David McWilliams to give evidence at the Banking Inquiry - time changes

Hi elacs

I couldn't agree with you more. The bankers do the same when they come before the Finance Committee. They spin out long irrelevant answers and then the questioner runs out of time. I had suggested to them, that they allow three of their members to do in depth questioning and following up on each other. But apparently, that's not politically possible.

I thought that Kieran O'Donnell was getting somewhere today. Unfortunately he spent a good bit of his time establishing what was already known, and then he ran out of time. McWilliams told O'Donnell that he was mixing things up.

I presume it's a non-party inquiry so another FG member can't agree to give his time to Kieran or a FF guy can't give his time to Michael McGrath.

When they get to meet Brian Cowen, he will be able to string them out.

Brendan
 
Constantin Gurdgiev comments on his performance was "Well done today, David. Credit to you" and I agree.
 
monagt said:
Constantin Gurdgiev comments on his performance was "Well done today, David. Credit to you" and I agree.
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Agree too. It was a masterful performance today.

He spun stories and he revised history so he was not made in any way accountable for the appalling comprehensive guarantee or for his claims that it would not cost the taxpayer a cent.

He should give lessons to John Fitzgerald. John admitted his mistakes and was skewered.

Brendan
 
The chairman asked David had he ever made any mistakes. David, with uncharacteristic modesty, said he had, plenty. However, when pressed he could not think of any so his modesty was perhaps a little disingenuous. Anyway for the record here are but a few.

1. First of all the Blanket Guarantee was not a mistake. His revised version of the guarantee i.e. a guarantee conditional on the banks being solvent would have been a nonsense.
2. In 2009 David recommended exiting the euro and devaluing sharply. He claimed that he would at first be jeered, then attacked until finally people recognised how right he was all along. This is a cross that geniuses have always had to bear. We are still firmly in the first phase of this prognosis. Even the Greek shinners don't think euro exit a good idea.
3. He observed that MNCs had €700bn assets here in Ireland. He suggested a one off 10% levy which he claimed they would hardly notice would solve all our problems. A bit like the après match sketch where Lenihan reckons our creditors won't notice a 0 being dropped from their loans.
4. He proposed the forgiveness of all mortgage debt not just negative equity stuff. He argued that it would boost the economy. Rather shows that even as an economist David could do with some CPD.
5. When it became clear that AIB needed €5bn of capital, David pointed out on radio that at the current share price the government good buy AIB for €0.3bn saving €4.7bn. He failed to recognise that even in State ownership AIB would still need €5bn capital. Seems that he didn't learn too much about banking in his stint in the CB.
6. David released an amusing video damning LTRO as the ECB printing money; lots of cartoon zeros. Yet a few months ago he wrote an article demanding that the ECB start printing! One or other of these diametrically opposite views is a mistake.
7. In 1998 he declared that property prices in Ireland were way overvalued. He may yet be right but 16 years on, we are waiting.

I could go on, but heck you get the picture.
 
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monagt said:
Constantin Gurdgiev comments on his performance was "Well done today, David. Credit to you" and I agree.
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All you need to do now is tell us what Brian Lucy thinks and then we will know for sure.
 
"The chairman asked David had he ever made any mistakes. David, with uncharacteristic modesty, said he had, plenty. However, when pressed he could not think of any so his modesty was perhaps a little disingenuous. Anyway for the record here are but a few."

This was not a fair question!

A blanket open ended guarantee was a mistake.
Euro exit may be a bad idea but maybe we should have not joined.
He proposed and suggested........so what?
He was 3 years in CB as a junior.
If he wrote articles and books that caused many to understand and think about topics outside their norm and question then he should be praised and not lambasted.

This thread is a bit OTT
 
Hi monagt

The problem is that David McWilliams has been portrayed by many people as having some Godlike powers of vision and to be infallible.

Someone on this thread said that he has been right more often than he has been wrong. Actually, he has usually been wrong.
He was completely wrong on the biggest issue - the bank guarantee where he encouraged the Minister to make such a huge mistake.
And what is particularly galling, is that he is rewriting history to pretend that he was right all along.

Economists don't have the power to forecast correctly. And it would be terrible if some new Minister for Finance believed McWilliams' PR and listened to him again.

