David McWilliams & the US billions plan

Actually I have to admit that the EEC really does get the hairs raising on the back of my neck.

In a Prime Time issue a year or so ago he suggested that the Government should recapitalise the banks by taking shares at a massive discount or even for free!

ERHHH how does this re-capitalise them? I guess that a minor technical
issue that the bean counters can deal with David.

I must confess my distain kinda extends to all economists in general. The
phrase "Economic Theory" is used for a reason. They Never say "Economic Rules or Economic Laws". These guys come up with all kinds of ideas with no regard for what is possible in the real world.

The world is a very different place from what it was 20 years ago. The EU and the EURO are unique experiments and there is no historical precedence that tells us what works in such a system and what does not.

DMcW does argue that no one ever pulled themselves out of a recession without devaluing the currency.

Yes - but when did it last happen to a small country with a common currency in a loose political alliance with some very big countries that really want to keep that currency credible?

The problem is that economics is a social science and yet you now have people who believe the economists can tell the future. I am not knocking economics or the people who practice it. I have a degree in the subject. The problem I have is with so called celebrity economists. None of them know what the future holds. Bank risk models involved phd students analysing past events to predict future events and look how that turned out. Economics is no different except for the fact that every economist will be right eventually and hence the high profile. Mc Williams is a clever guy but is more interested in a media career than serious analysis. There are plenty more of them out there.

Sunny said:

The problem is that economics is a social science and yet you now have people who believe the economists can tell the future. I am not knocking economics or the people who practice it. I have a degree in the subject. The problem I have is with so called celebrity economists. None of them know what the future holds. Bank risk models involved phd students analysing past events to predict future events and look how that turned out. Economics is no different except for the fact that every economist will be right eventually and hence the high profile. Mc Williams is a clever guy but is more interested in a media career than serious analysis. There are plenty more of them out there.

Click to expand...

That's what I was trying to say only you put it much more eloquently.

Just listened to the podcast of the radio show on RTE1 website. It is well worth listening to. McW is so emphatic over this business of Senior Debt not ranking equally with Depositors. In fact this is what he says:

"And What is happening, this canard, this complete and utter lie which says that depositors and senior bond holders are one and the same thing.
If this government can show me the legislation that actually says that,the acting Company Law that says that then they are doing something proper. But it doesn't exist."

This is I guess a clever twisting of the facts. I am sure that if you own a fruit company and you buy apples from one guy and oranges from another guy that both rank equally in a liquidation. Nevertheless there is no law that I know of that says Apple debts rank equally with Orange debts. It's just common sense.

He then goes on to discuss an Anglo Bond Issue that did contain provisions that sub ordinated the loan to depositors funds and suggested this was evidence supporting his case. I don't know but I guess this issue was post Sept 2008 and was secured by different guarantees. Nevertheless it raises another question. Whether the Senior Debt that is in question was issued with conditions such as this.

What really gets me about Ireland is that stuff like this just gets let pass.
If I were Minister for Finance and someone suggested I told a lie to the Dail I would move a mountain to prove him wrong.

Turbo, I'm with you all the way. Absent anything to the contrary, creditors rank equally, be they the plumber, the parish priest, the depositor or the (non subordinated) bondholder. They are creditors, they have no moral or legal hierarchy. Countless liquidations will have followed this obvious reality. Shareholders specifically are told that on a winding up they are last. Subbies are told that they are second last. Revenue has had laws passed to ensure they are first. The very fact that there are no laws distinguishing between depositors and bondholders underpins that they are equal. McW far from supporting his case is actually dismissing it when he says there is no law on the matter.

McW is reputedly very very very clever so he knows all this. But what is disturbing is when journos and academics and onq swallow his cynical sensationalism which has only one objective to promote his ego and entertainment career.

Onq you claim to be well in with legal supremos. Instead of suggesting that McW might have a point give us your opinion and please this does not need a Supreme Court ruling or a Referendum. And while you're at it what do you think of McW's idea that we can get an international insurance company to bail us out of this mess?

No need for the Supreme Court. Have to check with Her Majesty!

Sorry Can't post URLs (less than 15 posts)

Search this text and read the Independent.ie article though

ANY ANGLO DEFAULT WOULD HAVE TO BE DEALT WITH IN ENGLISH COURTS

Mcwilliams lost credibity with me when he suggested leaving the euro and then devaluing. We can easily achieve competitiveness without this dangerous risky plan of leaving the euro...by cutting our cost base by cutting wages and spending. But our clueless government can`t bear to make unpopular decisions and of course would prefer to devalue and print punts if they could.
What I suggested at the time about ANGLO was to let it fail and then the government could try to help the depositors with some compensation.If the law said the government couldn`t do that without the gov helping out the bond holders then i say the gov should let the depositors get torched. We`re talking 50 billion e here and counting...over one crazy decision ...Just so the gov with their highly paid advisors would not lose face. Thats 50,000e for every family in the country for Anglo alone!!!!
The thing about economists is that they usually have a vested interest and are spokesmen for their paymasters. What we need are independant minded economists but it seems they all can be got at.Another of mcwilliams ideas was to get the irish diaspora to return to Ireland...even south americans of irish descent.We have nothing to offer them and like tourists they don`t want to come to our expensive country.