It was a mirage fabricated by other people’s money. There was no miracle; it was an overdraft
One of the most harrowing memories of the past few years is of my children, strapped into car seats, screaming the Harvey Norman ad — yes, you know the one — the most annoying ad in recent Irish history. Harvey Norman hijacked our radio airspace, screeching about cheap furniture. Nothing represented the boom in housing, the interiors fetish and the lower, more seedy end of the property porn market, than the repetitive Aussie belting out “go Harvey go”.
You don’t hear that much about Harvey now because the market has collapsed and with it, the demand for beds, kitchens and furnishing. On the good side, a generation of young Irish children will be spared the ads; but the huge downside is that many of the same children will be brought up in families and estates that will have been traumatised by this downturn.
Ireland is about to experience its first middle-class recession. The big difference between this recession and previous ones is that this one will have a dramatically negative impact on the expectations of a generation whose world-view was almost unquestionably positive.
Commuter towns such as Naas, Arklow and Navan are likely to be hit hardest and the people who will lose their jobs and, eventually, their homes are the very ones who bought into the boom most. They are the young working families, largely employed in white-collar jobs, who believed the hype and bought the new houses, complete with decking and barbeques, close to the top of the market. They are the Decklanders and Ireland is about to endure the great “Deckland Depression”.
A few years ago, it was all so different. Deckland, that vast expanse of new suburbs, which emerged in the past 10 years, was the most optimistic place in the country. It was young, energetic and despite the snobbishness of many commentators who believed that these new towns were soulless, Deckland was as vibrant and community-focused as any new suburb has ever been. If you dispute this contention, look at the growth of community organisations like the GAA or new school rolls in the commuter counties. Deckland was Ireland’s “Babybelt”; and for many thousands of people, Deckland represented a New Ireland, where people could settle, own their own houses and begin the great Irish process of trading up. Deckland embodied the essence of the New Irish Dream, where the population was on an upwardly mobile conveyor belt, propelled by the twin forces of easy credit and rising house prices. Everyone could be a winner.
Now all that is shattered and the dream is over. Unemployment is rising fastest in these areas, house prices are falling quickest and a recent survey indicated that the most insecure part of the workforce are young, heavily committed white collar workers.
The reason that Deckland has every reason to be fearful is that it is home to a much higher percentage of non-public sector workers than more traditional, older suburbs. This is because the public sector has a considerably older age profile than the private sector and therefore, safe public sector workers don’t, in large concentrations, live in the newest suburbs. Secondly, considerably more immigrants live in Deckland; as they leave to go home, house prices in these estates will collapse because there is simply no one to replace them.
Thus, most Decklanders work in the highly vulnerable domestic service economy, which boomed even as the signs from elsewhere were turning negative. Over the past few years, as Ireland Inc has become dramatically more uncompetitive, the domestic service economy managed to continue growing. This confounded many people. If Ireland was so uncompetitive, how could unemployment keep falling?
The answer is simple: it is all down to easy credit. If we look at the activities of the three largest banks in the country since 2004, we see that they all nearly doubled their loan books, funnelling money into the country.
To achieve these rates of credit growth, they abandoned all sense of banking decorum and borrowed heavily abroad. As a result, domestic spending went through the roof and Irish inflation rocketed. The prices of everything rose; as did wages. This massive increase in Irish costs was ironically most easily gauged by free-spending Irish tourists complaining to Joe Duffy about the great value they could get in Spain in comparison to home. The difference between a dinner for two in Spain and the same in Athlone, became the staple conversation of the new Irish middle class.
All this disparity was telling you was that Ireland was pricing itself out of the world market. We could only keep the show on the road by borrowing even more of other people’s money we didn’t have, to buy stuff we didn’t need.
We were all on the same trip.
Such huge spending meant the local service industry didn’t feel the global effects of our country going off the rails. Tax revenue, itself a derivative of all the borrowing, kept rolling in, allowing Deckland’s “group trip” to continue. No one could wreck the buzz.
Then the international banks stopped lending to each other and stopped lending to Irish banks, who, in turn, stopped lending to us. This had the effect of someone turning off the tap.
When people ask bewilderingly now, how did it all stop so quickly, the answer is simple, it had to stop quickly, because it was a mirage fabricated by other people’s money.
There was no miracle; it was an overdraft. This simple fact will plunge Deckland into a depression, because without inflated local demand there is nothing there to keep people in jobs.
Consider this one fact. Now all our politicians are talking about the need to switch to an export economy. But just think about how many people the exporting sector actually employs and then make a stab at how many people can be productively employed in a short space of time in this sector — even if they had the skills. The multinational sector accounts for 87pc of Irish exports and only 100,000 employees, whereas total employment is 2,000,000. So there are 20 times more people employed in the domestic sector than the export sector. Therefore, the export sector has only the most modest capacity to take up the slack caused by collapsing local activity.
Ultimately, Deckland is facing a depression. We are beginning to see the first signs of this in the official figures, but if you want to get the real story just drive out to the new shopping centres, to the Woodies DIYs and the Currys of the new out-of-town stores. They are empty now and next year it will be worse as we will see the total capitulation of the consumer.
What will this mean for the country? What happens when a generation is betrayed? How will the Deckland Depression manifest itself? And how will it affect Irish politics?
With this background noise, history suggests Ireland won’t be pretty; and one thing is certain, the new soundtrack of the suburbs will not include anything by Harvey Norman
Some good news for ye…. it looks like the pressure is mounting on Patrick Neary to resign…. http://www.irishtimes.com/newspaper/finance/2008/1212/1228864715315.html
I know its late but better late than never but maybe the establishment are starting to see the seriousness of the situation.
Quote….
GREEN PARTY chairman and finance spokesman Senator Dan Boyle believes key figures in the Irish Financial Services Regulatory Authority should consider resigning over their handling of the banking crisis.
Mr Boyle said that, in his opinion, Patrick Neary, chief executive of the financial regulator, had not done his job correctly.
Asked whether Mr Neary should resign at a discussion on the crisis at the Leviathan “political cabaret” in Dublin on Wednesday, he said: “I believe the man hasn’t done his job right and he should step down.”
Is Leviathan one of Davids events?
Q – Is Leviathan one of Davids events?
A – Leviathan is a self styled political cabaret run by ex-Libertas director Naoise Nunn with online discussions hosted by ex-Libertas Campaign Director David Cochrane website politics.ie
featuring David who has no affiliation with Libertas.
Written by James who has no web address……… colours to the mast, old chap
The Irish economic and financial situation is continuing to deteriorate….
http://www.independent.ie/national-news/lenihan-now-admits–economy-will-shrink-by-up-to-4pc-next-year-1572718.html
This is an official admission of a problem. That means that we can now assume that it will shrink by [at least] 4%. A lot of people are planning on leaving after Christmas is over. Mostly people with mortgages, already unemployed, and facing the dole. There will be massive closures in retail, construction, and the non-export oriented private sector. This will constitute a massive social shock to Ireland.
