Monthly Archives: January 2013

How accurate are stock analysts

Not very it seems

Irish Business Blog

Theres an interesting paper which I linked to here . The paper looks, over the 2002-11 period, at the accuracy of equity analysts target prices. Irish analysts are included.

Among other things it shows on a country by country basis the accuracy.

Heres the chart. The data are TPMET for those interested. I It measures if the target price was hit at any stage in the following 12 months. So 0.5 would be that 50% of price forecasts , up or down , were hit at any stage in the next year.

Higher values indicate lower accuracy. Oops.


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State argues in High Court that a citizen has no right to challenge Parliament

The David Hall v Ireland (thats you)  case in the High Court, where the founder of LifeLine Ambulances and campaigner for mortgage relief is challenging the legality of the Anglo Promissory Notes, took what seems to me to be a surreal twist today. The basis of his argument is as far as I understand that the Oireachtas didnt vote these wretched scraps into existence they were created by the Minister as an executive act, and as that involves the expenditure of money thats a power reserved to the legislature not the executive.

Coming towards the end of a long day of argument which saw Anne Nolan of the Department of Finance sprung into the witness box as a surprise additional extra, the argument from Michael McDowell ran as follows….The Promissory Notes are a creation of Dail Eireann. David Hall is a citizen. As a mere citizen the state claims that he has no right to in effect act on behalf of the Oireachtas against the Executive. A citizen qua citizen has no role or right to ensure that the two parts act properly. Mmmkaaaay

Mr McDowell further suggested (remember folks, he is acting, legally speaking, for you and me…) that apart from a mere citizen not having any rights to get between the Oireachtas and the Executive, the only people who did were TD’s. The President of the High Court then noted that no TD had stepped up to date.

Now, I Am Not A Lawyer but it seems to me that as a citizen I have not just the right but the duty to hold to account the executive and the legislature if they are acting unconstitutionally. The debate noted the Crotty case, and McDowell (arguing for you people, its for you own good) noted that Crotty was a citizen and the case affected the constitution and thus all citizens. He noted that while the wretched notes had a  “far reaching” impact, it didnt matter whether the executive did the deed or the oireachtas, as the effect would have been the same. In effect this second guesses the Oireachtas saying that it would have created the wretched notes. And hes probably right. But we will never know. It would be sweet to see the government trying to get a vote on these through now….

MOOC and me

So, starting a MOOC next week, on astrobiology and the search for extra terrestrial life. Hosted by coursera, it's out of Edinburgh. I'm interested to see how it works, and in particular the way it works as a student. MOOCs aren't going to replace the traditional way of doing higher education, but they are a massively important complement.

I do worry that no Irish university has taken an initiative on this. I suspect that the internal bureaucracy plus the perception that this would cost a lot in a time of scarce resources and a small intersecting set of interesting academics/tech open academics/interesting areas is the cause. Maybe a start might be for the HEA to ask each uni to do one, and to pick up the tab? Given we want to encourage more students from foreign parts to come to Ireland it might be a very cheap way to get a few tens of thousands of potential students to have a gander?

Hall v Ireland (even though Ireland is on his side)

The essence of democracy is under question in the case taken by David Hall against the minster for finance which starts in the high court Tuesday January. 22nd. Hall is challenging the legality of the wretched Anglo promissory note . He is saying as I understand it that the constitution requires that all expenditure be approved by the Dail. That is where the power is. People elect TD' s who then in a democratic way vote on various matters including expenditure. The dail gives the government the money to spend . In 2010 the finance bill allowed the minister for finance to provide funds to the banks. Hall maintains that the dail can not give its constitutional powers to anyone else. Although not a lawyer my understanding is that one cannot alienate ones rights, not you, nor I nor the Dail.

The minister for finance on the strength of the 2010 bill created the now infamous promissory note. Halls constitutional challenge questions weather the promissory note was created legally as it was never approved by the Dail. It's hardly a small sum so it does seem odd that this was never subjected to a Dail vote.

A lot is riding on this case which will ultimately end up in the Supreme Court. If Hall succeeds then the Government will be faced with a very difficult situation of having to vote in the Dail and this might cause some issues for TD'S. this might be a chance to really negotiate with our European “friends. The government has put in place a high powered legal team to defend that which it is saying in Europe is indefensible. Expect these lawyers to do a super job, and expect the government to then face these arguments it is relaying to be used in evidence against it (and us) in Europe. This case won't be just about the constitutional niceties, but will inevitably raise issues of economics and bank solvency.

A smart government would not fight this case with rigour, but would let it lose, and then note that there was no way it could get something through the parliament. In reality they migh be hoping that the case, won or lost in the High Court, would result in a delaying of the need to pay the €3.1b in end march. That would put it up to the ECB. But Michael Noonan is not a man to eschew legal advice as the family of Bridget MCCole. Expect this one to run and run…..


