Lenny's Big Fat Lie

Malbekh

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It's hard not to like Brian Lenihan. He didn't ask to be Minister of Finance and take on the world's worst economic crisis, none of which was his making. It's hard after all, to influence government economic decisions as Minister for Children (2002 - 2007).

There's also his courage and endeavour to tackle and withstand an awful cancer.

Nonetheless, such is the catastophic nature of our economic crisis that sympathy has to go out the window particularly if like me, you are following an agenda to get rid of this government as quickly as possible. So regretfully, I'm afraid I am going to have to call Lenny out on the big lie this week, the one that he and other FF ministers and TD's have trotted out with gay abandon.

The lie we are told, is that at all times the government has seeked to limit the losses to the taxpayer. This is easily disproved in the case of Anglo Irish and INBS. In order of cost, here are the losses accrued to the stakeholders in these fine, upstanding financial institutions.

The senior bondholders post September 2008. The state guarantees any bonds sold by any of our financial institutions post 2008 to present. This is why the senior bondholders can't be burnt. It is to all intents and purposes as good as sovereign debt, if we were to default on these bonds (and it is for the lifetime of the bonds) then we might as well default entirely. These bondholders are making an excellent return in the rate of interest they are charging. No loss, excellent profits.

The senior bondholders pre September 2008. The state has guaranteed to pay back these bondholders during the lifetime of the scheme. All bar about €4b has been paid back. In spite of the fact that these bondholders took a calculated risk when they took what effectively were worthless bonds in an insolvent bank, they have either gotten their money back or will be getting it back shortly. With interest. No loss, reasonable profits.

The depositors. Anyone with a deposit in these institutions will get their money back. Whether you are a family, or the ECB, your deposit is guaranteed and earning the relevant interest allowed, if applicable. Zero loss. Some profit.

The subordinated bondholders. Anglo has already aggressively seeked to limit the repayments on these bonds, in spite of the guarantee scheme. Typically they have and will be discounted by up to 70%. Hilariously, this will be spun as making a profit when reality they are worthless junk bonds. These bondholders are losing 70% of their stakeholding, but will be thankful in getting anything.

The shareholders. Once nationalised, the shareholders lost everything. This includes families like you and I along all the way up to the top financial instutions. I put this next to last, because any shareholding has a risk. Total Loss.

And finally, we have the Irish taxpayer. We will be putting €40b+ into these two institutions and getting absolutely nothing in return. Unlike the shareholders, we did not sign any coupon along the dotted line to participate in this scheme. Our losses are total, and we are the bottom of this particular pyramid scheme.

Brian Lenihan has expressly said that at all times, he has seeked to reduce the cost to the taxpayer. In his dealings with these institutions he has done the reverse and actively pursued a policy to maximise the losses to the taxpayer.

Brian Lenihan.

Liar.
 


Luigi Vampa

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As usual Prof. Morgan Kelly is on the money :

This debt would probably be manageable, had the Irish government not casually committed itself to absorb all the gambling losses of its banking system. If we assume – optimistically, I believe – that Irish banks eventually lose one third of what they lent to property developers, and one tenth of business loans and mortgages, the net cost to the Irish taxpayer will be nearly one third of GDP.

Ireland is like a patient bleeding from two gunshot wounds. The Irish government has moved quickly to stanch the smaller, fiscal hole, while insisting that the litres of blood pouring unchecked through the banking hole are “manageable”. Capital markets may not continue to agree for long, triggering a borrowing crisis which will start, most probably, with a run on Irish banks in inter-bank markets.

Ireland may therefore present an early test of the EU bailout fund. However, in contrast to Greece, Ireland’s woes stem almost entirely from its banking system, and could be swiftly and permanently cured by a resolution which shares the losses of Irish banks with the holders of their €115bn of bonds through a partial debt for equity swap. Morgan Kelly: Whatever happened to Ireland?; Bank losses may push Ireland's debt-GNP ratio up to 140% in 2012
 

Catalpa

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Jun 10, 2004
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10,257
It's hard not to like Brian Lenihan. He didn't ask to be Minister of Finance and take on the world's worst economic crisis, none of which was his making. It's hard after all, to influence government economic decisions as Minister for Children (2002 - 2007).