Brendan
 
I missed a real cracker. McWilliams famously suggested that we could insure the guarantee In his own words insurers would "bite your hand off" for that size of business.

Unfortunately David has got away with it again. The IT give full coverage to his lap of glory and no reference to his role in the guarantee.

But he didn't fool the Committee. The Chairman's final question echoed the body language of the entire committee. It said "You have lectured us and patronised us for the last three hours. We weren't interested in any of that stuff - we know how housing bubbles happen, we have listened to real experts. What we wanted to hear was about your central role in the Guarantee and whether you made any mistakes in that regard. We are not at all convinced by your revised version which holds you totally above blame".

I agree with monagt that McWilliams should stop citing his junior role in the CB on his CV.
 
Hi Duke

That is a great summary. I hope that the final report reflects this.

I wonder will any of the other witnesses contradict his account?

Brendan
 

I didn't!

I knew he'd mention the Central Bank as it's related to this. Interesting to hear how he's now drawing attention to it being a junior role though. From the articles he's written down through the years I thought he was running the place!!

The soccer reference was a gamble on my behalf. Still not surprised he mentioned it. He's some self-promoter. Must have been the highlight of 2015 so far being back on the tele. I don't know if anyone here follows Tim Hartford in the Financial Times at all but he'd wipe the floor with DMcW....proper economic analysis and opinion!

Firefly.
 
An interesting thought experiment on a counter factual. What if Lenihan chewed garlic to the wee hours with Morgan Kelly instead of McWilliams?

Kelly was of course (I would say uniquely) spot on. The whole banking system was insolvent. Listening to Kelly you would have little choice but to let Fingers and Drummer go and nationalise the rest. We would now be 40bn less in debt, I hear you say. I don't think it is that simple. For a start presumably we would have had to make good Fingers' and Drummer's depositors of which there were quite a lot. But the immediate mayhem could have got badly out of control. We certainly wouldn't have made friends in Europe, these friends being most helpful in getting us to cope with our other, even worse, problem, our disastrous fiscal position.

As it is the Guarantee, based on erroneous analysis by McWilliams, might be considered in the better end of a range of very ugly possibilities.
 
seems to me that yous are all givin the fella a hard time. chill the beans lads.
 
monagt said:
way OTT
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How on earth can setting the record straight be OTT?

The guy gave terrible advice to Brian Lenihan.
It has cost us a fortune.
That's bad enough, but it's galling now that he claims that he gave different advice.

Brendan
 
"How on earth can setting the record straight be OTT?"

Lenihan had plenty of "advisors", up to him to decide and who makes an open ended guarantee anyway?

DMcW is not responsible for the guarantee, EU said "save your banks", Bankers told "lies", Regulators (FR and CB) incompetent, Fools in charge of Gov and still are in charge.

DWcW was a small player in the overall scenario so this is OTT.
 
Hi monagt

McWilliams had two face to face meetings and 10 phone calls with Brian Lenihan during the period. He had also a phone conversation with John Gormley.

He wrote a series of articles before,during and after calling for all creditors to be guaranteed, except the shareholders.

He called for a guarantee much wider than the Minister's advisors were suggesting, and the Minister went further than his advisors.

So he had a lot of influence.

But most galling of all, he is trying to rewrite history. Why does he not own up and say. "Sorry folks. I got it wrong. I said that it would not cost a cent, but it's going to cost €40 billion after all. "

monagt said:
EU said "save your banks"
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The bank guarantee was a solo run by the Irish without even consulting with the EU or ECB.
 
The bank guarantee was a solo run by the Irish without even consulting with the EU or ECB.
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-> ECB President Jean-Claude Trichet told Finance Minister Brian Lenihan: 'Save your banks'.

George Lee, RTÉ Economics Editor: “On 16 March 2008, Bear Stearns, which was the sixth largest financial institution in the United States, went wallop. From that moment on, the die was cast.”
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-> In September Lehmans collapsed which was a mistake by the US authorities.


-> The rest was up to Lenihan's civil servants, central bankers and personal economic advisors to determine scope, timing, limits, etc.
-> They did not follow the Swedish 1992 model.

So, I still think the focus on DMcW is OTT
 
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