Pork, fixins and Professional Politicians

fixinsIn the Sunday Independent today (I know, I know…) theres a most interesting piece. It notes that the offices of TDs are exempt from local authority rates while charity shops are not.  This prompted me to think about the nature of politics. The exemption from rates applies not to their offices in the Oireachtas, but to the politician shops, for that is what they are, that are now a feature of the main street of many towns. Time was when politicians held their clinics in the back room of a pub. Now they have plush offices with their names emblazoned in lurid neon. These serve to advertise the wares of Timmy O’Hooligan or whomever, and are basically invitations to come ask him to intervene on their behalf (fixins) or to provide information (which the citizens information bureau down the road has anyhow). So its selling pork, fixins, info and so on.

Under the Valuation Act 2001 the basis is set for the levying of  commercial rates. These same are a huge bubbear for many companies, and the debate on what exactly one gets for these rates paid to the local government is ongoing. Whatever it is its fair to say that a bookies office, a dentists surgery, a politician shop, all cheek by jowl on a street get the same. But the politician shop is exempt from commercial rates by virtue of Schedule 4 Section 19 of the Valuation Act 2001.

Along with politician shops also exempt are a whole clatter of other things : mainly they fall in to three categories – agricultural land, social good ( non profit museums, care centers, hospitals, colleges etc) and public works (lighthouses etc). Now, politicians have offices. These are located in and around the parliament. Thats where they work. They are not compelled to have a shop on the main street. They choose to do that. Politiicians get very sniffy when their professionalism is called into question. If they are operating from the shop as professional pork pullers, fixin merchants, information mongers and so on, they should surely be treated the same way as the other personal services on the street? If they are saying they are exempt, it must be because they want to be seen doing this as a public good (see citizens information) or else they are claiming they are doing this as a charity (why then get paid pretty well). The other alternative is that its a form of amateur dramatics….

In the USA fixins refer to the bits and pieces that go with food – pickle, biscuit, coleslaw, gravy etc. Like politician shops they are optional. One can have pork or whatever without the fixins. Theyre supplemental, not essential. So too are politician shops – they have offices in the parliament in which they have secretarial staff and where they are contactable, we have citizens information and other local bureau to give us advice on how to get a pothole fixed or a pension form filled in, and we have no need of these shops. Politicians elect to have them, at our expense, to show their wares, to sell themselves, to increase their income earning potential. In other words, they are commercial activities.

If they  want to be treated like professionals, then act like same. Pay the rates the other professionals pay and expense them against tax. If they wont do so then they are amateurs. And we dont need amateurs running the place.

The Running Sore that is Anglo Part 2,339

So Minister Creighton is happy, she has gotten positive indications from Berlin that they will look favourably on our negotiations on the Anglo Promissory note. Of course thats nice and all but then the people that have to make the final call are the ECB. And of course the ECB is above politics, and we could never imagine that german politicians would have any influence on the ECB, could we..

The promissory note is not complex and not techinical. It is in essence money created by the Central Bank of Ireland and given to Anglo who used it to pay off depositors and bondholders. The ECB doesnt, for a number of reasons some good some bad some plain bonkers, want this money to stay in the system and so the Irish government takes tax or borrowed money, gives it to the Central Bank who then destroy it. Yes, the way in which this round robin within the country works is complex but the principle is not.

Anglo is a running sore, an affront on an ongoing basis to the state. In 9 weeks a sum of money equivalent to the total amount saved in the budget will be destroyed. That is immoral and politically and economically bonkers.

Anglo gains a very large part of its ongoing income from the interest on the pro note. It gets  about 1.5b pa on an ongoing basis. Thats a vast sum and beyond the annual report we know very little about what it is used for. We do know that Anglo has annual expenses of c 300m, so that 1.5b comes in handy. We know that Anglo has a very different attitude to its dealing with the minister (who stands in loco parentis us in dealing with this wayward scion of the celtic tiger) : they ignore him and he seems to ignore them, allowing them to escape oversight and analysis. The every super Namawinelake has a set of posts on this : see here on wages, here and here on NAMA v IBRC .  Six Anglo staff earn over 500k per annum – why beats the ever living hell out of me, for running what is in essence a giant debt collection service.

