April 21, 2010

The great property scam is back to rip us off again

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They’re back! The creeps, the snake-oil salesmen and spoofers who condemned a generation to negative equity are cheerleading again.

The advertisers are salivating too because the “property porn” industry sees a chance to sell its fantasy again. The papers are once more displaying “dream homes” replete with doctored photographs and Mediterranean blue skies — all at “knock down” prices. It’s time to buy again, or so I’m reliably told by those who were so reliable last time that they gave us NAMA!

I am not saying that property won’t recover ever, of course it will; but not from here. Irish property is still extortionately expensive. It is expensive not just on a comparative basis but, more crucially, it is expensive on the basis of what is happening in the economy. Any government that is urging people to buy houses right now clearly has no intention of learning anything from the mistakes of the past few years and therefore is condemned to repeat them — with catastrophic results.

If you were a Martian economist and were asked to put together a blueprint for how Ireland can learn from this boom/bust travesty, the first point on the list would be that Ireland should try to ‘lock in’ the competitive gain that cheap property gives a country.

We should let property fall to a level that we can all afford and then start again. As well as a labour force that is willing and educated, low taxes and cheap land should be part of our competitive offering. In that way, we can afford to pay our workers more, because we are paying our landlords less.

But that isn’t happening. And worse still, the property hoodlums are back on the street again. To have been ripped off by the property scamsters once is bad enough, to be ripped off twice is a travesty.

Buying a house now makes absolutely no economic, financial or social sense because prices are condemned to fall much further and anyone who buys now will be suckered into the false rally, known as a ‘dead cat bounce’. Given what we now know about the boom, it’s hard to feel sorry for someone who believes the hype-property brigade. But even a cursory glance at the financial numbers today — just a little bit of due diligence — suggests that we have a long, long way to go before house prices reach the bottom. So beware, see through the glossy brochures and don’t say you weren’t warned . . . again.

Here is the nub of the issue. The reason the property merchants are back is because over the past 24 months, Ireland has been turned from a democracy to a ‘bankocracy’. A bankocracy is a country in which every major decision is taken to bolster the interests of the banks.

A democracy was one of those quaint ideas, like the notion that a state would be governed according to the interests of the citizens. In this ‘bankocracy’, because Irish banks can only be saved if the property market rises, the State will do everything in its power to extort cash from the citizen to give it to the banks via the property market one more time.

Everything the State has done so far has been to promote a bankocracy over democracy. It is far from clear why it is doing this. What is obvious is that the politicians who presided over this mess have no intention of learning from it. Initially, the guarantee — which I was a supporter of — was about containing the crisis. If you see a contagious bank crisis as a forest fire, doing nothing in the chaos of September 2008 and allowing the banks to go under would have been like a firefighter letting a forest fire blaze out of control, irrespective of what was burned in its wake. The State had to do something at the time.

However, the initial advice was to limit the guarantee to two years and then let it lapse. In this way, you could contain the crisis, see how bad the banks were and step back, giving the problem back to the banks and their creditors who had (a) caused it in the first place but also (b) are best placed to unravel it.

We are now being told that if we were to take the guarantee away now, the banks would collapse because of their funding difficulties. Well if a bank, as a business, can’t survive without government support, then it ceases to be a proper business and should be given to a liquidator to get the best price for any assets it has. The deposits can be guaranteed, transferred and form the capital base of a new or existing bank and away we go. No old bank, no old problem.

But that is how a capitalist democracy works. However, Ireland is not a capitalist democracy; it is a cronyist bankocracy where the government has tied the interests of the citizen to the interests of the bankers with calamitous results.

The government believed the banks’ hostage-taking stance. The banks claimed that they had a hostage called ‘the economy’ and that if the government didn’t give them the cash they would pull the trigger and sink everything. Now that the hostage-takers have been rewarded with a huge ransom, we face a concerted effort to inflate the property market again. Having given ‘cash for trash’ via NAMA, the only way that the ransom can be validated is through inflating the market again. But it won’t work. Prices will keep falling.

Look at the chart to see why. For the market in Ireland to clear, investors have to take up most of the slack. This means in people’s heads they need to have a profit model, which validates why they are buying property. In the commercial world, the yield — which is how much rent the property makes — is the crucial barometer.

Let’s say the yield on property has to be 7pc at least to make it worthwhile investing in property, then we can see with some clarity how much prices are still overvalued. The average cost of a house in Ireland is €250,000. The average rent per month is €863. This gives a paltry yield of 3.48pc per year. Now to get the yield up to 7pc, either rents have to double — which is not going to happen because wages are falling, taxes rising, unemployment rising and emigration is back — or prices have to fall. So average house prices must fall by another 45pc to reach fair value of €135,620. Unless prices fall back dramatically, you would be mad to buy because you would simply be paying the banks a subsidy on top of the tax you are going to pay to bail them out!

Another way of looking at how overvalued houses are is to examine the chart. The chart shows how much out-of-whack houses prices still are with respect to the average wage. Up until 1996, house prices and wages moved in tandem. After that, house prices moved out of synch. By 1999/2000 there was a clear bubble emerging and the rest is history. But as you can see, if rises in house prices are to get back to where they bear some relation to rises in wages, house prices have to fall back dramatically. In fact, to get back to a proper yield, house prices must tumble.

Anyone tempted to buy now should try to see through the spin that says: “Now is time to buy”. But this shouldn’t be that difficult. After all, who is saying that now is the time to buy? The sellers! Enough said.


  1. [...] rent-v-buy decision comes into equilibrium. The graphs referred to in David’s article should become available here. Possibly related posts: (automatically generated)Shared ownership — ways to stop subprime [...]

  2. For those who are interested in putting some numbers on their own circumstances, there’s a Rent-or-Buy calculator available here, comparing 25/30 year cashflow of buying or renting-and-saving/investing the difference:
    http://www.ronanlyons.com/2010/04/20/your-very-own-rent-or-buy-calculator/

  3. 1. we are suppost to be a republic not a democracy, so ruled by law as opposed to 50% +1. There is a BIG difference see http://irishsovereignty.wordpress.com/2010/04/06/irish-sovereignty-party/
    2. David often makes the point that the boom was caused by our ability to borrower the savings of trifty Germans. This is just mildly true as you MAY need savings to create loans however, LOANS create Deposits which create more loans. This is banking and the result is we have in the ECB a 108% per capita inflation of money since 1999 but less than a 50% increase in CPI and wages. See ecb website for montly reports and http://vimtrading.blogspot.com/

  4. Having lots of time for your insights, and agreeing in particular with the argument that we are way over-reliant on property, I am always a little disappointed that you go after your thesis & your targets with such over-blown rhetoric. Isn’t it the journalistic equivalent of the blue skies of property porn? You are over-playing the malevolence of the Government & State, while under-playing the reality of human greed, individual responsibility and freedom of choice. On the one hand, you seem to be advocating State-level controls to be put on the property players to prevent them from tricking the poor, defenseless public again (“We should let property fall”), and on the other hand you are (rightly) complaining about previous actions of the State in relation to the banks and property market etc. I would have THOUGHT you would admit that one has to let the market dynamics take their course, and in so doing we have to accept the realities (“evils”, perhaps) of a certain amount of marketing from the property sector (including vendors themselves) and really should only rely on supplying as many facts as possible to let people make up their own minds. You are fighting fire with fire, marketing with exaggeration, biased opinion with loose rhetoric. Not the way to go? Need to stand above that, perhaps, in order to bring people with you and be believed? Are we too merely playing a game, putting in the hours, giving them what we’re asked for, or do we really want to bring about change by convincing people to act more sustainably?

    • liam

      Hello MyHat, Doesn’t matter how we got here since we can do nothing about that. It only matters what we do about it so lets not confuse backward looking analysis with forward looking insight.

      The assertion that anybody buying a house now is mad, confused or suffering from the effects of information asymmetry and Government spin is a sound one, nothing wrong with saying that.

      • Hi Liam. But sure there are 1000s of people buying houses in Ireland at the moment simply because … they WANT to. They are in the happy position of being in good financial health relative to the rest of us, and probably just want to “improve” their shelter. It is not madness, confusion or ignorance – just the facts of a sizable population. And their actions (under the influence of the money markets) will decide on the movement of house prices. Some may be influenced a bit by the marketing of the property sector, but the idea of having to protect them from such natural efforts to sell one’s products is madness.

        • G

          They may be in ‘good financial health’ (which I question) but they are totally out of their f**king little minds!!

