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• Night of the long knives for quangos

  November 17, 2011 @ 10:52 am | by John Collins

  The big story today will be the publication at noon of the Public Service Reform document at an event in Government Buildings with Taoiseach Enda Kenny, Tánaiste Eamon Gilmore, Minister for Public Expenditure and Reform Brendan Howlin and Minister of State with special responsibility for Public Service Reform and the OPW, Brian Hayes.

  Doesn’t sound that exciting when you put it like that, but what in fact you can expect is an end to decentralisation, the merger or closure of several quangos and state agencies, and the loss of several thousand public sector jobs. Ciaran Hancock revealed this morning that the Irish Aviation Authority and the Commission for Aviation Regulation are likely to be merged. Merging the regulator into the body it regulates is an interesting challenge and gives you some sense of the difficult choices on the table. Here’s a full preview of what we expect.

  Elsewhere this morning the European boss of the IMF has quit, citing personal reasons, media group UTV has seen 2 per cent revenue growth in the first 10 months of the year, and make sure your sitting down for this one, Ryanair boss Michael O’Leary and BA boss Willie Walsh have come together to ask the British government to axe air passenger duty.

  In the newspaper today Simon Carswell got hold of David Drumm’s defence documents in his US bankruptcy case. Drumm is claiming that the Anglo Irish Bank board and Financial Regulator knew all about Sean Fitzpatrrick’s warehousing of his directors loans as well as the Maple 10 loans to customers to buy shares, both of which are the subject of investigations.

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• Were the banks trying to tell us something?

  November 15, 2011 @ 4:45 pm | by John Collins

  Three years on from the Irish banking crisis coming to a head with the Government’s blanker guarantee much has been written about how the authorities failed to see what was coming down the tracks.

  But maybe the signs were there all along for all of us to see? This picture which was sent in by a reader suggests they were.

  

  As our correspondent explains:

  “Took the attached photo  way back in the early seventies, in a town in the Midlands. Thought you might be interested in this photo and find it amusing.
  Was the bank trying to tell their Customers and Share holders something?”

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• Fake or philistine: the jury’s out

  September 28, 2011 @ 12:28 pm | by John Collins

  Alessio Rastani, the London day trader, has become a viral hit around the world following his rather in your face interview with BBC News on Monday. Rastani isn’t just a business story – even my Pricewatch colleague Conor Pope has got hot under the collar about this guy.

  If you haven’t seen the interview with the “independent trader” (echoes of Del Boy and Rodney?) who claims to dream of another recession and that Goldman Sachs rules the world, here’s the clip:

  

  Almost immediately after the appearance speculation began to mount that Mr Rastani was a fake and bore a striking resemblance to a Yes Man that had pretended to be a spokesman for Dow Chemical. As a result the BBC press officer was forced to issue a statement stating that Rastani was not a fake. Never missing an opportunity to have a pop at the Beeb the Telegraph published an article claiming he was a fake, although if you read the article he’s actually an attention seeking lowly day trader rather than a fake.

  My take: Rastani went on the show to get a reaction. Most of what he said isn’t new (remember Rolling Stone journalist Matt Taibbi’s description of Goldman as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”) it’s just that he managed to get so much into his three and a half minute slot and was so unapologetic about it.

  The best comment on the whole thing comes from Fiona Walsh, our London Briefing columnist:

  “By Tuesday evening, his 3½-minute interview had clocked up almost half a million hits on YouTube and, such was the candour of his comments, there was widespread speculation that it was a hoax. Seasoned City hands thought otherwise, however, and marvelled that someone had at last revealed what we all know to be true – that traders are in business to make money.

  Only an independent trader would have been be foolish (or publicity-hungry) enough to speak as unguardedly as Rastani; anyone employed by one of the major investment banks would have been sacked before he left the studio.

  In fact, the only part of the interview that did not ring true was the bit where Rastani said he wanted to help people. That part surely was a hoax.”

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• What’s $2 billion between friends?

  September 16, 2011 @ 12:51 pm | by John Collins

  So UBS “Delta One” trader Kweku Adoboli (left)  joins the rogues gallery of traders who have lost their employers millions or billions with dodgy trades which their superiors claim to have had no knowledge of. At $2 billion, he has some ground to make up on Jerome Kerviel, who lost $7.2 billion at Societe Generale in 2008. But he easily beats Nick Leeson, the Galway-resident who brought down Barings Bank with losses of $1.4 billion in 1995, and John Rusnak, the US foreign exchange trader, who lost $691 million at AIB’s US subsidiary in 2002.

  The truly shocking revelation has come this morning from the BBC’s business editor, Robert Peston, who says UBS’s internal controls did not pick up Adoboli’s massive bets. In fact they only found out about it on Wednesday morning when the 31-year-old came clean. This is hugely concerning for a bank that lost €50 billion during the subprime crisis in 2008 and had to be bailed out by the Swiss taxpayer. It also gives the lie to the statement by UBS chief executive Oswlad Grubel that the rogue trading does “not change the fundamental strength of our firm”.