The state financial situation is getting dire. It is looking like there will be another budget before April Fools Day. Otherwise it will be too late, and we will need a bailout from the ECB.
We are getting a double whammy over the shopping up north push. It is a drop in expenditure in our towns and cities. Such an event should result in a consumerate amount of money placed on deposit in the banks, which would rebalance the banking system. At the same time the banking system will face into 2009 with increasing loan defaults in retailing. This means that the banking crisis will get worse, and there would be more insolvency. Currently it is eating into our trade surplus. Last year we had a brandname mania with people going to New York in search of the latest labels to show off. This year it is a surge for cheap booze to show off that we are still proud, still celebrating and still in delusion. Food prices are lower, but not to such a degree to justify driving to Newry, instead of the nearest discounter or public market. The drop in excise tax here will cause a massive headache in the public finances. ROI alcohol expendure is equal to food expenditure. But alcohol expenditure contains a massive proportion of tax. And this will not be available. Though we will probably still have the A&E bills to resolve, from all that booze. But the money is not being placed in the ROI Euro banking system. Which is a problem for the availability for credit to small businesses, and which will be the source of more unemployment in the New Year. Even if the banks are switching sterling into Euros while Brown continues to mascarade as if he is completely on top of the crisis in the UK.
If Irish people just put the money on deposit they might help balance an increasingly suspect banking industry. Basically a shaky banking system is getting it’s oxygen supply cut off at this point in time. It would seem that the latest craze to sustain the Irish lifestyle, is sending Ireland Inc. in the direction of more banking problems. The answer to Rip-off Ireland and the crisis is a change in the direction of funds. We might have to pay increased direct taxes, but we have to allocate funds where they are required in our society and away from triviality – which is what has occurred in the last ten years.
In the meantime, there needs to be a state policy on bringing doing costs down here. Starting with the ESB and local authority rates/charges. Both are ludicrously high. These are the institutionally entrenched cost issues. All other cost issues in Irish retailing will endure hard shock over the coming 12 months. Starting with the property/rents issue. This will be the next headache for our banks to deal with.
Everybody who recommends that the government ‘do something’ should reflect on the government’s ability to make an impact on the increasing problems being faced. They borrow money for current expenditure at increased rates. They are encircled by a range of vested interests. And finding out what is really going on in the banks is impossible, as they deal with organizations that are filled with people who were appointed as a result of nepotism and relationships. In addition, many government ministers are located in areas for which they have no training, or inadequate experience. Many have lost the trust of the public. And then there are the quangos. The Public sector and Competition Policy are the only aspects of state policy where the government can have any meaningful impact on fixing the national financial problem. And both these areas are a minefield of vested interests.
Garry – I am tempted to ask “Where has Dan Boyle been the last ten years – in Reunion ?” In fairness, at least he has the courage to call for a complete replacement of the top rank of the FSRA.
I also notice Mark Duffy calling for a replacement of the top levels of any banks that get bailouts. I agree. In fact it should have already occurred. But the problem is that announcements like this have a terrible restrictional effect on the level of transparency provided by said banks. Bankers start to hide things and do Enrons, in order to preserve their largesse. Better to remove them swiftly and with very little advance notice. Based on the articles recently by Shane Ross, they are doing a lot of covering up, as this stand.
Deco, I think the ability of the Irish to put sufficient amount on deposit is rather like weeing in the Atlantic. I think the issue of people heading to the north being unpatriotic etc is overblown. There’s little savings except on cheap booze and anyway we should be promoting cross border trade and make costs on this side to drop. This is what All-Ireland is about.
- Cost of PS needs control
- Management in Gov, Finance, PS needs review. Only now we are seeing recommendations for people to take a fall. A bit late – but it’s happening
- Increase direct tax – but only if the PS is under control, which it is not.
There is going to be close to 20% official unemployment if not more here before this settles. Let’s at least make sure the export sector is ramping and that government intervention is minimised except for Law & Order and health/welfare for those who cannot help themselves….Is this so impossible.
I hope Spring, Summer and Autumn weather will be good for all our sakes.
‘There’s little savings except on cheap booze’
With respect philip you are wrong about this. Families are saving huge on monthly stock ups of non perishables and provisions. The trip to the north for most families is a high spend low risk exercise which is why it will continue long after christmas. People are not only going for the savings but they are going on principle in my opinion. Retailers and Politicians have insulted their intelligence for long enough so a 120 mile round trip is not an issue in order to avoid being taken for an eejit. Something I think the Irish psyche abhors. To reverse this trend retailers in the south will not only have to equal the north in prices but drastically start undercutting it. If satisfaction leads to habit then the task will become even more of a challenge.
[...] enjoy disagreeing with). D.McW seems to need a jolt of prozac too, predicting the collapse of Deckland accompanied by rolling tubleweed and feral BMWs. It’s all just rather [...]
Deco > MK1 – firstly we need to stop fooling ourselves into …..
I agree with all that you say in that parapraph. I am under know illusion and fully agree that we (Ireland) are not ‘special’.
Fergus > Let us be clear on this. If the price of a house and the associated cost of living had not risen exponentially during the Celtic tiger era, then teachers and nurses would not have been looking for 11% pay rises. Everybody was “at it” for the simple reason that the Government prized electoral success over any moral authority or vision for this country.
But just like lemmings going over a cliff, just because everyone was at it doesnt mean that it was a good thing. And now that property prices are 30% off their top, are Nurses, Teachers and those in the public sector out protesting that they would like to have their salaries CUT by 30%? Well, you know the answer to that.
We have increased the cost of the public sector way beyond the means with which we have to pay for it. That is recognised, even by all in the public sector, or at least those that can understand basic economics. This problem was created on the way up, not just in the last few weeks and ‘revealed’ by oracle Lenihan. Getting the PS costs back to the level that it should be at will be hard and painful, and its a nettle that politicians dont want to grasp.
> I personally think the public service in this country is lousy, is that the fault of public service workers? The top of the public service is headed by our politicians,specifically FF/PD politicians, and they have shown time and again that they WILL NOT take responsibility for their actions.
Its the fault of BOTH politicians AND public sector workers. Its cultural. I dont believe it is ‘bad’ people per se. Its systemic. It wont be changed overnight and it may take decades. If it happens at all of course.
> Yet while the public service leadership is incompetent and unaccountable, can we say that the private sector equivalent is anyway different? However, the private sector also consists of banks, service providers such as the solicitors and plumbers mentioned above, utilities such as eircom …
Agreed, there are faults in the private sector too. Big ones. Massive ones. I’ve come across plenty in my lifetime and continue to do so. However, the “policing” of the private sector is carried out by the public sector. The inefficiencies in the private arena can be protected by vested interests who support the politicians who support the status quo and the subsequent inefficiencies. All in all, a sorry mess.
