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Mark Stedman/Photocall Ireland

Why this economist made a late-night dash for biscuits in the midst of the banking crisis

David McWilliams says he became a defacto advisor to Brian Lenihan before the 2008 bank guarantee.

Updated at 13.20pm

AN ECONOMIC COMMENTATOR who became a defacto advisor to Brian Lenihan in the lead-up to the controversial bank guarantee said he felt “very sorry” for the then-finance minister.

Former Central Bank economist David McWilliams, an early predictor of the Irish property bubble, told the Oireachtas banking inquiry Lenihan first arranged to meet at his house in September 2008 after the pair were on the same TV panel.

“It was well after midnight; I had never had a politician in our house … I certainly never had a minister in my house,” he said.

“We kind of had a little panic where my wife said you’d better go and buy some biscuits, so I found myself at Centra in Ballybrack buying some digestive biscuits and some milk.”

McWilliams said he ended up having about a dozen phone conversations and two meetings with Lenihan around the time of the bank guarantee.

The Fianna Fáil minister was suspicious about the advice he was getting and needed to buy time to deal with the financial crisis, he said.

“I felt very sorry for him in a way because it would be a bit like me being elevated to attorney-general in the middle of the biggest constitutional crisis the country has ever faced.”

File photo: The governor of the Central Bank Patrick Honohan, said Brian Lenihan wanted to nationalise Anglo and Nationwide Former finance minister Brian Lenihan Mark Stedman / Photocall Ireland Mark Stedman / Photocall Ireland / Photocall Ireland

McWilliams said they talked about both a bank guarantee and a government takeover of terminal banks, but he thought the best option would be a “bail-in” of bondholders and other bank creditors.

“(Lenihan) said ‘could nationalisation of one of the smaller banks work?’; I said: ‘it could, but it won’t stop a bank run’,” he said.

We have to be very clear about what we are trying to do here – what we are trying to do here is prevent a national run on the banking system. If you nationalise a small bank, what signal does that send – it says this bank is problematic. In a panic does that say don’t worry the rest are fine?”What I said to him is ‘if you don’t know the facts how do you know that the next problem you’re going to have is one of the bigger banks’, which subsequently turned out to be the case.”

Lenihan, who died in 2011, contradicted some of McWilliams’ version of events in a 2009 interview during which he claimed the TV personality had been the one who insisted they meet up for a “discussion about the economy”.

Guarantee ‘a cloak to protect creditors’

About the same time McWilliams started writing articles in favour of a bank guarantee, although today he said he only supported a limited pledge to make people feel their money was safe.

“I became worried that what I thought was going to be an emergency measure to protect depositors was going to end up being used as a cloak to protect bank creditors,” he said.

After their last meeting on 4 October, McWilliams said their contact became sporadic and he felt like an “outsider” again as it became clear the government’s attitude became “we are going to pay everything”.

“At no stage did I ever imagine that subordinated (or junior) debt would be included (in the guarantee),” he said.

It has much more of the characteristics of a share than a bond and the reason is you get paid more to hold this subordinated debt so you are being paid for the risk. And if you’re being paid for the risk over and above everyone else, when the risk materialises you can’t expect to be paid in full.”

McWilliams3 David McWilliams at the banking inquiry today Oireachtas.ie Oireachtas.ie

‘Set up to fail’

Earlier McWilliams said the economy was “set up to fail” in the lead-up to the financial crash and he had shared that view with anyone who would listen in various newspaper columns and TV interviews.

“I consistently warned people at every juncture that our property market was a credit bubble … and it wasn’t a matter of if it bust, but when it bust,” he said.

McWilliams, who is credited with first applying the term “ghost estates” to Ireland, said the policies of regulators and the government between 2000 and 2008 were “pathetic” as it should have been clear to anybody with the right training that the property market would implode and take the banks with it.

“The Irish property crash and the banking crash were both incredibly predictable and absolutely preventable,” he said.

This was not isolated thinking. I believe that many, many thousands of ordinary Irish people could see that this was coming. I can’t tell you the amount of times I went to bars and pubs and talked to people and they said this isn’t right.”

Inquiry4

‘Unpatriotic’ thinking

But McWilliams said he was never contacted by a single government advisor, minister or civil servant about his views before the crash – instead he was accused of being “unpatriotic” for talking down the economy.

“We just said ‘it will be grand’ … and we were condemning ourselves to run out of options when the crisis happened,” he said.

The more we ignored, the more likely we were to end up with a situation where the choices weren’t the best of good and bad, it was the best of bad and worse.”

McWilliams said he ultimately blamed the banks for being the ones which “started the fire” through their rampant borrowing to fuel more lending after using up customers’ deposits, although the government had allowed them to run wild.

“Light-touch regulation means that you’re guaranteeing that you almost make certain that the banking sector is going to implode,” he said.

In Ireland we have an inability to accept reality. It’s a national issue. In a crisis the most important thing is to define your reality not as you would like the world to be but as it actually is. Then you can do something about it. In Ireland it struck me that all the way through, 2007, 2008, the official policy was to delay and pray.”