        • s1lverbullet

          @ MyHAT – “You are over-playing the malevolence of the Government & State, while under-playing the reality of human greed, individual responsibility and freedom of choice.”
          The problem with 80% of the people in this country is that the do what they are told and if they are told that now is the time to buy, as in 2003-2007, then they buy. These sheeple do not have free will, so it is down to the policy-makers to make sure that we are not scammed. Unfortunately the State is being run by malevolent people only interested in enriching themselves. And David is right, and all you have to do is open the Times or the Examiner to see the property game is on again. Or maybe believe the hype and you think this really is the time to buy, and in that case off you go, but somehow I dont feel you’ll take the bait

        • liam

          If you are already have your own home, then of course, moving is a viable and maybe even sensible option if your desire for ‘improvement’ outweighs the transaction costs. In fact, so long as house prices remain artificially high in Ireland, more people remain in this category. It makes sense therefore for the vested interests of the housing market to talk things up. Its complete bullshit of course. The markets do not determine house prices simply because, as one poster here eloquently put it, the price discovery mechanism of supply and demand has been captured. NAMA puts a floor on prices and there is even talk of demolishing excess stock.

          First time buyers are of course fully outside this category of lucky individuals with fortuitously acquired equity. They are totally screwed and without them, you might get a temporary uptick but ultimately you are relying on rich people trading their houses amongst themselves. This also helps keep rental prices inflated. This can be good news only for solicitors, estate/rental agents, valuers, surveyors and other economic rent seekers. Its an economic drag on the rest of the country.

          People are of course entitled to (and in fact should be encouraged to) make their own independent financial decisions. The law requires financial institutions to act with probity not in the interest of buyers, but in the interest of economic stability. These right-wing appeals to individual liberty and all such other dubious and incomplete philosophies are a smokescreen, and its exactly the type of claptrap that cause this whole mess in the first place.

          • liam

            High house prices are a consequence of prosperity, not the cause of it. Its time the Irish copped themselves on and realised this.

        • Bamboo

          MyHat,

          How many of the thousands of people are in a broken relationship or marriage and have bought the ex-partner out and is forced to buy again. Is there any statistics on this? Most of the people that I know who have bought in the last three years are in this situation.

      • Julia

        About a month ago I checked the prices of houses in Bray on Daft.ie. Not one house with 2/3 bedrooms available for under E250,000. After 24 years work I’m almost at the top of my payscale in the public service. I have a secure job. Post cuts I’m earning E49,000 a year. Great money I think and thankfully I bought years ago. Here’s the thing though. I rang my bank recently to find out how much they would give me if I were starting off again. They did some sums and told me I could have approx. E145,000. I’m almost 50. How are young people supposed to buy a house. Surely they all can’t all live in one bedroom flats. I’m glad David has pointed out that house prices must come down. Or else there must be a lot of young people on high salaries. Or, lots of people in their 50s want to move. I don’t think so. I never want to move again.

        • Bamboo

          Well said Julia!!!

        • wills

          Spot on Julia.

          The property market is used by the insiders to control society.

        • liam

          Great real-world example Julia. What are young people supposed to do? They are supposed to emigrate. That’s always been the answer in this country and since the Irish political system favours the status quo so much I assume that is what they are hoping for now.

        • Yes, unaffordable property price are hopefully becoming a thing of the past. As the credit bubble is deflated prices will have to fall to match what people can afford. A lot of pain for many people in the meantime, sadly, but the only way in the long run.

          Re Bray 2/3 bed houses: we have tracked 11 2-beds under 250k in past 12 months (Average floor area asking price € 3,041 per sq.M (€ 282 per sq.ft)); only 4 of them newly on the market in that time though – rest were price changes; and 9 3-beds under 250k (€ 2,808 per sq.M (€ 261 per sq.ft)) with 6 of them newly on the market in that time. Probably will see more & more under the 250k price in the coming months & years.

          • liam

            A lot of pain for many people in the meantime, sadly, but the only way in the long run.

            Pain is pain. I’m curious as to whom you refer to as ‘many people’ and what you mean by ‘a lot’. Of course you are correct in what you say but these are rather vague qualitative statements and would most likely be true no matter what course of action is taken.

            As just a regular member of the great unwashed, the kind of analysis you provide is certainly useful but lack some contextual dimensions. You are comparing yesterday in La La land with today in La La land. How do these prices for example compare with average prices in Tokyo, New York, Paris? How do they compare with Reykjavik?

            Comparing raw numbers is straightforward enough, providing estimates of relative value is a different matter. Certainly personal circumstances play a part in this kind of value judgement but its hard to argue that 200k for a home in Athlone represents the same value as 200k for a home in Paris or Tokyo.

    • roc

      “I would have THOUGHT you would admit that one has to let the market dynamics take their course, and in so doing we have to accept the realities (“evils”, perhaps) of a certain amount of marketing from the property sector (including vendors themselves) and really should only rely on supplying as many facts as possible to let people make up their own minds.”

      MyHat – you yourself were instrumental in setting up the original ST property supplement – no?

      It seems to me that you are saying in your post here that the reality of the market should rightly encompass the reality of propaganda. – I think you know quite well that the aim of this kind of property ‘porn’ is to construct a certain reality regarding property in the minds of people.

      Do you not agree that these supplements and articles and skewed presentations of statistics are designed to strike a number of unconscious and emotional vulnerabilities in the mass of the people – like their fears regarding their need for security and status; their fears regarding ‘missing the boat’; their natural avarice; and even (perhaps more than anything else judging from the tone and presentation of these property porn supplements) – their concupiscence.

      I feel that David is right – the purveyors of this garbage are nothing but creeps, snake-oil salesmen and spoofers.

      On the one hand, we have vested interests and institutionalised nitwits ‘talking up the market’. On the other hand we have these property supplements pretending to be straight forward marketing.

      There is a distinct lack of honesty, integrity and openness about the whole business that is going to be the death of us all.

      We need to change this.

      • “concupiscence”

        Word of the week.

      • wills

        Roc fair point, but myhat is getting at the eejits who let thmeselves be taken in.

        There are those who let themselves be taken in, and of course there are those who are wrongfully duped and then there are the organizers of this madness which you articulate in comment.

        • s1lverbullet

          @ Wills – no no wills, MYhat is one of the many vested interests in this scam

          • Vested interests: I make my living from selling, to anyone who will pay a fair price for it, summaries of property prices. Through PropertyWeek.ie we let the trade see more clearly what prices are doing; through MyHat.ie we let the general public do the same. In the meantime, I try hard to adopt a balanced view of the dynamics that got us into this mess. If you doubt my ability to think clearly, maybe a read of this post will allay your fears – http://myhat.ie/blog/?p=739

      • (Definitely not “instrumental” – was merely offered a decent hike in my income by an Irish entrepreneur who spotted the opportunity of making some money through the Sunday Times operation in Ireland. Like most people, including the journalists, editors, graphic designers etc whose work produces those supplements – just doing what I could & can to make a living.)

        I am arguing that using loose rhetoric & cliched labels & easy arguments (“corrupt politicians”, “greedy developers”, “evil bankers” etc) allows the likes of Williams to seem like he is being helpful, when in fact it is, in a way, adding to the problem.

        First & foremost we should make sure to protect ourselves from being susceptible to the inevitable efforts of others to rip us off. We should then have systems & channels of communication that make it very difficult for snake-oil purveyors to dupe people. Finally, we should have clear laws & punishments that make it very unappealing.

        At each level, we let ourselves down during the bubble. Not many are innocent by-standers. Some need to be named, investigated & penalised for not doing their jobs. Others need to be given a second chance with guarantees in place that they can’t repeat the same mistakes. The rest of us are going to get off scott free (at least if McWilliam’s angle wins out, as it very much seems to be here.)

    • Colin_in_exile

      Why have you omitted the third largest city in the state, namely Limerick out of your website? Don’t need the business? Things going really well for you all there at myhat.ie?

      • Very much need the business, Colin, but couldn’t get it in Limerick. In order to make it pay we need a handful of agents subscribing; the reports bought by the public wouldn’t pay us enough to keep going. In Limerick we had a few subscribers before 2007 but then lost them all to the market collapse and eventually had to stop tracking the Limerick market. Hopefully we’ll be able to start up again some time, though don’t know when. Apologies.

    • Eireannach

      @MyHat

      Here, here.

      David DOES portray the power dynamic with the little man in the street as David, while the bankocracy is Goliath.

      He consistently downplays the venality and gombeen gluttony of the Irish man in the street, as if these folks are in investing in property for some reason other than to enrich themselves at their tenants expense.

      Irish property investors are not ‘plucky little David’ going up against the big bad Evil Ones. The are more like little Lepraucháns high on cocaine and whooping ‘come on, spin the wheel there one more time Marty Whelan’. The property investing public have evil designs to get rich quick from ‘the upturn’ they want to believe in. Let them eat cake.