So, the situation is a ‘sick’ public sector, and a poor private sector. We need to fix them both!
We cant say, oh, the PS became too costly because everyone was ‘at it’ and gouging each other through the “boom” (mirage?). And now we (PS) are not going to give up anything.
Whats going to happen is a recession, with those holding on to what they can, its going to get nasty and painful, before we can become philosphical about it and enjoy the ‘squalor’.
Time for an uisce beatha methinks ….. I expect poitin will get a filip in the years ahead too.
MK1
ps: Another investment in “education”:
New engineering building for NUI, Galway
Wednesday, 10 December 2008
On Tuesday Minister for Education and Science Batt O’Keeffe announced that Government approval has been given for the €50m Engineering Building. The 14,200 square metre building will accommodate the College of Engineering and Informatics, which is currently spread across 13 separate locations, both on and off-campus. It will include ‘green-building’ initiatives, and will itself be utilised as a teaching tool for the students. The building will house 110 staff and approximately 1100 students.
if the Greens pulled down this gang it would be a start.
Perhaps we need an emergency coalition government of national unity ,comprising representatives from all parties.Such an administration could begin to address the abuses which have been well highlighted here.
The power of the vested interests,farmers, developers,public service unions etc has to be reined in somehow.
The people born and working in Dublin have suffered most from the property debacle.As David pointed out-when property became unaffordable, young families were forced out of Leinster into the waiting arms of the Fianna Fail speculators who have turned every town and village in Ireland into a planning disaster.
You were all fooled into believing the Celtic Tiger fairy story. Prepare for the descent into 3rd World standards of living. Believe it, this is a long ride to the bottom which is still no where in sight. Sell everything and wait till you reach the bottom, you will buy it all back at half price.
@ Soliders of destiny , I would agree here that we need an emergency coalition to sort this sorid mess out , yet at the same time letting those that got us here, there to unravel their errors made be catosphric.The old established parties and mind set is what needs to be changed here when you see this week they are now at local council level setting aside in their budgets for 2009 a fund for Councilors who don’t get re elected. This just shows you what a challange this country has on it’s hands !. F.F. know they will be in trouble at the local elections and here they are setting aside a fund which will give each non returned a hand shake of up to €40,000 . Where is civic responsibility here ? , should it not be a previlage to work for your fellow community and do they not already get enough through the racket of expenses ?
I would like to see Declan Ganley instead of running European canidates look at the local government , set down a mandate to the people and state clearly what they will do if elected.
Over the next twelve months we will have to borrow so much we will owe more than we did back in the 1980′s , and when you look what we have to borrow for , pensions for retired public servants and retired elected officials to keep these selected few in the life styles they have become used to is nothing short of a national embarrasment.
When you look at the attitude here of the qute hoore ( wrong spelling !) and what we got from Europe over the last decade to build our infastructure and then the sweet deals we have done to bring in international corporations , it will take more than twelve months to sort things out.
What has to happen also is those in Deck land have to sober up and become more active and question as many political decesions as they can , other wise we will go down a road where we will be in a financialy worse situation than we ever were before.
Our problems will not simply be solved by increasing the vat rate or making us pay more taxes , some creative thinking along with harsh decesions will have to be made.
“David your Decklander’s deserve to be exactly where they are ,as it is a situation of their own making”
This and the tripe following it in the post above is indicative of why Ireland gets into trouble time and time again. The mean-minded pleasure the poster gets with the prospect of people losing their jobs is typical Irish pumped-up snobbery (mixed with jealousy).
Lets create a scapegoat/stereotype (Decklander) then pick an ivory tower to look down from.
Not one positive suggestion, just delight at (and hope for) someone else to lose their job.
Sad. But that is why Ireland is the way it is.
David is on Matt Cooper on Todayfm at the moment
John ‘It was a mirage fabricated by other people’s money. There was no miracle; it was an overdraft’ Why can’t we get this into our thick skulls, it is reality. Nobody put a gun to their heads and said ‘buy that house or else’, free will played it’s part, a desperate desire to become middle-class got us into this mess. The unholy trinity are to blame too.
Great posts, great comments.
I read all of the past few weeks in one go and the main theme emerging is interesting- The recession tsunami has hit the shore and there is a search for the guilty, there is talk of revolution, revenge, demonstrations, demands for those responsible to stand accountable, the traditional elites and authorities stand shamed, disgraced, and there is a violent indignation sweeping the nation…the only positive outcome is a new sense of solidarity. It may be bad, but if the nation pulls together more closely it will be better in the future….?
However, there has been one great issue still not touched upon- and it is the most important!
WHERE HAS THE MONEY GONE?
There were billions generated during the Boom…where is it?
I can surmise it has been salted away off shore by the crooks who were the architects of the disaster.
As the Decklanders along with the widows and the elderly and the young and the vulnerable are told to brace themselves for hardtimes ahead…
I can tell you all on very good insider advice that the Four seasons in Ballsbridge D4 will be full tonight with a lot of people who have grown very fat indeed from the Celtic Tiger and they couldn’t give a Hoot about a recession.
..they have long since feathered their nests…..
Go back over there Ire and set off a smoke alarm for the craic…………………………….
Well, you cannot blame the young people who saw prices rising and rising (fourfold in 8 years in Dublin).They panicked sure-they borrowed, begged, and in many instances received a portion of their parents life savings, to fund the purchase of a 3 bed semi or worse-a two bed apartment somewhere close to Dublin,with the added millstone of lifetime community service charges (rates by the back door)
No worries about the refuse double taxation charges.it is all incorporated in one yearly payment.
The game suited “The Developers Party” to a tee.
Their golden pheasants thought it would never end!
Prestige “Trump Towers” style apartments in Ballsbridge, with one bedroom apartments starting at 1 million euros!!
Even the shoe shine boys (small builders) rushed to buy the now derelict sites littering the countryside from the happy farmers.
The global derivative/financial crisis, was the final nail in the coffin.
Ire_in_exile said:
“However, there has been one great issue still not touched upon- and it is the most important!
WHERE HAS THE MONEY GONE?
There were billions generated during the Boom…where is it?
I can surmise it has been salted away off shore by the crooks who were the architects of the disaster.
As the Decklanders along with the widows and the elderly and the young and the vulnerable are told to brace themselves for hardtimes ahead…”
Last week I read in the Irish Independent”:
“Although a banking report last year estimated there were 33,000 millionaires in Ireland, the Revenue Commissioners are only able to identify 12,300 people with incomes over €250,000.”!!
Should the civil servant in charge of Revenue go- along with the bank directors and the Financial Regulator.?