READ: ‘I do not think allowing Anglo to collapse would have been the right thing to do’ >

READ: Bertie and Brian need to get ready for some tough questions >

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75 Comments
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    Mute orla
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    Feb 26th 2015, 10:47 AM

    Only for listening to what David was telling us, my family and I would be homeless now.We would never have been able to afford our morgage. We moved and are morgage free. So A Big Thank You,David!

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    Mute Waddler Mooney
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    Feb 26th 2015, 11:24 AM

    “McWilliams said he ultimately blamed the banks for being the ones which “started the fire” through their rampant borrowing to fuel more lending after using up customers’ deposits”

    I like McWilliams but that’s not really a correct description of how commercial banking works. The domestic banks had no need to obtain external capital in order fund Irish home loans. Nor are the banks lending out the deposits of other customers when they issue loans.

    A commercial bank creates new money which did not exist previously each time they issue a loan. The new money is created via the simple act of computer keystrokes.

    This has been confirmed by the Bank of England a few years ago:
    “By far the largest role in creating broad money is played by the banking sector…
    when banks make loans they create additional deposits for those that have borrowed.”

    http://www.neweconomics.org/publications/entry/where-does-money-come-from

    A commercial bank creates new money each time they issue a loan. A banking license is effectively a permission to create money as granted by the state to a private institution. The banks are only authorized to create the money to meet a loan request and cannot simply add the money to their balance sheet in a single entry as profit. When a bank issues a new mortgage for €200k for example, the mortgage loan is entered on the Asset side of the bank balance sheet while the newly created deposit of €200k appears on the Liability side of the balance sheet. This is how the new money is recorded in the double entry accountancy system.

    As you pay off your mortgage over the 25 year term, the principal €200k amount is reduced and the money is extinguished (uncreated if you like) as the outstanding mortgage falls to zero. The bank depends on the borrower to pay back the loan in order to un-create the money which the bank created originally and that is why they won’t extend credit to just anyone and check your ability to service the loan etc. If you default on the loan, then the bank is required to reduce its assets by the outstanding amount. The interest that the bank charges the borrower however is not extinguished and is held by the bank as retained profits.

    For most people, the biggest purchase of their lives will be the family home and so the mortgage will be the largest debt they ever undertake. The bank creates a €200,000 mortgage in a couple of seconds with a few keystrokes. Over a term of 25 years at an interest rate of 4% to 5%, you will pay somewhere between €110k and €150k in interest payments to the bank on top of the principal repayment. This means that a person on an average annual wage of €30k net will work for 4 to 5 years and hand every single cent that they earn in that time to the bank to repay interest on the money which the bank created from nothing in a matter of seconds. This is the enormous power that has been granted to the private banks which they use to exploit the population through the debt mechanism.

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    Mute Bobby Phelan
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    Feb 26th 2015, 11:25 AM

    Lets face facts here the old monetary system is seriously flawed.To create money you have to create debt its a system thats over 100 years old.Why are we borrowing from private banks with interest attached why dont we just print our own money interest free do we really need private banks to run our countrys the old system only works for the elite it wont ever get any better for the working man unless the system changes.This whole crash had to purposes one was to create cheap labour for the boys and the other was a landgrab because if everybody owned their own property the banks would go out of business._.I think we should be looking into bit coin at this stage and do away with the banking system all together.They cant be trusted

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    Mute Hermes
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    Feb 26th 2015, 11:25 AM

    Only for David shutting his mouth about the David Drumm Picked it outta – then middle Ireland would have become more au fait with corruption -
    He’s a player nothing more !
    Let’s all put our shoulder to the wheel and give those guys in NAMA a big push – the Anglo Guys that had the plan in place before the collapse – as evidenced in the Anglo – Tapes !
    I would link the tapes from the INDO –
    My computer will not link from the Independent – perhaps a patriotic Irish person will link and post here -
    Together we are stronger !
    And meanwhile Fine Gael election material is targeted at the mailing list of our newest citizens – who are of course one of the highest demographics to vote – it makes them feel Irish and why not – they have probably come from some Tin-pot democracy where a small group of thugs control the media and give the people only one or two choices as to who can represent them !

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    Mute Waddler Mooney
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    Feb 26th 2015, 12:44 PM

    Well said Bobby.

    We’ve been deliberately misled by the mainstream economics profession (mostly bought and paid for by vested interests) and the mass media as to how the monetary system actually functions.

    Modern fiat currency money is not a scarce resource. It is created at will by the institutions public (central banks) and private (commercial banks) that are authorized to do so..

    The money has no intrinsic value, is created primarily on computer keyboards and so largely exists as electronic account entries. All financial assets are matched by an equal liability and so cancel each other out and ultimately net to zero. What remains is the real wealth of goods and services primarily produced by the working class through their labour. Financial assets (money) is a claim on that real wealth and therein lies its power.

    Government spending creates new money and puts it into circulation while taxation removes money from circulation and extinguishes it. Taxation is what ‘backs’ the currency. The government imposed tax liability creates a demand for the currency, ensures it is widely accepted and so gives the currency legitimacy.

