Monday 23rd June 2014
Inquiry needs to examine why symptoms of bubble were ignored by Ireland
Says former Taoiseach Bruton
ECB says it is on track to assume oversight of euro-area lenders as ‘health check’ underway
John Bruton, Ireland’s former prime minister and current chairman of Ireland’s International Financial Services Centre (IFSC).
The banking inquiry needs to examine why symptoms of the bubble were repeatedly ignored by politicians and regulators in the run-up to the crash, former Taoiseach John Bruton said today.
Mr Burton, who is now the president of Dublin’s International Financial Services Centre, made the comments at a conference hosted by the Irish Banking Federation in Dublin later this morning.
The same cevent also heard from the chair of the European Central Bank’s supervisory board Daniele Nouy, and Deputy Governor of the Central Bank Cyril Roux.
Mr Bruton said the inquiry would need to confirm that the symptoms of a bubble were visible in the wider economy, why such signs were ignored, and should also outline the practical steps needed to ensure that similar symptoms were not ignored in future.
“Taking away the punch bowl, while the party was still on, was never going to be easy,” he said. “ It was never going to be easy politically, socially, or administratively. Yet that is precisely what has to be done if we are to prevent a bubble economy developing in Ireland ever again.”
Mr Bruton says he believes two obvious signs of disaster were “studiously ignored” by the political and regulators.
“One was the fact that house prices were rising far faster than either the rate of increase in incomes, or the rate of inflation in other prices, and meanwhile people were getting 100 per cent mortgages.”
Mr Bruton says once that process ended, and house prices were only rising at a rate at or below that of incomes, borrowers, who had been given 100 per cent mortgages or were otherwise financially exposed, were immediately heading towards negative equity or inability to pay.
“That made a soft landing inherently unlikely. Why did no one see that?”
The other issue Mr Bruton addressed in his speech was the huge deficit that developed on the Irish balance of payments.
“The country was spending more abroad than it was earning abroad. That spending was fuelled by imported credit. Given that devaluation was impossible, that could only be reversed by (an inherently unlikely) dramatic increase in exports, or by a cut back in imports,” he said.
“The latter could only be engineered by a recession of some kind. It was plain to see that such a recession would render many mortgages unsustainable.
“Why did no one in politics, in Government, in the Central Bank, or in the banks themselves do the basic arithmetic to work that out?”
Mr Bruton insisted that the possibility must be faced that policy makers, including in the Central Bank, did not truly understand the implications of joining the euro, and acted (or failed to act) as if the devaluation/inflation option, was still open to the country.
Chair of the European Central Bank’s supervisory board Daniele Nouy said preparations to assume oversight of euro-area lenders were going according to plan.
“We are working very intensely to meet the objectives and we are well on track with achieving them,” Ms Nouy said. “For the first time in the history of the European Union, we will have a supervisor with a truly European mandate. It will reduce regulatory arbitrage and remove national biases. As a result, we will enhance confidence in the supervision of banks and in the whole financial system.”
Irish study says alcohol is ’embedded’ in national identity
The report stated alcohol abuse had created a “huge burden of health and social harm” in the Republic of Ireland
Alcohol has become “embedded” in Irish national identity, according to a major government-funded report into drinking habits in the Republic of Ireland.
Almost 6,000 people submitted personal “alcohol diaries” for the study.
At least once a month, over one third (37%) of all respondents consumed six or more drinks in a single drinking session – classified as binge drinking.
More than half of the drinkers who took part would be classified as “harmful drinkers” by international standards.
The state-wide alcohol survey, funded by the Irish Department of Health, was carried out by the Health Research Board.
As a nation, it is clear that we need to recognise, accept and tackle the negative consequences that can arise from our use of alcohol”
It found 54% of respondents who drank would be considered as harmful drinkers using a World Health Organization measurement known as the AUDIT-C screening tool.
‘A complex relationship’
Those who took part in the survey were aged between 18 and 75, and they submitted diaries detailing their personal alcohol consumption between July and October 2013.
The researchers stated that if the harmful drinking statistic was applied to the population as a whole, it would indicate there were between 1.3m and 1.4m harmful drinkers in the Republic of Ireland last year.
Binge drinking was most common among young men, with 68% of male drinkers aged between 18 and 24 confirming they did so on a monthly basis.
Almost two-thirds (63.9%) of men and half (51.4%) of women surveyed started drinking alcohol before they turned 18, the age at which it is legal to buy alcohol in the state.
