fundamental cause."

Them cats don't bounce

"Dead Cat Bounce." Who didn't love that phrase the first time you heard it. It could have been just about anything - 'Lump Of Wood Bounce', for example - but it's "Dead Cat Bounce." It really sums it all up.

So, that's the big question of the day/week. Is the market really rebounding or is this just a "dead cat bounce." I guess we won't know for a while, but if you read this it'll be more than the fate of the aforementioned cat that will worry you.

Canadians must face “the very real possibility that not only could the systemic global credit crisis and the spreading U.S. balance-sheet recession lead to a lost decade or worse for the global economy,” predicted veteran analyst William Macdonald in his written submission, “it could also lead to the breakdown of the globalization project itself.”

And, it goes without saying that where you read "Candaians" you can substitute whatever nationality you like (other than Zimbabwean, I guess).

The essence of the article from the Globe and Mail is that it's possible that what President Obama is trying to do is
wrong.

Throwing billions at trying to remove and resell the toxic assets that banks accumulated is a waste of time, because those assets are worthless and should be written off.

Worse, according to some, Mr. Obama's $3.6-trillion budget, with its emphasis on health care, education and energy reform, wastes money that is needed to combat the coming depression. It robs the economy of future growth by piling on debt.

Gulp. You simply cannot put the day of reckoning off forever. Too much many times the government intervened to prevent a recession.

Recessions are the medicine you hate. They may taste bad, but they're a lot better than waiting for some vital organ to give up the ghost leaving you needing major surgery and a long convalescence.

The NY 20th

The Department of Justice says that Governor Paterson didn't allow enough time for absentee and military voters to vote in the special election to be held on March 31. Well, if the feds say so, but I got my ballot application form, sent it off, got my ballot and sent that off. All well before the March 31 deadline.

One vote in the Tedisco column. Come on, Jim. The fightback starts in the suburbs of Albany. {And, I don't want to hear anything about all the mistakes Tedisco has made since the campaign started. Things are bad enough already.}

Next stop Aviva Stadium - NOT

Good for the MTA. That's the Metropolitan Transit Authority, New York's public transport body. The MTA is refusing to use Citigroup's name on the subway stop where the Mets' new stadium - Citi Field - is. The station used to be known as Willets Point/Shea Stadium, but now the stop will be Mets/Willets Point. (Not sure why Willents Point got bumped to 2nd place.)

The MTA wanted to be paid for advertising Citigroup, but the more or less bankrupt advertisement for mismanagement said 'No'. Okay. So the MTA said 'No' to their name on the subway stop and all those subway maps, etc.

I hope the Dublin public transport authorities have the same sense. The new rugby/soccer stadium going up where the old Lansdowne Road stadium was will be known as Aviva Stadium. Fine, but the DART stop there better not use the name Aviva unless Aviva is paying for it. Otherwise, stick with Lansdowne Road.

"Day of Action"

I bet a lot of the union leaders would count themselves among those people who thought George Bush was stupid. Well, no decision that Bush made as President is as obviously poorly thought out - okay, stupid - as the decision to hold a one day strike this Monday. I'm not saying that the public sector unions don't have a right to be annoyed, angry, fed up, whatever, but they have got to just suck it up and carry on.

The unions will reap a whirlwind if they strike next week. There is zero sympathy for the unions from non-union members and even within the unions, from what I've heard, there are quite a few members who think this is idiotic and have no sympathy with their cause.

Quantitatively killing us

Can we live with an exchange rate of €=$1.60? Can we live with € > £? I don't know, but if this guy quoted in the NY Times is right we will find out.

Jean-Michel Six, chief European economist at Standard & Poor’s, forecasts that the euro will push through $1.60 by the end of September and pass the parity level against the pound about the same time.

The funny thing is, I'm not a fan of this "quantitative easing". They might just as well call it "debasing the dollar" (or pound).

Doesn't matter, though. Right now it's much more attractive to an American company to look at the UK for their investment and it's more attractive for shoppers from here to head over the border for their clothes, food, cigarettes, alcohol, etc. How much more attractive will it be when the euro hits $1.60 and the pound is worth less than €1. We're in a bind.

