Why does our Government like vultures so much?
We're very trusting of people who are hoping to benefit from 'blood on the streets', writes Gene Kerrigan
What do you know about HedgeCraic? Probably not much. HedgeCraic sounds like the title of a UTV gardening programme in which green-fingered amateurs have "the craic" with celebrity gardeners, while picking up some tips about manure.
In fact, HedgeCraic was a gathering of about a hundred very rich people - representatives of hedge funds. They met at the Shelbourne Hotel and at the Ritz-Carlton for four days in September 2013.
They enjoyed what the event organiser termed "the craic" while discussing how to make money out of the distressed Irish economy. When they had a similar business/pleasure trip to Scotland they termed their booze-up 'BraveHedge'. Wacky guys, eh?
In an economic crisis, a lot of rich people circle distressed companies and economies like vultures. Such low-life types salivate at the thought of dancing on the grave of a company or an entire national economy.
Forgive my bitter left-wing rhetoric. Let me, instead, quote one of those gentlemen - Christopher Flowers, head of JC Flowers, one of the most successful vulture funds in the business. Addressing a meeting in New York in February 2009, Chris predicted that "low-life grave dancers like me" would make "a tremendous fortune" from the crisis.
Banks and property portfolios were collapsing under the weight of the greed of bankers and bondholders. Governments, Chris said, would buy up such assets.
And that is what politicians - taking advice from bankers - did.
Governments around the world, Chris predicted, "are going to own a lot of stuff, and they are going to be not very adroit, not very commercial. There's going to be a lot of money to be made around the edges of this thing."
This isn't an investor backing a business, creating jobs. This is smash and grab.
Another vulture, Steve Schwarzman, CEO of the Blackstone Group, advises vultures to "wait until there's really blood in the streets". You can "double your money within a few months".
It helps to get up close and personal with state officials and politicians, to judge their calibre.
Michael Noonan, Minister for Finance, attended the third day of the HedgeCraic conference, at the Ritz-Carlton.
HedgeCraic was just one of many such events held in Ireland over the past few years - without fanfare.
Governments have had to respond, both globally and nationally, to the problems caused by vulture funds. Let's look at how our Government responded, and see what that might tell us.
Vulture funds buy up debt cheaply, for cents on the dollar. Later, a government will be negotiating over debts that are simply unpayable. Creditors will accept a write-down - something is better than nothing.
At that stage, the vulture funds demand full payment - not what they paid for the debt, but the whole amount. They threaten to tie things up in litigation for years, as the economy spirals down the plughole. More often than not they get paid off.
Last September, at the General Assembly of the United Nations, Bolivia proposed Draft Resolution A/68/L.57/Rev.1. The idea is to create "a multilateral legal framework for sovereign debt restructuring processes."
In short - instead of governments being played off against one another, they will employ a collective legal strategy to fight the vulture funds.
Bolivia's resolution is a responsible move to protect sovereign governments from the predatory attention of low-life grave dancers. The resolution passed by 124 votes to 11.
Ireland voted against.
Why are we taking the side of vulture funds, against sovereign governments? Does our Government hold vultures in high esteem? Well, you might think that, but I couldn't possibly comment.
That's our government responding on the global level. How are they doing on a national level?
Information given in the Dail revealed that in 2013 and 2014 finance officials attended meetings with representatives of hedge funds no fewer than 65 times.
On eight occasions - including HedgeCraic - Mr Noonan himself attended.
Of course, from Mr Noonan's point of view, he and his people are merely fulfilling their duty to encourage investment in Ireland. And no doubt the vultures are meeting our government officials purely to seek advice that will ensure that they do nothing that will infringe on the welfare of the citizens.
Some people with mortgages are worried that their debts have been bought up by vultures. Here's Charlie Weston in the Irish Independent, last July: "Thousands of homeowners have had their mortgages sold on to unregulated funds, meaning they lose valuable consumer protections policed by the Central Bank.
"More than 10,000 mortgages have already been sold on to funds that do not have to observe consumer codes and protections."
Not to worry, Mr Noonan told the Dail last April. The purchasers are committed to "the terms of the Central Bank's code of conduct on mortgage arrears".
Eamon O Cuiv asked: "Am I right in thinking that the legal position is that the arrangements the Minister has made have no legal status and are totally unenforceable and that this is a case of what might be called light-touch regulation?"
Noonan: "Even if they only shake hands on it, there is a contract..." these funds, he said, are "reputable organisations and I do not think they would welsh on their commitments".
Eh, why, then, do states and businesses bother with any legally enforceable contracts? It's now official - no need to hire all those expensive lawyers - Mick Noonan says, just shake hands.
Pearse Doherty asked about the legal standing of the vultures' commitments. "Was it a spit in the hand and a firm handshake?"
And, it seems it was.
Since 2008, there's been a struggle between various forces, to see who will pay for the crisis and who will benefit. What does the relationship between this state and the vultures tell us about that struggle?
Some ask if the incoming law is good enough to protect mortgage holders from vultures? What's far more worrying is the tone of what has been happening.
Just who is up to what, and why? If my Government is siding with vultures and against sovereign states, it tells me something about who is on whose side.
It's questionable if the Cabinet even knows about the United Nations vote, much less the status of the spit and handshake deals. The Cabinet has been sidelined by the Economic Management Council - which has four members, including Mr Noonan and Mr Kenny, and is accountable to no one.
Of course, I'm sure there's nothing to worry about.