Wednesday, 4 February 2009

An epiphany

The story of how Joe Kennedy (father of JFK) got out of the stock market before the 1929 Crash has become the stuff of legend. Apparently Joe’s shoeshine boy began giving him advice on stock speculation, and was apparently himself doing nicely on the market using ‘leveraged’ funding. When Joe heard this he decided that something was terribly wrong and that a horrendous correction was on the way. He liquidated his assets and the rest is, as they say, history.

I had a similar epiphany about a year ago. While having a coffee with a friend we were joined by the this lady, an acquaintance of my friend. She regaled us with details of her latest luxury cruise, down Australia’s East Coast, which she compared favourably with the previous year’s Caribbean cruise. However, she and her husband apparently were adamant, the best one of all was an earlier one which took in Canada and Alaska.

I was intrigued as to what they were using for money. Perhaps her husband was a neurosurgeon, or they ran a large successful enterprise? No, indeed not. My friend informed me that her source of income was her ‘disability’ payment, while her husband was….. a school janitor!

These annual luxury four-week cruises were enabled by:

* The ridiculous levels of pay for unskilled staff in the public sector

* The generosity of Ireland’s disability payments, and the ease with which you can qualify

* A mountain of rolled-over debt

So I had a Joe Kennedy-like epiphany, telling myself that, when a welfare recipient and a janitor can take luxury four-week cruises annually, Ireland had to be heading for a terrible fall.

And so it has come to pass. The Government will be left with no choice but to cut back drastically on public pay and welfare entitlements. But as for the staggering mountain of private debt, there’s no easy solution in sight.

Likeliest result? Most of it will translate into bad debts in the banking system, further jamming it up and ultimately leaving the taxpayers to try and pick up the bill.

Truly scary times ahead of us.


Joe O'Neill said...

Unfortunatly Savant it is not just Ireland, but the whole world, I heard on the news this morning that 20 Million chinese have been laid off ( without dole).

Anonymous said...

Truly scary times ahead I agree. Question: where were all the fucking 'experts' when this problem was germinating?

Where are they now? I'll tell you - still in position advising the government how to get usout of the mess they created.

jesus wept!

Poor Jenny

Anonymous said...

See yesterday's article in 'Problems in real economy dwarf...'.
I think this article said Ireland per head is the most indebted country in Europe (and I expect, the world).
Conclusion:For the last six years this country was run as a long-firm fraud.

SAVANT said...

Thats true Joe, but as anonymous 19.24 says, we're in a worse position than most.

Anonymous said...

we are truly fucked , a mountain of private debt , highest cost of living in Europe , highest costs for business operations , truly shocking unemployment levels and their only getting worse ,most incompetent gov in history of state ,we will have to call in the receiver on Ireland inc , whats the odds on a general election this year ? biffo looks as if he'd be delighted to be at the other side of the dail now ! and god only knows how he's gonna get the Lisbon treaty passed now ! we live in very interesting times !

thank god i made all my money in the great lap dancing boom of the Celtic tiger ! and such trifling matters don't concern me !!!

Anonymous said...

The public sector here just dont get it. Relatively lowly paid front line staff are wheeled out to tell us their troubled.

The issue is, WE DONT HAVE THE MONEY!! The Government is billions in debt and its getting worse by the day. Will these people realise that the money just is not there in the publicity