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THE RUMOURS STARTED over the weekend and the story goes that a tabloid newspaper was prepared to break the news this morning.
But by releasing a short but detailed statement last night, Michael Noonan got ahead of the story, ensuring he can get on with the important work of the Minister for Finance.
It was classic Noonan. Understated, clear, concise, no panic, no big speech, no extravagant adjectives – just all the information that was needed to confirm what had happened, what was done and what happens next.
Now, if everyone’s happy enough, Noonan appears more than willing to get on with the job for as long as the Taoiseach thinks he’s up to it. And indications are that Enda Kenny is well disposed to leaving his predecessor as Fine Gael leader in situ when he reshuffles the Cabinet next month.
The handling of the story is in contrast to that of Noonan’s predecessor Brian Lenihan. Yesterday’s revelation brought back memories of December 2009 when news of the Fianna Fáil TD’s cancer diagnosis became public. However, from the outset it was clear that the then-Finance Minister’s illness was more serious. And the way in which the news broke was much more distressing for him and his family.
In that case Lenihan’s diagnosis of pancreatic cancer in December 2009 involved a drip drip of information over the Christmas and New Year period that culminated in him making a personal statement on the morning of 4 January 2010 – over a week after the story was first broken by TV3′s Ursula Halligan in controversial circumstances on St Stephen’s Day.
The obvious concern for Lenihan, as well the controversy over how the story was reported, caused distraction from the serious economic issues facing the country at the time for more than seven days. Once Lenihan had commented, the story went away and his health was rarely, if ever, discussed again before he sadly passed in June 2011.
In Noonan’s case the prognosis appears to be better than it was for Lenihan.
The 71-year-old Fine Gael TD for Limerick City received five weeks of radiotherapy to shrink the cancerous tissue earlier this year and the sarcoma was removed last Wednesday before he was discharged from hospital three days later.
“My medical team believe the treatment has gone very well and are upbeat about the prognosis,” he said in a statement last night. “There is no damage to my shoulder muscle and my risk of recurrence is low.”
In acting quickly and decisively to respond to the speculation with a statement last night – and a press conference due later today – Noonan seized the initiative and will now focus on the significant body of work facing him in the months ahead.
These include finding a new secretary general for his department and the October Budget.
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Moodys, Fitches and S&P… why do we care or listen to them. They triple A rates junk bonds on the sub prime mortgage fiasco… If they for those so wrong why listen to their opinion????
We don’t have to care what they think but when we need money it matters
Because lots of investment funds are only allowed to invest in bonds with a certain rating from those agencies. If you get a better rating, you get more demand, hence higher price, hence lower cost of borrowing new money.
Personally I wouldn’t trust Moodys to tell me what day it is, but that’s not how funds work.
Emily Saul that is no reason to give them more credibility. We have to take it into account, but if I was making decisions I’d want a few other corroborating data points before I’d base any decision off these peoples opinion.
They were more responsible for the crash than nearly any other single factor by mislabeling exploding mortgages as AAA rated investments in a massive fraud.
They should have been wound up and new agencys with new personnel put in their place…but why would we do that, we didn’t bother doing any other serious financial reforms…
The people that countries borrow money off listen to them and use them to set the rates. So we do not have to listen but we certainly are affected by it.
Give them credibility or not it doesn’t really matter. They are what they are and they are going nowhere
It was a rhetorical question…… I know why we do.. We have no choice as a small country… but why does any investor or country on mass do so
They must be doing something right or else investors are losing money……
Warren Buffett called it the lemming effect. While lemmings as a whole have a terrible reputation, no individual lemming has ever been singled out for criticism.
Exactly Brian!!
We know how corrupt the ‘free market’ and powers that be are..thus given how much emphasis is placed on bond status done by these rating agencies, the question is how are they regulated and by who!???
It would be ridiculous in the extreme to believe they were truly impartial and independent!
And Nigel wins the top prize. ….
Our barely above junk paper is trading with below 3% yields! I wouldn’t be so certain the markets still attach the same value to the opinions of these agencies that they once did.
Moody morons. What do they really know?
I would not say they are going nowhere at all Saul, theres another crash coming, anyone familiar with the insane risks currently being taken on the international markets can see that. Were in for a period of sluggish semi-ok but anemic GDP growth (a jobless recovery) followed by another crash and the scale of the risks being taken will mean that no bailouts will be possible this time.
I only hope we get people in charge in the US and UK who can see the writing on the wall in time and go back to pre80s financial regulation.
Also Saul the ‘must be doing something right’ comment is PAINFULLY naive…I used to have people say stuff like that to me in 07 when I was trying to yell ICEBERG ICEBERG back when you could count those of us seeing the thing on one hand, what you got was smug replies about how ”were doing ok so far” and ”soft landings”.