Prompted into a blunder

It was a light moment and to the Taoiseach's credit he apparently was quick to respond in a way that made what could have been simply embarrassing into a moment of endearment. On Tuesday evening in the White House he stepped up to the podium and started reading the speech off the teleprompter. Only it wasn't Brian Cowen's speech, but President Obama's.

Lise Hand says it was the Taoiseach having his "blond moment". And, I guess it is, but maybe the blame really lies with the person who was responsible for the teleprompter? And, maybe, some blame should go to President Obama, who apparently cannot speak without a prompt.

Yup, although it has gone unremarked in the Irish media, President Obama cannot speak without the teleprompter. I didn't know this until I read this a week or so ago.

Obama’s reliance on the teleprompter is unusual — not only because he is famous for his oratory, but because no other president has used one so consistently and at so many events, large and small.

… But be it extra precaution, style or a mental crutch, Obama has shown in the past that he needs the teleprompter.

… "He uses them to death," a television crewmember who also covered the White House under Presidents Bill Clinton and George W. Bush said of the teleprompter. "The problem is, he never looks at you. He’s looking left, right, left, right — not at the camera. It’s almost like he’s not making eye contact with the American people."

Obviously it's not a big issue - although you just know how the press would have reacted if President Bush had such a dependency - but it's a little weird.

So, maybe Brian Cowen would have been happier if he didn't have the teleprompter in front of him the other evening. I don't know, but his response when he realized what he'd done was excellent.

Brian looked around sheepishly to where President Obama was seated. "That's your speech!" he blurted, clearly morto as he realised that he was reading from the wrong script on the autocue.

… He turned to his host and looked at him sternly. "Who said these were idiot-proof?" he deadpanned.

Dear Mr. Ambassador ...

To Ambassador Dan Rooney,

Your predecessor snubbed me annually, so I'm getting my yearly plea in early. How about you, me, a turkey leg or two and a few beers as we watch football next Thanksgiving in your new house? I don't even mind if you have a few others over. I'm not selfish.

I will tell you this about the recently departed Mr. Foley, however. He seems to have done a great job and a great service to you, Ambassador Rooney, with his efforts at redecorating the place if the NY Times is to be believed. Still, what good was all that redecorating if I never got to see the house?

I eagerly await your reply.

Yours sincerely,

Irish Eagle

3.14159265....

It's funny now, but there was a time in my life when Pi was as commonplace to me as just about any other word I used. As a concept, it was much more familiar to me than worrying about the gas or electric bill, that's for sure.

Pi. It came up all the time. For the better part of, what?, 8 years of my life? Pi.

Pi = 3.1416

So what happened? Why do I almost never even think about Pi these days? Why does Pi not come up in my daily discussions - unless I'm helping with the homework - as it did all the time when I was 20? I don't think I could have imagined a life without Pi when I was a student, yet it has hardly featured post-graduation. When I'm talking with friends or people I work with nobody ever says, "You forgot to multiply it by Pi" or some such. Never.

So, even though it's equally stupid and geeky, I love that today's Pi Day because it's March 14 on the calendar. Get it? Well, of course you do, if you write the dates as Americans do - 3-14. Europeans will never have their own Pi Day, but I figure those who want to can join in today's "celebration".

Now, what's the formula for the volume of a cone?

The new "Oranje"

I watch the World Baseball Classic when I can even though it's not very good baseball and I don't care who wins so long as no Mets get hurt. The baseball's not that good because the players are not even in early season shape, let alone at their best. They're just getting stretched out for the long season ahead. And baseball's not really suited to the quick lose and you're out format that the WBC employs.

Still, despite all that, it's hard not to be stunned by what the Dutch have accomplished this week. Yesterday they beat the Dominican Republic for the second time in 3 days. If this were any other sport it would not be worth mentioning, but baseball is hardly a big deal in Holland and in the DR it's everything. Other than America, the Dominican Republic probably has the most superstars in the game.