However, just over one fifth (20.6%) of all those who took part in the research did not drink at all, having consumed no alcohol for at least a year before the survey began.
The Health Research Board’s chief executive, Graham Love, said Ireland has “a complex relationship with alcohol”.
“Its use has become embedded in our national identity and it is often associated with significant cultural and religious events.”
Mr Love said alcohol abuse had created a “huge burden of health and social harm, not just on those who drink, but on their families, friends and colleagues”.
“As a nation, it is clear that we need to recognise, accept and tackle the negative consequences that can arise from our use of alcohol,” he added.
The chief executive said that according to latest estimates, the combined cost of deal with alcohol-related crime and health problems was 2.39bn (£1.9bn).
Underground route for EirGrid west project unveiled today
Route will run from north-west Mayo to the existing Flagford substation in Co Roscommon
The underground cable will run between Crossmolina and Ballina, down the east side of Lough Conn, north-east of Foxford and north of Charlestown, Ballaghaderreen and Frenchpark in Co Roscommon to the Flagford substation area, south-west of Carrick-on-Shannon.
The operator of the national electricity grid has unveiled its preferred underground route for its controversial Grid West project.
The project involves connecting the north Mayo area with a strong point on the transmission system near Carrick-on-Shannon.
The underground route option would run from north-west Mayo to the area around the existing Flagford substation in Co Roscommon.
It is proposed to run the underground cable mainly along local and regional roads from north-west Mayo between Crossmolina and Ballina, down the east side of Lough Conn, north-east of Foxford and north of Charlestown, Ballaghaderreen and Frenchpark in Co Roscommon to the Flagford substation area, south-west of Carrick-on-Shannon .
This proposed route has been put forward after consultation with local authorities in Mayo, Roscommon and Galway, as well as the National Roads Authority and other relevant agencies.
Speaking in Castlebar today, EirGrid chief executive Fintan Slye said they had received extensive feedback from their public consultation.
“In January we responded with a number of important initiatives, including looking at underground options for the Grid West Project. Details of this underground route option are available today on the project website ,” he said.
“Over the coming weeks we will be asking the people of the West to review the work we have done to develop this underground route option and also proposed amendments to the overhead route corridor, and to provide us with their feedback on both,” he said.
“Importantly, the work we are doing on both underground and overhead options will be brought together into a single report later this year. This report will be submitted first to the Independent Expert Panel and, subject to its approval, published for public consultation.”
The overhead pylons route has been estimated to cost €240 million but the cost of the underground alternative remains unclear.
The development comes on foot of a storm of protest against pylons from farm, tourism and environmental groups, which emerged as a major political issue last year for both Fine Gael and Labour.
This led the Government in January to appoint an independent panel to carry out a detailed examination of whether cables could be put underground.
That independent panel, chaired by former Supreme Court judge Ms Justice Catherine McGuinness, will review both overhead and underground options.
Minister for Communications and Energy Pat Rabbitte denied the proposed underground route was merely a box-ticking exercise by EirGrid.
He acknowledged that cost would be a big factor in the decision to opt for the underground route or the overhead pylons route.
Speaking on the Pat Kenny show on Newstalk today he said the Government would make the ultimate decision and that it would be a “difficult” one.
“If the [underground]route costs three times more .. then my personal view is that we can’t afford that. I would ask taxpayers to tell me why it is … that Ireland in its straitened economic circumstances is supposed to put those cables underground.
“Protesters have been saying to me they want to see a fair comparison. They are now getting a fair comparison and I hope that they would put on their other hats as taxpayers and electricity bill payers and compare the two.”
Independent MEP Marian Harkin said any cost benefit analysis needed to place as much emphasis on factors such as landscape and health as it did on the cost of materials and installation.
She said opting for the overground route would “ignore factors such as adverse effects on the tourism sector and the important health issues associated with the presence of high voltage overhead cables.”
She said she had confidence in the independent panel.
Michael Colreavy, Sinn Féin spokesperson on Communications, Energy and Natural Resources welcomed the proposed underground route while the party’s TD for Cavan-Monaghan Caoimhghín Ó Caoláin called for the cabling for the new North-South Interconnecter to be routed underground in light of the news.
The Irish Cattle and Sheep Farmers’ Association also welcomed the announcement due to the negative effects on farming, landscape and tourism and the possible health risks of overhead lines.