    The gold standard was dropped in 1971. This changed fundamentally how the monetary system and the macro economy operates. Since then, all sovereign currency issuing states with a floating exchange rate (e.g. dollar, sterling yen etc.) face no financial constraints in their own domestic currency. Modern fiat currency money is not a resource. It is created at will on the computer keyboards of the world’s central banks.

    Therefore these nations do not need to tax in order to spend in their own currency. The act of government spending is what actually creates the money which is then later removed from the economy via taxation. Neither do those nations need to borrow their own currency from anywhere is order to finance public services such as health system, social housing etc. Such a state could for example implement a large scale social housing construction program to address the homeless crisis which Ireland currently faces. This would involve the government simply crediting the bank accounts of the builders, material providers, etc as necessary to have the homes built with the added benefit of creating desperately needed jobs in the construction sector. This contrary to neo liberal myth is how sovereign governments (e.g. U.K) actually spend in their own currency. They face no financial constraints whatsoever in that currency. The state can afford to buy whatever resources are for sale in the domestic currency.

    This is how those governments pay the wages of their public sector employees. So for example a £2000 monthly salary for a nurse in Britain will see her Barclay’s account credited by £2k (broad money) and Barclay’s reserve account (base money) at the Bank of England increased by £2k, all done by simply pressing the necessary computer keys.

    The state may face real resource limitations e.g. energy or skills shortages but not a financial constraint as it can never be insolvent in its own currency as it issues that currency. However if a state, promises to convert its currency to something else e.g. another currency or gold as a fixed rate, then it faces constraints in that other currency or commodity. So nations which maintain a peg with the dollar for example must earn (through exports usually) or borrow reserves of dollars in order to maintain the peg.

    The macro economy of nations and the globe is fundamentally different to the micro economics of business and households (private sector) who are users of the currency but not the issuer. A sovereign currency issuing government can afford to buy whatever resources are available for purchase in its own currency, (including the labour of the unemployed) as they can never run out of keystrokes and so a budget deficit should not be considered a problem once this understood. The U.K. can sustain any size of budget deficit or national debt once it is denominated in sterling as the interest on the debt is also paid via keystrokes at the central bank.

    When those states do choose to issue government bonds the primary objective is to implement monetary policy (e.g. drive their chosen base interest rate to target) not as a necessity to raise revenue. The usual mechanism is that the government will issue new bonds/bills/treasuries which pay a higher interest than reserves and sell them to the commercial banks in return for any excess reserves the private banks may have. In the reverse transaction, the central banks ‘buys’ back the government bonds in return for reserves in an effective asset swap with the commercial banks when they need to increase their reserve supply. The primary function of these transactions is to drive the base interest rate to the desired target. The central bank selling bonds drains reserves and so increases the interest rate on reserves while buying bonds injects reserves and so lowers the rate. The central bank reserves and bonds are created electronically at will by the central bank/treasury as necessary to maintain liquidity and the desired overnight rate in the interbank market. In this way a sovereign country can never really default on its own currency denominated debts unless it chooses to as the central bank can always ‘buy’ back the debt with newly created central bank reserves which every commercial bank requires to function. In addition, when those countries do ‘borrow’ in the market, it is clear that they effectively decide what the yield/interest will be unlike the Eurozone nations subject to profiteering by bond speculators.

    In fact with the fiat floating currencies we’ve had since the 1970s there is no need whatsoever for a currency issuing government/central bank like the U.S. or Japan to ‘borrow’ at all in its own currency as they can simply create the currency at will. This is why sovereign currency issuing governments actually control bond interest rates regardless of the state of their economies. The government ‘debt’ market is in reality a risk-free, interest bearing deposit facility for the large financial institutions and ultra-wealthy. Continuing this neo liberal agenda, the Eurozone was deliberately designed to allow private banks (markets) to profit to an even greater extent from member state debt. It’s really only the Eurozone countries that are required to borrow their own currency in the market at an interest rate determined by the market as the EU allows the financial markets to set the borrowing rate for Euro countries on an individual basis with the ECB is the sole issuer of the currency and the nations prohibited from creating the currency themselves.

    Austerity and deprivation is a policy choice at national government and EU level. There are no shortages of any of the real resources (e.g. energy, food, material to build housing etc) to eliminate poverty across the EU. The authorities pretend that there is lack of money to address the poverty of the citizens when in fact there can never be a shortage of a fiat currency like the Euro. The currency is created at will on the keyboards of the central and commercial banks. Under the QE program of the past few years, the ECB has created €1.4 trillion in reserves by pressing keys on its shiny computer in Frankfurt and made it available at extremely low interest rates to the parasite banks whose greed and stupidity triggered the economic crisis in the first place. So there are plenty of keystrokes available to shore up the financial system but not enough keystrokes to make sure Greek or Irish people don’t go to bed cold and hungry, that is if they have a bed.

    The macro economy is fundamentally about the production and distribution of real resources (goods & services). Money is a key mechanism in both production and allocation phases in that money is required to begin the production process and money is required by households/firms etc to access the output of production.