Maybe they are told not to look to hard for the big guys..
Heh Heh.
The guys over in Politics.ie (thanks for the link above James) have called DMcW the Red Adair of Irish economics.
Trouble is the folks in power here don’t realise we’ve a fire yet.
“Ger – u sed it. Popular delusions and the madness of crowds. An entire generation became lifestyle junkies, pumped up their arrogance level and went plain bonkers. They say that a proud man will fight and die rather than contemplate humbling his ego. This will happen. The decklanders number 1 loyalty is to a lifestyle. they are a lifestyle buyer group. A cohort of show-offs. Our energetic, aspirational, confident, liberal, no worries, trendy, selfish, narcistic, consumerist, brash, cohorts made the Modern Ireland and Celtic tiger. They supplied the labour, the skills, the expenditure, the arrogance, the group think, the norms, and the obedience. The obedience was almost ‘Somme-like’-as they rose like lemmings to the answer every advertising trend. This was a generation that wanted to express themselves before figuring it allout, to spend before earning, to have leisure before work, and to impress rather than tell the truth. The obedience is probably going, as they race past each other in SUVs up the M1 to Newry ?
They forgot something really important – in Ireland the economic system is rigged. And it should never be forgotten. In the heady haze of mindless pointless euphoria they consumed and were happy. And this made those that rigged the system more powerful and stronger. And Bertie Ahern said ‘long may it continue’. Now the danger is that they will find out what is really going on in this country. It will probably cause many people capable of working this society out of it’s problems into leaving the country for good. But the key thing for authority in Ireland is that the system continues to be rigged. That we will have no change without direction from those that control the banks, the monopolistically inclined commercial interests, the political establishment, the public sector unions, and of course the networks of nepotism/cronyism.
Maybe now we will have thought before action, saving before investment and humility before self-expression. Welcome to the Asian Century.”
an excellent comment here, however i think joining the euro without the brits was a major mistake, if we still had the punt it would probably be 30/40% lower than the euro is now, we need a much lower currency, i dont know the technicalities of trying to exit it, however i think the euro will also drop due to its inability to contain economies like germany and france on the one hand and spain italy and ireland on the other,
The Red Adair simile is only true up to a point. Adair was only called in by management when an oilwell fire was totally out of control. He arrived quickly, with total focus and all the equipment and personnel required to do the job.
DMcW tends to theorise about what could or should be done, but for whatever reason he seems to avoid getting his fringe singed by venturing too close to the seat of the fire. I think he is up to it, but I wish he’d get his hands dirty, collect ideas, advice and opinions from wherever he can, and prove he can produce an acceptable result.
Very interesting comments. I been reading for awhile now. Can someone explain how the overstretched state can help compensate the pork farmers for the pig problem. I know the EU is contributing, probably in exchange for a promised yes Lisbon re-vote.
Darkie,
Pig farmers vote FF en-masse, play polo in the suppliers fields and are generally related to local politicians.
Or something like that.
Furry, I fear this place has made you cynical.
Just to offer an alternative view, perhaps the pork bailout is slightly more palatable (excuse the pun) because it is saving an industry that wasn’t damaged through the willfull actions of all the actors in the market, but rather the (apparent) incompetence of one small link in a very large chain
Do they deserve the money? Maybe, maybe not. But they can, as an indigenous exporting industry, make a easier to justify a claim on.any bailouts going than some of the others we will see coming cap in hand over the next few months.
“the (apparent) incompetence of one small link”
Lorcan,
I still have problems with the link being call Mr Hogg.
A polo playing Hogg killed all the pigs.
I bet one of the Decklanders got their mortgage from Mr Barbeque the broker.
I think I need a holiday.
There is a lot of comment in this blog about the nepotism, back-scratching and free-loading of Irish politicians, as though we have to put up with a shower that would be consigned to the democratic trash-can anywhere else. yet although our lot may not be angels we should be glad we don’t live in the State of Illinois, or even worse in Germany the power-house of the EU.— And remember, we are being invited to endorse this lot in a new Lisbon referendum next October.
To read just how inbred politics in the EU can become, read the brilliant comment on Martin Wolf’s piece about the Eurozone by Achim Duebel:
http://blogs.ft.com/wolfforum/2008/12/the-eurozone-depends-on-a-strong-us-recovery/
I should be interested in the opinion of DMcW blog correspondents who live in Germany about this piece. Do they find German national politics even more anti-democratic and inbred than ours in Ireland? If this is the case and we sign up to Lisbon, then God help us.
Malcolm, I was at the Leviathan event on Wednesday where Michael O’Leary had a very good answer for the politicians.
“F**k them. Let them flap their lips. We’ll get on with business, like we always do. A politician’s job is to get elected, our job is to do business.”
On a lighter note, found some bedtime reading for the economic incompetents in the current administration. It’s a bit of a fairy story, so they should be on familiar territory.
http://www.ft.com/cms/s/0/a2321930-c65f-11dd-a741-000077b07658.html
SoldiersofDestiny – Concerning the 33,000 millionaires in Ireland officially listed in Ireland, which have ‘disappeared’. Well it seems there is a hideaway in Portugual, centred around the Quinta do Lago resort – owned by Denis O’Brien. You could call it “Ballsbridge in the Sun”. SoldiersofDestiny – you should go there – just to find out exactly what these people have been doing, and the politicians who make it possible for them.
Their activities are sometimes described in Pheonix Magazine, and occassionally in the Sunday Indo. Shane Ross makes the odd attack. But,they are smug and having a really swell time. Guinness on tap. Champers for occasions. Golf. Rugger on the telly. Old school jokes. Backslapping each other. Recalling the tales of old. Cigars. Whiskey. More rounds of golf. Executive taxi service. And most importantly surrounded by like minded people. Plus the odd visit from the accountants and lawyers. Fly home to do a deal. Fly back to the Sun and the fun. Throw in the odd high profile charity event, just for appearances sake. The duplicity, is the only thing that is sincere. I presume that the Revenue Inspectors would not exactly be welcome there. The resort owner claims ““My interests now are outside Ireland”. Which is increasingly the case with the rest of the resort also.
Of course Quinta la Lago is not the only resort. There are others, no doubt. But I think you get the picture. A different world from the drudgery of commuting from some dead end Midland town with no facilities, to a job in West Dublin where the pace gets faster every year. The problems of contemporary Ireland are completely out of view, and forgotten about. A guilt free zone for wheelers and dealers.
Ire_in_exile did you see Eddie Hobbs on the late late show? He has a way to rake in a few billion to match what we used to have rolling in to the coffers in stamp duty from house purchases: Tax all public sector workers a benefit-in-kind tax for job security, especially those earning over 50,000 euros. Also I think we should limit availability of the dole to non-nationals to 6 months. They have a similar scheme in the USA. Not to mention non-nationals being sent to prison here which costs a fortune.
