Anglo-Irish; Will Pandora's Box be Opened?

[Captain Con O'Sullivan]

Brian Lenihan’s tales of the bondholders in Anglo being little old ladies investing for retirement is of course a nonsense and dates back to the days when Lenihan was also maintaining that no-one could know who the bondholders were.

He neglected to explain that of course there is a known procedure on the stock exchanges on both sides of the Atlantic for announcing such negotiations are to take place and inviting representatives to make themselves available.

Frau Merkel and other leading German politicians are a little more aware of recent examples of bondholder haircuts of course most notably on the continent with the haircut that Parmalat bondholders had to take when Europe’s biggest private bankruptcy bled all over the stock exchanges of Europe in 2004.

Bondholders tend to get very angry when the company they have invested in via the most secure level of shareholding turns out to be bust. They tend to ask questions and demand investigations particularly of the management.

One wonders what Anglo Irish bondholders would think of the Maple 10 scheme in the summer of 2008 where Sean Quinn’s gamble on CDF’s in Anglo went horribly awry and it looked like 10% or so of Anglo’s shares were about to be dumped on the market.

Management of Anglo-Irish at the time turned to a group of investors, which the Times describe as ‘including some well-known names’ to whom Anglo lent money to quietly buy up the 10% of Quinn’s holding in Anglo. http://www.timesonline.co.uk/tol/news/world/ireland/article5581673.ece

Ten investors were needed it seems to make sure that each shareholding remained below the level at which interests should be declared to the Stock Exchange and would then be made public. Anglo-Irish bondholders might be inclined to ask whether this shareprice support scheme fell within the description of European regulation which says such transactions can only be legal if they ‘fall within the normal business of the company.’

Anglo bondholders might well be tempted to test whether the Maple 10 arrangement would be regarded as ‘within the normal operation’ of any company on the stock exchange. If asked to take a haircut or their stake converted to shares in a bank being wound down one could understand should they demand an independent investigation into the running of the bank which would mean the operation of the loan book as well.

The same European regulations require that a declaration be made to the national regulator for the company concerned where such transactions are concerned in order one assumes to avoid the charge of illicit share-ramping. This also could prove awkward for Patrick Neary who was in fact the regulator.

Some say the regulator was informed of the Maple 10 transaction. Others say the regulator was not informed. The Times article from the period in question says it is unknown whether Neary was informed. If he was then that puts Mr Neary in an awkward position. If he was not then Anglo were not compliant with the relevant European legislation for such maneouvers as the Maple 10 scheme as it is clear that the regulator should always be informed and copied.

The only way we may get answers to who knew what is if the bondholders demand the books be opened and communications around the transactions are made available to their lawyers.

Either way it seems Anglo Management or the Irish Regulator may end up bearing the brunt of bondholder anger.

One wonders also whether Anglo-Irish bondholders would be entitled to query what criteria was used in the management of the bank’s loan book particularly where the US market was concerned and whether they could make a case for negligence on loans to Irish celebrities and well-known names right on the cusp or in some cases as the US market was staggering. Some examples include;

Eimear Mulhern, daughter of late Taoiseach Charles Haughey, who got $1.4m;

Her brother Ciaran Haughey, who got $765,810;

Jockey Mick Kinane, who had recently retired, was loaned $1.4m;

The son of ex-Anglo Irish chairman Sean FitzPatrick, David, also got money for an apartment.

And the consortium behind the Shelbourne Hotel got a loan worth $7.9m just weeks before nationalisation, with developer Bernard McNamara listed as a guarantor of the loan. http://www.independent.ie/business/irish/how-anglo-bankrolled-highfliers-in-new-york-2011061.html

Should Irish taxpayers trust that the two investigations currently being run into Anglo will be thorough and transparent or should Irish taxpayers be crossing their fingers and hoping that Anglo bondholders are moved to demand an independent investigation?

Or should Irish taxpayers not be crossing their fingers at all and just be demanding that Anglo be forensically examined, loan book and central operations and all?

[TotalMayhem]

Brian Lenihan’s tales of the bondholders in Anglo being little old ladies investing for retirement is of course a nonsense

Maybe not. ;)

http://img812.imageshack.us/img812/4850/20101125211519clipboard.png

[morticia]

Naah, the little old ladies were the SHAREHOLDERS (I know one or two such), and they've already been incinerated.

