Here is the bank memo from Merrill Lynch mentioned by Michael Lewis in his Vanity Fair column.

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Henriettea Baldock Merrrill Memo IRELAND BANKS

Category: Bailouts, Credit, Really, really bad calls, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

2 Responses to “Irish Bank Memo, Merrill Lynch 9.28.08”

  1. uzer says:

    I have one question that is probably as likely to be answered as “what is the meaning of life?” but here goes: who is at the top of the global ponzi scam? (it is a ponzi scam, it is global and “it” is the economy)

    ~~~

    BR: I don’t believe ALL of it is a Ponzi . . . Most of the world’s GDP consist of legitimate businesses and organic economic activity.

    However, on the periphery . . .

  2. winstongator says:

    In Ireland, at least, you had banks raking in huge profits during the bubble. Developers, property speculators, flippers, realtors benefiting from rising home prices. Consider a big chunk of those profits to be ill-gotten gains, or accounting figments – If you run a bank, you take the profits, while the losses go to shareholders. So the Irish people backstop the banks, effectively becoming the shareholders eating the loss. The other option is the Iceland tactic and you just have the banks default. I don’t know exactly why Ireland didn’t allow that, but some of it comes down to national pride about the Celtic Tiger story.

    If you removed limited liability from the banks, if they were partnerships, you would have had the bank losses covered by those who posted the largest gains during the run up. Irish bankers net income from 2000-2010 might have been negative. Limited liability combined with the Irish gov bailout transferred those losses to taxpayers, while imposing no penalty on those who generated the losses.

    It’s not Ponzi. It doesn’t need new money coming in. It’s already been taken.