Are you too fascinated by the details of Berlusconi’s ‘Bunga Bunga’ parties? With all the serious stuff about the Dail, the election, politics and our predicament, we need a distraction.
A quick glance at ‘Grazia’ from time to time is just the tonic. In such magazines and in all the red tops, we get the “no-holds-barred” details of the Italian prime minister’s orgies outside Milan with young prostitutes who were themselves shocked by the demands of Silvio.
The image of the rich, successful, old ‘Sugar Daddy’ with oodles of money and no sense, infatuated by the beautiful temptress is as old as the Bible. It is the modern equivalent of Herod, Salome, and the Dance of the Seven Veils, which ultimately led to the beheading of John the Baptist. Berlusconi is Italy’s Herod.
The gifts to the girls, ranging from jewellery to straight cash, and their subsequent revelations indicate how the game Silvio was playing affected his own, admittedly tarnished, reputation.
Berlusconi insists that none of the girls at the parties are paid. Instead he gives them gifts for their time and attention. One girl received a diamond watch inscribed with: “It’s a good thing that Silvio is here”.
Old Silvio, having bought people off for most of his life, gambled that the gifts would be enough to cover up the whole thing and preserve his reputation. But he got in too deep and there were too many people who knew. Now that the girls are singing like bright canaries, he is desperately exposed and he looks like an old sleazy eejit.
But Silvio isn’t alone. He is not the only ‘Sugar Daddy’ in Europe who is caught out by the enthusiasm of his own initiative.
The ECB is the Silvio Berlusconi of the financial markets. It was the Sugar Daddy that threw money at the gamey banks in peripheral Europe and in Ireland, in particular. It was hoping that these gifts of huge amounts of cash would preserve its reputation. Its reputation was dented when it became apparent that it had presided over an orgy of credit in the boom years. It housed the orgy under the roof of the euro and as long as the euro looked clean and respectable on the outside, no one knew what was going on inside.
However, what was going on was a huge Ponzi-scheme where old German and French savers stuffed money into the hands of peripheral banks who, in turn, dealt this out to their financially promiscuous customers. As a result, according to the Bank for International Settlements, the banks in Ireland, Greece, Portugal and Spain owe over €900bn to the German and French banks.
Worse still, as evidenced by the shenanigans in Depfa Bank in Dublin, under the cover of the euro, the Irish regulator set about establishing the financial equivalent of a red light district in the docks. In the Irish red light district, German banks and investors were allowed to indulge in all sorts of things which they wouldn’t be allowed to do at home.
German capital was in Dublin because in Dublin you could do things that would have had you arrested in Frankfurt — “light touch”, how are ye! The motto of the IFSC for some was the banking equivalent of a stag party on tour: “What happens in Dublin, stays in Dublin”.
The Sugar Daddy overseeing all this was the ECB, which, when it knew that certain things were going on that it couldn’t possibly condone, simply looked the other way.
Now that all this is emerging and the ECB has to face up to the direct consequences of its financial orgies, it is trying to pay off its former ‘Bunga Bunga’ girls — the peripheral banks — for them to stay on message. Remember the diamond watch inscribed with: “It’s a good thing that Silvio is here”?
Maybe our banks should have one inscribed with “it’s a good thing the ECB is here” because without the ECB, the banks would be exposed. But the problem is that all the ECB’s money injected into the Irish banks (€97bn) comes with the huge price that we, the taxpayer, pay over to the banks who lent to our banks in the first place.
The ECB’s reputation is now tied up with the emerging evidence of the orgy of credit that it hosted from 2000 to 2008.
To preserve what is left of its reputation, it has to keep the ‘Bunga Bunga’ banks on message. The message is that no bondholders get burned, but the ‘Bunga Bunga’ banks are demanding more money from the Sugar Daddy every day just to keep them onside.
At some stage, one of the banks will crack, not least because the banks are dependent on the people of Ireland paying for the recklessness of German, French and British loan sharks.
The pressure is just too much. It is clear that if the ECB wants to be credible, it needs to employ a Max Clifford and change its story. It should come clean and ‘fess up. What we need is a full confession that it hosted the credit orgy and then, when it was over, it kept the ‘Bunga Bunga’ banks open via gifts and inducements.
Then, with an undertaking to change its ways in the future, the reputation of the Sugar Daddy — the ECB — could be salvaged, or at least that process could begin.
