The Art of the Crisis

So. Somehow I got persuaded (took, ooh, three seconds) by Con Kennedy (he of the wonderful Punt Nua meme) to launch an exhibition of art on the crisis.

The exhibition details?

Venue: darc space, North Great George’s Street, Dublin 1

From: Tuesday May 29th 1830h

The exhibition will be fun and provocative, with visual artists addressing the crisis, the Troika, and so on.

Some highlights of the exhibitions include the below, but there are a dozen artists and exhibitors. This crisis is too serious to be left to the economists and politicians, and its great to see the artistic community coming into the fray in a slightly oblique manner. Go along, support the artists, buy a piece, and expand your view of how society responds to the crisis.  As Steve Jobs said

“Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things. And the reason they were able to do that was that they’ve had more experiences or they have thought more about their experiences than other people. Unfortunately, that’s too rare a commodity. A lot of people in our industry haven’t had very diverse experiences. So they don’t have lots of dots to connect, and they end up with very linear solution without a broad perspective on the problem. The broader one’s understanding of the human experience, the better design we will have.”

So go out and get broadened.

Kevin Devine unveils his new board game, NAMapoly (Austerity Edition)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stephen Ruane has a series “past present future”

Eugene Langan has some really nice giclee prints on austerity ….

and there is a set of Vacuum Sealed Emergency Green Underpants to ensure you are not only green of jersey but green of undergarment from Fergus O’Neill….

The real problem country in Europe….

This is an extended version of an opinion piece published in the Irish Examiner Saturday 25 May 2012

So another European summit concludes inconclusively, with the poor ole can again booted down the road, hopefully avoiding the fork that said road will take when, as seems probable, Greece departs the euro. To be fair, while inconclusive in terms of its outcomes there was a clear sense that the ground has shifted, away from the coordinated austerity for all pushed by Germany for the last two years towards a more balanced approach. Perhaps we should recall and amend the words of Churchill, substituting European for American and noting that Europeans will do the right thing only when all other alternatives are exhausted. Eurobonds, where a central or pooled treasury issues bonds and then doles out the cash to members of the pool, are at least back on the table, there is a recognition that growth needs to be at least as much a focus as fiscal discipline and there is an acceptance that bank recapitalization costs cannot fall only on the taxpayer.

However there is still a massive problem. Europe is mired in recession. Recent PMI indices, indicators of future economic activity, are all pointing recently to a deep slowdown. Spanish banks are treading the same dreary path as did Irish banks, with each deep look at the depth of the damage caused by its property boom revealing deeper and deeper holes, and the state adopting sequentially more and more drastic action to stem these holes. At least so far they have avoided a NAMA or bank guarantee fiasco. Meanwhile Greece continues to fester and the dreadfully dangerous precedent of an exit from the monetary union (which would render it no more than a fixed exchange rate zone, and we know how the last one of those in Europe ended) inches closer.

There can be no doubt looking at the economic history of the last decade that the biggest winner from the adoption of the euro was and is Germany. It has achieved massive relative competitive advantages over the other nations, mainly it must be admitted by the less than optimal actions of these countries, but also by reducing the labour share of the German cake. From close to 70% in the 2000 period employees compensation as a % of GDP is now closer to 60%, and German net exports to the Eurozone rose nearly fourfold in the ten years to 2006. A very crude characterization of the euro might be that the core lent money to the periphery that bought core goods and now the bills have come due.

The reality is that in this environment sides, the core and the periphery (which now seems to be everybody bar Germany and Finland…) are locked in a symbiosis. Coordinated austerity is not going to allow the peripheral nations to grow and in not growing they will neither consume core goods nor indeed repay core credits advanced to stem the losses arising from the credit bubbles or to shore up fiscal ssytems that were not fit for purpose.

