Who Do Your Believe Reggie Middleton or Central Bank of Ireland

I have spent two week warning Ireland and the world about the Irish banking system, with a summation available in the aptly titled post, If I Provide Proof That The Entire Irish Banking System Is A Sham, Does It Set Up A Much Needed System Reboot? Let's Go For It...Yesterday, the Irish media STARTS to come clean, although they are still not as explicit as the Irish Sun article which put my researched facts front and center...

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From the Irish Times

Yesterday, at the press briefing to discuss the Central Bank’s 2012 annual report, Honohan matter-of-factly told us that the Irish banks would need more funding before 2019 due to changes in capital reporting requirements imposed by the new Basel III accord.

The transition period for these changes to be implemented by banks in the EU is January 2019.

There were more than a few eyebrows raised at this frank admission.

Honohan’s statement is in stark contrast to those of the various Irish-owned banks –AIB, Bank of Ireland and Permanent TSB. In public at least, the banks have maintained that they are adequately capitalised and that they do not envisage having to raise additional capital to bolster their ratios.

From the Independent:

Mr Honohan said the Central Bank was still working towards carrying out stress tests on the banks at the latter part of the year. By 2019, the banks will need more capital under international regulations.

"In an ideal situation, that capital will come from private investors, as is happening all over Europe, all over the world, where bank capital is being pushed up through the market system," he said.

From private investors? Yeah, right! As said private investors are hoodwinked, just like those poor muppets in the US - reference What Should The US Do If One Of The Biggest Irish Banks Blatantly Defrauded US Investors:

The Bank of Ireland

In the 2008 Annual Accounts (Irish version of Annual Report) of Bank of Ireland (see attached, page 178) it states the bank gave a first floating charge in favor of the Central Bank of Ireland (an arm of the European Central Bank) and the Financial Services Authority of Ireland over the Banks ‘right, title, interest, benefit, present and future, in and to certain segregated securities listed in an Eligible Securities schedule.’

Fact: The BoI 2008 Irish accounts (~annual report) refer to the charges in their Disclosure Section (see attached page from 2008 accounts) where they describe the charge as being over ‘certain segregated securities.’

Of paramount importance for US investors and regulators, there is an absolute omission of this information in the Bank of Ireland SEC 20F returns for 2008.

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From the Irish Examiner:

However, banks would need capital over the medium term to comply with Basel III capital requirements by 2019. It is hoped the banks will be able to raise this from private investors, he added. He hoped Ireland would not need the help of the ECB’s outright monetary transaction programme when it exits the bailout programme. However, if it met certain criteria, then it would be able to use the facility. 

But private investors have done so well in the Irish banks, particularly considering their pristine disclosure policies, right??? Again, reference What Should The US Do If One Of The Biggest Irish Banks Blatantly Defrauded US Investors:

The Bank of Ireland 2008 Irish Annual Accounts refer to the charges in their Disclosure Section (see attached page from 2008 accounts) where they describe the charge as being over ‘certain segregated securities,’ but no mention of ‘right, title, interest, benefit, present and future, in and to certain segregated securities listed in an EligibleSecurities schedule.’

There is also no mention of any information related to this floating charge in the Bank of Ireland SEC 20F returns for 2008.

It appears that this floating charge was not disclosed at the time of the stress testing of the bank conducted by the European Banking Authority.

It is possible that I may have overlooked such, and because of that possibility I have made the SEC 20F available for all who want to check over my work. Here is the UBI 2008 accounts and here is the SEC 20f-2008 for the Bank of Ireland.

Now of course, to constitute fraud there has to be a loss on the part of the one being defrauded or a gain on the part of the one being defrauded - at least according to Wikipedia. Otherwise, it would be a hoax. That's the Irish banking system, and not this bank in particular. So...

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If you believe that the information above actually identifies a gross misrepresentation of fact, omission or outright fraud, simply contact the SEC and let them know that Reggie Middleton suggested they look into it. You can actually use this form to convey my message. 

Remember, extreme wealth concentrates, so you don't have to... Coming from a "Cyprus'd" bank near you!

Subscribers, can download ALL documents supporting shenanigans by these banks (click here to subscribe):

•  EU Bank Capital Confusion, Part 3 - It's BIG! (professional and institutional subscribers only)
•  Ulster Bank/RBS Supporting Charge Documents
•  EU Bank Capital Confusion, Part 2 - Malarkey
•  EU Bank Capital Confusion, Potential Failure

CNBC Stock Draft 2013

I appeared on CNBC Friday to go for my 2nd win in their Stock Draft Challenge. Of course, I started trouble. I took the liberty of compiling  snippets from the last contest, the results and the most recent airing last Friday - along with some interesting notes. Pay attention to the argument that ensued when discussing Google's business model towards the middle of the video.