Read this article earlier on and thought it was a bit weak – just a rehash of facts we already know – no real suggestions on a way forward. I guess David will leave that to the politicians in the new government – who are likely to fail miserably as usual.
[…] This post was mentioned on Twitter by Paul Fallon, Elliffe Consulting and Somad Mann, Direct Democracy Ire. Direct Democracy Ire said: Party is now over for ECB and ‘Bunga Bunga’ banks http://dlvr.it/F8HNP […]
If our new leader of FF and his mob could guarantee to burn the bondholders, maybe FF would have a chance in the election. It’s not a case of getting rid of the stupid politicians, they nearly all have resigned anyway.
Always thought the Berlusconi debate on his sex life was somewhat confused.
On the one hand, exploitation of sex and its abuse is wrong and so we condemn those who cause needless suffering through such abuse and exploitation.
But then there is the other side, those who, relics of a bygone Victorian era, dislike sex in any shape or form, as some form of twisted moral hazard.
So here are some good things to be said of sex, you must put into practice:)
http://bit.ly/vbMrf
David.
Awesome article.
Virility of the Irish Cash Flow Currency Bunga Banks & Bunga Politics a l’Irlandaise has more dairy cream that olive oil from Italy or goose fat from Breton or beer from Munich and is usually flatulent and lacks the eroticism of supply to demand and always looks dead when written on paper and needs outside support.And even that does’nt work either. Sugar sweet daddies in Irish Polithicks are always non performers when presented to produce a payment for National Recovery.A kickback using the hand with a brown envelope confuses the paying spectators . The Irish pregnant male stomachs are the… Read more »
There David goes again misleading the public about banking “a huge Ponzi-scheme where old German and French SAVERS stuffed money into the hands of peripheral banks”. Blame the savers; would it be more honest if you discussed the unwillingness of the wise old German and French to borrow? This would lead to more clarity and discussion on how the ponzi-scheme works, where loans make deposits. Forget your cute banker’s strategy David, misleading the public into thinking that one receives the savings of another when a bank makes a loan. Explain credit and how the money supply has expanded by over… Read more »
I give this to you to lighten up, my mood, :) For the craic …………..Enjoy! A farmer named Bill was overseeing his herd in a remote mountainous pasture in Scotland when suddenly a brand-new BMW advanced toward him out of a cloud of dust.. The driver, a young man in a Brioni suit, Gucci shoes, RayBan sunglasses and YSL tie, leaned out the window and asked the farmer, “If I tell you exactly how many cows and calves you have in your herd, will you give me a calf?” Bill looks at the man, obviously a yuppie, then looks at… Read more »
Today after I learned the M Martin was elected I was hoping it was a moment of change for the better for the country and I was subscribing to Tims mantra to reform from within . I have just been listening to him talk on prime time tv and I am appalled at how he explains the system of economics and banking and regulations etc I am honestly very very very disapointed .What we have today is a new dog with the same spots only maybe these are more red from Cork. His mindset is from the school of knocks… Read more »
David, the difference between your analysis and what we’ve gotten in terms of action grows wider and wider all the time.
Although I am thankful you have not entered politics, as an aside, I am not enthusiastic of what the result of the election will be. I hope people will focus on what they hope the future will be rather than reacting in anger. The next few weeks could be a good time to focus on what the future should be, individual by individual.