There's also his courage and endeavour to tackle and withstand an awful cancer.

Nonetheless, such is the catastophic nature of our economic crisis that sympathy has to go out the window particularly if like me, you are following an agenda to get rid of this government as quickly as possible. So regretfully, I'm afraid I am going to have to call Lenny out on the big lie this week, the one that he and other FF ministers and TD's have trotted out with gay abandon.

The lie we are told, is that at all times the government has seeked to limit the losses to the taxpayer. This is easily disproved in the case of Anglo Irish and INBS. In order of cost, here are the losses accrued to the stakeholders in these fine, upstanding financial institutions.

The senior bondholders post September 2008. The state guarantees any bonds sold by any of our financial institutions post 2008 to present. This is why the senior bondholders can't be burnt. It is to all intents and purposes as good as sovereign debt, if we were to default on these bonds (and it is for the lifetime of the bonds) then we might as well default entirely. These bondholders are making an excellent return in the rate of interest they are charging. No loss, excellent profits.

The senior bondholders pre September 2008. The state has guaranteed to pay back these bondholders during the lifetime of the scheme. All bar about €4b has been paid back. In spite of the fact that these bondholders took a calculated risk when they took what effectively were worthless bonds in an insolvent bank, they have either gotten their money back or will be getting it back shortly. With interest. No loss, reasonable profits.

The depositors. Anyone with a deposit in these institutions will get their money back. Whether you are a family, or the ECB, your deposit is guaranteed and earning the relevant interest allowed, if applicable. Zero loss. Some profit.

The subordinated bondholders. Anglo has already aggressively seeked to limit the repayments on these bonds, in spite of the guarantee scheme. Typically they have and will be discounted by up to 70%. Hilariously, this will be spun as making a profit when reality they are worthless junk bonds. These bondholders are losing 70% of their stakeholding, but will be thankful in getting anything.

The shareholders. Once nationalised, the shareholders lost everything. This includes families like you and I along all the way up to the top financial instutions. I put this next to last, because any shareholding has a risk. Total Loss.

And finally, we have the Irish taxpayer. We will be putting €40b+ into these two institutions and getting absolutely nothing in return. Unlike the shareholders, we did not sign any coupon along the dotted line to participate in this scheme. Our losses are total, and we are the bottom of this particular pyramid scheme.

Brian Lenihan has expressly said that at all times, he has seeked to reduce the cost to the taxpayer. In his dealings with these institutions he has done the reverse and actively pursued a policy to maximise the losses to the taxpayer.

Brian Lenihan.

Liar.
I agree with your opening lines but bear in mind that ANY Minister of Finance anywhere has ala 007 a License to do what needs to be done in the Service of the State - to a point.

Lenihan can lie his pants off if by doing so he stops a run on Ireland and lowers the cost of our ability to borrow.

Its not his lack of honesty here that is the issue but his blundering into such a huge undertaking (The Guarantee of Debts by the Irish Financial Institutions) when he had no idea how much they owed.

That and his gullibility at believing the spoofery he was being fed by certain people within those institutions.

A fact he has now all but admitted.
 

LongShanks

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644
Tabloid.
Self-serving.
Factually incorrect.
Nonsense.
I presume you're referring to "it's of systemic importance".
 

EUrJokingMeRight

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Tabloid.
Self-serving.
Factually incorrect.
Nonsense.
Stop going on about Lenihans press performances of late. He is not a well man. You would do well to remember that. I thought you were supportive of the 'party'.
Sure Lenihan tells the truth, the whole truth and nothing but the truth, so help me Willie o'Dea.
 

goosebump

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Malbekh, you logic is completely flawed.

How do you know what the cost to the taxpayer would be if other options, like letting Anglo go, or de-stabilising the entire system would be?

Your logic seems to be that because the cost is enormous, that the we have defaulted to the worse case scenario. You can't make that assertion, because we will never know the consequences of other decisions.