      • I’ve attempted a fuller analysis of David’s way of presenting things >> http://ow.ly/1C77S

        • liam

          Hardly a fair analysis, give your own use of “loose rhetoric & cliched labels & easy arguments”: Mc Williams argues…marketing should be banned & we should only be allowed to buy property with cash from under the mattress.

          Our host and everyone else here can speak for themselves, but I’d point out that its kind of insulting to me that you think I or anybody else reading this is incapable of drawing their own conclusions.

          But, if one ignores the emotional bluster, you do have some I think excellent points in there, particularly in reference to personal responsibility. You have however ignored the duty of the banks to their shareholders and in particular to depositors and that the banks operate at the behest of the state as fundamental elements of the financial system, thus should be regulated closely to ensure the stability and sustainability of this system. We are not talking about somebody taking opportunistic advantage of some inadvertent loopholes, we are talking about the active collusion between the state, the banks, developers and many others right on down the chain to grossly distort the market. If I get ripped off, that’s my own fault, but if the state is actively facilitating my getting ripped off, that’s another matter. And if I’m expected to pay for yet another round of fools being parted from their cash, then its time for a revolution.

          Anybody who regularly reads theses pages and in fact any dispassionate analysis of the Irish economy will strongly suspect that the housing market, and the general economy in Ireland is doomed, and will put their money where their mouth is, just as the bond markets are doing. Your conclusion that anybody who vocalises this view is therefore advocating tyrannical intervention is a non-sequitur.

          If you believe that people have an obligation to be as informed as possible in their own financial affairs, where do you suppose people are supposed to inform themselves on these matters? Would you prefer that people just listened to the opinions of the vested interests within the property sector, and the Government? Is there an approved list of sources of economic information somewhere that I missed?

          There is a awful lot of tripe being talked about the recovery of the Irish property market, much of which would not exist in a normal regulated and open market. What is wrong with calling this nonsense for what it is? We’re all in this party together after all.

  5. sean79

    “There’s an old saying in Tennessee – I know it’s in Texas, probably in Tennessee – that says, fool me once, shame on – shame on you. Fool me – you can’t get fooled again.”

    • G

      Or from the Outlaw Josey Wales: “Don’t piss down my back Senator and tell me its raining!”

      This article enrages me – it is not a question of ‘learning’ anything, these politicians and money men (estate agents etc) are intent on not only driving us off a cliff, but on the throttling the carcass on the cliff rocks to ring the last pennies out of the mangled corpse!

      New government, and now!!!!

      Vote Labour, campiagn slogan: Your least worst option!

    • s1lverbullet

      George Bush was no Oscar Wilde, thats for sure

  6. Malcolm McClure

    To get the housing market moving again the government needs to take the initiative and establish an auction-based floor value for each county.

    It should find ten middle of the road houses in each county and get each “valued” by three local estate agents. The houses would then be auctioned off to the highest bidder and the vendor of each would receive the auction proceeds plus half the difference between average valuation and realised price.
    The ratio between realized price at auction and average “valuation” would then establish the true valuation in the public mind. The cost of this exercise would soon be recovered from stamp duty when the market started moving again.

  7. rmb

    Your calculations leave something to be desired, David. Are you using a 10 month occupancy assumption? You’re certainly not using 12, which is fair enough, but if you’re going to do these illustrative calculations it should be made clear what their basis is.

    An 11 month occupancy might be fairer, which would give a 3.80% yield.

    I agree wholeheartedly by the way, prices are still way too high. A look at any family home in any average-nice area tells you this.

    But maybe we need a new device rather than yield, or multiples of annual rent. A country that is ruled by those up to their elbows in property and its associated businesses may always be dysfunctional in this sense.

  8. Puschkin the Black and White Cat

    David, sadly I made this observation myself. I thought about it, and I have decided that the reason we cannot forgot property is simple. Our nation is not industrial we have no industrial leadership our whole “system” knows only property. There never was a “Celtic Tiger” based on the “smart economy”, all that existed was a few “gombeen Paddies” borrowing money and playing a game of musical chairs. This game is interesting as it’s always the tax payer who is left standing. So why not play it again!

  9. bmv

    Why do we have an auction system in the first place? Why not calculate the cost price of building a house including land price, and add a percentage profit? An auction system is designed to push prices up as high as someone is willing to pay.

    • Malcolm McClure

      bmv:
      It is not the vendor who establishes the value of an asset, it’s the purchaser, who decides how well his requirements are fulfilled and how he can extract value from his asset or increase its desirability prior to selling on.
      A well advertised public auction attended by bidders who pay a refundable deposit to bid is the best way to establish the value of anything.

      • bmv

        Malcolm:
        Apologies. I was fuming at the time. I didn’t mean auction, and you are correct in what you say.

        I meant to say that when someone puts in a bid for a propery, the auctioneer takes the bid and waits for a few more. Then he has them bid against each other, driving the price up and up.

        Surely this practice should be outdated? It is in essence an auction mentality that suits the seller and auctioneer only.

        • Malcolm McClure

          bmv
          I agree that the auction system is not perfect, but at least it’s out in the open. Just be glad that you aren’t subjected to the iniquitous Scottish system where sealed bids are opened by solicitors behind closed doors. Bidders are encouraged by their own solicitors to place bids 10% or 20% above the asking price to ensure that they are in with a chance! The old boys club there makes ours seem like the cub scouts.

          • bmv

            Malcom:
            As I understnad it, in other countries like France and Spain, when an offer is in, it is considered a legally binding offer. The seller has to refuse the offer before accepting another.

  10. Peter Schum

    I agree we now live in a bankocracy, and as I commented in this site last year, regardless of which political party is in power, it is now in their interest to direct government policy towards inflating property prices to ensure NAMA meets its growth targets. Can we change this, …I’m not sure. Lets just focus on getting the country moving. Maybe the Entrepreneur Show in RDS this weekend will show us some positive ideas for indigenous growth?

  11. Art1980

    History repeating itself – buying back into the property market only to fall further can be compared to that of the 1920′s stock crash……..
    Roaring Twenties. It was a technological golden age as innovations such as radio, automobiles, aviation, telephone and the power grid were deployed and adopted. Companies who had pioneered these advances, like Radio Corporation of America (RCA) and General Motors, saw their stocks soar. Financial corporations also did well as Wall Street bankers floated mutual fund companies (then known as investment trusts) like the Goldman Sachs Trading Corporation. Investors were infatuated with the returns available in the stock market especially with the use of leverage through margin debt. On August 24, 1921, the Dow Jones Industrial Average stood at a value of 63.9. By September 3, 1929, it had risen more than sixfold, touching 381.2. It would not regain this level for another twenty five years. By the summer of 1929, it was clear that the economy was contracting and the stock market went through a series of unsettling price declines. These declines fed investor anxiety and events soon came to a head on October 24 (known as Black Thursday) and October 29 (known as Black Tuesday).

    On Black Tuesday, the Dow Jones Industrial Average fell 38 points to 260, a drop of 12.8%. The deluge of selling overwhelmed the ticker tape system that normally gave investors the current prices of their shares. Telephone lines and telegraphs were clogged and were unable to cope. This information vacuum only led to more fear and panic. The technology of the New Era, much celebrated by investors previously, now served to deepen their suffering.

    Black Tuesday was a day of chaos. Forced to liquidate their stocks because of margin calls, overextended investors flooded the exchange with sell orders. The glamour stocks of the age saw their values plummet. Across the two days, the Dow Jones Industrial Average fell 23%.

    By the end of the week of November 11, the index stood at 228, a cumulative drop of 40 percent from the September high. The markets rallied in succeeding months but it would be a false recovery that led unsuspecting investors into the worst economic crisis of modern times. The Dow Jones Industrial Average would lose 89% of its value before finally bottoming out in July 1932.

    • coldblow

      Have you been reading Galbraith’s the Great Crash? I’m getting towards the end and this is all very familiar. The similarities between then and now are quite striking. I was just reading last night about the head of one of their banks who borrowed from his own bank to buy shares in it. And the meetings that were held to make it look like something was being done, and the efforts to talk up the economy and… and…

  12. I notice that RTE might be heading that way as well. Showhouse (RTE1 8:30 last night) seems to be a dipping of the toes to see if there’s audience interest.

    Groundhog day?

  13. Colin_in_exile

    Great Article David,

    We’re back to the kernel of the matter, the root cause for our problems. Expensive Property.

    It takes great courage to take a stand in this society of ours to say “No, I won’t buy property”. You are still looked down upon, viewed to be a little bit fruity maybe.

    So, why is there pressure on people to buy property?

    1. People who are in negative equity or close to entering negative equity want to suck you into their miserable world because they are bitter and twisted about their experience.

    2. We still have the “Renting is Dead Money” Brigade throwing in their tuppence. The root of this mentality surely comes from negative experiences of landlords ripping tennants off. So, instead of attempting to end the culture of landlords ripping tennants off, this Brigade want you to become a landlord yourself, a perverse sense of “if you can’t beat them, join them” rationale.