A number of changes to the overhead route corridor were also announced today. These changes involve undergrounding over 7km of the existing 220kV line into Flagford.
It also involves an alternative substation site or the option to underground lower voltage lines (110kV lines) into the proposed substation at Moygownagh.
Partial undergrounding will lessen the visual impact of wires in and around both substations.
EirGrid is planning to write to people affected by the underground route option as well as updating people within the emerging preferred overhead route corridor option.
Over the coming week EirGrid will be contacting stakeholders with details about how and where they can review this work, meet with the project team and provide feedback.
Obesity crisis so severe in Ireland that parents now face burying their children
Department of Health secretary general calls for restricted availability of sweets, fizzy drinks
Department of Health secretary general Ambrose McLoughlin has said the current generation of parents could be the first to “bury our children” unless the problem of obesity is tackled.
The obesity problem among young people is so bad that the present generation of parents may be the “first to bury our children”, Department of Health secretary-general Ambrose McLoughlin has said.
He told an Irish Heart Foundation conference today that the State had to move away from treatment and towards prevention, adding that tackling obesity was now a “public health priority”.
“If we don’t deal with [obesity], we will be the first generation to bury our children,” he said.
Mr McLoughlin addressed the conference on the feasibility of imposing a 20 per cent tax on all sugary drinks. One of the ways to tackle obesity, he said, was to restrict availability to so-called “top shelf” items such as sweets, chocolates and fizzy drinks which were not necessary for human health.
Mr McLoughlin said discussions were taking place with eight Government departments and an action plan on a “Healthy Ireland” would soon be submitted to the Minister for Health James Reilly.
He added there was now “significant evidence” that fizzy drinks contributed to childhood obesity. “We believe there is a need for a societal debate now to look at the issues.”
A poll carried out by the Irish Heart Foundation found that 52% of the Irish public want a 20% tax on sugary drinks such as full-fat Coca Cola and 7up, with some 87% of the population believing such drinks contribute to obesity among children and young people.
In their last pre-budget submission, the Irish Heart Foundation advocated a tax on sugary drinks which it said would raise €60 million. The proceeds could be used to subsidise buying fruit and vegetables and support a children’s health fund in schools, it said.
IHF chief executive Barry Dempsey described the introduction of such a tax as a “no brainer to protect our children”.
Guest speaker Dr Adam Briggs from the University of Oxford said a 10% tax on sugar sweetened beverages could lead to a 1.3% reduction in obesity and reduce the number of obese and overweight adults by 14,000.
Consultant endocrinologist Prof Donal O’Shea warned that the health service was close to becoming “overwhelmed” by the number of obese children presenting.
Some 20% of calories for Irish children between the age of five and 12 came from junk food, he said. He said children receive the equivalent of two weeks energy a year, or some 24,000 calories, from sugar-sweetened drinks.
Dr O’Shea said there had been an absolute explosion in the extreme end of obesity with a 1,200 per cent increase in those with a body mass index of 52 or over (18 to 25 is normal).
“We now know that obesity causes every disease and makes every disease worse. Nothing does that bar ageing,” he said.
He criticised Coca Cola’s advertising campaign of personalised bottles with names on them which is aimed at children, describing it as “personalised pedalling to our kids”.
Mysterious night-shining Clouds are back again
Earth’s polar skies have shined with eerie blue-white glowing clouds slowly twisting and undulating in the twilight sky every summer since the late 19th century.
These mystifying clouds are referred to as night-shining or noctilucent clouds. Such clouds form in an upper layer of the Earth’s atmosphere called the mesosphere during the summer and can be seen from the high latitudes on Earth.
If skywatchers want to possibly see noctilucent clouds, four criteria must be met: The sky must be free of tropospheric (“ordinary”) clouds. The region of the atmosphere where they form must be sunlit. This means that the sun must be no more than 16 degrees below the horizon. The background sky must be adequately dark enough for the clouds to stand out.
This final requirement means that the sun must be at least 6 degrees below the horizon, what astronomers refer to as the end of civil twilight. Your viewing location should be at a latitude north of 45 degrees, although as you will soon see the clouds have been sighted at more southerly latitudes in recent years
A series of massive eruptions from the Krakatoa volcano in late August 1883 may have serendipitously helped to draw attention to the phenomenon of noctilucent clouds. Dust and ash injected high into the atmosphere from the Indonesian volcano caused spectacular and colorful sunsets worldwide for several years.