    As explained, there can never by definition be a shortage of a fiat currency like the Pound. So if the U.K. chose to, they could simple keystroke the necessary sterling into existence to hire all the idle labour resources in Britain to maximize the productive output of real goods and services.

    This would meet the twin objectives of creating real output for consumption to drive up living standards while distributing it to the people who need it via their wages which are then used to buy those real goods and services.

    All the real resources (e.g. energy, food, material to build housing, medicine etc) are present to meet the human needs of the citizens in a developed economy. Neither can there ever be a shortage of fiat money at a macro level as explained. So all the ingredients are present to solve the economic and social crisis the developed nations at least (we can move on to the developing world later).

    Therefore it in inarguable that austerity and deprivation is a policy choice at national government and EU level. This policy choice serves the interest of capital as more and more of the world’s resources accumulate to the 1% at the expense of the majority. This is starkly demonstrated in the current recession where the world’s billionaires have doubled in number since 2008 and more generally where the 85 richest individuals on the planet now hold the same wealth as 3500 million people, the poorest half of the globe’s population.

    http://www.forbes.com/sites/laurashin/2014/01/23/the-85-richest-people-in-the-world-have-as-much-wealth-as-the-3-5-billion-poorest/

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    Mute Rory J Leonard
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    Feb 26th 2015, 12:52 PM

    More and more cheap short- term wholesale funding from interbank market atop growing customer deposits and banks own capital, (including bulging fictitious profits) combined with those keystrokes you describe, all served to inflate that bubble.

    The above lot was then imprudently and recklessly leveraged to hell, many fold via the keyboard, to grow Loan Books to the maximum, without adequate consideration for any downside. Commissions, bonuses, and profits were only focus of Bank Leaders.

    Whoever in Central Bank / DOF allowed for short-term interbank funding to act as part-launchpad for new 20 year mortgages and shorter term development loans for property developers has lots to answer for.

    Internal and external auditors in main banks were clueless in their risk assessment roles, as evidenced by non existent provision for bad debts in annual Financials leading up to crash of 2008.

    Banks’ capital bases were therefore built on quicksand and it seems no one noticed, other than David McWilliams and Prof Morgan Kelly.

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    Mute All Aboard To China
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    Feb 26th 2015, 1:05 PM

    It’s a comment section Waddler, not an long winded diatribe section. I suspect you need professional help

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    Mute Sergeant Yates
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    Feb 26th 2015, 1:20 PM

    Waddler thinks that he knows more than David McWilliams. That’s why he’s cutting and pasting here and in front of the banking enquiry giving advice and explanations.

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    Mute Hermes
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    Feb 26th 2015, 1:57 PM

    Amnd who died and made David McWilliam the be all and end all – his accent tells you all you need to know about his commitment to Ireland dahling !
    Yates tell the Saxons that the Lilliputians have figured out that their enemies feet are made of clay – and they are going to piddle all over them and watch the saxon fall and roll around like the worm he is !
    And the Lilliputians will dance on his body like dancing at the crossroads – with forgiveness of course !

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    Mute Thomas Aquinas
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    Feb 26th 2015, 2:08 PM

    What kind of accent did James Connolly have? Or Roger Casement?

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    Mute Pauliebhoy
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    Feb 26th 2015, 2:18 PM

    Or Jack Charlton ……

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    Mute Mjhint
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    Feb 26th 2015, 2:18 PM

    To judge a person by their accent is to do yourself a disservice. I agree with a lot David says but not all. He is well versed in this event thats why is being asked about it. At no stage will his accent play a role.

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    Mute Jonah Drumm
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    Feb 26th 2015, 2:19 PM

    @Waddler Mooney

    Finally an MMT au fait commenter!
    Well done and keep spreading the knowledge.
    Central Banks are the real villains – knowing that when the truth is understood their claims to omnipotence will be revealed as a sham.

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    Mute Hermes
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    Feb 26th 2015, 5:03 PM

    Did he mention David Drumm’s Bum Fluff ?
    No he did not – That kind of accent – the accent of a spoofer and dodger etc.

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    Mute Etheric Projection
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    Feb 26th 2015, 10:34 AM

    The man is talking sense. Would love to hear what his opinion is when the cameras are off. The while financial collapse was a scam to benefit the rich.
    Every recession is a transfer if wealth. Simple.

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    Mute Peter King
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    Feb 26th 2015, 10:48 AM

    Rather than a big conspiracy I think it had more to do with stupidity and an inability to think what people were doing could have long term consequences

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    Mute Egg Head
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    Feb 26th 2015, 11:03 AM

    Really Peter? You don’t see any similarities between the way the IMF is treating European countries today with how they have treated African countries in the past? And you don’t see a link between the deregulation of US finance begun under Reagan and completed under Clinton and the IMF/World Bank/whatever other umbrellas the US corporatocracy exists under, and their ability to start buying up Europe?
    It’s not even really a conspiracy at this stage I suppose, it’s just the modus operandi of US corporations wishing to empire build overseas, and is barely even a secret anymore.