    3. Pride. As Deco has detailed here many times, Irish + Pride together make for a disasterous mix.

    Note; With birth rates falling (18.1 births/1,000 population (2008)), demand should be lower than supply of existing houses, which should result in property prices falling continuously into the future.

  14. tony_murphy

    Thanks David for this article

    I know 1 person who has put a booking deposit on a house and another seriously considering buying.

    The “Soap opera” generation .. *roll eyes* They are easy prey

    I’ve sent a link to them this morning, hopefully it will help change their minds

    • I condensed the article and did the same Tony.(Sorry David). I take MyHats points above but a lot of young people are like lambs to the slaughter. They just don’t understand the risk of sinking every penny into this present market.
      Anyway, property starts rising when commercial heads decide it won’t fall any more, not when some first time buyer dons the rose tinted spectacles.

    • G

      The British sacrificed 60,000 men on the first day of the Battle of the Somme, did they learn from it?

      The battle went on for another 5 months! Lost my great-grand-uncle on 16.07.1916, buried in Rouen.

      Ground gained: 9.7 km
      Numbers dead or injured: 1.5 million

      Lambs to the slaughter in every generation, you can only do so much, if people want to run towards the financial machine guns then that is their choice. A lot to be said for doing nothing, waiting.

    • silentobserver

      I did a similar thing once to a friend in 2007, where he ended up paying at the peak of the market- unfortunately all I got was a tirade of abuse- so make sure these are very good friends. I’m not Irish, and it made me realise how attached the culture is to property. It ended the friendship!

  15. Brilliant piece of timing to publish this article the same day as MyHome.ie publish this;

    http://www.myhome.ie/residential/advice/whats-new/first-time-buyers-intend-to-purchase-in-the-next-year-2630

    The astute among you, ie all of you, will note this little comment at the end –

    Note to Editor
    Findings based on survey of 539 first time buyers who were surveyed between 8/03/2010 and 15/03/2010.

    Only 539. Hardly a comprehensive snapshot of the first time buyers market activity in Ireland but it does reveal that of the 539 house hungry souls, only 36% or 194ish actually have mortgage approval. Mortgage approval under what terms we don’t know but presumably sufficient to buy some hen-house.

    BTW, it looks like Doctor Dan has changed his name by deed poll-

    “”"In his analysis of the results, independent economist Paul Murgatroyd, said first time buyers clearly do not expect market and economic conditions to deteriorate significantly within the next twelve months. “”

    Weeeee doooon’t beleeeeeve it Paul.

    • G

      Will ask Fintan O’Toole about http://www.myhome.ie tomorrow night in the Rochestown Park Hotel @ 8pm.

    • Joeh

      Google Paul Murgatroyd and check his linked in profile. Was a partner in DNG for 10 years, only left in May 2009!! Doesn’t sound like much of an independent economist to me!!! Especially when it comes to speaking about the Irish property market!

    • Deco

      Furrlylugs – excellent peice of research.

      That quote that you mentioned
      {
      In his analysis of the results, independent economist Paul Murgatroyd, said first time buyers clearly do not expect market and economic conditions to deteriorate significantly within the next twelve months.
      }
      That has me really baffled.

      I have not met any of these people. Maybe I don’t keep company with all the optimists that “Dan 2.0″ manages to find.

      Rule number 1 of a debt ponzi-scheme economy. “You are not permitted to talk down the economy-even when it is telling the truth”.

      Rule number 2 “you are supposed to beleive that opportunists trying to talk up the economy are telling the truth, even when it is obvious that they are lying”.

      ….and then there is the picture of the attractive lady with a sign saying “welcome” a big smile and a pit of leg….here we go again…vested interests once again using sexual meaning as a means stiffening the demand curve for houses, when there are ghost estates everywhere.

      Advertising is always about strenghtening the emotional resolve of the buyer so that they are less concerned about price.

    • matt

      What a ridiculous and pointless survey. From the press release -

      “Two thirds of first time buyers plan to buy in the next 12 months”

      The most striking words in that sentence are “buyers plan to buy”. That’s hardly a unexpected result! What’s next? Swimmers plan to swim? Painters plan to paint? Runners plan to run?

      What might actually be useful would be a survey of people from the general population in the age-bracket where people typically first get onto the property ladder (25-35?) rather than self-identified “buyers”. Somehow I doubt the results would be quite so up-beat for the property market!

  16. G

    This is one hell of a f**king article!!!!
    Hallelujah!!!! Will be doing the rounds!!

    These sick property f**ks and their political asshole buddies are a threat to our economy and our democracy, there will be no recover worth its salt as long as house prices remain inflated. I ain’t touching the market, burn motherf**ker burn!

    Sitting Bull G.

  17. SLICKMICK

    The asking price for a 3 bed semi in Clontarf is still 750k, a bowl of soup and 1 dessert in the local alehouse is 9 euro!.Housing cost in Dublin is still double The level of Liverpool and Leeds!.Dan McLoughlins peeped above the parapit to offer some advice-a aman so inept , he couldn’t organise a prayer in a mosque.Will Fingers and Seanie be investing in the Irish property market?.

    • G

      Relatively ok affordable houses in Crosshaven, Co. Cork have been advertised at €144,500, not too far from Cork city, right by the sea and the oldest yacht club in the world. By end of year (2011), they will be under €100,000!

      House prices are tumbling, there are those trying to hold out, keep things inflated, but they will not be able to hold back what is yet to come, the mother of all double dips, just sit, pour yourself a drink and relax, all will be revealed.

      The unsustainable and myopic nature of the Irish economy is slowly playing itself out despite the efforts of the vested interests, they are using up their resources for one last desperate throw of the dice, but the game is rigged against them. F**kers!

      • s1lverbullet

        @ G – Dead on with your analysis. Anyone who believes the hype and buys now deserves to lose the lot. oh I forgot about the green shoots…..ha ha ha ha ha ha ha ha ha ha ha ha. Any house now going for 140,000, in my opinion might hit 75,000 by the middle of next year

      • Bamboo

        Don’t forget about the affordable housing scheme.
        County council is “awarding” the people these houses. It is a lot out of a lottery. Remember that!! You are the lucky one, if you are “awarded” an “affordable house”, it is not to be sniffed at. Take it with both hands, this is a chance of a lifetime and you should be eternally grateful for the rest of your living years.

  18. MK1

    Hi David,

    Well, you are right, Ireland is not a democracy. But it is up to the citizens of this republic to make it so.

    Overall, we talk too much about property still, its last years “party”, we still have the hangover, we need to correct the structural cause of it to prevent it again and move on to other topics. Property is a utility (like clean ash-free air at 30,000 feet). It should be there, there is no ‘magic’ in it nor should there be. And people should not become wealthy because of abusing market shortcomings in its operation.

    In terms of the property market, part of the NAMA plan is as you know to be a significant player in the market and enough to influence prices upwards. That helps NAMA and ultimately those that it bailed out. It means the prices that people have to fork out for properties is more than it would have been otherwise.

    > Irish property is still extortionately expensive.

    It is expensive, but just like P/E’s in the US are in recent history above that of european stockmarkets, if everyone in a market is willing to pay ‘over the price’ or over the value, it does become the new ‘value’.

    > Ireland should try to ‘lock in’ the competitive gain that cheap property gives a country.

    Ireland can do many things. We can unrestrict property development so that anyone can build anywhere AS LONG AS it fits in with a general grand and detailed plan for the country. ie: yes, you can build an estate there as long as the facilities for 100 houses are served with shops, schools, etc.

    Ireland is also very Dublin-centric and has the ‘all roads lead to Rome’ problem which the Romans of ancient times ‘discovered’. The solution is REAL DECENTRALISATION, maybe a 50 or 100 year plan to rotate the capital between Dublin, Cork, Galway, etc, etc …. again, its back to a workable blueprint for the country.

    > We should let property fall to a level that we can all afford and then start again.

    but what level is that? Average salaries in the public sector are 50k, so if given loans at 2.5 and with 2 people thats a loan of 250k. We are at that now. Property prices will be like elastic, especially if planning rules (=curbs) stay in and there is ‘zoning’.

    > property hoodlums are back on the street again.

    They didnt go away, well, maybe to Portugal, but they were just holding their breath.

    > will be suckered into the false rally, known as a ‘dead cat bounce’.

    I dont know if we will have a dead cat bounce, but prices should remain soft for a while you would think as current demographics and economics suggest.

    > it’s hard to feel sorry for someone who believes the hype-property brigade.