The sad reality for Europe is that we have a weak german leader in a strong german economy who for too long was propped up by an even weaker French leader in a weakened france. The European experiment, of which the euro is the latest embellishment, is predicated on france and Germany being strong and democratic and working together to keep each other in check and at peace. In that it has succeeded but the reality now is that to get Europe out of the mess Germany is the only feasible paymaster. It will have to pay in one or more of four ways. First, there is a debate on an arcane interbank settlement system called Target 2. In essence there is nothing to be worried about absent a break in the euro, but were that to happen then Germany would be left with a large hole in the bundesbank. While that might appear problematic it can equally be argued that the net cost would be minor. But that would in any case be unthinkable to the money hawks in the German economic apparatus. A break of the euro would entail the return to the DM, which would result in a massive appreciation, resulting in lower German exports and lower German economic growth. While Germany has shown that it can survive and even thrive with a hard currency the dislocation would be large. Again, a break in the euro would also result in massive losses to German financial institutions, running potentially into hundreds of billions of euro, which would have to be recapitalized by the German taxpayer. The alternative to these is some form of Eurobond (which is constitutionally difficult and politically anathema to Germany) resulting in a rise in German borrowing costs, or a fiscal union including transfers from Germany and eventually France. . The latter in particular would insist that there be tax harmonization in some guise as a condition of entry.

Thus, we face more weeks of high political economy drama and economic highwire acts . Germany and to a lesser extent France need to accept that the costs of saving the Eurozone are going to be (short run and ongoing) high, and weight these against the incalculable disruption and losses of it collapsing. A Greek exit would be in my view an irreparable damage, as it would show that the Eurozone is not a monetary union. For Ireland the question will arise sooner than later: what are we willing to give up to remain in the enhanced European system, or do we take our chances on the outside. The stakes could hardly be higher.

For Europe as a whole and Germany in particular we might do well to recall the words of that most supreme political operative, Cicero , who stated :

“Six mistakes mankind keeps making century after century:
Believing that personal gain is made by crushing others;
Worrying about things that cannot be changed or corrected;
Insisting that a thing is impossible because we cannot accomplish it;
Refusing to set aside trivial preferences;
Neglecting development and refinement of the mind;
Attempting to compel others to believe and live as we do.”

Germany under Merkel has committed most of these follies, insisting that only german management of the economy is the right way (6), that there must be no increase in money supply regardless of the pressing need (4), that Eurobonds or debt monetization are so anathema to them that they are impossible (3), that if only the rest of Europe were German then there would be Germanic economic ordoliberalism prevailing (2) and that we must all simultaneously engage in austerity while exporting to each other (1, 2, 4 and 6).

At least German culture remains as refined as ever. Maybe we should reach into the shared common stock of European culture and recall the words of Voltaire, as echoed by Uncle Ben Parker in Spiderman, who noted that with great power comes great responsibility. It is time that Germany took that responsibility as seriously as its power demands.

What will be the Feta Greek-Irish economic relations…..

So Michael Noonan, our finance minister, apparently is unconcerned about Greek exit from the Euro, joking last week at an investment conference that we didn’t actually import anything from Greece much, apart from Feta Cheese. So that’s ok so…. I suppose the analogy of the Greek economy with a crumbly animal byproduct that is an acquired taste and not really very popular was too tempting to avoid.

It was still rather a bizarre statement. If Greece were (when it does?) leave the Euro, the effect will be to make Greek exports cheaper and imports to Greece more expensive. Ceteris paribus we would expect to see the trade balance between Ireland and Greece shift in Greece’s favour. We would export less to them and import more from them. While that is all very helpful to Greece it is less so to Ireland and makes the blithe insouciance of the finance minister puzzling. I suppose its about confidence….

The other puzzling element is that its not even true. We export several hundred million dollars worth of goods to Greece each year, which in a grexit will be much less competitive. And we import a small amount, its true, but Feta isnt even the largest amount.

The import/export profile of Irish trade with Greece is as below (in $). FWIW there is a nice tool here from the OECD that allows one to look at bilateral trade

total	Imports		38,673,897
	Exports		406,650,122
			367,976,226
Food and Live animals	Imports		7,513,252
	Exports		42,917,508
			35,404,256
Beverages and Tobacco	Imports		5,455
	Exports		8,835,026
			8,829,571
Crude Materials, Inedible, Excluding Fuel	Imports		384,758
	Exports		25,762
			-358,995
Mineral fuels and related	Imports
	Exports		122,750
			122,750
animal and vegetable oils fats and waxes	Imports		144,984
	Exports
			-144,984
Chemicals and Related	Imports		16,950,172
	Exports		314,978,978
			298,028,806
manufactured goods	Imports		4,480,229
	Exports		2,147,716
			-2,332,514
machinery and transport equipment	Imports		2,434,467
	Exports		17,761,196
			15,326,729
Miscelleaneous Manufactured articles	Imports		6,030,702
	Exports		16,051,474
			10,020,772
Commodities and transactions not eslewhere specified	Imports		729,877
	Exports		3,809,711
			3,079,835