They were making money for people with the sub prime mortgage securitization scam and that ended up getting away from them and crashing the global economy.
Ryan I’m not saying I agree with the system. I’m just saying that it’s not going to change anytime soon. You are properly correct when you say another crash is in the way. I’m not an expert or even close to being one. Are you telling me that nobody (investors) actually listens to ratings agencies? BTW I tried to sell my house in 2006 because I could clearly see the writing was on the wall. Unfortunately I had no idea how bad it was actually going to be or I would have dropped the price a lot more!!!
Putting your faith in those in charge in the US and UK to “see the writing on the wall” and act is a bit naive too Ryan. The ones in charge are the ones orchestrating the crashes – doesn’t take a professor to work out the ultimate consequences of pumping upwards of $40bn in new liquidity every month into capital markets.
No no quite the opposite Saul…sadly…to my eternal horror they listen to them as if they never had any history of fraud whatsoever. Talking to people in the financial sector today and I’m talking about traders investors not bank tellers the smugness is shocking, and I feel kinda bad saying that cos some of them are friends, we’ve generally agreed to avoid this topic in our conversation, but they act as if the 08 crash had nothing to do with them, and no mistakes were made, that it was all govt policy mistakes or people ”dumb enough” to buy houses above their grade.
I don’t beleive crashes are orchestrated I’ve seen too much of the inside of the top of the political and financial systems to beleive that, the more scary (imo) reality is they are unplanned and people are bumbling through oblivious to the consequences of their actions (politicans)..or just not caring (in the case of the financial sector)
Even in the best most ideal financial reform we’d still need ratings agencys…I’m not saying lets stop being capitalists and bring on the central planning, just that these particular actors should have been swept away and new people and organizations put in their place, we could still do that and should.
Short of that, I’m saying we should take what they say with a grain of salt and look to corroboration for everything they say.
Is it worth pointing our none of the triple A bonds defaulted. They were a lot riskier than people thought but if held to maturity none defaulted.
I think we need to be clear about what the rating agencies’ fraud was, because usually it is trotted out by crusties who don’t know what they are talking about.
The obvious type of fraud they could commit would be to overstate the prospects of investments in which they already had a stake. People buy in and they cash out. There’s absolutely no evidence of this type of fraud whatsoever. So whenever it gets trotted out, it is easily dismissed.
At the other end of the scale is incompetence. Getting it wrong, even getting it spectacularly wrong as the rating agencies did, is hugely damaging. But it is not fraud.
That is the distinction which the agencies have been able to draw so far. But it is a false dichotomy. In between those two extremes is an area which in my opinion isn’t grey at all.
The way the subprime loans worked was that junk was bundled up with apparently good stuff, so that overall the investment was seen as fairly safe and graded accordingly. These were then themselves mixed up, repeatedly, on the insane theory that if risk was spread around far enough, it effectively disappeared.
By the end of this chain, the instruments which were being sold to Norwegian pension funds and Canadian cities were based on an incredibly complicated basket of assets. By some estimates, in order to conduct a due diligence exercise on any one of those instruments, you would have had to read one billion pages of documents. This is of course impossible.
And it is the very fact that it is impossible which makes the rating agencies fraudulent. They were giving a rating to securities when they had absolutely no idea whether or not they were good investments – and must have known that they couldn’t possibly have any basis to rate them.
The theory is that the agencies have escaped prosecution because they have threatened to destroy the credit rating of any country which tries. This at least has the whiff of credibility. It cuts down the number of countries who would be in a position to give it a go, and certainly rules out the US.
Subprime was never mixed up with prime mortgages in CDO’s. You fundamentally misunderstand what a CDO is…
6 year old video but explains the problem well.
https://www.youtube.com/watch?v=eb_R1-PqRrw
An upgrade would upset the Whingers. They should leave announcement until after weekend.
This will drive the Sinn Fein shills mad.
Good news under this Government puts them into a dark rage, verbal diarrhea and lashing out insults at everyone. Their economic think tank had been hoping for a second bailout.
As a measure of current market sentiment, this is fine; as a measure of economic and financial reality, it is delusional.
Given the Agencies’ rating of US sovereign debt, their indebtedness and the state of their economy, this upgrade for Ireland is relatively realistic if not too little.
” likely to upgrade Irish debt to Baa2 from Baa3 ”
This company run by sheep or something?
Well, the deficit is heading towards 3% of GDP?
the only thing its confirming is the abality of Baldie and Givememore to bitch slap a capitve population
fock moodys vankers
It’s just another euphemism for” your still trash lads” . Long ways from the heady days of triple A
Heading the right way though
Baa2 is a long way from Caa1/2/3. Anything but trash.
have your say