Anglo's days can be numbered precisely until the day after the next election.

FG and Labour (I hope) will at least be unafraid of the contents of the books. If this doesn't come to pass, I'd imagine that some among their number are also compromised.

[TotalMayhem]

FG and Labour (I hope) will at least be unafraid of the contents of the books.

Dream on, they'll lick the IMF/ECB boots and not go near the banks ... just like bunch in government now.

[morticia]

Dream on, they'll lick the IMF/ECB boots and not go near the banks ... just like bunch in government now.

Erm, I'm not discounting that, but I think the ECB/IMF may have to move to bondholder burning shortly (see thread on Spanish bond sale auction for reasons for donning hairshirt and brown underwear). Should this happen and our Lords and Masters pull a U turn sharpish, it will be interesting to see if FG/Lab welcome this with open arms or start turning an interesting shade of pistachio.

If the latter, some of dem have a few auld loans etc, too

[Captain Con O'Sullivan]

Angela Merkel is pushing legislation through the Bundesrat to ensure that bondholder burnings become law in Germany ... can't help wondering at the signals out of Germany in the last few days on this.

There was an interesting article detailing her maneouvres on this somewhere I can't find right now but I can't help wondering whether she knows other German banks are going to be edging back towards bailouts in the near future... I am pretty sure she knows that subsidiaries of German banks had no small part in blowing holes in the banking system in Europe as well.

[TotalMayhem]

Angela Merkel is pushing legislation through the Bundesrat to ensure that bondholder burnings become law in Germany ...

And what good will that do?

Didn't they blame the strict banking regulations in Germany that made those poor German banks set up shop in Dublin?

[morticia]

And what good will that do?

Didn't they blame the strict banking regulations in Germany that made those poor German banks set up shop in Dublin?

It will do US, the Irish taxpayers, an enormous amount of good, because what she is tacitly saying to us all without making it too obvious, is "gimme a few months, then burn your bondholders too. Then you can give us back some of that bailout money"

Bundesrat today, Europarliament tomorrow, Dail next week????

Is it possible that she's creeping up behind the markets with an enormous cosh?? And setting the grounds for an orderly bank implosion device with the ECB in the meantime??

Maybe that's unduly optimistic, but if so, respect!

[Captain Con O'Sullivan]

Strange that they should do that since Merkel's govt (like the Irish) were very accomodating to the banks.

I think she knows that other German banks will want to approach her for bailouts and she wants the legislation in place to say 'nein. Burn the bondholders.'

Germany wants Ireland to take the loans and accept the massive debt but she wants the ability to avoid that in Germany. She knows damn well that it wasn't just Anglo-Irish involved in nutty valuations and derivative surfing via the IFSC. There were German banks at it as well and even though Depfa (subsidiary of Hypo in Germany) appears on the Irish books she had to nationalise Hypo at home. She wants a cut-off point and is facing an election not too far off in Germany and does not want any more black holes in the German economy.

She's preparing to do the opposite of what she wants Ireland to do in my opinion.

[Captain Con O'Sullivan]

It will do US, the Irish taxpayers, an enormous amount of good, because what she is tacitly saying to us all without making it too obvious, is "gimme a few months, then burn your bondholders too. Then you can give us back some of that bailout money"

Bundesrat today, Europarliament tomorrow, Dail next week????

Is it possible that she's creeping up behind the markets with an enormous cosh?? And setting the grounds for an orderly bank implosion device with the ECB in the meantime??

Maybe that's unduly optimistic, but if so, respect!

The best possible result for the Euro, for Europe and for the wider world would be such a cosh lowered on the head of gambling banks and their bondholders worldwide.

I would love to see her and other leaders destroy the shortsellers in the market who are behind the destabilising of the Euro.

I'd like to see her and other politicians with major markets announce a windfall tax on current short-sell contracts and a legislative ban on such trades. It would kill the shortsellers dead and ruin them because they rely on making a profit off their gamble before having to buy low. It would kill them. Which would be a very good thing.