  Adoboli was a trader on UBS’s Delta One desk, a shadowy area of banking that allows banks trade with their own money largely out of the sight of regulators. As one commentator has noted, most bank chief executives don’t understand what actually happens in these units. Delta One is a rapidly growing area of derivative trading and one you are likely to hear a lot more about after this.

  And on a slightly lighter note, if Adoboli posted on his Facebook page (now converted to a UBS community page by Facebook) that he needed a “miracle”, surely someone at UBS should have got concerned??

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• Business podcast: April 21st

  April 20, 2011 @ 6:02 pm | by John Collins

  John Collins hosts a discussion of the Nyberg Report on the banking crisis with Simon Carswell, Ciaran Hancock and Colm Keena

   Standard Podcast [23:29m]: Download
  

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• Business podcast: April 14th

  April 14, 2011 @ 7:30 am | by John Collins

  Simon Carswell discusses AIB’s record annual loss, Suzanne McElligot of IAB Ireland on the growth of internet advertising and Urban Frog co-founder Angie McMenamin on setting up a new sports clothing brand. John Collins presents.

   Standard Podcast [23:56m]: Download
  

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• Drumm struggled to balance household budget

  February 15, 2011 @ 12:54 pm | by John Collins

  

  Former Anglo Irish Bank chief executive David Drumm outside the federal court in Boston in 2010

  So David Drumm ran a €72 billion loan book while chief executive of Anglo Irish Bank but wasn’t able to get a handle on his personal finances? (more…)

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• FitzPatrick’s tale hard to swallow

  January 14, 2011 @ 12:41 pm | by John Collins

  It has to be said The Fitzpatrick Tapes is compelling reading. When I first heard about Tom Lyons and Brian Carey book in The Sunday Times I had reservations. What had the two journalists agreed to in order to get the former Anglo Irish Bank boss Sean FitzPatrick to speak at length on the record – something he has streadfastly reused to do since the collapse of his beloved institution?

  Tom Lyons covers off the genesis of the book very well in his introduction. FitzPatrick wanted to give his side of the story and Lyons put in the groundwork to win his trust and cooperation.

  The issue is that FitzPatrick’s claims around many key events are hard to swallow – even for his colleagues. The authors call him out on some of these claims – such as not knowing the identity of the “Maple 10″, the Anglo clients who bought 10 per cent of Sean Quinn’s stake in the bank. FitzPatrick himself acknowledges that others have different memories of key events – in one case Anglo exec Pat Whelan has phone records to prove he informed him the deal was close to completion. But even then FitzPatrick can’t say he was wrong – just that he believed Whelan.

  The true worth of the book, however, is how it has driven the news agenda this week and shown there are significant gaps in our knowledge about events running up to the bank guarantee. The revelations about FitzPatrick’s golf game with the Taoiseach have now been followed with the news that Cowen assembled a kitchen cabinet at Druid’s Glen but apparently one which did not discuss the elephant in the room – the ailing Anglo.

  While much more rounded accounts of the meltdown in Irish banking will emerge, and are currently being worked on, The Fitzpatrick Tapes is a compelling, if by its nature limited, contribution to the publics knowledge of events that have helped bring our economy to its knees.

  • A full review of The FitzPatrick Tapes by Kathy Sheridan will appear in tomorrow’s Irish Times.

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• Don’t ask for credit, refusal might offend

  November 30, 2010 @ 12:47 pm | by John Collins

  At the time of writing Bloomberg is reporting the yield on Irish ten-year bondsis 9.38, a gain of almost 1.5 per cent today and up from Friday’s pre-bailout close of 9.196. (more…)

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• Recording emerges of Lenihan investor call

  October 4, 2010 @ 8:58 pm | by John Collins

  US blog Zero Hedge has managed to get hold of a recording of Brian Lenihan’s controversial conference call with investors organised by Citi. Unfortunately it’s the second half of the call – after the initial call descended into farce when all the lines were left open rather than being placed on mute. What happened during the original call, and whether or not the Minister for Finance was heckled by traders as suggested by The Daily Telegraph, is still a subject of debate. This recording shows that even the call that went ahead was not without technical difficulties.

  The Citi host for the call begins by offering “profound apologies for the foul up our conference provider had this morning, inconveniencing everyone, not least the Minister”.

  The call features John Corrigan, chief executive of the NTMA and Minister for Finance Brian Lenihan giving short presentations and then engaging in a Q&A with investors. On the 45 minute call Lenihan is grilled on a range of issues including our “sluggish” growth, the cost of the banking bailout, and next year’s Budget.

  One of the NTMA officials confirms that the Attorney General is working on specific legislation to deal with subordinated debt holders in Anglo and Irish Nationwide, so that they can share the pain. Lenihan than reiterates the view that Irish law recognises senior debt as being equal with deposits and there should be no ambiguity about that.

  As is customary the operator warns all participants that the call is being recorded – so clearly a recording exists of the origingal call. It seems unlikely it will ever see the light of day.

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