John Q, I think the Hobbs idea is not half bad, most of his are fairly OK. But I’m not at all certain on the second part where you advise sending non-nationals home to prison. There is something thin end and all that, for it is not much of a leap to sending all out of the area to a cheaper prison environment. It is a bit ‘fields of Athenry’.
And to clear up the earlier comment of mine. I hold we have a very European view on Debt, but only for some people. And while we play the USA game with money and the old vision to debt then there will always be tears.
We need to see this situation as a massive revaluation. Where when things shake themselves out most will be socially exactly where they were before. With the lenders extending to all a sort of half repayment and doubling of the time. Not for the first time.
Deco said:
SoldiersofDestiny – Concerning the 33,000 millionaires in Ireland officially listed in Ireland, which have ‘disappeared’. Well it seems there is a hideaway in Portugual, centred around the Quinta do Lago resort – owned by Denis O’Brien. You could call it “Ballsbridge in the Sun”. SoldiersofDestiny – you should go there – just to find out exactly what these people have been doing, and the politicians who make it possible for them.
Thats interesting Deco, so Portugal is to Irish fat cat wheelers and dealers- what Ireland is to American multinational tax dodging corporations.!
More seriously though if golf is not your consuming passion and one wants to reduce one´s intake of Warfarin in old age,
I recommend a poor mans tax exile Island where VAT is 3%!
Here in Gran Canaria (my abode) the sun shines all year, the temperature never drops below 18 centigrade,no heating bills, the wine is almost free,the obligatory 4×4 costs little more than a VW golf in Ireland, the fuel is 70cents a litre (today), there is an abundance of fresh and frozen fish in the Supermarkets (half Irish prices)-need I go on.?
One friend of mine who lives here is a retired Irish civil servant .He bought an apartment(one bedroom) last year for 70,000Euros, and frankly he does not know what to do with his index linked pension(70,000 per annum and growing..
That gets taxed in Ireland of course),but reality is, even a poverty stricken couple living on the basic Irish old age pension could live like a lord here..
Forget Quinto De Lago-when you retire (or are made unemployed) here is the legendary Atlantis-its as good as ever.!
From the Indo today
“The Government willl have to bring new legislation before the Oireachtas if it wants to use some of the €18bn in the National Pension Reserve Fund’s (NPRF) coffers as part of a re-capitalisation of the troubled banking sector.
It is understood that new laws will have to be enacted to empower Mr Lenihan to direct the seven-member National Pensions Reserve Fund Commission to use the funds.”
Since Young Lenihan has rumbled Anglo’s backdoor attempt to get the government to buy shares the D4 crew must be in a state of chassis. Anglo must be finished come next week.
Now, if the NPRF is the repository for our old age security, I don’t see, when the markets don’t see fit to prop our banks, why our national savings should be poured down that plughole either. The statement above infers a fait accompli with new laws being enacted to allow the pillaging of our pensions.
And who knows for sure that they’re worth 18bn anyway?
This is Decklanders chance to stand up and say no. The last safety net the country has for its old folk is about to be sucked dry to keep the show on the road for D4.
But with a clever bit of media manipulation, we’ll be too busy talking about Lisbon to notice.
Furrylugs: It seems likely that the problem with the pensions will be even worse than you have expressed. As I pointed out previously, it is extremely unlikely that this €18 Billions is sitting under a floorboard in Leinster House. Where is it, then?
If it is in securities somebody is in for a big surprise. (Check out Shell’s pension fund in Holland.)
If it is in Irish banks, you can’t use the same money twice—even though you have ‘guaranteed’ it.
If it is in Madoff’s Hedge Fund then it’s ‘Goodnight, Irene’. (Or maybe Goodnight, Nicola Horlick, former superwoman).
It will be interesting to see what happens next.
National Pensions Reserve Fund
Quarterly Performance Statement
30 September 2008
Figures are unaudited.
Returns are measured on a time-weighted basis. This eliminates the impact of external cash flows on performance
Asset allocation is based on amounts allocated to each investment manager and includes cash and other net assets held.
Small cap equity figures relate to the Fund’s dedicated small cap equity mandates only. The Fund’s large cap managers also have limited discretion to invest in small cap stocks.
The cash figure includes the unrealised gains/losses arising from the Fund’s long term strategic foreign currency hedging policy.
GTAA = Global Tactical Asset Allocation.
This is the caveat blurb on the NPRF website which I don’t pretend to understand for one moment but if you look at the investment split there’s a lot of names that have cropped up here previously as having been under pressure.
By what benchmark can they say they have 18bn given the current destruction??
Furrylugs: I just hope for everybody’s sake that the NPRF didn’t dabble in the Alternative Investment Fund scene. According to Irish Times Dublin-based Pioneer Alternative investments has lost heavily on the Madoff scam. But how many of these funds are viable in present circumstances?
St Patrick is said to have banished snakes from Ireland but it seems a new nest of vipers has been introduced to Dublin in the form of these Ireland-based Alternative Investment Funds.
Its worth taking a look at their prospectus:
http://www.irishfunds.ie/content/alt_investments_doc_2007.pdf
From the FAQ it would seem that Las Vegas is better regulated than these serpents.
Thanks Malcolm.
Now David you have a job to do. Tell this how it is. We have sat here for the last few months coming to the point of infinity and it appears that generally we here agree on your stand.
Stand young man.
Make the forum.
2009 is a year for leadership.
Lead.
Furrylugs: I discovered that NPRF’s investments are handled by a London-based Pension Investment group called Hermes. They also invest for the British Telecom Investment fund, where they place 20% in Alternative Investment Funds and 33% in International Equities. If their strategy for NPRF is similar, it must have taken quite a hit over the past few months. In any case, I think we should be told its current valuation, and whether its holdings will be sold or used as collateral for another loan to save the banks.
Right now Malcolm and everyone else that wants to make a difference. We couldn’t do jack about anything else but we could do something about this.
No way should raping the pension fund be taken as a fait accompli but first of all, what is it worth. I’m very aware David that previously you supported the bailout via the NPRF but given the level of disinformation to date, what is your position now?
Todays SBP article answers my question above. It’ s not possible to be any clearer than that.
Good man David. The country owes you a debt of gratitude that will only become evident in time to come.
Is anyone of any authority taking any heed though?
soldierofdestiny – they are centred around Quinto da Lago, because it an upmarket resort. Basically they want to be with their own class of people. Being tax resident in Portugal has had major advantages concerning the capital gains tax. And most of these Irish ‘exiles’ are in Quinto da Lago to avail of this. But what capital gains. Well, capital gains relating to rezoning, and property development. Brown envelopes and all of that. They represent a sizeable proportion of Ireland’s wealth. McCreevy cut the capital gains tax, because he could not control them, or tax them. This was so that they would shift their business accounting home. But they already had the resorts, the networks and a taste for the good life. I am talking about the kind of people who would never be seen in a 70 grand apartment. An apartment that ‘cheap’ would result in the wrong sort of neighbours. This resort never advertises, because it never has to. It is a magnet for wheeler dealers. As I say, it is Ballsbridge in the sun.