To use an analogy, the economy was a car flying down a road with Lenihan at the wheel. Suddenly we had a blow out, and the car started careering out of control. Lehihan had to crash it somewhere; it was going to be a wreck no matter what he did, and the fact that he steered it into into one ditch rather than the other doesn't change that.

Debt is like matter. It can't be destroyed. You can squash it down but it will just pop up somewhere else. Regardless of what action has been taken, Anglo's debt would have to be dealth with somewhere and sometime.
 

s1lverbullet

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There's also his courage and endeavour to tackle and withstand an awful cancer.



How the hell is he being courageous???
He is getting the best of care that our money can buy. I have more respect for the thousands or ordinary people out there that have to battle this awful disease with little or no means. And I make this point...he is the healthiest looking cancer patient I have ever seen. Awhole year of Chemo, long economic late nite sessions added to the undoubted stress of the
situation, and the man looks perfectly healthy...does he really have cancer or is this a lie too????
 

Catalpa

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Malbekh, you logic is completely flawed.

How do you know what the cost to the taxpayer would be if other options, like letting Anglo go, or de-stabilising the entire system would be?

Your logic seems to be that because the cost is enormous, that the we have defaulted to the worse case scenario. You can't make that assertion, because we will never know the consequences of other decisions.

To use an analogy, the economy was a car flying down a road with Lenihan at the wheel. Suddenly we had a blow out, and the car started careering out of control. Lehihan had to crash it somewhere; it was going to be a wreck no matter what he did, and the fact that he steered it into into one ditch rather than the other doesn't change that.

Debt is like matter. It can't be destroyed. You can squash it down but it will just pop up somewhere else. Regardless of what action has been taken, Anglo's debt would have to be dealth with somewhere and sometime.
Its more a case he was put in the driving seat as the car headed over the cliff...:eek:

But he had other options than the one taken and chose not to pursue them.

He could have guaranteed the depositors in each bank up to a certain amount and gone the whole hog for BOI & AIB (not Anglo-Irish!)

With hindsight the decision made was clearly the wrong one.

The Government should have had not made such a huge commitment when it knew it was not in a position to judge the depth of the losses incurred in the Irish Banking system.
 

LongShanks

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Debt is like matter. It can't be destroyed. You can squash it down but it will just pop up somewhere else. Regardless of what action has been taken, Anglo's debt would have to be dealth with somewhere and sometime.
Correct. But it wasn't OUR debt. Let those who owe the money pay the debt.
 

Malbekh

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Malbekh, you logic is completely flawed.

How do you know what the cost to the taxpayer would be if other options, like letting Anglo go, or de-stabilising the entire system would be?

Your logic seems to be that because the cost is enormous, that the we have defaulted to the worse case scenario. You can't make that assertion, because we will never know the consequences of other decisions.

To use an analogy, the economy was a car flying down a road with Lenihan at the wheel. Suddenly we had a blow out, and the car started careering out of control. Lehihan had to crash it somewhere; it was going to be a wreck no matter what he did, and the fact that he steered it into into one ditch rather than the other doesn't change that.

Debt is like matter. It can't be destroyed. You can squash it down but it will just pop up somewhere else. Regardless of what action has been taken, Anglo's debt would have to be dealth with somewhere and sometime.
Garbage.

Lenny says that limiting the loss to the taxpayer is foremost in his strategy as MoF. I've just proved that with INBS and Anglo, we're bottom of the pile - AFTER THE SUBORDINATED DEBT HOLDERS.
 

goosebump

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Its more a case he was put in the driving seat as the car headed over the cliff...:eek:

But he had other options than the one taken and chose not to pursue them.

He could have guaranteed the depositors in each bank up to a certain amount and gone the whole hog for BOI & AIB (not Anglo-Irish!)

With hindsight the decision made was clearly the wrong one.

The Government should have had not made such a huge commitment when it knew it was not in a position to judge the depth of the losses incurred in the Irish Banking system.
The Guarantee has nothing to do with the recapitalisation of Anglo.

How many times does this need to be said?

