Murphy's Law, Kelly's Corollary, Part Deux: Irish Banks

OS mentioned this yesterday, and the news is beginning to trickle in.

If you don't believe OS, check out today's Irish Times front page. That unemployment number is pretty chilling. We don't think it can happen here?

(Click to enlarge..)

Kelly's Corollary--Murphy Was An Optimist: The Irish Banks Admit The Extent Of Their Losses

Murphy was Irish, no doubt about it. And, in his honor, that black-humor classic 'Murphy's Law' has attained immortality. There are many versions of it floating about, but it goes like this:

1. If anything can go wrong, it will, at the most inopportune time.
2. If there is a possibility of several things going wrong, the one that will cause the most damage will be the one to go wrong...first.
3. If anything just cannot go wrong, it will anyway.
4. If you perceive that there are four possible ways in which something can go wrong, and circumvent these, then a fifth way, unprepared for, will promptly develop.
5. If everything seems to be going well, you have obviously overlooked something.
6. It is impossible to make anything foolproof because fools are so ingenious.

The list stretches on, but OS's hands-down favorite is Kelly's Corollary: Murphy was an optimist.

All this as an introduction to Robert Peston's most recent droll post on the basket case that Ireland has become.

To prevent Irish banks toppling over one after another, the European Central Bank has lent €117bn to them and the Central Bank of Ireland has lent them a further €71bn. So that's €188bn of loans from the eurozone's taxpayers to Ireland's banks - which makes the €67.5bn lent directly by the eurozone and IMF to the Irish government look like peanuts.

And a further €20bn of bank bonds - another form of bank debt - is still guaranteed by the Irish state through the Eligible Guarantee Scheme.

So that is €208bn of taxpayer loans to Ireland's banks - equivalent to a remarkable 154% of GDP.

It gets much worse, in the tradition of Murphy, and OS hopes you take time to read the entire essay.

Today, the banks will have to announce the extent of the damage that has hitherto not been discussed in public. And then, some hard decisions will follow. The illusion spun by The Left that there is no problem, that the massive debts aren't deleterious to a culture's health, that we can just go about business as usual--is just that, and is finally seen for what it is in Eire.

When will our leadership admit the same in the US? Not anytime soon. The story about Chuckie Shumer coaching everyone on the party line within earshot of the press would normally be funny, but the time for laughter has long passed.

Tuesday's effort by the House GOP to wind down the HAMP program, a scandalous failure, in order to save a few billion and protect homeowners from disaster, was met with scorn and vitriol by House Democrats today. It was like watching bad opera, with Barney Frank holding the big spear, wearing the horned helmet.

By noon today in the US, we'll have the news. It will be interesting to see if the markets have any reaction, at all, or even a moment's reflection on what it means.

OS ain't holding his breath, but he sure ain't sitting long on the market either, if yuh know-whudd-I-mean.