    But here-in lies a catch. People have to continue to live, property is not an option, and people will want to ‘settle down’ with all that it entails. So many that may have waited on the sidelines with good salaries over the last 2-4 years may now jump in as they see some value. Sure, downside may be there, but if they have a 5 year or a 10 year gameplan for the property, then they will buy. Its certainly not a flippers market.

    > Ireland has been turned from a democracy to a ‘bankocracy’. A democracy was one of those quaint ideas, like the notion that a state would be governed according to the interests of the citizens.

    agreed.

    > the State will do everything in its power to extort cash from the citizen to give it to the banks.

    Yes, and its painful and not needed.

    But riddle me this: land-owner A sells field outside Athlone to developer B for 30m. CGT paid is 20%, lets say 6m to State. Developer B gets loan from bank (eg: AnIB or INBS). 2 years later market ‘crashes’ (due to Lehman and Bear Stearns of course, wink-wink, nudge, nudge), developer B is bust, cant pay back loan. AnIB (or INBS) ‘sells’ loan to NAMA (state) who pays 50% 15m. AnIB is recapped by 15m.

    Who gains+loses: Landowner A has netted 24m
    AnIB or INBS staff who made good salaries on playing ponzi
    Developer B may have made money on other deals before this one but has it safely stashed
    Government: CGT +6m, -15m paid from NAMA, -15m for recap +value of field in future (LTEV)
    Joe Soap: pays for Government – very negative

    But who is going to clawback anything from Landowner A (not that Landowner did anythnig wrong, unless they bribed local councillors for rezoning!), staff at AnIB (INBS, BOI, AIB, etc), Developer B ? ie: the money that Joe Bloggs is being forced to pay now IS somewhere else.

    Time to get back a democracy?

    > the politicians who presided over this mess have no intention of learning from it.

    My fear is that they cant learn from it. They are part of the problem.

    > like a firefighter letting a forest fire blaze out of control, irrespective of what was burned in its wake. The State had to do something at the time.

    But did we have to include babies (ie: joe soap) in the bathwater to put ‘the fire’ out.

    > the banks would collapse because of their funding difficulties.

    The banks DID collapse but have been saved by the state.

    > The deposits can be guaranteed, transferred and form the capital base of a new or existing bank and away we go.

    One problem we do have is that a lot of the deposits were used (abused), so AnIB which has 27b of deposits on its books doesnt really have that cash to pay back when demanded. A 100% guarantee of deposits will cost the state a lot if they banks were wound down in an orderly manner.

    > Look at the chart to see why.

    Can you put it up here, although I can imagine what it looks like.

    > Let’s say the yield on property has to be 7pc at least to make it worthwhile investing in property

    But in low interest rate situations (ECB 3%), a yield of 4% would be enough to make money, right? (presuming values stay at least the same).

    Values in ireland may stay over-priced (in relation to salaries) for a long time to come. This is an island nation after all with relatively few people and too many vested interests and controls.

    > fair value of 135,620.

    I dont think they will get that low due to all of what I’ve stated above. The market is not logical!

    Now may not be the time to buy or sell, yet people will still do it, as people are not average. I think daft.ie reported 30,000 house sales in 2009, which is probably half of what it should be. Its a depressed market but not completely dead amazingly. At least not yet a dead cat!

    MK1

    • “Well, you are right, Ireland is not a democracy. But it is up to the citizens of this republic to make it so”. What a classic statement. Before using a word findout its meaning. Didn’t read the rest of your rant but a republic is not a the same as a democracy.

    • Alf

      “Average salaries in the public sector are 50k, so if given loans at 2.5 and with 2 people thats a loan of 250k. ”

      Hi MK1,

      I never really understood or accepted these kinds of calculations. They seem very seller oreintated and lack consideration of things like market debt and supply and demand. Ireland is way over supplied right now and unemployment is high; more so in the first time buyer segment who would be a key driver in new house sales.

      Why should mortgages be valued at 2.5 of average public sector salary anyway? To give an extreme example, if 50% of the population were unemployed and housing stock was oversupplied by double then the average public sector salary does not mean much.

      Surely these kinds of calculations belong up there with LTEV and are possibly part of the problem?

      • MK1

        > Why should mortgages be valued at 2.5 of average public sector salary anyway?

        Its only a rough calculation method which crudely estimates the ability of a person to pay a mortgage loan over the long-term. Its a rough estimate.

        Other methods and formulas can be used, but at some point a lending institution will give person A an amount X to be paid back over N years, based on their current salary S and their expected costs.

        True there are risks involved, so hence the lower the amount of mortgage given per salary amount the better the chance it will be paid off. And during our frenzy we gave out more and more amounts, bigger and bigger and minimal deposits of 10% went to 0%, and even 100%+ mortgages were given, and people were borrowing from credit unions to pay for their stamp duty, etc, etc. Madness of course.

        The point I was making that even in the current market where house prices are decreasing slowly, two Public Sector workers on 50k would likely get loan approval for 250k. With the Public Sector being supported by extensive government borrowing and with NAMA owning a vast swathe of property in this country, these factors add to property price ‘support’.

        That doesnt mean that prices will go up but its a factor which is keeping prices from going further down than the should. Markets are always made up of competing forces, whether real or perceived.

        MK1

        • Alf

          HI MK1, I agree. I guess the problem I see with it is that just because one buyer can afford a x loan does not really make the house worth x if a default occurs. The bank should consider how likely it can liquidate the asset at that price and if it really is adequate collateral. To give an extreme. If I can afford a 100 million euro mortgage based on my salary it does not mean the bank should give me a 100 million euros. The bank should consider how many could take my place (so they can get their money back) should a default occur.

          Factors such as supply and demand, unemployment should be factored in, but also how much real market demand or depth is at that price level. After all, the banks problems have been largely due to ‘marked down’ assets but this was partly because it had a seller-orientated model of valuation based on what the buyer could pay rather than the average demand was for the asset. Maybe this could have been avoided if a default scenario was more seriously considered.

  19. The government needs to stay out of the housing market and let free market economics function. The don’t have the balls to do the right thing because it would collapse the market in the short term. Long term its the best option. We need to take the pain and get this downturn over with asap. Its not going away.

  20. wills

    David.

    We are back to ‘Generation Game’ your book, which by the way ought to be on that list of ‘books of the decade’, a book worth its weight in gold.

    The Cronyist Bankocracy of Ireland.

    Defined:
    A network of interests holding in place a property bubble making economy which pumps the price of property up and up, again and again for loadsa money.

    ‘Property bubble making’ economy.

    Defined:
    A professional class of lawyers, accountants, politicians, bankers and admin under the grip of greed and amorality prepared to put their own selfish interests above all else.

    Tools of the community like media and credit provision under the control of a professional class whose own self interests reign supreme.

    Link this cartel of interests up and lock it down into the hubs of power and connect it into a gigantic money printing machine like the ECB and we get NAMA and bank guarnatees and ANGLO and banking tyranny.

    • wills

      On ‘banking tyranny’ can i add the following.

      Banking tyranny is NOT bankers in suit and ties behind a desk handing out spurious loans.

      It is a well connected, well organized, well planned and well executed economic program.

      It is an operating program in the hard drive of credit provision and poses as the only show in town and the only way to do business etc etc and gradually over time manufactures a culture of falsity on free markets and labour provision and debt consumerism evolves and slowly and ploddingly society becomes hollowed out and needy and dependent and trance like and forgetful and the debt money system and its false paradigm become all truth.

    • coldblow

      Yes that struck me too. The Pope’s Children is there but the two follow ups are better IMHO.

  21. Tadhgd

    This article is going to really p!ss some people off. The usual vested interests I guess. We should try and send to as many people as we can. I asked on this blog not so long ago what people thought would happen with property prices here and those that replied suggested only one way …and that was down. David quite nicely advised someone on Facebook a while back not to buy so this latest article won’t come as a shock to those who follow his posts. On the whole he is right but as MK1 points out we are not average people. Never the less prices will continue to drop but they are never going to become cheap. My sister nearly bought last week only the engineers report saved her. I tried to steer her away but at the end of day she is a grown adult and wanted her own home to start a family. Her husband has been laid off since last year and she had to take a pay cut of 5% despite earning less than the average salary. She was still offered a mortgage of 4.5 times on her salary alone and had to ensure a phantom bidder before having an offer accepted ! Nothing has been done by the government here when any idiot could see how a few simple actions could level the playing field even a little for the buyer. Only for the engineers report it would have been madness. The worst thing is that her husband prospects at the moment don’t look good. He was happy enough to tip along with a few quid in his pocket, do the job and leave Friday afternoon maybe head to a match with a couple of pints thrown in at the weekend. To be quite honest he never knew what was coming down the tracks and now that he has been mullered over no-one is going to give him a hand back up. I hope he finds a job but quite honestly it is looking like a miracle is needed. The government probably hope they will emigrate….