There is only 1 decision worth analysing: should Anglo have been saved or allowed fail.

You have the luxury of not having to deal with the consequences of vapourising €70bn worth of deposits and debt.

Lenihan doesn't.
 

Maximus Cynicus

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To use an analogy, the economy was a car flying down a road with Lenihan at the wheel. Suddenly we had a blow out, and the car started careering out of control. Lehihan had to crash it somewhere; it was going to be a wreck no matter what he did, and the fact that he steered it into into one ditch rather than the other doesn't change that.
Ah, the old false analogy method..............let's play with it anyway.

And why - pray tell - was the car flying down the road in the first place? Because FF "owned" it for 10 years; never serviced it; left it with baldy tyres; when asked by anyone with the temerity to do so if it had underwent an NCT was told FF'off and commit suicide. And when the blowout occurred, the blame was fixed firmly on LeMans...........................
 

goosebump

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Garbage.

Lenny says that limiting the loss to the taxpayer is foremost in his strategy as MoF. I've just proved that with INBS and Anglo, we're bottom of the pile - AFTER THE SUBORDINATED DEBT HOLDERS.
You haven't proved anything. You've offered your opinions.

The Sub Bondholders are threatening to push Anglo into insolvency if they don't get a good price for their debt, which would trigger the deposit guarantee in Anglo.

Hedge funds hold Ireland to ransom over Anglo Irish Bank bail-out - Telegraph

How do you think having to stump up €52bn for the deposit guarantee would go down with taxpayers?
 

Luigi Vampa

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To use an analogy, the economy was a car flying down a road with Lenihan at the wheel. Suddenly we had a blow out, and the car started careering out of control. Lehihan had to crash it somewhere; it was going to be a wreck no matter what he did, and the fact that he steered it into into one ditch rather than the other doesn't change that.
Not withstanding the dangerous drunk driving at speed, and the fact that the blowout was caused by the incompetent and dangerous work of the golden circle, Lehihan decided to crash the car into the taxpaying public instead of the super rich bankers, bondholders, speculators and other assorted golden circle pals of FF.
 
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My main beef with Lenihan is that from day one in the banking crisis he has based his policy decisions on 'best case scenario'/excessively optimistic interpretations and numbers, which have been proven to be wrong time and time again, as the hole gets deeper and deeper. He then gets extremely sniffy whenever any journo attempts to pull him up on this point, repeating the mantra about basing his decisions on "information available at the time", as if his was the universal view at every stop along the line. Bluffer at best.
 
Last edited:

greengoose2

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Stop going on about Lenihans press performances of late. He is not a well man. You would do well to remember that. I thought you were supportive of the 'party'.
Sure Lenihan tells the truth, the whole truth and nothing but the truth, so help me Willie o'Dea.
Black is white if you are prepared to pay for it according to Joan Burton in an exchange with Lendahand. petunia
 

Malbekh

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You haven't proved anything. You've offered your opinions.

The Sub Bondholders are threatening to push Anglo into insolvency if they don't get a good price for their debt, which would trigger the deposit guarantee in Anglo.

Hedge funds hold Ireland to ransom over Anglo Irish Bank bail-out - Telegraph

How do you think having to stump up €52bn for the deposit guarantee would go down with taxpayers?
The hedge funds are seeking to maximise their return, of course they're going to ramp up the pressure on the government. But most of the junior debt has already been bought back at 30c in the Euro. And the remainder will too. And hey, even if it turns out to be more expensive to buy them out, it just proves my point, the taxpayer comes last after everyone else gets paid off.

Why don't you pick a fight you can win?
 

Catalpa

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The Guarantee has nothing to do with the recapitalisation of Anglo.

How many times does this need to be said?

There is only 1 decision worth analysing: should Anglo have been saved or allowed fail.

You have the luxury of not having to deal with the consequences of vapourising €70bn worth of deposits and debt.

Lenihan doesn't.
I didn't say it had.

No one is suggesting that Lenihan had the luxury of doing nothing 'nothing'

But what he did do was undertake the Irish State to guarantee these debts when he did not know how much they were.
 


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