On a more serious note, we have tribunals to investigate planning corruption. But they are hopelessly inefficient. They are also extremely expensive. They prosecute nobody. I think that this makes completely ineffective. We need to get this resolved. It would make Ireland a better place to do business.
Also our media laws are extremely censorous. The country is awash with rumours about certain banks, certain politicians, certain branches of the HSE, certain local authorities all being intensely dubious or corrupt. But it actually makes people very despondent that nothing is ever done about it. I mean I have met Italians living in Ireland who tell me that there is more corruption in Dublin than in Palermo. Our legal system has been completely ineffective. It needs to made more effective. The Irish legal system has become even more cumbersome now, than when the vast majority of the population regarded crime as an offence to Almighty God, and an invitation to Divine retribution. Some time after CJH appeared on the scene societal morality and respect for others just evapourated.
Now, it seems that there is a lot of immoral behaviour, in Ireland, but none of it is ever classified as criminal. There are too many in our society who regard crime and law breaking as some kind of civil right and entitlement. It is no wonder we are becomming a dysfunctional society, with an increasingly dysfuntional people. Maybe this crisis might wake people up. But, I expect some sort of control mechanism/argument to prevent it happening.
VincentH – concerning our debt culture. For many people who are living the American (sunbelt) dream, Californian style debt facilities are an essential prerequisite. This only appeared in Ireland after 1998. In 1998, property mania, and the binging started. Which incidentally was the first year of Bertie Ahern as Taoiseach. I would contend that since 1998 was the beginning of the official madness in many areas of public policy in Ireland. Until then, the memories of the hard times restrained any stupid experimentation with personal and national finances. Bertie Ahern played the feel good factor. It definitely resonated in Dublin. And spread into surrounding counties. And these constituencies gave Ahern majorities.
Somewhere between Mullingar and the Atlantic however, the Ahern charm had the exact opposite effect. Counties that had previously been Fianna Fail driven, became sources of all sorts of misgivings. We had a stream of TDs representing Western discontent. A signifigant quantity of voters switched to Independent candidates and Fine Gael. It seemed that West of the Shannon people were completely unimpressed with Ahern.
We should thank the electors of these counties, because they acted as the conscience of the nation, more than any other. I know that the West has areas that have massive outmigration, bad wages, and dire public services. But the West was awake. It was the rest of us that were collectively asleep in the midst of all the BS euphoria that dominated our society over the last ten years.
Did Lenihan consult those of us who are paying PRSI, concerning his proposal to put our PRSI money into that clown circus, ANIB ??
Look, there is a thing called the market. It seems to apply to unemployed brick layers. But not to incompetent wreckless bankers. This is absurd. I am a PRSI tax payer – and I do not want my PRSI duties being put into a bank managed by a bunch of turkeys. I am sure many others feel the same. I am deeply suspicious about the ANIB trading figures. Were they played around with so that ANIB would look like a good investment for the taxpayer ? I consider ANIB a bad deal for the taxpayer. I could be wrong, but the bank needs to be thoroughly investigated by the state. And the FRSA needs to be completey overhauled, before that can happen.
There needs to be more transparency concerning ANIB, before this is allowed to happen.
Deco said;
“SoldiersofDestiny – Concerning the 33,000 millionaires in Ireland officially listed in Ireland, which have ‘disappeared’. Well it seems there is a hideaway in Portugual, centred around the Quinta do Lago resort – owned by Denis O’Brien.”
While you mention Denis O´Brien, is he not the most high profile example of where all the wealth generated during the Celtic Tiger years has gone.? I know these big wheelers and dealers hate to pay 40% capital gains tax-and never did when it was part of the tax laws.
It was finally reduced by half to encourage them to leave something behind for the running of the country: Health ,Education,Civil Service etc.
Did this work? hell no-as you say they scarpered with the lot.!
It is ironic that Mr OBrien made his vast fortune by laying telecommunications cables on taxpayers property! (C.I.E. rail lines)
Here is Spain the capital gains tax is still 40%. However almost nobody declares the full value of a property sale on the “Escritura”.(Bill of Sale)
A brown envelope changes hands outside the Notary´s office with up to 50% of the transaction in hard cash.!
(Thats why there are so many large safes in most houses in Spain.)
I often wonder how the property wheelers and dealers here laundered all the money during the change over from Pesetas to the Euro!
No doubt the banks here facilitated them and the authorities turned the same blind eye-as the Irish government did to the “missing” 33,000 irish millionaires.
The Spanish authorities know well it goes on-but refuse to lower capital gains tax to encourage more compliance.
Perhaps in many cases it would make no difference anyway, if they did-like the irish experience of the Mr O´Briens of this world-human greed is a voracious animal.The wealthier the animal-the greedier it is.!!
So why exactly do we need 22% capital gains tax apart from to make people feel like the wealthy are being taxed? Why is 22 somehow ideal whereas 10 or 15 is a problem? Of course it makes a difference when you lower CGT as, if it didn’t, we wouldn’t have all these bloody Irish tax exiles taking their profits from company and property sales out of the country. The rich will, reasonably enough, weigh up the financial advantages and disadvantages of being resident in any particular country. Stable regime, membership of the EMU, tax rates (not necessarily in that order!). The end result of our tax regime is that the middle classes bear the brunt as the rich have scarpered elsewhere. FF constantly talked about the need for a low tax regime but it applies in specific cases. Corporation tax, those benefitting from a number of property and commercial tax relief schemes some of which were over long and perhaps misguided… We should have moved to repatriate some of our tax exiles and attract some new ones.
Take artists paying 0% income tax up to 200k under a scheme (which they actually need to register for). Artists generally struggle and even the rich ones have normally floundered for a while before becoming successful. However, by ramping up the tax after 200k we lost some potential tax revenue to countries with lower tax rates. We can debate the morality of a band like U2 basing operations elsewhere for tax reasons but let’s assume we’d introduced a 5% tax after 200k.. U2 had tours and record sales of 255 million dollars in 2005. Assume that half of that was overheads and we get around 130 million USD. Let’s take a 1.5 Dollar:Euro rate. This is just for illustration purposes and we get a rough estimate of income tax at 4.3 million Euro. Would they pay it? Possibly but they certainly won’t pay 40% or more.
Admittedly we encourage inventors to live here through tax reliefs BUT this gives rise to some very banal process patents which are not technically income substitution but…
Then there’s the stud farms. It really is all or nothing in our attitude to personal taxation?