Folks,a very extensive manifesto by one man here:
http://www.vote4pluto.com/Home_files/Pluto_2011.pdf
(via Constantin Gurdiev)
“Our object in building up the country economically must not be lost sight of. That object is not to be able to boast of enormous wealth or of a great volume of trade, for their own sake. It is not to see our country covered with smoking chimneys and factories. It is not to show a great national balance-sheet, nor to point to a people producing wealth with the self-obliteration of a hive of bees. The real riches of the Irish nation will be the men and women of the Irish nation, the extent to which they are rich in… Read more »
As the old African proverb goes: “The beautiful are yet to be born, the ugly are yet to die.” All is greed, whether it be for property, money, women, fast cars or cocaine. The price of such greed which leads to excess can be all consuming and has taken lives as we have seen. It is a serious business and not to be trifled with. Those currently at Davos would do well to remember the lot of the rich man and poor man for they eat from the same bowl with altogether different consequences. As the Oracle at Delphi warned… Read more »
Bunga Tax FROM LAPDANCERS TO CIRCUSES You’ll save a few bob and keep your wife sweet if you give up your visits to the lapdancing club — and head to the circus instead. You pay 13.5 per cent VAT on admission to a lapdancing club “where a live performance is included as part of the admission fee”. However, you won’t pay any VAT on admission fees to a circus, castle or historic home. If you can avoid concerts where drink is served, you’ll also do well. “Tickets to a live music or theatre gig are exempt from VAT,” says Mr… Read more »
Pity david is not running. This election is going to be very dirty. A casual glance at some of the work of the FF/FG/Labour Trolls on Politics.ie will confirm this. For the past few months I was working uner the assumption that a small group of independents were going to form a loose alliance (standing on the platform of political and economic reform)and go in with FG. Clearly the will for change is not there in FG or Labour…… and well FF are FF so no change there. This election is being fought on “smokes and daggers” no real debate,… Read more »
Poor Show I liked the analogy of the red light district down at Dublin docks but I don’t care about Silv or the red tops. I buy the mirror on saturdays for the footie and the tv supplement but all the rest is a distraction for people who want to fill their minds with nonsense. It’s a bit rich having a laugh at Italian ‘Bunga bunga’ parties when we know that Ireland had it’s own versions of such parties not so long ago You are telling us stuff we already know and this article is not your finest effort. Can… Read more »
David mentioned, in his young scientist article, the young scientist kids who developed their own OS based on Linux. Here is an idea I think could work given the right people, application and resources: -put together a group of investors to back these kids {state, private, whatever} and other like them -develop the OS properly and flesh out a 2, 5 and 10 year plan to build up a good business whose aim is to one day spread its wings and go solo [no state intervention] -Reopen the Dell computer manufacturing plant in Limerick as a semi-state company making good… Read more »
{ With all the serious stuff about the Dail, the election, politics and our predicament, we need a distraction. } I thought the purpose of the current “optics” nonsense in the Dail (and tomorrow the Seanad) was to provide a distraction from the state of Club Med debt. Forget Berlosconi for a moment. We had Bertosconi here married to the CIF, but also co-habitating with ICTU and in the process fathering loads of quangoes. And for more fun he had a long running affair with IBEC. He got into bed with the FAI and several other organizations every now and… Read more »
I thought it was an entertaining article using as it does such a cheeky simile. I’d long been aware that the Anglo-US financial model was out of control and headed for disaster but I had the impressoin that the European financial system was ‘conservative and boring’, ie what was required. So it came as a shock to realize that this was not the case and that they were up to their armpits in the mess too. When David first raised this issue over a couple of years ago it was probably a step too far for most to swallow but… Read more »
erm… there’s a few things missing – the money the German Banks lent out did not come from German Savers, it came from the Federal Reserve Bank who loaned out 5 or 6 trillion to european and african and south american banks in 2007/8/9…. at very low interest rates, which the ECB then loaned it to smaller banks at a slightly greater interest rate, who then leant it out at a greater rate…. http://www.federalreserve.gov/monetarypolicy/bst_liquidityswaps.htm http://www.bloomberg.com/news/2010-12-02/federal-reserve-may-be-central-bank-of-the-world-after-ubs-barclays-aid.html Of course NO-ONE is reporting this…. least of all the European Media, because it reveals the ECB to be just as phucked as the smaller… Read more »
Here is some PORN on the national economy: Enjoy! ;) UK Government debt is today at 60% of GDP S&P on Ireland: “The general Government debt is expected to rise to 124% of GDP at the end of 2011 from 68% at the end of 2009” Ireland will be trying to achieve budgetary cuts in ONE YEAR – 6 billion – equivalent to what the UK intends to cut over a period of 4 years. UK RESULT for final quarter 2010: GDP falls (-0.5%), with some independent analysts claiming that result is NOT weather related. UK will cut 80 billion… Read more »
Cbweb, I’ve left a return post to your order to me to *grow up* :-)
