Economy Rigging 1

BSK daily log July 5, 2010

Filed under: Uncategorized — bashstreetkidjailbreak @ 5:42 pm



Profits and Moves Behind the Downturn – The International Forecaster



> Ireland is having its economic crisis, but are we going to take this as our opportunity to change? The model of land, banks and credit as a wealth generator has been exposed lamentably. Countries, after a crisis, should identify the problems and never again repeat the mistakes of the past and move on. The present government policy, through NAMA and bailing out the banks, is trying to put the “humpty dumpty” of the “feudal” land economy back together again. One thing we see throughout history is that the government of a country simply has to set the tone right and invariably the entrepreneurs do the rest. The recurring idea appears to be the government should invest in infrastructure at all costs. Infrastructure enables growth.


Excellent article – reluctance or inability to change is the road to extinction in all evolutionary processes. Our policy makers are literally analogue men in a digital world when it comes to the importance of broadband. The feudal land based values still have priority among our elite because of the inherent insecurity associated with living in a country that has always been dependant on another for its survival – today on multinationals. We were never buccaneers.


The present government policy, through NAMA and bailing out the banks, is trying to put the “humpty dumpty” of the “feudal” land economy back together again. In this effort, it is being ably abetted by the professional “fee takers’ who dominate the advisory game in Ireland. This week we see just how significant these fees are. NAMA will dole out €2.8bn in professional fees alone!’

For anyone operating in reality on a daily basis the assertion above found in Davids article is a fair and empirical assessment of the situation the ‘outsiders’ are faced with, I reckon anyway.

This is the lens through which everything else in ireland can be seen for what it is and put in its right jig saw piece place.


What Suds does not say and what needs to be examined is the role of the ECB and bondholder banks of lenders/savers Switzerland,France,Germany in the creation of the meltdown. Sure there has been lack of political governance at European and local level. But also there has been a severe pillaging of countries effectively given unrestricted 100% mortgages by banks. The types of financial controls now being brought to bear by Obama were not in place as bondholders poured money into Anglo. At least, though controversial in the case of Goldman Sachs and other big player banks as we found Goldman being paid 100% on the dollar by AIG, in the fall of AIG, we found banks had taken out large insurance on losses against CDO’s and other derivatives. What insurance against loss had the ECB required of lender banks, or of Anglo. European banks awash with money ran a lending spree that went amok. That’s without getting into the argument that the EMU was less about political unity than an opportunity for banks to package large CDO’s for the German, Swiss and French banks and selling them as bonds to the likes of Seanie et al. Bondholder banks were given regulation free rein. As individuals go, Jean Claude Trichet has a lot to answer for. He was against Lehmans being let go, what’s his responsibility for unregulated lending, what’s his responsibility for not bringing in banking controls? Puppets like Suds and Lenny don’t want you to go there! Its a hobbyhorse of mine, but I’ll mention Honahan again in the context of his remarks that there had been enough of an inquiry into the banks and we didn’t need more. I’d like a lot more on the flavour of the ten biggest lenders who were given billions by Anglo. How much were they given? How was it spent? Audited proofed accounts please? Who managed these loans? Story of? Documents please? OT Seanie in the courts in fear of bankruptcy at the moment wants Anglo to do a ‘private arrangement deal’, he’s arguing the creditors will gain more from a private arrangement than one under bankruptcy. Now we’d all like to see the sordid and hapless details of this, wouldn’t we? Pity our goms didn’t do a private deal on the €22bn like 10% on the euro:) Let’s ask more and more and more questions of the banks, compared to the response of congress to the banks re financial meltdown of 2008, the response of local gom politicians and even more so the response of european leaders in spite of all the meetings recently has been little to none. But then their eyes are set at the roof falling in, €750bn war chest to buffer the likes of Greece and Spain smacks of a bankers victory over the incompetence of EU leaders rather than a solution to the role of pillaging banks hoovering up all euros.