Can't help thinking that the Volkswagen Porsche affair in Germany would be a good guide.

The short-sellers were gambling on driving shares in Volkswagen down to a level where their contracts would pay off- what they didn't know was that Porsche were poised to make a bid for VW.

One German shortseller ended up throwing himself on train tracks when Volkswagen shares started climbing off the back of the Porsche news and wiped out his billions and then some.

Gut nacht nurse .... no sympathy at all for him as he and his mates were trying to destroy Volkswagen just to earn a Ford Capri style bonus.

[morticia]

Yes, perhaps. But if this passes in the Bundesrat, the "do as I say, not as I do" angle will be obvious.

And a new Government here can pass similar bank bankruptcy resolution laws

After all, imitation is the sincerest form of flattery.

Mind you, if everyone does this, there'll be a total meltdown. Perhaps, as your second post says, that is precisely what what we need.

Better late than never, Ange, maybe we've been "misunderestimating" you.....

[TotalMayhem]

It's a matter for the Bundestag first, I suppose.

Anyway, should this be passed into law and come the time to burn bond holders, it will be 'amended', forgotten or simply abolished. Mr Ackermann will make sure that Ms Merkel understands the 'gravity of the situation'. Looking forward to the next dinner at the Kanzleramt (http://www.earthtimes.org/articles/news/282745,social-democrats-attack-merkel-over-dinner-with-bank-chief.html).

[morticia]

It's a matter for the Bundestag first, I suppose.

Anyway, should this be passed into law and come the time to burn bond holders, it will be 'amended', forgotten or simply abolished. Mr Ackermann will make sure that Ms Merkel understands the 'gravity of the situation'. Looking forward to the next dinner at the Kanzleramt (http://www.earthtimes.org/articles/news/282745,social-democrats-attack-merkel-over-dinner-with-bank-chief.html).

Wouldn't count on it entirely. Mr Ackermann is not in the strongest position. He was in charge of Deutsche prior to Lehman going down and his bank has received a bailout or two.

It is also possible that Trichet and Weber are somewhat behind this.... they'd have to be thick, if, at this point, they don't have the central bank equivalent of a Defcon 3 nuclear button.

I wonder if they're lateral thinkers???

2 scenarios; 1) covert QE/interest forgiveness that drags on for years

2) some sort of cosh....

[TotalMayhem]

Mr Ackermann is not in the strongest position. He was in charge of Deutsche prior to Lehman going down and his bank has received a bailout or two.

No, it didn't. He made sure of that, however, Deutsche Bank AG benefitted hugely from AIG, HRE and other 'bailouts', raking up billions of US and German taxpayers money. DB was the only major bank in Germany that refused to be 'bailed out' (and Mr Ackermann is missing no opportunity to point it out). By the way, Deutsche Asset Management (DeAM) is a Deutsche Bank subsidiary in Dublin and listed as Anglo Irish bond holder.

As for debt forgivness (wich would hurt bond holders), Mr Ackermann is strongly opposing any form of debt relief/forgiveness, because he "doesn't want to end up like Herrhausen (http://en.wikipedia.org/wiki/Alfred_Herrhausen)" (he really said this on TV).

http://img827.imageshack.us/img827/6136/20101125222704clipboard.png

[Captain Con O'Sullivan]

Mr Ackermann is definitely tainted goods ... there's another very large German bank that smells bad and Mrs Merkel also needs to lay off blaming lax regulation in Dublin- she's partly right but she needs to 'follow the green threads' eastwards to Austria if she wants to start harping on about lax regulation and many's the German bank with a subsidiary there.

People in glass beerkellars should not lob grenades.

[Captain Con O'Sullivan]

With magnificent timing from the Public Interest Director at Anglo Irish Mr Alan Dukes, acolyte of Goldman Sachs chairman Peter Sutherland and joint author with Bertie Ahern of a book lauding the European project ....

http://www.breakingnews.ie/ireland/anglo-chief-opposition-must-pass-budget-483279.html

If Dukes is Public Interest Director at Anglo why isn't he opening the books- considering the bank is being run down?

Because he's protecting the bent 'elite' thats why.