Anybody catch PK snippet on radio this AM, caught a piece, NAMA breaking its own rule on Competitive Tendering Process, eg €9m hotel with 50% haircut, NAMA selling it privately at €4.5m, the cronies buying it at this discount, then selling it immediately for eg €6m, pocketing instant profits of €1.5m in above example. Taxpayer is at the loss of the €1.5m. There is no Public tendering process for these properties and they are being sold privately with tip offs to those in the know, that they are up for sale. NAMA is avoiding its duty to maximise the price/value… Read more »
As I said above, the idea of the ECB/EU bearing some responsibility seemed rather extreme, say 3 years ago (or people were just keeping quiet), but it is now widespread. Even by John Bruton, who has written to to Barroso: http://johnbruton.com/ Bruton still accepts, however, that the main blame lies on the Irish side: with the banks, regulators etc. He includes the people who took out the loans. While those who borrowed to buy a second or further properties should accept their share of responsibility I think this is going too far on ordinary homeowners as it is accepted (isn’t… Read more »
Today on Max Keiser:
More bankers arrested in Iceland
US and other bankers meeting in Davos this week
100 Tn of new Ponzi debt being created
25% of Tunisian gold gone missing
60% German gold is held in US Fed and US considering commandeering this gold
Wage and inflation problems to follow Australian floods
Bono backed development funds swamped in fraud
Bono is an investment banker disguised as a rock star
Bono is a shcmuck
Russian people used to read Pravda and assume the opposite. Sounds like RTE snooze
[…] You may view the full article and add your own comments at http://www.davidmcwilliams.ie/2011/01/26/party-is-now-over-for-ecb-and-bunga-bunga-banks […]
The way I see it is we have a massive deleveraging underway. The local yokels running the shop here are irrelevant. We are at the start of witnessing a tsunami of runs on banks. The massive chip cash-in is about to get underway. Burn the bonderholders? Sure…just means the banks will collapse and vanish along with the deposits of savers – not just in Ireland but for our unfortunate German and French friends as well. The trick is to pull your cash and convert it to something useful before anyone else. There is no other way around this. I just… Read more »
An article in the FAZ [Frankfurter Allgemeine Zeitung] yesterday stated that Klaus Regling considered that the interest rate on the EU part of the ‘bailout’ could be reduced below the ca. 6% interest rate.
Now, the issue may be an academic one against a backdrop of possible default, but nonetheless, I doubt if it has even registered on the radar of the DOE.
The article was on the EFSF, explaining the mechanism. Interesting reading indeed……..
The only way forward is a brand new banking system with new rules and regulations for creating money. We see what happens when money generation falls out of sovereign control. The end game is an almightly splat. This latest fiasco has been ongoing since the 80s and collapse is overdue.
If Ireland issued a new currency in about 3-4 months time – just when the banks were about to implode along with the Euro etc, we’d be off to a good start.
“It is clear that if the ECB wants to be credible, it needs to employ a Max Clifford and change its story. It should come clean and ‘fess up. What we need is a full confession that it hosted the credit orgy”. People usually hire only Max Clifford only when the media is about to reveal all anyway. The EU and ECB haven’t had to worry about that yet because nearly all of the media has given them an easy time and we’re always hearing instead about the “bailout for Ireland” or “bailout for Greece” for what is really a… Read more »
“Too many hotels built for this country dot IE”
http://www.breakingnews.ie/ireland/receivers-appointed-to-lynch-hotel-group-490993.html
I wonder will these end up in NAMA also….
David – Fantastic article.
Subscribe
Thought some of you might find the main points of the following interesting…
http://www.bloomberg.com/news/2011-01-25/efsf-said-to-get-43-billion-euros-of-orders-from-500-investors.html
NAMA Monster …. banks not pursuing developers….really sickening stuff this!!! http://www.rte.ie/radio1/todaywithpatkenny/ Thursday 27th January 2011 NAMA It has been claimed that people who owe hundreds of millions of Euro to the banks are buying back their debt at rock bottom prices through third parties and offshore companies. Fianna Fail Senator Mark Daly (whose family is in the auctioneering business) claims some property is being sold back for “virtually nothing” to the original owners and that NAMA is not following legislation enacted by the Oireachtas. Mark Daly joined Pat along with Deputy Business Editor of the Irish Independent Emmet Oliver. podcasts… Read more »
Irish Sovereignty. Seems to me u are essentially aligned with David in the fundamentals. On your point regarding savers ~ Saving s from Germans n French opened up more and more fanning out of loans ~ throughout the private banking system thereby ~ making available to irish private banks a slush fund on the interbank lending market which ~ by the by streamlined from the euro provided funds for Irish banks to use to ~ then fan out loans to developers and mates in Ireland which inflated a property bubble and became a Ponzi scam. Thats what david is getting… Read more »
Irish Sovereignty. I personally reckon u are spot on to highlight this though. If one take s a look back over this property bubble private banking inspired / engineered property price bubble. Now if one looks at the property price bubble and makes the links correctly one will then and can only but come to the conclusion that the banks fanned out loans by whatever means and devices and instruments etc, the banks fanned out loans to levels which put in jeopardy their own business models. But not only that, the banks flooded the economy with debt to such a… Read more »
On a Side note there is a zero rate for non resident irish companies and in the past many of these committed acts of fraud that was tolerated by the government until external pressure was forced on them by the EU to regulated them more .