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    Mute Coco McDee
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    Feb 26th 2015, 11:20 AM

    I agree Egghead. It’s funny how when people look closely at something that really doesn’t seem right they get called conspiracy theorists. When the truth is unpalatable it gets passed off as a conspiracy, but I think a huge number of people are waking up to the reality of things. The information is freely and readily available it’s just about whether people really want to know what’s going on or not.

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    Mute Peter King
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    Feb 26th 2015, 11:23 AM

    I’ll give you that the best way to control a country is to control the debt. I’m talking about the Irish perspective. Bertie isn’t some master villain who sold us to Europe.

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    Mute Hermes
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    Feb 26th 2015, 11:27 AM

    Peter – you are either very ill informed or something -
    Go and listen to the Anglo tapes – it was constructed before it was delivered – how else could the Anglo bankers know that they were going to be civil servants before the establishment of NAMA ?

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    Mute Egg Head
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    Feb 26th 2015, 11:30 AM

    I’m certainly not a conspiracy theorist, I just understand finance. But I don’t understand finance as well as US presidential advisors would understand it obviously, so if I can see links between things like repealing Glass Stegan in the US and water charges in Ireland after the event, I have little doubt those who championed the dereg saw such outcomes in advance.
    And you’re right, Bertie & FF didn’t cause the problems, but they certainly didn’t help them either. A property boom & bust in Ireland was inevitable from about the mid 90s, but the size of the boom & bust could have been minimised had FF not stoked the flames by incentivising property investment. We would have been snookered either way, because that was always the plan, but it was a plan born closer to Boston than Leinster House.

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    Mute Augustus hoop
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    Feb 26th 2015, 11:38 AM

    Etheric are you talking in an irish context or globally? If you are talking irish – while some may have gotten richer as a result many more rich people lost (though comparatively not as much as the poor), so ran the scam and why? While I don’t think many of those at fault (government, bank management, regulator etc) have been punished (or even questioned) to the extent they should be, not sure that any of them are earning more today than they were pre-crash…?

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    Mute Hermes
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    Feb 26th 2015, 1:24 PM

    Bertie was one thing – peter Sutherland as Attorney General – there is one massive root in the thorns that entwined Eire until now !
    Enda is no fool either – he is playing Garrett’s game – “A wise man to act the fool ” ….
    They know what they are doing because the script is written in Davos – what Taoiseach would campaign to abolish the Seanad ? It was scripted because Fine Gael don’t have the councillors and there will be no Labour Senators – that is why Enda will do a deal with Satan himself to get the prize of the 11 controlling senate nominations -
    Flannery was brought back to crunch the numbers – but the numbers are blinded from them now that Irish water has blown up in their face – totally unexpected after we remained silent on the L.P.T. …

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    Mute D H
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    Feb 26th 2015, 2:29 PM

    Peter , bertie and now enda are merely pawns…its the imf ,ecb ,the us federal reserve and the large corporations who are the ones pulling all the strings. It has been said before that the privatisation of a countries assets and natural resources is the way to control that country coupled with control of their debt. Once in debt and then having no access to natural resources to help ease the debt a country is then at the mercy of the creditors. This is why countries such as venezuela ecuador and bolivia are such a thorn in the side of thr west. They continually paint thrm as rogue nations because they nationalise and control their resources leaving them outside control of the imf/ world bank

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    Mute Hermes
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    Feb 26th 2015, 5:06 PM

    Ireland will be the first in Europe to do it – we have the constitution to do it and now that the carefully manufactured political machine has hit self destruct mode with the Irish Water the controllers are exactly where they don’t want to be ..
    You see when the Troika handed over their illegal running of the country to End awe became sovereign again and when it comes to Natural Resources then we have to Follow best international Practice ..
    Stael our fish is it ? – Big mistake !

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    Mute Gerry Ryan deG
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    Feb 26th 2015, 11:05 AM

    I remember at the very start of the ‘BOOM’ in the late 90′s watching a Tory party conference on TV and a British (former at the time) Chancellor Lamont was chatting about property ‘BOOMS’ and he said that what was starting in Ireland at that time would end in a ‘BUST’ as sure as night followed day.

    I can only conclude that the powers during that period allowed certain Elites to rake in the cash in the full knowledge that any fallout would be passed on to the ordinary citizens.

    That, my friends, is Treachery in my book. We probably cant prove it and the current powers would want to hide it so I don’t expect anything will happen, but we should never forget what happened to our country under the Fianna Fail watch.

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    Mute Hermes
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    Feb 26th 2015, 11:28 AM

    You don’t have to conclude – the Anglo Tapes prove it !

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    Mute Reg
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    Feb 26th 2015, 11:53 AM

    It wasn’t just the elites that raked in the cash, the goverment did also from various taxes. They reduced income and other taxes on the back of this which contributed greatly to the deficit when the crash eventually came.

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    Mute Bobby Phelan
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    Feb 26th 2015, 12:08 PM

    Reg the government are the elites lap dogs the bankers puppets

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    Mute Spiderman_Irish
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    Feb 26th 2015, 2:36 PM

    See I think David’s comments sound really good but only Brian Lenehan and himself will ever know exactly what he advised him to do. I like the guy but a lot of economists have steered this crisis to gain popularity. Not saying he did by any means but one thing is for certain not one minister, not one TD, not one Senator, not even the President of Ireland said no to the 5-10% increase in wages and expenses each year that FF were offering.