    • MK1

      > Nothing has been done by the government here when any idiot could see how a few simple actions could level the playing field even a little for the buyer.

      Agree. One simple action is true and accurate information on what price a property achieves. This is what any political party worth its salt will be demanding and no-one should vote for any party that doesnt promise to implement this. How can a market operate properly with no accurate information? It cant, simple.

  22. paddyjones

    Supply and demand will dictate the market , it always has. It is stupid to borrow money and then gamble it as many “investors” have . I would not borrow money from a bank and then “invest” it in the stock market so why do they borrow money and gamble on property.
    There is an unlimited amount of property on the market but very limited buyers about. Constraints are the availablity of finance and low earnings. Many young people earn about 30k but prices are about 250k, it does not make sense. So Davids point about “investors” is valid , they are the only buyers out there at the moment but can not continue to buy because of negitive equity of existing property, falling rents, availablity of finance, cashflow and low yeilds.
    A 3 bed house with garden and garage anywhere in Germany costs about 180k. A 2 bed apartment anywhere in Germany costs about 60k. If I was to borrow money to buy property i.e. take a gamble , Ireland would be the last place I would buy.

    • wills

      paddyjones.

      The problem is is that the supply and demand is been manipulated and engineered by special interests.

      • will,

        They can fight against the free market, but the forces are too strong to distort forever.

        • roc

          Joseph Schumpeter remarked in the period following the boom of the 20′s, “During boom periods, ludicrously exaggerated opinions develop about the power of open market operations over business situations. On the other side, during the bust, the exact opposite opinion takes hold.”

      • s1lverbullet

        exactly Wills. For the years of the boom supply has been plentiful, but how was it that prices kept going up? Manipulation???

        • MK1

          Not manipulation, but due to herding, lack of information, over-supply of easy credit, the lemming effect, and all those things that normally happen in a ‘frenzy’, a bubble market.

          My thesis is that many markets are not in fact accurately priced at any point in time, and seldom are in fact as they are usually over-priced or under-priced. In our case it was over-priced even when the values and the facts were telling people otherwise. Fields (potential to supply) were selling for 30million, 3-bed houses for 1million, etc. There was no overall planning for our little volcano-less island with 5 million people. Its called insanity in medical circles, and it was collective, of course NOT everyone, and not even the majority participated, but the average went along with it to a certain degree and for most the ‘benefits’ wafted their way whether they wanted to receive it or not.

          • For us the war is over. We know too much, are too well travelled and will never be caught again due in no small part to David and the Internet.

            For those who dive in this time without making some attempt to ask for advice or guidance, who never question the garbage printed as “News”, caveat emptor.

            6-One Nama Eventually Will Survive dár le RTE-Pravda.

        • Bamboo

          Manipulation, gullibility, stupidity, innocence and pure greed.

  23. luckyahern

    Great article and agree fully with the notion that the property prices have a long way to fall before they recover.

    You critize the government for supporting the banks saying that they should have been liquitated.

    ‘No old bank, no old problem.’

    I’m not a fan of Nama either but what else could the government do? With most of the banks liquitated how could the economy work?

  24. [...] April 21, 2010 tags: competitiveness, house prices by John P. Muldoon David McWilliams has a truly depressing column today about the government and its banks approach to the property market. I was surprised, too, to [...]

  25. wills

    Posters.

    This is comment by Dr. Constantin Gurdgiev is worth a mention…

    ‘The reason for this is that our lending model allowed for that anomaly: banks were literally sucking out tens of billions of Euro area cheap interbank loans and hosing down a tiny economy with cash. As long as the boom went on, it didn’t matter whether the bankers actually had any idea why and to whom they were lending. Now, the tide has gone out, and guess who’s been swimming naked?’

    http://trueeconomics.blogspot.com/

    Now this is interesting for a number of reasons primarily it beefs up my comment above but also it raises a crucial further question.

    At the point of entry of all this lending into the economy, mainly over the loan officers desk did lending take place in a prejudicial way.

    For example, did anyone who played by the rules and who wanted a loan fair and square and were straight thinking and independent minded and self empowered and assertive did this type of individual get cleared for a loan when ‘supposedly’ the banks were lending to everyone.

    I contest that assertion the banks were lending to everyone.

    They were most definitely NOT lending to everyone in the time of bounty.

    I know from personal experience the banks were NOT lending to certain type of customer in the boom times.

    The customers whom the banks lended too fitted a specific profile which had nothing to do with credit credentials and all to do with other hidden pretexts.

    • Fergal73

      Wills – spell it out. Just who were the targets?

      In 2002 I went looking for a loan, fair and square, I had a fair bit of cash and a few small fixed deposits that I could access if the need arise. I was offerred 12.5 times my salary, on the basis that I was “young and my earnings would increase, and I had a bit of cash” behind me. I smelled a rat at that point. In 2004 I emigrated.

      IMO there was no target demographic – the banks would lend to anyone who could come up with a story on how they would repay.

      • wills

        Fergal73.

        Its not about ‘targets’ its all to do with making the right moves to preserve ruling power at any given moment in time and who are the casualties while tactics are been implemented.

      • wills

        Posters.

        Inter generational private pools of capital, under tight control and umpteen bodies overlooking and controlling it and what are we getting, we are getting destruction, destruction, destruction.

        Our society holds energy of wealth circulating through the cash ecosystem and yet we are been faced with the powers at be significantly destructing wealth and abusing the system in a systematic fashion.

        This is what we are all faced with now whether we like it or not.

        A Cronyist Bankocracy rules and is using the system to shrink wealth, this is what I am getting at in my post above Fergal42, shrink wealth and steal the wealth.

        If one looks at the credit system and one hears of the amounts on cash moving about in the background been given to the banks to bail them out and it happening without resistance and no questions asked and no heads rolling one can only but be asking, hang on a second, why can that not be done to build more hospitals and schools and do anything we want done that benefits all of society and that supports freedom.

        But, if one looks at it from an alternate angle and see’s throught the propaganda what surfaces is a cronyist bankocracy working a set of rules in the background that has been kept hidden from the rest of the masses. And one must consider that the system we thought worked in the favour of the regular citizen is in fact been used in a way which is not adding up which ever way one applies common sense and knowledge to even the main basic information on all of this stuff we see on nothing more basic than the 6 o clock news.

      • wills

        I assert in the system there is unlimited wealth creation ability and there are self serving ruling elites stifling this and interfering in it to stop this unlimited wealth creation from happening.

        The system is designed to suppress wealth.

        We have to turn this on its head. Find the energy to turn it all around on a micro level, individually and in step with reclaiming ones own personal power back.

        Are you with me so far posters.

        So, we must believe its possible to reverse the process and shift the power away from the suppressers of the wealth creation, the cronyist bankocracy holding down the system and take the power back on a micro level.

        One can do this by quietly deciding to start to walk more each day instead of using car.

        One can start to eat a better diet and work from there.

        One can start to slow down breath control a little day by day.

        One can select out of diets hydrogenated fats, less sugar, high fructose corn syrub eradicate from diet and so on.

        Simple micro level choices all add up.

        The crony bankocracy functions on the basis that people are laizy and not interested in been healthy and wanting a more fuller life.

        • Fergal73

          There’s clearly a set of society that is the top of the pyramid (as there is in every society – and always has been, even back to tribal / hunter gatherers, there was always a leader).
          At the top now is Goldman Sachs.

          It is worth noting, that we in the west are a part of that pyramid. Our standard of living is higher than that of the people in the 1940′s in Ireland. We have central heating, cars, tvs. We are wealthier, though maybe not happier.
          Real wealth has been created around the world, although there are clearly losers, and wealth creation does not equate to happier people.
          What is happening is a re-allocation of the wealth, from the western masses to the western elite. By masses, I mean upper middle class – the guy on the EUR100K job needing to work 12 – 14 hour days all the way down to the pensioner and unemployed person on the dole. If that is what you mean by “specific profile” fair enough. It would be easier to say that the people in the top tiers of power and wealth have re-allocated 10 years of wealth creation from a wide base to a narrow one.

          Irish people will still vote FF, because they think anyone else would be worse. So, FF will continue to put the developers and the bankers and the senior civil servants (who wouldn’t know a 14 hour day except when it comes to negotiating their way out of a pay cut) and of course themselves before the good of the people. As Albert said “sure I’m worth more to them than that” in reference to teh EUR 170K PA that it costs to keep him in drivers and a car.
          I’m not sure who the “them” are, but safe to say it’s not the majority of the people of Ireland

    • Bamboo

      “They were most definitely NOT lending to everyone in the time of bounty.”