Now we have levies which are taxes by another name. The middle classes and the well off will suffer. The super-rich won’t suffer. Compare us with somewhere like Hong Kong where wealthy ex pats pay around 3% income tax & they don’t leave. Our income tax policies cost us money and opportunities in the long run. Our corporation tax rate is better but still faces tough competition. Especially seeing as Irish-based companies have to pay people more to cope with how bloody expensive our over-taxed goods are here.
We’ve an opportunity for tax reform here as we have an overly complex system which requires thousands of civil servants to administer, Across two governmental departments. ultimately creating the need for higher taxes. Although in the current system the government takes a huge amount of tax revenue and pays the civil service who pay back the tax revenue to the government, processed by more civil servants. This feedback of revenue encourages pay increases for the public sector as the government knows that when they’re spending, most of the money comes back anyway. So what happens when they (and everyone else) stops spending? Big deficit.
Well, then we’d be better off with lower public sector wages so freezing public sector pay for a while and actually reducing tax rates would possibly be better than the proposed levy. The national pay agreement generally gives the illusion of wealth as it creates inflation and now corresponds with these levies.
All this in a country with one major city and a population the size of some US cities . Nuts!
on the 33,000 millionaires….. A lot of these characters were paper millionaires and given the recent declines in property and share prices, may now no longer be millionaires. Simple as that… it doesn’t always have to be corruption or government incompetence……
David – I read your latest article in the SB Post. 100% in agreement. The taxpayer as shareholder, should get better management for the six banks. We need to do it now. If Lenihan does not get this right, he not be a TD in the Dail. Basically Lenihan’s career is on the line – either he gets rid of the pretenders running these banks, and ends their careers, or Lenihan’s career will be over, and Joe Higgins will trounce him in his Dublin West constituency in the next election, with Higgins bringing in a second candidate.
Lenihan’s career is on the line. The Irish people, will not forgive him for dithering in the manner, so descriptive of the former Taoiseach. Dithering is not acceptable anymore.
David – thank you once again, for telling it as it is.
http://www.independent.ie/national-news/lenihan-we-didnt-notice-the-downturn-1574408.html
rep ipsa loquitur
jack
David,
I dont think anybody wants to read your article in the SBP today.Its to frightening.
Apocalypse now ? Iceland Mark two..?
If it happens, the messenger will get shot.
Dont bother applying for any government jobs-or directorships now or ever-your a dead man walking..
I’m pretty sure most of these tax breaks were suggested here by david or the thriving group of commentators that flock to dmcw.ie. Maybe someone is listening after all!
http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=NEWS-qqqs=news-qqqid=38238-qqqx=1.asp
Yes Shane, good to see this “new innovation fund” is being prioritised by the Taoiseach and his advisers.
These are some easily implementable and maybe ‘quick win changes’ to increase volume of businesses generating export revenue from Ireland and in turn economic activity producing additional tax revenue.
- Promote heavily the fact BES is now applicable to all SME’s in the EEA region with a ‘qualifying Irish operation’. Opportunity to attract innovative companies from all of Europe and the world to trade from Ireland.
- ‘Income’ Tax remission for ‘start-ups’ as well. Most would have a better chance of developing if did not have to pay income tax in early years as it built value and recurring profitable income from customers.
- ‘Innovation fund’ for international businesses trading from Ireland. Opportunity to capitalise a fund servicing export businesses and become the intl leader in financing innovative companies with Irish ‘qualifying’ operations.
Hopefully the fund will have a ‘wide’ defintion of R&D as we have not created export sales from ’4th level’ R&D ?
Is tomorrow our Black Monday?
Between David’s SBP article and RTE’s documentary on One, its possible that the penny may drop with the great unwashed. I notice sales of the SBP up in recent months, if I’m not incorrect. Maybe the cleaner version of the truth is being sought out.
Rumours of visas and pass cards not working anywhere in Portlaoise on Friday/ Saturday. BOI in Tullamore had ‘electrical’ issues and was closed for the whole of Friday.
Black Monday anyone? I hope not.
If we were to 100% accept the dire future ahead of us, worst case scenario post Obama, then we could perhaps mobilise to an export future that targetted the only hopes of growth, the Asian domestic economies. Recognise the 10 year mess we’ve got ourselves into and have a 10 year national plan to get us onto a much more stable footing. All this media /political talk of a 2 year recovery is just ridiculous. Recover to what?? To the mirage?
Shane, re your link to the article in the Sunday Business post
http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=NEWS-qqqs=news-qqqid=38238-qqqx=1.asp
the plan reminds me of a previous quango type operation (similar to that now proposed by Fianna Fail a a bold new economic plan to save the nation) called “The National Digital Research Centre” set up by Bert some years ago, before shortly afterwards plunging into ruin and oblivion, at great expense to the usual victim-the sufferin taxpayer.!
Here´s the link: History repeats itself. http://www.soldiersofdestiny.org/celialarkin.htm
The government are giving 10 billion of our money to the banks! Surely now the people who are indirectly trying to save the banks have their mortgages slashed across the board? The banks will say its a legal agreement between the mortgage holder and the bank. Surely that goes out the window if they have been bailed out by the people whom they are holding to ransom?
Ironic to see all the fuss the government are making over the potential takeover of Aer Lingus by Ryanair to avoid a monopoly. And they seem not to care about the biggest monopoly of all that is crippling the spending power of much of our population. That is the mortgage lenders monopoly which FF have supported
Have the balls Cowen to cut the mortgages or at least give people who cannot afford their houses/apartments to drop the key back carrying no debt and boost sentiment and give us optimism to take a new direction….AWAY FROM PROPERTY
Amazing announcement tonight of a recapitalisation programme for banks of up to €10 billion. How can the Government who is not a ‘shareholder’ (but guarantor of all their debts) annouce that about PLCs whose combined market value is €3.5 billion (AIB,BOI, IL&P, ANIB) – why not say we own them since they plan to underwrite!
You can buy all for less than €4 billion at market value but how can they say no more than €10 billion is required now ?
Where is the Financial regulator / Central bank – within 10 weeks of the ‘guarantee’ to save the banks, so no ‘changes’ for another 3 weeks at least as the banks have been asked to submit their proposals in early January -so no certainty or decsion yet. Maybe the markets will dictate that this will all have to happen before Christmas ?
Yes, its a joke. Why not take majority shareholding and then throw in the money? Crazy. It shows that the tail is still wagging the dog.
This gets to the stage when we have to ask fundamental questions about society and taxation. If the government is not acting in the clear interest of the Irish people as a whole, then fundamentalists and extremists will start to pop up, just like the old days. And why shouldn’t they? If you’re looking at a disenfranchised 20-30 years ahead of you, you may start to take directions previously unthought of.