On the evening of June 8, 1885, T. W. Backhouse was admiring one such beautiful sunset from Kissingen, Germany, when he noticed something rather strange: as darkness deepened and the ruddy glows faded, he noticed wispy bluish-white filaments seemingly glowing in the north and northwest sky. At that time, scientists dismissed this effect as some curious manifestation caused by the volcanic ash. But after a few more years, the ash settled and the vivid sunsets induced by Krakatoa faded.
And yet the noctilucent clouds persisted.
There is some debate suggesting that Backhouse was not the first to describe the clouds, since in a report dated from 1854, Thomas Romney Robinson, in Armagh, Ireland, communicated his personal observation of the “phosphorescent properties of ordinary clouds.” So it might be that Robinson was making a reference to noctilucent clouds 31 years before Backhouse.
What causes them?
Noctilucent clouds can form only under very restrictive conditions. They are the highest clouds in the atmosphere, located in the mesosphere at altitudes of between 47 to 53 miles (76 to 85 kilometers). They are normally too faint to be seen, and are visible only when illuminated by sunlight from below the horizon while the lower layers of the atmosphere are in the Earth’s shadow. [Earth’s Atmosphere Top to Bottom]
Ice crystals in clouds need two things to grow: water molecules and something for those molecules to stick to — dust, for example. Water gathering on dust to form droplets or ice crystals is a process called nucleation. It happens all the time in ordinary clouds, which generally appear at altitudes of up to about 9.5 miles (15 km) and get their dust from sources like desert wind storms.
But it’s all but impossible to push wind-blown dust all the way up into the mesosphere. So scientists speculate that the dust associated with noctilucent clouds could originate from outer space. Every day, Earth encounters millions of meteoroids, which have been shed by comets. While some of this material rams into our atmosphere in a flash to produce the effect of a shooting star, other tiny particles remain aloft. As for the source of the water vapor necessary to produce clouds at such extreme altitudes, upwelling winds during the summer are capable of carrying water droplets from the moist lower atmosphere toward the mesosphere.
That’s why noctilucent clouds only appear during the warm summer months. The clouds consist of tiny ice crystals about the size of particles in cigarette smoke.
Some more viewing tips?
While reports of noctilucent clouds from Europe and Russia date back to the late 19th century, the first observation from North America did not come until 1933, probably because most were not specifically looking for them, or if they did see them, they didn’t realize what they were seeing.
Observers have been able to draw some interesting conclusions from observing the clouds over the past 75 years in North America. The earliest and latest sightings are, on average, April 1 and Sept. 28, respectively. Peak activity comes around July 20, about one month after the summer solstice.
Ninety-two percent of the displays are observed during June, July and August and 82 percent are observed after the summer solstice. Before the solstice the clouds tend to be faint and cover small areas of the sky, whereas after the solstice they are usually brighter and more extensive.
In general, it would seem that the best times to look for them are during July and August.
As to what you’re looking for: gossamer, electric-blue clouds, resembling luminous tendrils, spreading across the northern to northwestern sky and slowly twisting and rippling in the twilight.
It’s a case for global warming?
Over the last few decades, noctilucent clouds seem to have been increasing in frequency, brightness and extent. A century ago, for instance, the clouds were confined to latitudes above 50-degrees north. Observers would have to go to places like the United Kingdom, Scandinavia and Russia to see them. But in recent years, they’ve been glimpsed as far south as Colorado, Utah and Virginia.
It is theorized that this increase is connected to climate change.
“Extreme cold is required to form ice in a dry environment like the mesosphere,” said Gary Thomas, a professor at the University of Colorado.
Surprisingly, global warming helps. While greenhouse gases warm Earth’s surface, they actually lower temperatures in the high levels of our atmosphere.
Studies from above?
Satellites have helped scientists study these clouds. In September 2009, the United States Naval Research Laboratory (NRL) and the United States Department of Defense Space Test Program (STP) conducted the Charged Aerosol Release Experiment (CARE) using exhaust particles from a Black Brant XII suborbital sounding rocket launched from NASA’s Wallops Flight Facility to create an artificial noctilucent cloud. The rocket’s exhaust plume was widely observed and reported from New Jersey to Massachusetts.
Other evidence indicates that at least some noctilucent clouds resulted from freezing water exhaust from NASA’s retired space shuttle fleet. In fact, the clouds were observed and photographed by astronauts from orbiting spacecraft.