McWilliams: “I found myself in Centra in Ballybrack buying biscuits and milk –” C Lynch: “We need to deal with the substantive, please.”
— Gavan Reilly (@gavreilly) February 26, 2015
Economist David McWilliams at the Banking Inquiry this morning.
More as we get it.
Asked by Fianna Fáil’s Michael McGrath about critical articles shortly after initially describing the bank guarantee as a masterstroke, Mr McWilliams said if it had not been done, the banks could have been bust. But he said it moved towards being used not as an emergency measure but as a full payment mechanism in event of bankruptcies. Mr McWilliams said he told then minister for finance Brian Lenihan that more conditions should be added.
He earlier told the inquiry that the property and banking crash was incredibly predictable and absolutely preventable.
Mr McWilliams said he spent a decade warning that the property market would crash and money would fly out of the banking system.
He had a moral imperative and a patriotic duty to warn of catastrophe, he added.
The Irish banking system and by extension, the rest of the economy, was set up to fail, he said.
He said he believed hundreds of thousands of ordinary people would end up in negative equity and debt where their lives were destroyed due to the debt associated with the housing market.
The panic of September 2008 did not have to happen and was not pre-ordained, he added.
If there was no housing boom, there would have been no banking boom.
Bank guarantee should have been temporary, says McWilliams (RTÉ)
Meanwhile earlier….
Got a problem?
Odds against you?
Call the Predictor.
David McDreamy arrives at the Banking Inquiry this morning.
(Leah Farrell/Photocall Ireland)
Update:
From the close of proceedings:
Ciaran Lynch [Chairman, Banking Inquiry]: In your opening statement, you said you had published 2.5 million words.
David McWilliams: I have published 1.2 million words, and I have read nearly all of them during the past three weeks.
Lynch: “Excellent, because I have a question on them. Did you ever get it wrong?”
McWilliams: “We all get lots of things wrong.”
Lynch: “What did you get wrong?”
McWilliams: “Wow. This is a trick question.”
Lynch: “It is not.”
McWilliams: “While we all get lots of things wrong, I do not think I got anything wrong during the period we are discussing. I am an economic commentator. I am an independent economist and have never been paid by the State for advice.
Lynch: “I had many professions before I came here and I have got things wrong in those professions. It is not just politics.”
McWilliams: “Of course one gets things wrong.”
Lynch: “Give us an example of something you got wrong in 1.2 million words.”
McWilliams: “I get things wrong every day.”
Lynch: “Give us an example. In the 1.2 million words you have written about the economic crisis in this country, did you get anything wrong?”
McWilliams: “It is an unfair question. One gets things wrong every day and one hopes to learn from them.
Lynch: “In terms of getting things right for the future, what is your assessment of the Irish Government’s level of preparation for the banking problems that emerged in September 2008? How well was the State prepared? Are Irish policy making authorities better prepared today, particularly regarding the regulation of the property and banking sectors?”
McWilliams: “We were totally unprepared in 2008 because we had not listened to any of the warnings. I am not sure I see anything now that would prepare us again for such an eventuality. The most important thing is to be hyper vigilant on a sector which, if managed well, can serve the needs of the economy very well but, if managed badly, can lead to a financial catastrophe.”
Lynch: “Is there anything else you would like to add before we conclude?”
McWilliams: “No.”
Full transcript here
His opening statement was quite a performance. Reminded of Hugh Grant at Levinson. Except Hugh Grant is an actor and David McWilliams is an economist.
My favourite part was when he played a clip of himself.
10+ years time he’ll be at the next inquiry playing a clip of himself playing the clip of himself.
And shortly after that happens, he’ll disappear up his own bottomh0le and we’ll need an inquiry into that. Cue Constantin Gurdgiev claiming that he’s been warning about the imminent up-own-bottom-disappearance-possibility ever since McWilliams staged his one-man ‘Ain’y I Great’ show on the Abbey stage.
meh, his “early warning” mantra is an attempt to distract from the overwhelming support he gave to the bank guarantee
http://www.independent.ie/opinion/columnists/david-mcwilliams/lenihans-masterstroke-has-bought-us-time-to-sort-out-our-own-problems-26481076.html
You have to insulate your own system first by using tactics that no one else has deployed.
Near term, this government guarantee obliterates the sellers who do not have Ireland’s national interest at heart.
Further out, it also buys us time to sort out our problems. (I’d have paid good money to see the faces of hedge-fund managers in London yesterday morning when they suddenly became conscious that their strategy against Ireland was in tatters and they realised that they stood to lose the millions they gambled against the Irish system).
We are not out of the woods by any stretch of the imagination. Indeed, some Irish banks have been so recklessly managed that they hardly deserve to be covered by the guarantee, but the choice was between the system or bust.
The minister obviously thought that by guaranteeing some banks and not others — as many of his advisers argued — he would open up the prospects of the weaker banks undermining the stronger ones. He has put the system first and this can only be a good thing.
As this column has argued before, there is plenty of time for recrimination. By keeping the banks liquid, the private sector will solve the problem of writing down bad loans, working with debtors to get the best deal and, most importantly, by doing all this in a controlled, not panicked fashion. When people are panicking, they tend to make the wrong decisions.
+ €n.
But In fairness, the media wheeled him out at every opportunity as their ‘go-to’ economist. In an age of financial reverence, economists are treated like prophets. Dastardly times we live in.
When is Eddie Hobbs up?