We have the NAMA strategy. We have the ‘Knowledge Economy’ Strategy. (And an inbuilt assumption that we can create wealth by being smarter than everybody else, and by doing less work than others). We have the ‘we must pay the bondholders to safeguard our reputation’ strategy. We have the Long Term Economic Value Strategy. We have the ICTU strategy (maximize public sector employment). We have the IBEC strategy (minimize private sector competition). We have the Chambers of Commerce strategy – tell people to spend. We have the ‘lower our costs’ strategy. We have the strategy of making more quangoes. We have the strategy of eliminating quangoes. And we have the strategy of amalgamating quangoes but not improving efficiency, so as not to offend union bosses. We also have the K-Club strategy. We have the ’save every bank at all costs’ strategy. We have the ESRI strategy (talk the situation up, and it will all work out). We have the GP strategy – Ryan and his electric cars. We have the DoF strategy. We have the Bertie Ahern strategy that is still relied on a lot of the time. And now we have a “borrow 5 Billion for rail links to compete with the buses” strategy.

Loads of strategies. Lets be honest here. It is a mess. Put them together and you get a maze of incoherent nonsense, committee think, analysis-paralysis, reports, consultants reports, etc… Everybody is lying back expecting somebody else to do the hard work, and absolutely no team spirit. There is a lot of rousing talk. (Don’t confuse team spirit and lemming group spirit – one is the characteristic of winners, the other the characteristic of losers.) In fact when you have too many strategies, you have a lot of inefficiency. And Ireland at the moment is very inefficient. This is exemplified by the cost of living report.



Knowledge economy is a misnomer for being organized to cope with the new realities in highly outsourced and majority temporary contract labour (meaning insecure) environment. Domestic market has yet to leverage the knowledge economy in the same way as the Irish exporters.

Knowledge economy is taking over with or without the Government’s consent. It is the new multinational with fewer boundaries and lesser affiliations without the bureaucracy.

The next revolution in wealth creation ‘coming soon’. Meanwhile the owners of the means of production keep an unfair percentage of it all for themselves.

So we can have our knowledge economy and in time bit by bit we will get it as broadband is painfully slow rolled out. But, the wealth created will be re allocated up the pyramid and into the coffers of the jailors leaving the crumbs of the profits generated for the underlings.



have been trying to tease out why Fianna Fail let the Country down. We all know this has been happening for years and years, and it follows the same pattern, time and time again, with their leader usually leaving under some cloud or other, disgraced but still in denial.
It finally occurred to me that FF could be suffering from a prolonged dose of Groupthink, and that it was this Groupthink as part of their inherent culture that leads to the disasters that we have seen for generations.
To make groupthink testable, Irving Janis devised eight symptoms indicative of groupthink (1977).
1. Illusions of invulnerability creating excessive optimism and encouraging risk taking.
2. Rationalizing warnings that might challenge the group’s assumptions.
3. Unquestioned belief in the morality of the group, causing members to ignore the consequences of their actions.
4. Stereotyping those who are opposed to the group as weak, evil, biased, spiteful, disfigured, impotent, or stupid.
5. Direct pressure to conform placed on any member who questions the group, couched in terms of “disloyalty”.
6. Self censorship of ideas that deviate from the apparent group consensus.
7. Illusions of unanimity among group members, silence is viewed as agreement.
8. Mind guards — self-appointed members who shield the group from dissenting information.
Groupthink, resulting from the symptoms listed above, results in defective decision making. That is, consensus-driven decisions are the result of the following practices of groupthinking
1. Incomplete survey of alternatives
2. Incomplete survey of objectives
3. Failure to examine risks of preferred choice
4. Failure to reevaluate previously rejected alternatives
5. Poor information search
6. Selection bias in collecting information
7. Failure to work out contingency plans.
Its scary stuff when you read it and think about it.



One could consign bear and bull spin cycles to the waste paper basket of history by educating people on the long term dividends that arrive in abundance for all when one practices the art of *delaying gratification*. So, as you can see, its not that difficult in finding the solution.




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