    Also Fine Gael and Labour if I recall correctly actually wanted to pour fuel on the fire that was our property bubble, and then had a massive change of policy when things went south. FG/Lab had a major hand in the pain we felt here too because they were on every radio station, current affairs and news station undermining our financial condition and undermined the sovereign to get in those doors themselves.

    So when I hear the usual line by Labour when they utter it at my door that they “only had 2 weeks of money left in the kitty” and boo fuking hoo. They wanted in to line their own pockets and under them families are worse off now for their sins as much as FFs.

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    Mute owen m
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    Feb 26th 2015, 9:49 PM

    Fianna Fail raked in the donations from construction companies

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    Mute Coco McDee
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    Feb 26th 2015, 10:55 AM

    No one in the establishment was ever going to listen to David mcWilliams because he is intelligent, honest and decent and speaks the truth.

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    Mute Tommy Whelan
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    Feb 26th 2015, 11:33 AM

    Coco nobody listen to him because nobody cared. The people had money in there pockets and the government could do anything they wanted . Everyone was happy . The whole country was in denial because we where too busy enjoying the good life .

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    Mute Tim Nelligan
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    Feb 26th 2015, 12:24 PM

    @Tommy Whelan, Untrue. Teachers in the ASTI were jumping up and down over unfair levels of pay since at least 2000; then, we spent years fighting against Benchmarking. The govt/media/Peter Sutherland nexus conspired to beat us into submission.

    We did NOT “all party”!

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    Mute jack frost
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    Feb 26th 2015, 11:18 AM

    Personally I listened to David and not hobbs and avoided the trading up and the greed. . I now have a mortgage free 30 + years a head of me …greed is a terrible ilness !!

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    Mute Were Jammin
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    Feb 26th 2015, 10:55 AM

    McWilliams on point as always. His testimony should be bet into any future Minister for Finance and bank regulator with a large stick.

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    Mute Hermes
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    Feb 26th 2015, 1:30 PM

    Not quite were …
    The control of those who appear on R.T.E. is very controlled …
    Joe Duffy show is as far as I am concerned scripted – a friend of mine did a bit of work there – he said the script writers are very very controlling.
    A woman in Clontarf could be an R.T.E. player for all we know – what else do the R.T.E. players do ?
    This whole inquiry is Time wasting exercise – every day they remain in power the debt keeps running up and it all out of the Drumm rear end !
    You can be certain that the Irish water movement is hi-jacked as well – there were two different groups involved in the water march in galway – divide and conquer !
    The solution is of course to unite and ignore !

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    Mute rory conway
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    Feb 26th 2015, 1:43 PM

    Jammin , did it strike you at all that it’s his word against a dead man who can’t answer?

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    Mute Shane Denham
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    Feb 26th 2015, 10:57 AM

    A shower of gangsters nd not 1 of them get punished

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    Mute Spiderman_Irish
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    Feb 26th 2015, 2:40 PM

    Why would you punish the guys that did the work for the EU nor the guys that continue to do the work of the EU?

    Think about it look at the state of Europe you have Islam ready to break alot of states into civil war, low rights, low pay for the majority of people vs the rich getting richer, a banking union, a unified army coming up shortly, persecution of Jews and Christians and this was despite all of the cast iron guarantees that this wouldn’t happen.

    We are fast becoming the United States of Europe and the way it is developing is undemocratic and has threads of Marxism and Comunnism embellished in it.

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    Mute John Joseph McDermott
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    Feb 26th 2015, 10:53 AM

    “In Ireland we have an inability to accept reality. It’s a national issue. In a crisis the most important thing is to define your reality not as you would like the world to be but as it actually is. Then you can do something about it. In Ireland it struck me that all the way through, 2007, 2008, the official policy was to delay and pray.”
    The same epitaph can be applied to Irish Water..?

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    Mute Mad Mike
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    Feb 26th 2015, 11:40 AM

    This article has NOTHING WHATSOEVER to do with Irish (Fracking) Water. Leave it out.

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    Mute Vannin
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    Feb 26th 2015, 2:02 PM

    Ah now Mike, your supposed to learn from history to stop it repeating, the bad bits anyway.

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    Mute Neuville-Kepler62F
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    Feb 26th 2015, 7:30 PM

    If there’s one thing the Irish can learn from history is that the Irish don’t learn from history. They keep leaving their brains outside the Polling Booths and repeatedly vote for the same Political Parties (Private Clubs) that continue to take them for a ride.

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    Mute Niall Mullins
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    Feb 26th 2015, 10:55 AM

    Such a pity that nothing will ever be done about anything that’s said during this “inquiry”.
    It’s been set up to protect the instigators from any prosecution in the future and for fg to use as a political football. Yet another farce in irish politics. But sure at least it will look like there’s something being done and paddy should be happy with that. Right?