Het is een wonder

I'm tempted

I hate reality t.v. shows. I don't care what they are, I can't stand them. Except ...

I love Feirm Factor. And Feirm Factor is looking for people for the next series. Ohhh. The temptation.

I know, I know, they're looking for farmers, but I figure I can get around that minor obstacle. So tempting.

The War on Drugs and Mexico

Pat Buchanan - yep, that Pat Buchanan - makes the case for legalizing narcotics. He's not happy about it, but he says it's either that or America (& Mexico, presumably) will have to start killing the suppliers and users in order to win the war on drugs.

Buchanan says that Mexico is losing its war on the drug cartels, who "field more than 100,000 foot soldiers", according to the Pentagon.

Add a collapsing global economy to a losing war with drug cartels, and Mexico is at grave risk of becoming a failed state, a narco-state, with a 2,000-mile border with the United States.

… Will we raise the white flag in the drug war, as well?

Which is the greater evil? Legalized narcotics for America's young or a failed state of 110,000 million on our southern border?

Could things really be that bad in Mexico?

Shiver me timbers!

I'm sure I'm not the only one who nearly passed out on catching sight of their most recent gas bill. It sure was a cold period - mid Dec through mid Feb - but still. My bill is up by nearly 60% over the same period last year. I used 33% more gas and the price has risen by over 20%. Even the number of kW/h per cubic meter of gas has gone up - and I can't explain that one.

That's it for heat this winter. Extra sweaters all around.

Tempting text tax

So, the Green Party suggests that one new tax that the government should impose is a 1c tax on all texts. Let me just say that if we must have new taxes - and I'm never a fan of new taxes - this one is about as good a tax as I can imagine.

Last night I went through my sent texts and found that I'd sent 27 since October 1. That works out roughly at around 80 texts per year. I can handle an extra 80c on my tax bill - and truth is, I might even cut back if the cost of texting is increased.

Of course the mobile phone companies are opposed and I don't blame them. Texting is a gold mine for them. They're already worried about people switching to Skype-enabled phones.

I can't really imagine all those teen texters cutting back if they have to pay an extra 1c per text, but maybe mommy & daddy will not increase their phone allowance. That might force teens to reduce the number of texts they send even if they don't want to. However, I can easily imagine that those same teens would put up with the lower quality Skype service if they can get free messaging and calls. Oh yeah, you can hear the painful screams coming from Vodafone and O2.

And, that's why I like the text tax more than most taxes. It might get rolled out just as texting dies out in favor of internet IM'ing via mobile phones. The government may never realize the €146m in revenues that they're expecting.

It's not all media hype

Twice this past weekend I found myself talking to two men - separate conversations - who believe that the "economic crisis" is mostly media hype. "They've got to sell papers", is what one of them told me.

I didn't know what to say. As someone who's fairly well convinced that we're heading down and fast I didn't know where to start. I simply let each of them say what they had in mind and walked on. I was shocked. I have no idea what these men do for a living, but I hope to God they're right. I'm sure they're wrong, but I hope they're right.

Today the news is full of the "mini-budget" or emergency budget or whatever you want to call it coming at the end of the month. I'm sure there's a reasonable explanation for waiting a month - having been about 4 months late realizing how bad things are - but it's lost to me. I can't understand why they don't just impose the tax hikes right now. What does the state gain from such a delay?

There's a small part of me wondering if there isn't something bigger being planned for the economy than 2c extra on the tax rates.

United States of Europe

That's a phrase that is used all the time to describe a dream of Euro-federalists. It's ironic to now realize that it's now becoming a reality, only it's happening on the western side of the Atlantic.

I was wrong about Barack Obama. I thought he'd be cautious. Wrong, wrong, wrong. He is not cautious.

He's rolling the dice on America's future in a way I would never have imagined. I thought he'd take a year to stabilize the banking and finance systems, get the economy cooking again and then look up and see what next. That's not what he's doing.

Nope. He's building the European dream - in America. Economically and socially it's a reconfiguring of America. I'm surprised and I don't much like it, but that's what you get when you lose.