      Wiils, I can confirm that too. I had all the credit credentials but I couldn’t get any loan approval. Although I am the main earner in the family, I had to let my wife deal with the banks. All I had to do is sign it and as long as I don’t show my face then everything is OK. Unfortunately it took us a long time to find out why.
      Besides the bank we had to deal with estate agents as well. Again as long as I don’t show my face everything was fine. So my wife had to go and view the different properties on her own.

  26. Tull McAdoo

    David I dont think this is a “dead cat bounce” as it has all the hallmarks of an “echo bubble” http://www.investopedia.com/terms/e/echobubble.asp
    It also appears to be well orchestrated, given that FF has all their new faces in place at the Banks and elsewhere. My take on this for what its worth is to create a buffer zone between the uber-rich in Ireland and all the rest by inflating an echo property bubble which will be supported and protected by a delusional middle class ably assisted by professionals who will be thankfull to restore some sense of privilige just as the mammies had ordained.

    • Tull McAdoo

      Apologies for my lack of engagement of late as I had to contend with the aftermath of a rather destructive shower of large hailstones which battered the bejasus out of us here in Perth. for those of you not up to speed on these heavenly events I would suggest youtube for our version of shock and awe. Lookup perth hail storms awesome stuff. I suppose it would be arrogant of me to suggest that it was my critisism of FF that angered the Gods thus.

  27. Father-fool-em-all

    I fear that Irish property’s Vested Interests are too powerful on this little island. Everything that can be done will be done in order to help NAMA work. Too many powerful reputations are at stake to allow it to fail. So yes! property will now be reflated by luring in those pent up buyers that have accumulated in the last 2 years and Yes! here we go again. FFS! the bleein Tea Shock is up to his jowls in Birmingham apartment deals. He’s hardly gonna stand by and watch the value of his poxy little dog boxes go down the jacks. So what do we do? Whine on about it or take some action? I aint much of a leader but I know good leadership when it stirs me. Who wants the job?

  28. Deco

    So the question…concerning the intellectual state of the society…considering all the scams that have been revealed….will the lemmings be whipped into a state of euphoria again over property ?? …..you just never know….

  29. Tim

    Folks, Max Keiser just tweeted this, about the Government of the Netherlands protecting its people from under-handed bankers:

    Netherlands gov’t to ban Goldman. Kamer: wij kunnen wel zonder Goldman Sachs http://bit.ly/cY0ure

    Will our crew EVER protect us from Peter Sutherland and his gang?

  30. G

    Ferguson – Safe As Houses (Ascent of Money)

    http://www.youtube.com/watch?v=McIcrz9YFmA

  31. David, Great article and the charts were a nice touch for non economists like myself who only want a high level snapshot of the current state of
    affairs.

    The opening sentence was a blinder and it is good to see a high profile man of smarts using such language to describe these property psychopaths. Keep up the good work and don’t ever let the buggers off the hook.

    The Irish people can’t claim they have not been warned about the folly of emotional attachment to property. It will take decades for this programming to be removed from the national psyche, if ever, because as someone once said “there is a fool born every minute”.

    We have fundamental problems with our government. They need high property prices yet there are 60,000 on local authority waiting lists while there are >300,000 properties lying vacant. This is a crime against Irish
    people.

    People are getting pissed off and the gov’t are continuing to squeeze us. Next we have the carbon tax, water charges and the next rounds of savage budgets to face. You can only squeeze a guy’s nuts so much before he gets mad and says ‘fuck you’ and gives you a Glasgow kiss. This country is warped, sure, but I for one will stay and fight rather than flee like so many have done before us – even if it just to spite them :-)

    Ireland’s Ghost Estates
    http://irishlightandcolour.com/Landscape-ghost-estates.php

  32. Tim

    Look at this unfortunate typo in this pic of a Florida TV news bulletin:

    http://tweetphoto.com/19347279

  33. Alan42

    People involved in selling property are sales people . Estate agents to newspapers to vested interests who hold worthless bank shares etc . They are not involved in a ‘ porn ‘ like industry .

    People should really grow up and realise that EA’s are in the business of selling houses and that newspapers make big money from their property supplements . That is their business . What kind of a sales person have you ever met that has told you ” to hold off for a while , prices will drop further ? ”

    I am surprised that somebody like David here who has been banging on about over priced property for years would use a word like ‘ recovery ‘ about Irish property .

    I don’t live in Ireland and I have no ‘ vested interest ‘ in Irish property . However is property not already recovering ? Is it not returning to a sustainable level ?

    Anyway , how can property not fall further ? You have massive personal debt , high unemployment , bust banks , everything is either moving to Eastern Europe , China or India . A government that has no clue about job creation , a massive national debt that is growing by the second to pay for NAMA and Ireland inc .

    We have Greese about to topple with Spain and Portugal to follow . I think we are next in the domino line .

    I was in Ireland at xmas and I spoke with somebody who has a great business mind . We were discussing the banks . He said and I kid you not . ” I don’t know what will happen if the banks will not lend after xmas ” I was stunned . What was he expecting , a visit to AIB or BOI by Santa ?

    Although in fairness to Irish people who like to blame everything on evil porn like people . Having the government as a major vested interest in property is really nasty .

    • wills

      Alan42.

      Your missing D point.

      The property market is rigged and alorra people are rigging it across the professional classes and he is making the point that these people involved in rigging the market are the very ones creaming the market when the bubbles inflate.

      And D use of the metaphor ‘porn’ is just that, crikey youve really skewed a rather black an white and accurate article.

  34. Bamboo

    For some reason I have a feeling that we’ve gone through this discussion before. Unless there is a new generation suddenly coming up in this forum. I don’t think so somehow.
    I think by now everybody should be well informed unless they have been living on another planet in the last 3 years, were in coma or stoned.

    So for those who have been away or asleep and have no idea what has happened in the last three years, they should really try and pick up the pieces of what has happened. The media will help them a bit.

    For those who want to or think of buying, I suggest to pinch your arm and check if you’re asleep or awake.
    For those who think this a nightmare, well it is not. This is reality.
    For those who were told and believe that builders are having a hard time getting work. Well, they are having a whale of a time. Lots of families are adding extensions to their properties and building costs have gone up since the boom.

  35. Bamboo

    David,
    You choose the title “The great property scam is back to rip us off again
    When did this property scam ever left us alone. The GOV talked about the come back of the property market since it started talking about NAMA. Anybody vested interest in the property game talks about a come back or bottoming out”. There is no such a thing as “bottoming out”.
    My understanding is that “Bottoming out” means that it will go up again. Rising up from the bottom. So this is another delusional idea that Irish people have. When it will reaches the bottom it will stay at the bottom. Some are talking about a “dead” market. Well, my understanding of “death” is that it never ever, ever will come alive again. Unless you are so unfortunate to believe in the resurrection. In my opinion there will be a new property market and not a resurrected one. A market that is geared and open towards a balanced society.

    • wills

      Too true bamboo, and I go further and assert the insiders use the property market to control society.

      • Bamboo

        The problem is that insiders can’t shoot each other. Seany Fitzy for example. If any of the insiders starts attacking him he will reveal all the details of the other insiders. Remember Kieran Boylan, a notorious drug dealer with convictions in Britain and Ireland, who was granted a license to conduct his business as a haulage contractor. He threatens to reveal Garda practices if he didn’t get his license.

        • wills

          …..imagine though if they got so paranoid due to extent of scamarama that like the end of a caper movie they’re capacity for holding it together crumbled on they all turned on each other like ‘ladykillers’ movie end..?!!

        • s1lverbullet

          On the ball Bamboo. If anyone of the scum gets jailed then he will bring the whole house of cards down with him. Nothing will change cos Cowen and co. have no control. The air fiasco is a prime example. Cowen says they had to ground all planes for safety reasons. But it wasn’t his decision, was it? The EU calls the shots and the banking elite control the EU…..SIMPLE AS THAT. All government policy and tax laws are written to suit the elite, why else is there no DIRT tax on company bank acounts and corp tax is so low? oh the sheeple will pay all the tax and now they want us to pay for water. 2bn to install meters when the same could be spent to fix the leaky pipes and create a lot more employment. figure that one out!!

          • Bamboo

            Most of the water meters have been installed in my street about 4 years ago. One day county council decided that bits of the concreted footpaths are no good and they started digging it up and installed a water meter. The areas with the bad patches of concrete were not touched. I always wondered why they did this until my plumber told me that I had a water meter and I asked around my the neighbors if they had a water meter and surprisingly, yes they do.

          • s1lverbullet

            How about this one Bamboo. In a few years they will sell off the water to a big american corp. and we will have poor people in this, the wettest country prob in the world, without access to clean water. mark my words this is the plan

          • Bamboo

            I wouldn’t be surprised at all s1lverbullet

          • BigJim

            Let’s keep some realism, Silver Bullet; not even the sheepish Irish electorate would wear that one !