[Munnkeyman]

Never!!!!
I think it's clear now that the whole bank bailout and
the current bailout(if I'm allowed to call it a bailout?) is a charade.

[Captain Con O'Sullivan]

Of course. The whole point is to cover the hole in Anglo Irish with taxpayers money and even to the point of borrowing billions to do it.

That must be some set of books to pour a third to a half of the Irish GDP into an effort to keep the books from being investigated.

We hear of password protected documents (rubbish- banks have security procedures to stop employees locking off bank docs and demanding money to open them) and we hear of legal efforts by Anglo to claim privilege over documents and keep them away from the bank's owners- the Irish taxpayer.

Of course its a black hole of corruption. Who are the 'Maple 10' Mr Public Interest Director? Are there two or more FF politicians among them?

[Munnkeyman]

http://i.dailymail.co.uk/i/pix/2008/12/19/article-1098835-02DBC391000005DC-212_233x423.jpg

I wonder does he walk the dog for his benefit or the dogs health?????;)
p.s. Sodium thiopental would work wonders under questioning.

[Dr. FIVE]

Someone had their hand in the biscuit tin http://www.rte.ie/news/2011/0721/fraud.html


A former senior official at Anglo Irish Bank is suspected to have stolen more than €3m from a number of deposit accounts.

The Garda Bureau of Fraud Investigation is to investigate the matter after an AIB customer reported irregularities in their account to the bank.

AIB reported the matter to the Gardaí and has also informed the Central Bank.

The funds in question are part of the €8.6bn AIB acquired from Anglo Irish Bank's deposit book last February.

In a statement AIB said in addition to reporting the incident it has also begun an investigation and insisted that customers will suffer no financial loss.

Anglo Irish Bank is believed to be collaborating with AIB's investigation.

It is suspected that a former senior official at Anglo Irish Bank stole large sums of money from a number of deposit accounts.

He moved large sums of money between accounts to cover the thefts and avoided detection by ensuring that funds were available for accounts that matured.

It is understood that the man at the centre of the allegations has since passed away.

[Griska]

Someone had their hand in the biscuit tin http://www.rte.ie/news/2011/0721/fraud.html

And conveniently is in a biscuit tin of their own now:mad:

[Captain Con O'Sullivan]

Then if he's passed away and can't be prosecuted and they know who it is why hasn't the name been released?

[TotalMayhem]

Anglo has turned the corner (http://www.independent.co.uk/news/business/news/anglo-irish-reveals-big-losses-drop-2344372.html)... ;)


Ireland's rogue lender Anglo Irish Bank has dramatically reduced losses to just over 100 million euro (£88 million), down from the record-breaking figures it suffered last year.

[SocratusO'Pericles]

Anglo has turned the corner (http://www.independent.co.uk/news/business/news/anglo-irish-reveals-big-losses-drop-2344372.html)... ;)

[QUOTE][The Irish finance Brian Lenihan told us all in September 2008 that the reason for the guarantee on all bank debt was to increase liquidity to support lending to Irish businesses. This has now shown to be a total fabrication given that the government is now winding up the largest beneficiary of the guarantee. Every Irish taxpayer is now in debt to the tune of €15,000 for Anglo's losses alone never mind the debts for all the other Irish banks involved. This is so French, German & British banks don't have to write off any of their loans to Irish banks. Makes me sick
/QUOTE]

[Dr. FIVE]

Still no sign of Pandora's box opening though.
Wouldn't we love to have a look at the Anglo/INW loan books still

[jpc]

Re: will Pandora's box be opened?
I think we can all safely conclude that it is well locked down again.
FG/Lab seem to have lost their belly for seeing the truth revealed.
It wouldn't make things any better materially for anyone.
But to see the players revealed and named for the incompetent clowns that they are might be as good as it gets.

[morticia]

Then if he's passed away and can't be prosecuted and they know who it is why hasn't the name been released?

Usual Irish respect for the family of the deceased, I'd imagine. Inappropriate, perhaps, in this case? However, I'd imagine someone within the bank must have examined this and decided that little of the money could be recovered from the estate? Widow and children, perhaps? Who knows.

Wonder if it was a suicide? A clever journo could probably work it out I'd say, would have been in the news somewhere?