He’s not an economist, he’s a media personality.
Yep.
He is both. They are not exclusive to each other. I attended a talk of his in 2001. He couldn’t have rang the alarm bells any harder or louder. Later, he advocated the sand boxing of bad banks. He wasn’t on his own but this was at a time when Bertie was telling people to go kill themselves. He was on the mark so give him some credit for that at least.
To be fair, the bank guarantee would have been a good idea if the bankers had been completely truthful about how much they owed.
Shurrup you, he correctly predicted the collapse in the property market. He told Jesus in AD 8 “I know you’re the son of God and everything though You.Need.To.Enunciate.Your.Words.More.Slowly and also house prices can’t continue to increase forever”
And BAM! 2000 years later, he was spot on (and also, would anyone have even heard of Jesus without those vital words of media-savvy advice)
So, how many buy-to-let acquired in the early noughties do you have in your portfolio?
Exited 2005, piled back in 2013, neither time on the advice of Swami McWilliams
McWilliams still suffering from verbal diarrhoea I see.
When he writes his book, what would he call someone that buys biscuits and milk in Ballybrack, Afternoon Tea Gentleman ?
He’s better than Eddie Hobbs -in fairness
In what way exactly?
His accent.
cuter
What kind of biscuits? Surely this is the substantive that Lynch is talking about..
Rich Tea
Jammie Dodgers
Hob nobs…the plain ones, not the chocolate ones…
Clearly chocolate would be far too much of a luxury with an obvious banking collapse and economic depression coming down the line!
Eddie Hobb Nobs?
nah Gold-Grain.
jammie dodgers wins!
What about ginger nuts?
Die jestive crookies
Yep. Followed by Marry Gold.
Nice
; )
The auld lassie chewing the pencil in the background is putting in a powerful mornings work
More than you, it would seem. Unless that is a picture of you typing that comment on Broadsheet, in which case you have created a quantum paradox and we’re all dead! A powerful morning’s work indeed.
McWilliams is an absolute spoofer.
Take away the anecdotes and there’s not much substance left.
Unfortunately we have a political system which can’t cope with anything beyond anecdotes so he gets wheeled out every few months to tell another story.
Trite, boring and rather obvious put-down. One does wonder as to your own standing to make such a glib remark? The anonymous internet “expert” – no qualifications or experience necessary.
I’m equally qualified and experienced as McWilliams when it comes to making a statement based on a handful of observations and anecdotes.
The real skill – which both McWilliams and I lack – is thorough investigation of data.
Is that you, darling Dave?
He was an supporter of the guarantee but there was more to it then that. His plan involved guaranteeing the banks but then also assessing the solvency of each bank and shutting down the ones that were not viable. The government went with the first part of the plan but didn’t have the balls to carry out the rest of it.
“shutting down banks which were subject to a blanket guarantee” – if the banks were guaranteed we still carried the can. And how crazy do you have to be to guarantee banks whose loans are secured by property which you’ve been claiming has been bubble-overvalued for more than a decade.
When the tide goes out, your nudity gets exposed, and there’s Dave in the nip, can the politicians tell he’s wearing no clothes?
i could never stand this clown, thats not a hindsight statement either – never!
Well…. I like him.
+1. The guy did make one mistake in 2008, but overall he was right all the way from the mid-90s onwards. I listened to him and used his articles to convince the wife not to get into the buy-to-let market or to ‘release equity’ from our home in the early-mid noughties. I suspect many around here were too worried with putting him down, lust like Bertie & Co. and may be paying the price now.
Yes, he may not be the most loveable person, but to discard his views on that ground is petty.
What’s Mrs Brown doing at the banking inquiry?
If you go to Twitter, he’s re-tweeting all the praise he’s receiving for his performance.
of course he is
Self promotion on twitter elevated to an art by the talentless.
Comes with the territory of the job. As a writer and freelance economic commentator he needs to attract attention to himself to keep the work coming his way.
I’m just seeing ‘The Equaliser’ update… fupp ya, I nearly started skittering with laughter :)
In fairness:
He knew exactly what was going on.
Remember he tried to warn us about the pope eating too many breakfast rolls?
And how it was ill advised to wear a skirt made out of pencils?
On the money.
Some funny comments above. A rarity on this site. Usually the jokes are predictable and sound like engineers or banking officials trying to sound original.
Everyone’s here to entertain you sir.
You and your massive ego.
No one’s ever explained to me why the bank guarantee had to cover all debts.
What difference would it have made if it just covered all debts AFTER the date of the guarantee itself?
People would be confident in investing in them and the State could still pull the plug on Anglo etc. and only owe compensation to the newer lenders?
The economic crash arises form joining the Euro, borrowing billions
from Germany, ploughing it into property that could not be afforded
or even sold, with property developers funding political parties and
the news media running property supplements to egg it on, does it really
take David McWilliams or a Dail Committee sitting 7 years later to
estabish the facts, and to correct the debacle is to ditch the Euro
set up a state housing agency to manage the surplus property and
make the Army Engineering Corp maintain them, establish what payments
were made to political parties by developers, shame the media and
make them recant and pay and break up their monloplies.
And lastly renage on all debt associated with guarnteeing bank and
bondholders, the only debt we repay is the soverign one that arises
from the annual defecit, which a vast proportion arises from public
sector pay….remember “benchmarking” and Joe O’Toole qoute
“like stopping by the ATM”.
Who has the balls to do it….oh what would David McWilliams suggest now.