Minister Noonan’s responses to Dail questions shine further light into the Anglo promissory note deal (you won’t be impressed)

Reblogged from NAMA Wine Lake:

Question: If I loan you €10 on 3rd April 2012 for a maximum of 90 days, what is the maximum “maturity date” for you returning the €10 to me? Answer: Should be 1st July, 2012 but according to the Department of Finance, it’s 30th May 2012

Cast your minds back to the “deal” on the Anglo promissory notes announced in the Dail…

Read more… 965 more words

Namawinelake takes the department of finance apart...

Holding my Nose and voting Yes

This is an expanded and linked verison of a column published in the Irish Examiner Saturday 12 may 2012. http://www.irishexaminer.com/business/a-reluctant-yes-voter-for-vital-access-to-funds-193627.html

I have decided, very reluctantly, to vote yes in the upcoming referendum on the fiscal compact. I have previous expressed many many doubts, most of which have remained unanswered. The compact is bad economics, it is inserting an ill-defined and inestimable concept in the constitution, it is highly likely to be a moot compact as soon as a large country deems it domestically expedient to be dropped, and it will result in us having to radically change our way of doing things. The latter may not be a bad thing given how poor at governance we have shown ourselves to be.

The debate has rapidly, and predictably, gone off the rails of the actual debate onto tracks that are only vaguely parallel. It has morphed into a debate on austerity, driven for the most part by the ideologues of the left tapping into an inchoate if understandable desire on all our parts to see an end to austerity. At some levels the debate has been farcical, with Richard Boyd-Barrett claiming that an unspecified 10b (presumably per annum) can be found from “wealth” while at the same time arguing against taxing housing….wealth. The 10b wealth tax meme has been roundly exploded by Seamus Coffey, but as is all too common in Ireland RBB has decided to engage in policy based evidence rather than evidence based policy. At least we are spared so far the more extravagant claims (YES For JOBS) on the yes side but expect the ludicrous level to rise there as the debate intensifies. Another feature of the no side is that it features the same old same old – SF have opposed every single EU referendum since our entry into the EU and one can assemble a DIY ULA Speech from a box of 1982 Socialist Workers Party posters.

The most often repeated argument is that signing to the treaty will institutionalize austerity as we drive towards a 60% debt gdp ratio. This is possible but not necessary. It all comes down to growth . Adopting the fiscal compact will require that in the end the debt to gdp ratio head to 60%. That is a massive fall from where we are now, and many of the commentators, including to some extent myself, see that trajectory as most probably involving a requirement to not simply run small or zero deficits but to actually have surpluses. Underlying the concern that this will institutionalize austerity is is pessimism about growth. The reality is that debt at the national level is rarely paid down. The debt/gdp ratio, the metric that will be used in the fiscal compact era, can fall as a result of debt being paid down (which doesn’t happen), gdp rising, or both. These figures are measured in nominal terms also, so the ratio can be eroded by inflation. An examination of the 1990s onward shows that debt/gdp ratios can fall very quickly.

From 95% in 1992 the ratio had fallen to 53% in 1998. Admittedly the 1990s was an era that in many ways was more benign in terms of the external environment and in terms of the degree of policy maneuver available to government, but the lesson stands: so long as debt does not grow the ratio should fall. It is abundantly clear from the debt-GDP analysis that first, this can can change for good or ill rapidly and second the deterioration since 2007 is appalling, driven by the collapse of the tax base (hence the need to rebalance and re broaden), the collapse of the economy (driven as it was in large part by a credit boom) and by the bales of wet straw that were placed on it by the gargantuan folly that was and is the bailing out of Anglo. The latter is important but it is not by any means the font et origo of our problems. While it may be tempting to call it bank debt treaty (as the superlative Namawinelake has when explaining that that is why he/she/they are agin it) the reality is that 2/3 of the increase in debt since bout 2007 to 2015 in down to our own deficit. It is without a shadow of a doubt true that the bank debt is usurious, that it should never have been loaded on the state, that we have shown ourselves to be singularly unable to gain meaningful change in its repayment and that it is an albatross around our necks. The issue is not that – it is whether or not voting yes or no is more likely to allow us a better negotiation position. As to whether we can effectively use that position is quite another thing.

