Why should he give a good logical argument about Kellys views, surely Gekko could be using his job as an 'intellectual' to spark debate.
It would be nice for everyone if debate actually included the person who instigated it.
Morgan Kelly's latest article
- Thread starter ccbkd
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Why should he give a good logical argument about Kellys views, surely Gekko could be using his job as an 'intellectual' to spark debate.
It would be nice for everyone if debate actually included the person who instigated it.
Top sentance is well, just ridiculous! the majority of AAMer clearly want Morgan Kelly's argument to be proved false by debate or other opinion.. so far we get John Bruton's clearly pro-banking statement in yesterday's Irish times... the opinions on blogs below piece are generally scathing. I have seen nothing else from any other economist yet that clearly knocks out Kelly's argument..the tiresome arguments on offer here do little to presuade.
It amazes me how much Kelly is being attacked, just like McWilliams and Lee etc used to be attacked back in the day. Not only that, but people still believe the vested interests - politicians and bankers - over independent thinkers! Just adds to my belief that Ireland is screwed.
Totally Agree!
Who is attacking Kelly? I haven't seen anyone come out and have a pop at him. I have seen people come out and point out that his solution of telling the IMF and the EU where to go is not exactly realistic. And Kelly knows this himself. Do you think if you made Kelly Governer of the Central Bank tomorrow of Finance Minister, that is the first thing he would do?
If that's what people want, we should have elected Sinn Fein.
If that's what people want, we should have elected Sinn Fein.
Ceist Beag
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I haven't see anyone on here saying they believe the politicians and bankers over Kelly? And I don't think he is being attacked - posters are merely looking for further detail on the opinion put forward by Kelly. For example, to those who think what he says makes sense, what exactly do you think would happen in Ireland if the government were to hold a budget in the morning to balance out the difference between spending and revenue in one go? First of all how would this be achieved? Would it mean putting loads of PS staff out of work? If so they go on the dole queue yeah? Kelly makes it sound like a simple economic problem but it's so much more than that - this is why I don't give his opinion the same credibility some of you seem to be giving it.
I think people still haven't woken up to the fact that the country is in serious trouble. Kelly's articles provide the shocks that Irish people need to wake us from our slumber. There are those who continue to believe that you can talk down an economy. But at the end of the day the people to listen to are the people whose money is on the line. And those people are no longer lending to Ireland. The sooner we as a nation wake up to the fact that we are in serious trouble, the better. And to that end Kelly et al are doing us a big favour.
I don't think anyone is slumbering. I think a lot of people are scared out of their wits, and Kelly doesn't help and isn't doing anyone, least of all Joe and Joanne Public, a favour.
He speaks, terrifies a lot of people and then refuses to engage in debate or defend his position, or add anything further to the debate apart from haranguing people like Honohan who have to do a job.
Don't get me wrong, Kelly often makes sense, and he might be substantially right in his assessments, but if he really wanted to do us a favour, then he either needs to explain his thinking and defend it, or shut up and stop hurling from the sidelines. That's cheap, easy and useless in the context of a national crisis.
On a fundamental basis Prof Kelly's arguments and proposals are difficult to dispute. Yes we must at some stage default on our debt as there is no prospect of repaying 200/250B or carrying a long term interest bill on this level of debt. Also it is certainly essential that if we were to approach the markets we do so with a balanced budget. However what Prof Kelly fails to take into account is the human and financial consequences to the broad populace and the economy of implementing such a strategy. It is clear that in order to achieve a balanced budget there would need to be significant cuts in the PS wages bill. Also SW payments would need to be severely cut and finally taxes would need to be increased to cover the balance. However in taking these actions the consequences would also have reprecussions on the tax take as well as impoverishing a significant element of the population. From an economic perspective this is not an issue as economics purely deals with figures and not the human casulties of any actions taken (Milton Friedman & Chicago School followed these principles).
In summary we are ultimately heading towards a default. However the ECB/IMF are fully aware of this and a structured default (if such a thing is possible) does appear to be a better option than a pre-empative one. Those in favour of taking Prof Kelly's advice should also be prepared to both anticipate and deal with the consequences of such actions. Otherwise we end up with recommendations that work only from an economic perspective but factor out the social issues. Balance must prevail in taking any decisions.
