OMS Ireland
Chartered Certified Accountants
Phone 057 87 41767
PLEASE STOP
Sat, 15th May, 2010
Like me, I’m sure you’re all tired of the recession and I hope it’s not only me completely bamboozled by the reporting of the economy by the National media. We’re being bombarded with NAMA, NERA, SIPTU, Billions, Billions and more Billions.
What does it all mean?
I often recall the children’s story “The Emperors New Clothes”. You all know it. The king is seduced into paying an outrageous amount of money to a pair of swindlers and then parades around naked glowing with pride. A child seeing through the pretence calls stop. “Why is the King wearing no clothes?”, he asks.
Can I be the village idiot? I’m a practicing Accountant, therefore suitably qualified as an idiot.
“STOP”
Can somebody please explain the value of one Billion, just one?
I hear you answer “a thousand million”.
Really that much one thousand million equals one Billion.
Sorry, but I’m still none the wiser.
In Dungarvan, Co Waterford, two weeks ago the winning Lotto ticket was bought. The winner is due to collect 16.7 million. It’s the second largest payout in Lotto history. That amount of money will earn in a secure and risk free bank account ( Government guaranteed ) over € 9,000 per week before taxes assuming an interest rate of 3%.
Imagine a Billion, it is almost 60 times bigger, generating interest of over 540,000 per week. Nice money if you can get it.
Let’s pretend we have a Billion euro in the bank. We decide to go into farming. “Don’t do it” I hear you all say. “You can’t make a decent living” I hear you and agree you can’t. Let’s give agricultural land a value of € 10,000 per acre. With one million we can buy 100 acres, forgetting about taxes & stamp duties & legal fees. Not big enough for me. I’m going for a 1,000 acre farm. Buying a few small farms to make a big one I have to pay over the average. I’m like Roman Abramovich in Chelsea. I buy up stock, machinery land and buildings from 10 farmers in Co Laois and I pay out in total 25 million. Lots of money. But I still got 975 million change from my Billion so I’m still able to drink a pint on Friday night and feed my kids.
Have you ever put a few euro on a horse? You get a tip, can’t loose. But guess what, it falls at the first. Not that easy to explain that night to the wife. Can you imagine how poor Sean Quinn must have felt going home for his dinner the day it dawned on him that he lost 3 Billion euro.
“Darling, you know that bank I was going to invest in?”
“Yes dear” she replies.
“It didn’t go quite according to plan”
“Don’t worry Sean, you win some you loose some.”
“This one is a little more than loose some. Its more like I lost 3 Billion, I am sorry dear. I really am annoyed with Seanie Fitz. I shan’t be inviting him to play golf in the Slieve Russell this weekend.”
“Why don’t you get on the phone and have those nice politicians sort it all out of you. Didn’t they solve our banking crises?”
PLEASE STOP
Our whole economy seems to have been built on a house of cards. Our kids can all look forward to an emigrant’s life in the US, Australia, or the UK. But fear not we have managed to successfully defend our banking industry from its “Systemic Crises”.
“Sys what?”
Brian Lenihan to the rescue.
We must have a strong vibrant Irish banking sector and NAMA is the only show in town.
God forbid the foreign banking institutions come into Ireland. We might discover the cosy cartel within Irish banking is nothing more than the rich amongst us getting richer off us. Bring in the foreign banks, I say. They can be no worse than our own.
“Still though what is a Systemic Crises?”
I was going to say “Fu*ked if I know.”, but the editor took it out.
Actually, I can explain it in reasonably articulate English. Next week, check out this column. I promise not to bore you. Indeed, read this column over the coming weeks and I will try and explain some of the terms that politicians and economists use in their sound bites to the media. Mostly they are painting the picture of the economic crisis as being far too complicated for you to understand.
STOP
It’s not too complicated. Don’t let them hoodwink you with gobbledegook. It’s not complicated and I will expose their dastardly plan to bore us into submission.
Please e-mail me your queries dhorgan@omsireland.com
What does it all mean?
I often recall the children’s story “The Emperors New Clothes”. You all know it. The king is seduced into paying an outrageous amount of money to a pair of swindlers and then parades around naked glowing with pride. A child seeing through the pretence calls stop. “Why is the King wearing no clothes?”, he asks.
Can I be the village idiot? I’m a practicing Accountant, therefore suitably qualified as an idiot.
“STOP”
Can somebody please explain the value of one Billion, just one?
I hear you answer “a thousand million”.
Really that much one thousand million equals one Billion.
Sorry, but I’m still none the wiser.
In Dungarvan, Co Waterford, two weeks ago the winning Lotto ticket was bought. The winner is due to collect 16.7 million. It’s the second largest payout in Lotto history. That amount of money will earn in a secure and risk free bank account ( Government guaranteed ) over € 9,000 per week before taxes assuming an interest rate of 3%.
Imagine a Billion, it is almost 60 times bigger, generating interest of over 540,000 per week. Nice money if you can get it.
Let’s pretend we have a Billion euro in the bank. We decide to go into farming. “Don’t do it” I hear you all say. “You can’t make a decent living” I hear you and agree you can’t. Let’s give agricultural land a value of € 10,000 per acre. With one million we can buy 100 acres, forgetting about taxes & stamp duties & legal fees. Not big enough for me. I’m going for a 1,000 acre farm. Buying a few small farms to make a big one I have to pay over the average. I’m like Roman Abramovich in Chelsea. I buy up stock, machinery land and buildings from 10 farmers in Co Laois and I pay out in total 25 million. Lots of money. But I still got 975 million change from my Billion so I’m still able to drink a pint on Friday night and feed my kids.
Have you ever put a few euro on a horse? You get a tip, can’t loose. But guess what, it falls at the first. Not that easy to explain that night to the wife. Can you imagine how poor Sean Quinn must have felt going home for his dinner the day it dawned on him that he lost 3 Billion euro.
“Darling, you know that bank I was going to invest in?”
“Yes dear” she replies.
“It didn’t go quite according to plan”
“Don’t worry Sean, you win some you loose some.”
“This one is a little more than loose some. Its more like I lost 3 Billion, I am sorry dear. I really am annoyed with Seanie Fitz. I shan’t be inviting him to play golf in the Slieve Russell this weekend.”
“Why don’t you get on the phone and have those nice politicians sort it all out of you. Didn’t they solve our banking crises?”
PLEASE STOP
Our whole economy seems to have been built on a house of cards. Our kids can all look forward to an emigrant’s life in the US, Australia, or the UK. But fear not we have managed to successfully defend our banking industry from its “Systemic Crises”.
“Sys what?”
Brian Lenihan to the rescue.
We must have a strong vibrant Irish banking sector and NAMA is the only show in town.
God forbid the foreign banking institutions come into Ireland. We might discover the cosy cartel within Irish banking is nothing more than the rich amongst us getting richer off us. Bring in the foreign banks, I say. They can be no worse than our own.
“Still though what is a Systemic Crises?”
I was going to say “Fu*ked if I know.”, but the editor took it out.
Actually, I can explain it in reasonably articulate English. Next week, check out this column. I promise not to bore you. Indeed, read this column over the coming weeks and I will try and explain some of the terms that politicians and economists use in their sound bites to the media. Mostly they are painting the picture of the economic crisis as being far too complicated for you to understand.
STOP
It’s not too complicated. Don’t let them hoodwink you with gobbledegook. It’s not complicated and I will expose their dastardly plan to bore us into submission.
Please e-mail me your queries dhorgan@omsireland.com