Deco hits it consistently on the head. Its about the rigidity of the structure that simply hasn’t changed since the State was formed. You can have crumbs from the table, reagan & McCreevy style, but don’t you dare put your paws on the table sunshine!
The gravy train rolls on for those suntanned sh1theads….
I’m repeating myself I know and I’m going to. Our Constitution prevents our Government allowing one distinct sector gaining prominence to the detriment of the State as a whole.
They just cannot do as they want or if they do, just rip up the constitution.
I would be the first at the barricades to stop civil disorder. It doesn’t work. Ask John Hume.
Neither does more extreme action.
Ask the British Miners. Brother and Sister against one another. If this is set and the die is cast, God help us.
I know only one thing for certain and that is row in behind peaceful dialogue such as we have here. Maybe they’ll listen and if they don’t or won’t, then God help them.
I’ve never faced into a more uncertain New Year.
Just wait until you’re reincarnated as a pig or a turkey or God forbid, a Green councillor.
As a man in my late twenties I used watch you on TV years back, The Agenda, I think was the name of the programme. I listened to you then & never stopped listening to you. You are a remarkable guy who’s helped me avoid the property trap of last decades banking madness & as a consequence to have more than the average Joe put aside for the storm …
I would love to hear your advice for a Joe like me, private sector paye, renting at less than e300.00 per month in a 3-bed burb in Maynooth, driving a 10yr old diesel, no debts, and with >50k resting in the banks …
“on the 33,000 millionaires….. A lot of these characters were paper millionaires and given the recent declines in property and share prices, may now no longer be millionaires. Simple as that… it doesn’t always have to be corruption or government incompetence……”
Garry, you are dead right, and I know a few of these characters, they now owe the banks money, and they are getting very little sleep. One in particular,he looks to have aged about 20 years in the last 12 months.
“Surely now the people who are indirectly trying to save the banks have their mortgages slashed across the board? The banks will say its a legal agreement between the mortgage holder and the bank.”
Sorry, but are you saying that only mortgage holders are indirectly saving the banks? I should point out that those of us who didn’t get caught up in the property bubble and buy something we couldn’t afford are also going to pay for this, and no-one is offering us any money.
P.
Thanks Paul for noting that. I forgot to mention that as well as I was preoccupied with the obvious:
“The banks will say its a legal agreement between the mortgage holder and the bank. Surely that goes out the window if they have been partially bailed out by the people whom they are holding to ransom? I say partially as now all those who own no property are going to help pay the bill”
So, bh, are you agreeing with my suggestion that if mortgage holders are bailed out, then non-mortgage holders like myself should receive a big wad of cash in lieu? This certainly would be a great Xmas present.
P.
I wish that was the case Paul as I have been renting for the last number of years and was not fooled. No we should not be given a wad of cash if the government were to bail out mortgage holders/option of giving key back
Answering this question links to my disgust of FF and overall right wing policy post 2002. All ‘wealth’ from Irish property has been credit based. It is not ‘real’ money.
The damage that this credit money has done has been to drive up prices and alienate communities as 1 person per car drives back in 2 hours of traffic to some ugly box apartment in the back arse of nowhere.
Now the country is in a situation where some people can barely afford the houses they live in. The vast majority of these are honest decent paying tax payers. As many are losing their jobs, their lives are now based around keeping their homes. If they lost their homes currently they lose credit rating…….according to the banks who are being bailed out by the government!!!!!!!!!!!!! This is a joke. An absolute disgrace.
And why are Mortgage holders in this situation? Because the government had no guts to ban interest only mortgages and releasing equity years ago like other Western countries did. They were busy enjoying their stamp returns.
And who voted in the government. The people of Ireland!
Their predicament is a lot worse than ours Paul and we need as much taxpayers money to keep this country going as the private sector is not up to much. Bear in mind their predicament was created by the banks and the government and who voted in the government?
Sorry, bh, but I completely disagree with you. I bought Eircom shares back in whenever, and like an eejit sat on them and lost money. I took a chance and it didn’t pay off. Sucks. That’s life.
Roll on several years, and people paid over the odds for investment properties that they knew could never produce a decent rental income. Some of these people were buying several properties in tandem, ploughing the incomes from one property in the mortgages for another.
And yes, the banks gave these people money, and the newspapers had lovely shiny property sections, and RTE had Nobel Prize-level economic geniuses saying that there would never be a property crash as she didn’t “think any government can afford to let that happen” (http://www.rte.ie/tv/househunters/webchat.html)
But people have free will, are not sheep, and do not have to do as other people tell them. I mean, there’s an irony as we’re here talking about this on the very blog of one economist who warned us about it.
The summary of the summary: I would rather emigrate than hand some dopey Canny McSavvy’s my hard earned cash.
P.
Thanks Paul, Completely see your point and agree in many respects but if I were to ask you the question, what can be done for the homewner who purchased in the last few years? (Leave aside the investor with his 10 houses who is a different species all together as reflected by law).
He/she bought to own a home as opposed to a gamble to make money. It was not a like a share. They want to work and feed their families but instead are now victims of the monopoly of banks backed up by the goverment (who are obsessed with stopping Ryanair taking over Aer Lingus to avoid a monopoly!) We need these people to help grow this country. If its a case of “tough luck its a free society” well then we will forever have problems in this country. We have to move back to the centre as opposed to have gone so far to the right.
bh, if we’re not talking about investors but those who bought a home to live in, then I fail to see why they need bailing out either. Even if someone bought at the height of the boom, if they bought it as a property to live in long-term, they haven’t “lost” anything. Sure, they over-paid, but they we all overpaid for goods in the last few years.
Could you tell us what exactly you are suggesting should happen?
P.
Paul – I dont think anyone can tell you what should happen now because we have a minister who fudges the facts on everyone and will not empower us the electorate to make up our own mind – so the goal posts are changing daily …..the only thing we do know is that we as a nation are seriously in big big trouble and everyone will pay an enormous price in new year ….lots could be done now if we had a transparent minister who is honourable and that we could trust
Paul, my logic is that thousands of homeowners are on interest only mortgages paying for something that is only ‘worth’ what it is because of this disgusting credit culture that was allowed to run rampant. This plays perfectly into the hands of the far left who see this as a collapse of the capitalist system.
Next year this plastic wealth will continue to evaporate, unemployment will rise, and many people will have to skip their mortgages, with less money available for our schools and hospitals.
As regards what we could do regarding houses:
Allow those who cannot afford their homes to hand back the key without any loss of their credit rating (how can banks have the authority to judge anyone financially now?)
The state should take the key and not the bank.
We need to focus our energies on the things we are good at. Food, Drink, Hospitality, Tidal Energy, Wind Energy, Technology and Ryanair!! We have got a lot of things going for us.
But if people continue to quibble over houses and banks we are f***ed
Meanwhile the East continues to progress.