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    Mute Neuville-Kepler62F
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    Feb 26th 2015, 11:36 AM

    “Delay and Pray is not a policy” … nice one David.
    That a little man with a ‘tash in a backroom somewhere was supposed to “mind” all these grown “supposedly educated” adults on Boards and CEOs from destroying their companies ….. naive in the extreme. Financial predators sucking wealth from ordinary hardworking folks …. and it is still happening .. the LPT tax on Family homes a prime example and the most regressive Car Tax where the wealthy who can afford new cars get the low annual road tax (€280 v €951) ….. sucking wealth from the poor to subsidise their roads – a really disgusting place to live.

    Until the population en mass is educated to think clearly for itself (philosophy in second level to start) it will continue to be stripped
    naked by Financial Predators:-
    - Landlords who MAX families Rents
    - Banks who MAX families Debts
    - Political Parties who MAX families Taxes.
    Loading families with stress and shortening their lives.
    Will the Irish bring their brains to the polling booths? .. we will wait and see.

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    Mute Deco James Connolly
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    Feb 26th 2015, 11:47 AM

    When does Charlie McCreevey get his grilling , he seems to have slipped out of the public eye since the meltdown .

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    Mute Reg
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    Feb 26th 2015, 12:46 PM

    McCreevey made some reforms to taxation that needed making, and also some stupid things. He was gone by 2004 so I don’t blame him entirely. Cowen on the other hand was totally reckless for his four years in Finance. Continued to spend (the taxes from borrowed money) without a thought for the long trem consequences.

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    Mute Stephen Benson
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    Feb 28th 2015, 9:50 PM

    He was drunk Reg.

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    Mute Ivan Murphy
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    Feb 26th 2015, 12:21 PM

    I listened to David back in the day….. I sold out of the property I had and now live as good as mortgage free.

    A BIG thank you to David McWilliams!

    It’s just a pity that others didn’t, instead he was called ‘unpatriotic’ by the FF fanboys at the time. I argued with them to no avail, they kept pushing the party line, its still happening today ;-)

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    Mute Joseph O'Regan
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    Feb 26th 2015, 11:00 AM

    Herd Mentality. go with the trend

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    Mute Al Ca
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    Feb 26th 2015, 11:57 AM

    David was a voice in the wilderness, no one in Government wanted to listen to him simply because he was right.
    The Government put it’s head in the sand and prepared…not to save the country …but to find others to point the finger at.

    The one evening Brian Lenihan called to Davids house looking for advice, David told him exactly what to do to minimise the damage and save the country.
    The first thing he told Lenihan,
    (1) To immediately go into the banks, sack the management in return for the guarantee on the basis that the lads who got us into this mess should be punished not rewarded and
    (2) to raise a much bigger recapitalisation fund to cover the expected bad debts of over Euro 20 billion that I expect to see.

    Of course the management was not sacked and many got bonuses instead and alas many of his other ideas were ignored too.(the main article is good too)

    You can read more about this here in the comments section of this link in which David replies to commenters…
    http://www.davidmcwilliams.ie/2011/02/16/before-we-sell-the-country-we-should-ask-the-people

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    Mute Fifty Shades of Sé
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    Feb 26th 2015, 10:01 PM

    George Lee was warning people about the coming crash for years but instead of going on a 6-year “I told you so” tour he actually became a Fine Gael TD, trying to actually change things.

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    Mute Al Ca
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    Feb 26th 2015, 11:07 PM

    True…but they wouldn’t listen to George either…..so he quit in a huff.

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    Mute jack frost
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    Feb 26th 2015, 11:55 AM

    Creep creevey lives in a big house with big gates between sallins and Clane….still talking crap .

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    Mute Fifty Shades of Sé
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    Feb 26th 2015, 12:38 PM

    I’m so sick of McWilliams’ self-aggrandising.

    He wrote a book in 2005 saying that everything was grand in Ireland and excoriated everyone who disagreed with him as being a “pessimist” or a “rejectionist”

    He was for the bank guarantee, then against it.

    If you take the opposite positions on every issue, you’re bound to be right some of the time.

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    Mute Fifty Shades of Sé
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    Feb 26th 2015, 12:41 PM

    Before any of his fans red-thumb me, this is from the inside flap of The Pope’s Children:

    The Pope’s Children is botha celebration and bitingly funny portrait of the first generation of the Celtic Tiger—the beneficiaries of the economic miracle that propelled Ireland from centuries of deprivation into a nation that now enjoys one of the highest living standards in the world.
    Named for the ironic coincidence of the Irish baby boom of the 1970s, which peaked nine months to the day after Pope John Paul II’s historic visit to Dublin, the Pope’s Children are overflowing with money, ambition and optimism—but they are also the most hedonistic, status-conscious and decadent Irish generation ever. They have abandoned the Old Irish Dream of Catholicism, nationalism and limited expectations in exchange for the New Irish Dream of instant gratification, material possessions and endless possibility.