So we are fine if we get growth but where will that come from? This is the key dilemma for Ireland and for the world. The latest IMF World Economic Outlook is at best cautious on prospects for growth. . We face a period of significant fiscal consolidation through 2015 to simply move to a state where the level of debt stands still. Indeed, at present the plans are still to run a deficit. Structural or otherwise a deficit where debt continues to grow is not conducive to reducing the debt/gdp ratio. The Fiscal council has suggested that additional to the government plans to have fiscal consolidation of 12.4b through 2015 an additional 2.8b might be required to achieve balance. This will weigh on any recovery and regardless of any fiscal corset or compact getting to a broadly balanced budget when the debt-gdp ratios are as high as they are is a good macroeconomic aim.

Nonetheless, as the fiscal compact is specified on nominal levels, so long as we keep debt rising by less than the nominal growth rate we will be reducing the ratio. Given that our average annual nominal growth rates over the longterm have been in and around 10%, achieving even modest nominal GDP growth should be feasible. So long as we do that we will, almost automatically, comply with the headline adjustment figures (see Seamus Coffey again and Karl Whelan on that issue)

A major problem with the plan “going forward” by the government is that it relies in essence on an export led recovery. The entire world seems to now be betting on export led recoveries, which makes sense only if we have found a Martian civilization willing and able to pay for our goods and services. Successive government projections for growth have been shown to be on the optimistic side, and it is clear as a bell that coordinated and prolonged austerity, lite or heavy, in the Eurozone is not going to lead to a recovery and all the evidence is that this is beginning to sink into the political consciousness. Thus at some stage we can reasonably expect some pro growth measures at a European level, whether written into a revised compact or as an addendum. The French and Greek election results guarantee that.

The main reason why I see myself, reluctantly, voting yes is to secure access to funding as and when we need it. The reality is that even if we were not to require a single additional euro of debt, by running a balanced budget, we face a massive refunding requirement. To reiterate, national debt doesn’t get paid off – it gets rolled over and over. Paying off the maturing debt with new debt does this. The trick, as we have noted above, is that with a modest amount of growth the burden on the state falls as a proportion, and with a modest amount of inflation the burden in present day funding terms falls further. The challenge then for Ireland is to achieve this. But we will still have to pay off the debt. We need to repay, to refinance, over €30b between 2014-2018 in national debt, and some 23b in funds issued under the bailout. There is guaranteed funding from the ESM for this. There is the argument that we can apply to the IMF which is true but application is by no means the same as acceptance. The IMF have previously expressed doubts (P 12 here) as to the appropriateness of them sharing the burden alone. The EFSF continuation would also seem to me to provide some cover only for the existing bailout, leaving the remainder of the rollover of national debt and any additional funding to be sought from the markets.

Voting no would thus expose the state to having to fund at least a part of its total requirement from the markets or from internal resources or from the markets at a still usurious price. As States can always fund themselves from internal sources, as a consequence the argument that “they will not let us collapse” do not hold as strongly as did the same argument for restructuring the banking debt. Ireland no longer holds the cards that it did when our banking system was a source of major potential contagion.

Banks reliance on the ECB has fallen and continues to fall, and we now are approaching a percentage of borrowing from the ECB more in line with our economic size. The ECB will support banks (although that support has to be coming to its limits) but they will not and cannot support states. Thus we face a “lesser of two evils” argument : this is pragmatic and economic reality no matter how much it may stick in the craw. Voting No would be the eviler of two lessers, and would rapdly expose how unimportant we now are.