I will release fresh, updated Google research that incorporates projections for Google Glass and Google X Phone, as well as this quarter's most recent earnings update. In the meantime, refresh your collective memories with the last Google update published, see Google's Q4, 2012: This Looks To Be The Leader Of The New Distributed Information Paradigm.

Subscription research (click here to subscribe):

Google Q1-2012 Valuation Summmary 04/20/2012

I was recently alerted to an article in Business Insider regarding a Twitter battle between Nasim Taleb and fellow academics, analysts and financial journalists. What caught my attention was:

1. Taleb called out the academics for charlatans, which I felt was quite bold.
2. Two, I agree with him
3. One of the academics, who presided over the US bubble at the Fed AND the Irish banking bubble at the Central Bank of Ireland is also the guy whose proclamations are the antithesis of my recent Irish banking research, see 
   1. As Forewarned, The Irish Savers Have Just Been "Cyprus'd", And There's MUCH MORE "Cyprusing" To Come
   2. What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors?
   3. If I Provide Proof That The Entire Irish Banking System Is A Sham, Does It Set Up A Much Needed System Reboot? Let's Go For It...

I attempted to join the conversation, albeit a little late. See below...

Hey @nntaleb @jsphctrl @dsquareddigest @jsphctrl @lorcanrk @dsquareddigest let's chat, starting with boombustblog.com/blog/item/9067… real talk not BS

— ReggieMiddleton (@ReggieMiddleton) April 25, 2013

@nntaleb @jsphctrl @dsquareddigest @jsphctrl @lorcanrk @dsquareddigest challenge mighty PhDs w/lowly BA, my credentials boombustblog.com/reggie-in-the-…

— ReggieMiddleton (@ReggieMiddleton) April 25, 2013

@jsphctrl @dsquareddigest @jsphctrl @lorcanrk @dsquareddigest So, I join tag team match on @nntaleb side let's dance boombustblog.com/reggie-in-the-…

— ReggieMiddleton (@ReggieMiddleton) April 25, 2013

As you can see, nobody wanted to chat with me, so the following day (this morning), I decided to force the issue with a barage of facts. You know how facts tend to get in the way of a good Twitter flame war, don't you?

@nntaleb @jsphctrl @mandycnbc @sullycnbc @cnbc renown for Irish econ @whelankarl says Ireland rebound? Facts disagree boombustblog.com/blog/item/9046…

— ReggieMiddleton (@ReggieMiddleton) April 26, 2013

@nntaleb @jsphctrl @mandycnbc @sullycnbc @cnbc @whelankarl I ask MSM 2 FORCE TRACK RECORDS 2 FOREFRONT! not PhD but boombustblog.com/reggie-in-the-…

— ReggieMiddleton (@ReggieMiddleton) April 26, 2013

If media pundits and government/Central Bank consultants were gauged (and paid) based upon thier track records and successes, methinks this would be a better world to live in.

@nntaleb @jsphctrl @mandycnbc @sullycnbc @cnbc I respectfully challenge @whelankarl to address Irish banks reporting boombustblog.com/blog/item/9063…

— ReggieMiddleton (@ReggieMiddleton) April 26, 2013

@mandycnbc @sullycnbc @cnbc New Theme! Banks BURN as parlor tricks turn to fraud? ie. sloppy reporting, hide/sausage boombustblog.com/blog/item/9066…?

— ReggieMiddleton (@ReggieMiddleton) April 26, 2013

@whelankarl @nntaleb @jsphctrl @mandycnbc @sullycnbc @cnbc really wanted to debate academics vs reality so I guess I have to force the topic

— ReggieMiddleton (@ReggieMiddleton) April 26, 2013

@nntaleb @jsphctrl @mandycnbc @sullycnbc @cnbc all due respect @whelankarl track record=bursting bubbles everywhere! Fed pre .com, banks!

— ReggieMiddleton (@ReggieMiddleton) April 26, 2013

@nntaleb @jsphctrl @mandycnbc @sullycnbc @cnbc Re: @whelankarl it could be bad luck, but it appears academic leaning collides with prudence

— ReggieMiddleton (@ReggieMiddleton) April 26, 2013

@jsphctrl @mandycnbc @sullycnbc @cnbc debate @nntaleb & @whelankarl shows Taleb with an unassailable point, academics not=to being right!