In summary we are ultimately heading towards a default. However the ECB/IMF are fully aware of this and a structured default (if such a thing is possible) does appear to be a better option than a pre-empative one. Those in favour of taking Prof Kelly's advice should also be prepared to both anticipate and deal with the consequences of such actions. Otherwise we end up with recommendations that work only from an economic perspective but factor out the social issues. Balance must prevail in taking any decisions.
Great article Sunny. Altho on a personal level, I would like to see the EU & ECB share the burden of debt that Ireland (immorally in my view) has had to bear, and which all the EU benefits from in terms of stability. The scale of this problem is so vast, I really don't see us as being able to manage it alone, and the very stability that has been gained, risks being lost in a structured or chaotic default
I agree but I suppose Europe will just turn around and say they are providing us with funds at a 50% discount to the market and the ECB are providing unlimited funds to our banks at a ridiculous level. As the article says, we will be in a much stronger position when we don't need to borrow €20 billion a year to run the country.
Personally I think there will be a limited debt restructuring but not until at least 2013.
Vincent Browne's guests last night included Joe Durkin and Constantin Gurdgiev, Gurdgiev was in total agreement with Morgan Kelly's finding and I thought he made ESRI's Joe Durkin look foolish with his forensic analyst of Durkin's Rose-tinted figures, Gurdgiev has a very good grasp of figures and is formidable advocate, I suppose you could say he was vicariously advocating Kelly's case. I think we are in deep deep trouble and so too is the Euro zone.
J
JoeB
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I thought NAMA was worth nothing... i.e, it's self funding.
They borrowed 80 billion say, to purchase 160 billion worth of bad loans, which are worth 80 billion now, and which they paid 80 billion for.
Very simple figures there (not trying to sound condenscending, what I mean is simplified figures),.. but Nama is worth nothing in the sense that if all loans were paid back the money received would repay Nama borrowings, and so it'd be a break even point.
Nama spend some money on admistration.. we are probably overpaying for this, but only a drop in the ocean compared to 80 billion I'd imagine.
The danger is that Nama doesn't receive 80 billion for the loans it's paid 80 billion for,.. in which case NAMA is worth less than nothing to the Irish taxpayer.
So is this what Gurdgiev meant?
edited to add: perhaps you meant that NAMA will show a profit?, in which case it's worth the profit to the Irish Taxpayer..
I'd be surprised to see a profit.. I reckon such profits will be siphoned off to pay fat cats.
They borrowed 80 billion say, to purchase 160 billion worth of bad loans, which are worth 80 billion now, and which they paid 80 billion for.
Very simple figures there (not trying to sound condenscending, what I mean is simplified figures),.. but Nama is worth nothing in the sense that if all loans were paid back the money received would repay Nama borrowings, and so it'd be a break even point.
Nama spend some money on admistration.. we are probably overpaying for this, but only a drop in the ocean compared to 80 billion I'd imagine.
The danger is that Nama doesn't receive 80 billion for the loans it's paid 80 billion for,.. in which case NAMA is worth less than nothing to the Irish taxpayer.
So is this what Gurdgiev meant?
edited to add: perhaps you meant that NAMA will show a profit?, in which case it's worth the profit to the Irish Taxpayer..
I'd be surprised to see a profit.. I reckon such profits will be siphoned off to pay fat cats.
The total amount of loans bought up by NAMA so far is about €30b, and the underlying valuations were based on Q3 2009. Since then real estate prices have dropped at least another 10%, so NAMA would already be in the red.
dockingtrade
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Can you explain what this means?
Is it a bad thing?
I hear "experts" say a restructuring is a default, why is this so. If u owe 100k over 10 years and u cant pay it and you restructure the loan to pay over 20 years surely thats not a default.
The EU say they wont allow a bank to fail or a country to default if this is the case whats all the fuss about, when it comes to wont it be just sorted out?
I never claimed that my opinions were more credible than Kelly's.
But I do not believe that it's feasible to impose an €18 billion current account adjustment in one year. Workers would simply refuse to repay their debts because they could no longer afford to do so. The economy would collapse.
The solution to our problems is to finance the bailout over (say) 50 years a la war financing and for the Eurozone countries to fundraise collectively with Eurobonds.
Cough!! Splutter..Gasp! War Financing!! Despite the moral implications of such a statement I wonder who will we declare war on..The residents of the Isle of Man.
I think he means war bonds or a kind of Marshall plan. Given there's a fair bit of money in the country, the gov.t could do worse than offering a bond with a guaranteed decent return!