The need for a land banking strategy

Reblogged from Ireland after NAMA:

There was an article in Tuesday’s Irish Times concerning the land aggregation scheme run by the Department of Environment. To date, 47 sites with a loan book of €110 million has been transferred to the Housing and Sustainable Communities Agency, which has responsibility for the management and maintenance of the land.  There have been 115 sites submitted, with loan debts of €260 million and interest accruing.  

Read more… 830 more words

"Because there has been no carry forward costs to holding land (such as property tax), and the recommendations of the Kenny Report were never implemented, the state has been held to ransom by land speculators for development. "

Jobs, education and industrial inertia

This is a hyperlinked version of a column published in the Irish Examiner on Saturday 28 April 2012

Recent research for the USA suggests that not only are many recoveries from crashes etc jobless for a long time, but that they also see the destruction of large numbers of ‘middle class’ jobs. When recoveries happen jobs do come back but these are typically at lower skill and wage levels than before or at very high end. Middle jobs tend to get squeezed. This trend has been noted not just in US and UK research but is also an increasing feature of growth patterns in developing countries. This is not to deny the massive growth in middle jobs in emerging countries but to suggest rather that the creation of jobs tends to uneven not just in geographical but in distributional terms. While growth is expected to return to the Irish economy, at least by measured GDP figures, the jobless total will fall very very slowly. The historic experience of Ireland is that respectable growth levels can be combined with high unemployment and that it takes a very long time for jobs to follow growth. In that context it is nice to see that there now appears to be a move to include in the European policy mix a growth and jobs agenda.

The difficulty we face is that regardless of the fiscal treaty we are running a worryingly high current budget deficit. While it is undoubtedly the case that the treaty will lead to us having to run decades of surplus budgets, the immediate problem is that some degree of austerity is a given to balance the books. Working off the debt will take much more. To some austerity is in and of itself a good thing, believing as they do that there is such a creature as an expansionary fiscal contraction. That such even existed is doubtful. Recent BIS work suggests that the external environment is essential to restoring growth. This centrality of the external environment is all the more important for Ireland, as the entirety of Irish growth in 2012 and 2013 is forecast by the EU to be driven by net exports. Austerity, at least until such time as we are able to return to normal borrowing structures, will continue to drag on the Irish domestic prospects. Thus we face a dilemma – we need to restructure our domestic finances and to do so in an environment where there is little evidence that such restructuring in and of itself drives growth. PaulKrugman has suggested that the linkage between reduced deficits and austerity is one that is weak and lagging. Debt does act as a drag on growth but it is also important to note as does recent research that slow growth also leads to debt.

All of this leads us to see an Irish economy that is likely to struggle to create jobs. We have failed over the decades to create an economic system that can drive jobs and opportunity for our population. There are over 500,000 Irish born people in the UK, the largest part of them undoubtedly there as a consequence of economic migration. It is often suggested that governments cannot create jobs, but can create the environment for jobs. In the modern globalized economy that environment all agree is one where people are skilled in languages, math, science as well as interpersonal skills. And yet we are not investing in these – we have dropped language skills from the lowest level of school where children are most receptive, our relative achievement levels in math are poor, there is no coherent IT teaching in second level schools etc.

Government plans for dealing with these issues often tend to chase ideas and attempt to predict what the markets think will be required in a number of years time. But all the evidence is that industries change and can change rapidly. Take two examples in Ireland – canals and communications. The south west of Kerry was in the late 19^th century a hub of high tech communication with transatlantic cables coming ashore and sustaining a significant infrastructure of highly skilled workers at the cutting edge of technology. And yet, with the advent of satellites this disappeared very rapidly. In the 18^th century canals were the technological innovation that transformed transport. A visit to Belmont mills in offaly gives a good insight into the scale of goods and services associated with these. Again, canals enjoyed a relatively short life. The key lesson from this is that planning for industries is always going to be fraught but provision of skills to people will always repay.

A week in higher education

This is an expanded and linked version of the column “My Education Week” which appears each Tuesday in the Irish Times.