    A noted Irish economist, broadcaster and bestselling author, David McWilliams cleverly dissects and describes contemporary Ireland. He tells how “Wonderbra Economics” is raising living standards and pushing the social classes closer together. He describes how prosperity has given rise to two distinct social classes: the Decklanders, so named because of their obsession with backyard decks and rank materialism; and the HiCos, who are trying to fuse their Irish heritage with their newfound cosmopolitan values—sometimes with hilarious results.

    A brilliant writer, McWilliams blends words into new and unexpected forms. You’ll learn about “the Expectocracy,” “Property Porn,” the “Carrot Juice Contrarians,” “RoboPaddy” and “Speed Bump Moms.” Vividly and powerfully, McWilliams brings contemporary Ireland to life.

    Witty, intelligent and irreverent, The Pope’s Children tells the real story of Ireland’s amazing economic and social transformation and the special generation that is changing the country

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    Mute Huey
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    Feb 26th 2015, 1:31 PM

    Where was hero Cowen during all this?

    Singing drinking songs or sucking up to DOB somewhere?

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    Mute Charles J. Ahern
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    Feb 26th 2015, 10:54 AM

    Probably trying to plug a new book

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    Mute Dave O'Hanlon
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    Feb 26th 2015, 11:32 AM

    Nope he’s just reminding us what your shower let happen

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    Mute Charles J. Ahern
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    Feb 26th 2015, 12:12 PM

    My shower? The emigrants, the professionals, the tax payers or the students?

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    Mute Dave O'Hanlon
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    Feb 26th 2015, 1:30 PM

    FFers

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    Mute Hermes
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    Feb 26th 2015, 1:39 PM

    The A.T.M.s will run out of money – Retracted lie !
    We can’t find the Trichet letter – Lie !
    There is no paperwork from the night of the Guarantee – Lie !
    etc. etc.

    Fiscal lies to insure we were frightened into Passing the Fiscal treaty and loose our democratic voting rights at the E.C.B. !
    thankfully we are legally entitled to a second treaty on all European Treaties – if you can have two on Lisbon and Nice and Irish Law prevents illegal misinforming of the electorate during a campaign then let’s have a second Fiscal treaty -
    When Mark Kenelly reads this his bowels will loosen !
    On a separate note – we have to start thinking about what we do with the members of the Economic Council – I hear there are some good judges and guards getting ready to pounce on them – let’s hope this is correct !

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    Mute stopit
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    Feb 26th 2015, 1:58 PM

    this may seem like a small point but why does the article say “McWilliams, who first coined the term “ghost estates””

    Here is the phrase being used in the UK in 1990 http://hansard.millbanksystems.com/commons/1990/apr/23/langley-estate-manchester

    Sometimes when small details are wrong the bigger details are wrong too.

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    Mute vv7k7Z3c
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    Feb 26th 2015, 2:09 PM

    Fair point, I’ve corrected the article to reflect that the term was being used before elsewhere.

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    Mute stopit
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    Feb 26th 2015, 2:15 PM

    thanks.

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    Mute Gombeen Island
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    Feb 26th 2015, 12:30 PM

    We live in a Gombeen run- Republic!..

    Down with the Gombeens!

    https://gombeenisland.wordpress.com

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    Mute John Wheelwright
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    Feb 26th 2015, 11:59 AM

    “The Irish banking system and economy was set up to fail”

    That must be the new revelation for 2015 then, aka compound interest.
    It’s hilarious that these simpletons have all the “solutions” after the fact that the titanic has already sunk. (6 years of austerity and counting)

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    Mute Adrian
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    Feb 26th 2015, 1:15 PM

    Its easy to be an expert after the event! Lots of economists now saying they predicted the crash, but very few people was hearing them before the crash. Anyway acedemics in university of groginen said economists worldwide were using the wrong models before the crash, models that couldn’t predict a crash from a stable economy!

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    Mute stopit
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    Feb 26th 2015, 2:14 PM

    here is a paper from and academic from Maynooth in 1999 that says “We also estimate the probability of a crash in the Irish housing market to have increased to around 2 per cent by the end of 1998.”

    http://www.tara.tcd.ie/bitstream/handle/2262/60133/1_Roche.pdf?sequence=1

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    Mute james r
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    Feb 26th 2015, 1:38 PM

    This European debt crisis was planned long long ago .. Don’t be fooled by any other nonsense ..

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    Mute Alan O'connor
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    Feb 26th 2015, 12:14 PM

    The irony of a Shinner talking about nearing something into someone with. Large stick.

    So more of the same if the Shinners get power eh Werejammin?

    Comrade Jarry won’t like that mistake.

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    Mute Norman Hunter
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    Feb 26th 2015, 12:43 PM

    Have you ever offered a constructive comment?

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    Mute orla
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    Feb 26th 2015, 4:06 PM

    Forty Shades, From The Generatio Game “Can you imagine an Ireland wheree house prices begin to fall precipitously? Already we are seeing house lrices fall around the country- could you imagineif this became widespread? “

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    Mute Matt Cummins
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    Feb 26th 2015, 2:49 PM

    “At no stage did I ever imagine that subordinated (or junior) debt would be included (in the guarantee),” he said.

    Ya should have told Lenihan that such was you’re case. Ya gave him not all the advice he needed then.

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