— ReggieMiddleton (@ReggieMiddleton) April 26, 2013

@nntaleb @jsphctrl @mandycnbc @sullycnbc @cnbc If results carried more weight than degrees then @whelankarl claim of Ireland collapse market

— ReggieMiddleton (@ReggieMiddleton) April 26, 2013

@nntaleb @jsphctrl @mandycnbc @sullycnbc @cnbc @whelankarlI send these series of tweets with the utmost respect & don't intend to be rude

— ReggieMiddleton (@ReggieMiddleton) April 26, 2013

@nntaleb @jsphctrl @mandycnbc @sullycnbc @cnbc I respectfully challenge @whelankarl to address Irish banks reporting boombustblog.com/blog/item/9063…

— ReggieMiddleton (@ReggieMiddleton) April 26, 2013

@nntaleb @jsphctrl @mandycnbc @sullycnbc @cnbc since I was respectful+evidentiary, we assume silence=acquiescence on part of @whelankarl, ok

— ReggieMiddleton (@ReggieMiddleton) April 26, 2013

Well, I haven't heard back from the man thus far, so....

@nntaleb @jsphctrl @dsquareddigest @jsphctrl @lorcanrk @dsquareddigest nothing scream credentials better than results boombustblog.com/reggie-in-the-…

— ReggieMiddleton (@ReggieMiddleton) April 25, 2013

@nntaleb @jsphctrl @mandycnbc @sullycnbc @cnbc 1 more thing, respectfully challenge @whelankarl to address this video youtube.com/watch?v=7gwCdg…

— ReggieMiddleton (@ReggieMiddleton) April 26, 2013

Last week I shocked many with several revelations in the post What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors? Well, there's more to the Bank of Ireland story than evades the eye.

BoI Boucher1-1

His statement appears to ignore the existence of the charges that were clearly delineated and illustrated in my previous post - What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors?
Below is a sworn copy of the affidavit for Richie Boucher, the CEO of Bank of Ireland. This relates to reducing the Banks Regulatory capital by almost 4 Billion Euro which was shared amongst its preferential shareholders – at the expense of the common shareholders.

You will see he states that the bank has assets of almost 155 Billion Euro. The bank reported losses of 2.1 Billion euro last week.

BoI Boucher2

Although he states that the bank has assets of almost 155 Billion Euro, it recently reported losses of 2.1 Billion euro, which of course materially reduces capital. This loss had to be visible from within the bank for Citibank (amongst other analysts) had bearish views on the company. I doubt Citi knew something that the bank management didn't!

This bid to raise capital for dividend distribution in the face of apparent and expected losses (Citibank had a bearish outlook on the bank’s operations, as did the CEO himself) appears to fly in the face of prudent operation designed to keep the bank as an ongoing concern. Further investigation supports reason to question this action.

Citi analyst on BoI-144

The institutional bank investor Wilbur Ross bought preferred shares of BoI, and benefitted from a windfall payout as BoI successfully petitioned to reduce its regulatory share capital amongst current and impending losses that it was confident it would be taking.

 Wibur ross butphoto-145

Wilbur Ross, et. al. made off like bandits, with the Bank of Ireland common people shareholders left holding the bag with millions in losses. We calculate Mr. Ross pocketed over $600 million dollars for this 5 month or so trade - and with relatively very little out of pocket expense or risk. He still owns the preference shares, after all - and still got the cash as well! Touche' mister Ross, Touche'. As for the common shareholders nursing that 2.1 billion euro (roughly 4.5B dollar) losse, I say the same to you that the big US bankers said to their clients during the 2008 debacle - Muppets! See Goldman's take on Muppetology to get a firmer grasp on what I mean and how the US banks consider nearly all taxpayers muppets.

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I calculate the Bank of Ireland taking even more aggressive losses in the future. Why? Failure to mark to market means Irish banks are carrying loans whose true saleable value are roughly 27% of book value. This literally means insolvency for many – and that’s without the recognition of the various charge issues illustrated within. I have documentation to back this up as well and will delve into it in a future post. In the meantime, review my previous posts on the topic or subscribe to download some of the speficic charge documents contained in the posts herein.

 Other hard hitting pieces on the resurgent EU banking crisis

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• As If On Cue, BoomBustBlog Shenanigan Research Gets Real In Ireland, Why Aren't These Guys Knocking On My Door?
• Are You About To Get Cyprus'd in Ireland? When A Single Word's Worth Billions Of Euros...
• Dear Ireland (& AIB), Haven't We All Learned The Problem Is Insolvency, Not Liquidity?
• Oh No! Is It Possible? A 3rd Irish Bank With Hidden Charges Not Revealed In Its Annual Reports?
• Ireland, You May Very Well Be Bust & I Make No Apologies For What I'm About To Show You
• The Next Leg Of That Counterparty Led European Bank Run Has Put On It's Running Shoe
• I Illustrate How The Irish Banking Cancer Spreads to UK Taxpayer & Metastizes Through US Markets
• Allegations Of Big Irish Banks Operating…
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