Current Account »

• 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.

• Questions unanswered on Lenihan conference call

  @ 2:22 pm | by John Collins

  The Telegraph’s report that Minister for Finance Brian Lenihan was heckled by investors on a conference call on Friday attracted lots of attention over the weekend. The Department has clearly stated that the report is inaccurate.

  I haven’t spoken to anyone on that call or heard a recording of it (if you were, please get in touch) but a number of things in the article warrant comment. (more…)

• The big painful snip: did McCarthy and co get it right?

  July 16, 2009 @ 2:32 pm | by Laura Slattery

  After months spent surgically examining how the State is run, the report by “An Bord Snip Nua” chaired by economist Colm McCarthy has now been published on the Department of Finance website, although on my computer the eggtimer is still whirling around to no avail. You can read the Irish Times initial summary of the main recommendations here. They include an axing of 17,358 public sector jobs and a 5 per cent general cut in social welfare rates, with a 20 per cent slash in child benefit.

  Quango-wise, the Irish Film Board and Bord Bia are among the many agencies that the report says should be subsumed into an Enterprise Ireland-type super-body, while candidates for outright ”discontinuation” include the Active Citizenship Programme and the… er…Newfoundland-Labrador Partnership. Apparently, there were two Public Service Modernisation Units – one is now recommended for the chop.

  So have they got the balance right or is this the most offensive document since the Enron Guide to Honest and Sensible Accounting? Is Martin Cullen, minister of a department that Bord Snip says should be discontinued, the highest-profile loser? Which recommendations will see the light of day, which ones will be quietly shelved and which ones will prompt an embarrassing backtrack when the understandable public anger refuses to subside? What was missing from the report?

  And finally… are Brian Lenihan’s hopes for a “considered and honest” debate the biggest pipe dream since talk of a soft landing in the property market?

   Ah, I’ve finally made it onto the Department of Finance home page and it is completely blank except for the links to the Bord Snip report. Those cutbacks really are swingeing.

• Krugman on Ireland – part 2

  April 20, 2009 @ 3:02 pm | by John Collins

  Seems we were closer to Boston than Berlin all along, if Nobel award winning economist Paul Krugman is to be believed. Following on from his comments last week at an event for the foreign press, Mr Krugman devotes his column in today’s New York Times to the problems facing our economy and what the US can learn from them.  

  He suggests that free market excesses drove our housing bubble to the point that “Ireland became in effect a cool, snake-free version of coastal Florida”. Krugman believes that the last remaining hope for Ireland is that a recovery in our big trading partners prompts an export-led recovery at home. Nice to see he’s read the “twenty economists” opinion piece carried in our paper last Friday, which suggests there is little point in establishing Nama without nationalising the banks.

  The last line of Krugman’s column should probably be pinned on all the noticeboards in the Central Bank and the Department of Finance:

  “And the lesson of Ireland is that you really, really don’t want to put yourself in a position where you have to punish your economy in order to save your banks.”

• Taxing times

  December 2, 2008 @ 8:55 pm | by Laura Slattery

  Fine Gael finance spokesman Richard Bruton opted for “calamitous”. Labour Party equivalent Joan Burton plumped for “ruinous”. The November exchequer returns data released today was, Minister for Finance Brian Lenihan admitted, “poor”. In fact, they confirmed our “worst fears”, said Ulster Bank economist Pat McArdle.

   So what happens now? Judging from Mr Lenihan’s statement today, he is sticking to his chosen strategy of chasing further cuts in current spending, with the Special Group on Public Service Numbers and Expenditure Programmes, forever destined to be known as An Bord Snip Nua, having already begun its review of how the Government spends / wastes the tax we pay. Other options include flogging off public assets or further tax hikes to balance the books. (more…)

• Democrats are good for the US economy

  November 5, 2008 @ 1:39 pm | by John Collins

  Wall Street had its strongest election day rally in 24 years yesterday, while the dollar has climbed and Asian markets hit a three week high on the back of Obama’s election overnight. Which all flies in the face of the conventional wisdom that the markets and business in general like Republicans and fear Democrats.

  That particular urban myth got a good thrashing recently when Prof Stéphane Garelli from Switzerland’s Institute of Management Development (IMD) addressed a conference in Dublin. In his highly entertaining presentation on the competitive outlook for 2008 and beyond (who would have thought Swiss econmics professors could be so amusing) Prof Garelli showed a slide which plotted different US presidents against the budget deficit they oversaw. It showed clearly that the Democrats tend to oversee surpluses while the supposedly market-friendly Republicans run up massive deficits. Link to the full slide below.

  US Budget Deficits

• Mini-budget misery?

  October 17, 2008 @ 5:38 pm | by Laura Slattery

  The dust hasn’t even settled from what our colleague Miriam Lord called a “cluster bomb budget” earlier this week, and already the number crunchers are saying that the Government will have to (and should)  have a “mini-budget” early next year. (more…)

• Irish property bubble was Governments’ fault

  @ 2:54 pm | by Colm Keena

  The ESRI economist Prof John FitzGerald was speaking at  the Society of Chartered Surveyors conference in UCD today and once again had harsh words to say about the Government’s handling of the economy, and in particular the property market, in recent years.

  He made the rather obvious point – though one that recent governments obviously didn’t find attractive politically – that the low interest rates that prevailed in the eurozone during the Irish property boom, could have been counteracted by fiscal policy, eg the imposition of taxes that would have increased the cost of mortgages, thereby militating against the development of the property bubble that has now burst.

  On the budget he was of the view that it wasn’t hard enough. People were ready for something hard and perhaps now was the time to really do the job, he argued, because the quicker matters were stabilised, the better. The government has said there will be further harsh budgets in 2010 and 2011 but a slide he displayed showing in which years over recent times the Government put money into the economy, clearly showed a pattern where budgetary policy was following political rather than economic cycles.

  It was mostly, though not all, gloom. Land prices are falling as fast as property prices, meaning that the infrastructural projects in the national plan, should now become a lot cheaper. Tom Costello, managing director of John Sisk & Son Ltd, was of the opinion that you could get up to 40 per cent more road for your euro in the coming market conditions as compared with ten years ago, what with decreased land and other costs. Furthermore, the use by the Government of the “world-class” construction industry that now exists in Ireland, he said, would help prevent it being lost as a resource over the coming few lean years. “Use it or lose it,” he said.