The government have staked a lot of political capital on a “deal” (nature unspecified) on the Anglo pro notes. The deal must do three things : it must, if as seems probable we are stuck with Anglo for the forseeable future, give sufficient income to Anglo to allow it to run in the manner in which it has become accustomed ; give a saving to the state in terms of cash outflows; be simple enough that it can be sold to the domestic public that count (the labour backbenchers mainly), although  we can be sure that any sop thrown to them will be lauded by the media cheerleaders as a heroic seismic massive breakthrough

Or, it could decide that after 2 years in office with zero progress to show, it annouces that it will not be paying. This would have to be done by Enda and Noonan standing up in the Dail and saying so. Not a penny, no more, the letters of comfort underlying the pro note are withdrawn. That would of course represent a massive headache for the ECB, for the Central Bank and for the exceedingly well remunerated board and senior staff of Anglo. Some would cry it a sovereign default when in fact it is designed to avert same. Legal challenges and cries of dismay would emanate from the depths of the Bundestag  but a Jardnyce v Jarndyce approach would spin that out.  A clear statement now in public that we are not paying this in any way any more is needed. Delaying the repayment over 40 or 50 years is a cop out – its designed to avoid confronting the issue. Reducing the interest rate is a worse cop out as the flows of money are circular within the state. The moral, politically sensible and economically meaningful solution is to walk.

Fianna Fail, I am convinced, willingly or not, laid a trap for this government into which they have fallen and in which they are now writhing on the stakes. The trap was that no matter what austerity or restructuring, we would not get meaningful traction on getting out of the mire with the Anglo note hanging round the state finances. A person who is now a minister told me in january 2011 that “we will simply have to walk from Anglo” as the political and economic cost would be too much. Two years on its time to go walkies.

Austerity Pictionary : a competition

So the Austerity Dictionary (see here and under Twitter #austeridictionary) was amusing (I thought anyhow) and got a lot of views and comments.

In conjunction with Margaret Harrington (@curtainqueen) and Scotlyn Sabean(@AuntieDote) we are plotting world domination a charitable initiative. More on this later but heres a thing


Many of the Austerity Dictionary entries lend themselves to graphical representation. So, as a prelude to our reign of terror the charitable idea a wee competition…


For the Austerity Dictionary entries below, send me ( a graphical illustration of the said entry.  The three of us will then choose which we find most amusing/pertinent/impertinent and I will then host a competition on the blog for a crowdsourced winner for each. The winner will get nothing, but I will, on successful completion of this competition, give €100 to a charity of their choice.



1.         Entering this you give up all copyright and ownership of the picture – this is to allow it to be used later if needed in whatever way we think is good and prope

2.         Only pictures sent to my gmail above with a subject line Austerity Pictionary : <definition> will be deemed entered

3.         The judges (us three) decisions are final, binding, and final.

4.         Pictures should be sent as attachments, in jpeg or pdf format only, not to exceed 2mb.

5.         Pictures can be b/w or colour, but each must have on the picture caption the austerity dictionary definition and   hashtag #austeridictionaryas well as the three twitter handles (@AuntieDote @brianmlucey, @curtainqueen) the first to let people know what it is the latter to stroke our monstrous egos….

6.         Entries must be received by midnight GMT Saturday 19th January 2013


Entries are sought for the following



Austerity: Cargo cult popular with European political elites

Bertied : to have people come up and give you bags of money and houses, for no favors asked. Believed a mythical state

 Bondholder : synonym for fireproof.

 Brownian motion: the movement of the eyebrows of an powerful tv presenter when presented w a Td talking shite

 Budgetary Stance ; being stood against a wall while an “Anglo” of money is demanded from you

Clusterfeck (n): A policy decision that causes havoc in every department. Can be direct or indirect. Always catastrophic.

domestic consumption : Ireland as the auld sow eating her farrow

ECB (v) to repeat the mistakes of the 1930s in a belief that the 2010s are really the 1920s

Economist: hurler on ditch. Either found in Ivory Tower, or maximising DOOM! in private sector to sell book.

EconoMist…where the department of finance is lost

Fiscal adjustment (n): Emptying the pockets of the taxpayer by rotating through 180 degrees. Permanently.

Ghost Estate: Beyond the pale void we have been staring at so long it begins to look back

Goldmansachs : a form of alchemy where everything can in fact be monetized.

Green shoots of recovery. ; favoured diet of unicorns.

HSE (n,v, obscene) a curse or invectice  “you’ve made a right HSE of it”, “you have HSE’d that up rightly”

Laffer Curve (n): Where taxation levels are so high that the worker squeals hysterically following sight of their payslip

Pillar Bank : that to which you are tied to be scourged by the Troika 

Social Porknership : where union leaders in exchange for a lack of criticism land jobs on state boards

 Summit: A place European leaders meet to plan a race to the bottom

 Trade deficit : the realization you can’t get a bloody plumber because they are all In a mine in western Australia…

 Troika. (v) to attempt to turn a group of people into Germans.

 Zombie Bank: ghoulish unkillable horror creature that sucks the money from our childrens future