This week is Trinity Week, culminating in the Trinity Ball, which means teaching semester is over. Which, if one believes everything one reads in the papers means that I and every other third level academic is off work until the autumn…would that this were so, but it remains a pleasant fantasy. No scheduled teaching means one can catch up further on the Sisyphean tasks of administration, research and student management! The perception of lazy academics is one that is all too common, but recent research suggests an average working week of 50h, above that of the european norm. Its a sad commentary on irish public discourse when research, carried out by a highly prolific academic in her area, is dismissed and all but called academic fraud by commentators simply because it doesnt conform to expectations. That coarsening of debate is something about which as academics we should be most concerned.

Sunday evening is generally when both I and Mrs Prof, a primary school teacher, organize our work week. She plans the weeks lessons, I outline my ‘to do’ lists and deal with any weekend issues. As a college tutor in TCD one finds oneself dealing with all sorts of odd requests above and beyond the norm. This Sunday the fire to be fought is a student who has that weekend been given a chance to go on an internship in Singapore, very relevant to her degree, but this would entail missing examinations and a decision is needed fast. I email her, she rings me, we talk and plot out a route to be tried on Monday morning.

Monday morning I stop off in Kildare FM en route to work, and talk for half hour on both my new book “what if Ireland defaults” and on general economic issues. Local radio is a powerful force in Ireland, and too often ignored by commentators. Part of the job of all professors is to profess and what better way than to discuss ones works with the public who after all pay a large chunk of my salary! The remainder of the morning is taken up with finalising my thoughts on paper for my appearance on Wednesday at the Oireachtas Subcommittee on European Affairs, regarding the Fiscal Compact. Monday is Trinity Monday and as always there’s a great buzz in Front square when the names of new scholars and fellows are announced. Its hard to think that its nearly 10 years since I was made fellow. Time flies when your having fun! This year there are 103 scholars, a record, reflecting the exceptional quality of students we are privileged to have. The afternoon is taken up with finalising and submitting a paper, a meta analysis of research on the linkage between property values and aggregate stock/bond market returns, to a US journal. Submission costs €125 and I decide to pay that myself rather than dip into my research funds (where I divert my media earnings) which I use for travel for myself and for postgraduates and for things like launching books….

Tuesday The MSc in Finance in TCD is unique Ireland in its range of professional partnerships, with linkages established with Bloomberg, PRMIA, CFA and CIMA (the signing ceremony of which is shown here). I set aside time to talk to MSc Finance students, but some exam issues mean that a number cant make it. We talk anyhow to those that can make it and reschedule the rest. These are students who are to be under my supervisory wing throughout the summer as they undertake their dissertation which accounts for 1/3 of their degree. I have 10 to manage but am also the general ‘go to’ person in the supervisory group for issues around data and statistical analyses beyond the norm so I usually get to see most of the 50 plus students at some stage. The students will work on these projects for the summer and hand up the work in late august. Some projects are industry linked, others are pure research, others expanding on previous work. Of the ten students I am supervising 3 are Irish. The projects range from analyses of option pricing, through dividend policies, to work on the determinants of personal financial risk taking. Its hugely challenging and enormously rewarding each summer to work with the masters students on their projects. We get an update from the head of school on the fundraising for the new Business School Building (going surprisingly well given the times that are in it) and news that a new colleague has accepted (at lecturer level) the position in strategic management which was created when Professor John Murray died, 18 months ago. The norm now in irish academia is that no matter how senior, experienced and internationally well qualified and recognized is a person, if they depart and are replaced at all that will be at the lower end of the scale. It takes time, and experience to mature as an academic as for any post. We are eroding academia from the top down. I talk to a Finnish newspaper on the Irish banking collapse, and they keep asking the same question as all overseas commentators do : why on earth did we do the bank guarantee. I have no printable answer…

Wednesday the Dean of Students Honor Roll is announced, recognizing students for non-academic involvement in college life, such as volunteering and tutoring/mentoring second level students in the inner city. Of the 400 honoured 38 are business students. College is of course much more than simply classes and the creation of rounded socially aware business graduates cannot be but a good thing for the future. The morning is taken up with attendance at the Oireachtas Subcommittee, in the company of several others, namely Jimmy Kelly and Michael Taft of UNITE and Megan Greene. Presentations are here (me, Greene, Kelly, Taft, and here is a link to the transcript of the debate). While one might decry the antics of the Oireachtas at times, it is our sovereign parliament and it both is and should be an honour to be asked to present ones views to it for consideration. I certainly take that perspective. We present our views on the fiscal compact; I concentrate on the effect of same on the financial markets, while the others concentrate on the macroeconomics. We have a good round of questioning.