Folks, Here’s a link to the 2011 election info site run by @adriankavanagh
http://bit.ly/dQLmjl
Philip.
Interesting read on post above.
A country can always restructure the debt and print its own money , this will avert deposits going up in smoke and we will get the reset to boot.
Furrylugs
Where are you? Are you preparing the new written proclamation ?
PS
This time the signatories must not allow themselves to die like the last bunch in 1916
I don’t know what this will achieve, if anything. Sarkozy’s backers are not going to back down on the bank debt.
http://www.breakingnews.ie/ireland/kenny-travels-for-talks-with-barroso-on-bailout-491057.html
@Deco @John Allen Deco’s link above: “Leader Enda Kenny and Finance spokesperson Michael Noonan will meet with the President of the European Commission Jose Manuel Barroso. They want to try and renegotiate the terms of the bailout should they assume power after the General Election. Read more: http://www.breakingnews.ie/ireland/kenny-travels-for-talks-with-barroso-on-bailout-491057.html#ixzz1CJyBF0vT” Barossa: “Sorry, your banks got you into the mess, its not our problem. If we cut a deal for you, it could bring calamity to the European banking sector. Most European countries are doing ok under this system plus citizens across Europe would not support their banks and their money being used… Read more »
I bet this chap is sorry he did not get his start in Anglo Banglo….
http://www.breakingnews.ie/entertainment/former-apprentice-contestant-convicted-of-fraud-491098.html
Cause if he did that sort of messing in anglo banglo, he would be a state employee for years into the future….
May Day May Day Calling to the WORLD
Ireland is Under ATTACK
Repeat Repeat Under ATTACK
We are EATING Ourselves
FAiken – you should sell that final year project you completed from 1994 concerning the non-feasibility of the Euro.
Of course, with the Irish university sector desperate for EU funding, we can hardly expect them to give an A to a paper that tells us that the empire is a clueless project…
The Euro is is dire trouble becasue of lack of regulation during the ECB watch. They “are” the Central Bank. I am at a loss as to why we blame our own toothless central bank. Ireland is the 1st to fall. We are being used to protect the rest of the ediface from falling. Our negotiating stance is simple. We walk from the euro or we are genuinely bailed out at 0%. The Euro has no clothes and the EuroCraks know it. Still, I think we should start planning our exit sometime this year just when the run is about… Read more »
Bunga Bunga Bank Managers with Bunga Price Properties
Fitzy owns / did own a share in a property located in the second most expensive place in the world after Monaco and its location is in Cap Ferat France where prices can be obtained for €70,000 a sq m or more.
The stories of waste in the public service I am hearing are shocking. It is going to end as money dries up. The wasters will not be happy. Tough. The Croke Park deal will be canned, and a voluntary redundancy scheme will be offered in the public service. John Gormley was the first politician to admit this yesterday. He is right. When that scheme is undersubscribed, a la the HSE, there will be involuntary redundancies in the public service. There will be no choice in the matter. Christophe Mueller in Aer Lingus is showing the way forward. There was a… Read more »
Ok, had a think, can’t let circumstance quieten the voice.
Scenes out of Egypt are astonishing.
I agree with John Allen, there is an assault on working people and an effort to role back the welfare state and have people distracted by struggle, think people may need to come together outside of the normal structures which have so badly failed to preserve the integrity of the Republic.
Chomsky has a nice discussion here, some 20 years old or so, so the warnings are out there
http://www.youtube.com/watch?v=8Z8hhJQfKcw