Afterwards I have lunch with Megan, who is senior economist with Roubini Global Economics, who also attended the committee. Over lunch we have a lively exchange with some parliamentary researchers about the future of the Euro. In the afternoon i catch up on some emails about the UK and Ireland Chapter of the Academy of International Business , on whose executive i sit, and attend to my role as Editor of a journal (Research in International Business and Finance) I divert a query from a Sunday newspaper to someone who knows more about it than me. and get pleasant news with a paper accepted to a reasonably decent US based journal, subject to some minor (mainly editorial) changes.

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Thursday involves sorting out the sessions for a large conference I run every year, with over 150 papers in all areas of finance. As usual in excess of 95% of the papers are from overseas, and we expect about 200 delegates. Having run this for 10 years in Ireland, it’s probable that the conference will go overseas from 2013, as the lack of sponsorship from domestic financial institutions makes running it here increasingly difficult. Despite having attracted Nobel laureates, having attained significant international credibility, being linked with one of the top international journals in finance and having had present each year the leading finance researchers there is worryingly little commercial interest in pure knowledge. This is in stark contrast to France and Italy where the conference is bound for the next decade and where financial institutions are more than willing to interact from the very start with academia I also catch up with some PhD students, and we discuss how they will overcome some issues, publicise the research and discuss how to interact with an overseas financial institution which is funding one study. I talk to a Norwegian academic who is researching the Irish banking crisis, and try not to be embarrassed when they note that not only did they not get anywhere in getting an interview with official sources they didn’t even get a reply. We have a long way to go yet before we realise that sunlight is the best disinfectant. We seem to have not only zombie banks but vampire-like openness in the permanent government.Later in the afternoon I meet with the people from Orpen press, and we discuss a series of talks to be held in bookshops to push the debate which we have opened with the book “what if Ireland default”

Friday I spend working from home, as I try to do each week for at least a day. Knowledge work requires a brain and a pc. The physical location is of minor relevance, and research requires for me at least uninterrupted time to think and muse. While the work of science academics typically requires them to be at their benches etc to do experiments, for arts, humanities and social science research this is not the case. There is a recent push towards trying to tie academics to their desks : this not only flies in the face of government policies on teleworking it is wholly misguided. So, the attic it is, where I work to finish a paper on small firm finance I am doing with a colleague in DCU and another collaborative project on gold prices which involves researchers in the USA and Australia. While none of these will generate patents they should I hope advance human knowledge a little bit.
What Im listening to : I generally stream baroque or early church choral music when im doing writing or research, and for walking/commuting 1970’s and 80’s rock such as Led Zeppelin, Lizzy, Guns n Roses….

What Im reading : In the Shadow of the Sword by Tom Holland and Blue Remembered Earth by Alastair Reynolds.

What Im watching : The Good Wife and Homeland, two top notch US series. Also Game of Thrones and Alcatraz

17% of NAMA sold to un-named private investors

Reblogged from NAMA Wine Lake:

You’d think buyers would be queuing up around the block of Upper Merrion Street following the decision of the Government to sell the 17% of NAMA currently owned by Irish Life Investment Managers. Well, too late, the stake has already been sold!

Although we all regard NAMA as a government agency, back in 2009 the Government was careful to structure NAMA…

Read more… 583 more words

so : 17% NAMA sold to unknown investors at an unknown price. Hmm....

Minister says NAMA can continue to operate even if balance sheet-insolvent

Reblogged from NAMA Wine Lake:

It seems to be a moot point for the time being given that NAMA is saying it will make a profit of €200m in 2011, but Minister for Finance, Michael Noonan last week said in a reply to a parliamentary question that NAMA does not have any minimum capital requirements and can accordingly continue to operate even if balance sheet-insolvent.

Read more… 536 more words

Bankruptcy is no bar to NAMA it seems, as the minister suggests that solvency = liquidity. Hmmm... that sounds awfully like what we heard re banks in 2008...