  36. [...] The great property scam is back to rip us off again | David McWilliams Possibly related posts: (automatically generated)Dummies Guide to exposing NAMA [...]

  37. Alf

    Hi David,

    During the property bubble, estate agents were indulging in all sorts of manipulation, such as fake bids at auctions to pressure buyers to pay a higher price. Other shenanigans such as colluding with mortgage brokers to fish out the buyers upper price limit. The whole estate agent auction process will need to be reformed so that all bids are public and verified; all of this will be needed before investors can trust again.

    Even so, some forget that Ireland’s “Celtic Tiger” started with a real boom in the economy; based on a change in corporation tax and an influx of US multinationals. It was a real economic change, rather than just cheap bank money, that created the primary wealth which fed the property boom. It was this initial wealth, which was then taken and pyramided by the banks; this turned into a bubble.
    But where is the new wealth supposed to come from to start the property bubble? Without new growth there will be nothing for the banks to pyramid except more and more debt. Also, more importantly, there will be even less money in the economy to pay off existing debts. And with the State’s finances in dire straits, the doubling of the national debt approaching, there will have to be a claw back.

    Being stuck in the Euro, with no way to devalue, austerity measures and economically damaging deflation must be on the way. The taxpayer will have to foot the bill.

    With the prospect of more cuts, taxes and levies are on the horizon where will the incentive to invest come from?

    Its definitely not at good state to be looking to start a property boom.

  38. BigJim

    First-time comment – great piece, David.
    Do I detect a lot of comment and criticism and, on the other hand, a distinct lack of constructive suggestion ?
    Honesty is a good starting point – we all had our fingers in the till; from minor fiddles of small cash and pulling ‘sickies’ all the way up to the ‘NAMA Top Ten’.
    Only when honesty again prevails, with zero tolerance all round, will we actively begin our recovery process; otherwise we can wait, passively, for someone else’s process, over which we’ll have no control, to arrive at some stage in the distant future !

    • Bamboo

      Welcome BigJim, late night and look forward to your comments.

    • liam

      Welcome BigJim. I’d ask you to consider this: what was the actual increase in the proportion of owner-occupiers as a percentage of the population during the boom? The government would have you believe that there is a collective and uniform responsibility to be dealt with, it is quite simply and plainly a lie.

      It matter not how we got here, only what we are going to do about it. Currently we are planning to punish many for the sins of a few, and in the process enrich the very people who caused the problems in the first place.

      • Bamboo

        It is in the GOV’s interest to have the public forget about the past and how we got here,
        Anyone who’s caught with their pants down in the act would want to forget how he got his pants down in the first place.
        Any other news like the volcano is a welcome break for the GOV so they it can have some breathing space.

        • liam

          We can’t change the past. Not suggesting we forget about it.

          • roc

            The point is that we need to understand precisely the phenomena of the past so that we can take actions in the present to attain a new EQUILIBRIUM.

            For example, if the values that were commonly held were largely responsible for our predicament, let’s swing those around to their polar opposite.

            Or, another example; if we were borrowing like crazy to live beyond our means, then let’s counteract that with other philosophies in this regard.

            So, it does matter very much how we got here – it holds the key to deciding what we need to do to reach a sustainable equilibrium.

            But, since many are unable to admit their culpability and face up to their past and their behaviour (in terms of the values they held, their financial shennanigans etc.), then nothing will change – rather we will continue going further and further away from the needed equilibrium.

            This is what is currently happening. Attitudes like yours are a huge hindrance, actually.

          • roc

            We can only create an adequate movement away from the phenomena of the boom era to create this new needed equilibrium by pathologising the type of behaviours and values that took us so far away from equilibrium.

            We desperately need to adequately pathologise the following kinds of phenomena:

            (a) Cronyism in business and politics
            (b) Borrowing to fund essentially unproductive business
            (c) Channeling taxpayer money through tax breaks and grants to fund essentially unproductive business
            (d) Corruption in business and politics that engendered essentially unproductive business
            (e) Borrowing to fund speculation and extravagant life-styles etc.
            (f) National fixation on property, and more generally, economic rent-seeking in all its guises (we need these kind of businesses like a hole in the head).

            The best way to pathologise and create a movement away from these things is to utilse the courts and legal system to the greatest extent that they are capable of.

            Since we are not doing this at the moment, there is not enough movement away from the above pathologies – in fact, we’re still doing the same things!!

            We will never reach the needed equilibrium at this rate.

          • liam

            roc, I understand your point, I think you are framing my comment in an entirely negative context.

            We cannot change the past. I think its hard to argue with that statement unless you possess a time machine. And I repeat: that’s not to say we can’t learn from it. Don’t see these as tremendously difficult ideas.

            My ‘attitude’ is to deal with the truth in so far as it can be discerned, and to consider what are possible ways forward to a desired outcome. The OP exemplifies this in my opinion.

          • BigJim

            Didn’t intend any implication, Liam, that we should take either course ; “we are what we are, and we are what we were” – surely the issue to be addressed is “what will we be ?”

            One major issue which I believe we must address is the failure of the established political process, of which failure this discussion is a good example : historically, participants in a discussion such as this vented their opinions through established political structures ; currently we retreat to our PCs, and the political energies created are a mere tiny fraction of what historically impacted on the system and under which, alas, we are still governed.

            The requirement for equilibrium is a ‘given’, as is the absorption of the lessons of the past; dare I suggest that a presumption that all contributions are fully read before shooting off a response is reasonable too ?

        • BigJim

          Agreed, but what are you going to do about it ?
          Don’t get mad, get even !

      • BigJim

        I don’t disagree with you , Liam, but we must move on, having absorbed the lessons; there’s obviously a total lack of confidence in the establishment, so from where else will the impetus emerge, other than at the bottom ?

        Just because we’ve been enjoying relative independence for the past 80 years doesn’t mean that we’ve completely lost the rebellious instincts of the previous 800, or does it ?

  39. Paul Krugman coins a phrase here;

    http://krugman.blogs.nytimes.com/2010/04/21/low-information-voters/?src=twt&twt=NytimesKrugman

    We’ve got too many Low Information Voters in Ireland, either unwilling or unable to learn. How do we turn the country into a questioning society full of Long Term Educated Voters?
    Or LTEV’s.
    Sorry.
    Couldn’t resist.

    • liam

      Information asymmetry, mixed with an appeal to emotion and common personal insecurities is what you are up against. It is overwhelmingly a lack of will rather than a lack of ability that prevents progress, from what I can tell.

      • Agreed Liam.
        Having returned here from some years abroad, I notice that many of the people who never left have become conditioned to accept and not question. This is tangible here because anyone who doesn’t comply soon finds the business leads cut off.
        I myself have suffered from this Boys Club mentality, when in fact, with 4m people, we should be like Switzerland. Millionaires all.

  40. Morning,

    Thanks for all the comments. I was distracted yesterday by Greek bonds going to 8.17% . This is clear default territory as we have noted here over the las few weeks. The question is whether there is any way to prevent contagion or is contagion exactly what we need to put a rapid end to this episode and look to the future?

    Best David

    • IMHO in a desperate move this weekend the Worldbank proposes their biggest stockup since 1988. +58 billion approaching 200 billion.

      At the same time voting quotas are supposed to undergo some restructuring, still the US will hold 15,58% of the votes.

      What is your view on this move?

    • MK1

      Hi David,

      The problem that Greece has is that it started with a large goverment debt (which it tried in vain -illegally?- to conceal) and it has so far not tackled its current deficit which has ballooned.

      Thus to the market its like watching a car about to crash in slow-motion, and with plenty of other debt to support globally, there are other safer havens.

      Greece bonds are heading towards junk bond status, BUT, there are still buyers PLUS each time Greece has gone to the market it has got funds. A lot of attention is on Greece but it is a small player in absolute terms, quantity wise. As are we in Ireland. Ireland is also paying over the odds for money.

      Btw, Fitch has Japan on ‘credit watch’ today due to its debt size yet its 10 year and 30 year money is at rates much much less than even Germany. Note that the US and the UK bonds also trade above that of Germany.

      Greece may be the focus point but its has solutions at hand to turn itself around, but it HAS TO grab the nettle, reduce public deficit, and start gathering taxes. It can brake and turn around that crashing car. It might be bumpy for the passengers but its better than going off a cliff or using the IMF/EU airbag.

      MK1

    • http://www.businessworld.ie/bworld/livenews.htm?a=2589061

      The IMF forecast won’t help David. Our shower still think they can get away with “Ukraine Tractor Production” economic forecasting.
      Since nothing is being invested into SME’s, at least nothing SME’s believe in, we’re not going to generate the wherewithal to consolidate the present mess.
      I for one would have nothing to do with any Government Quango offering gifts (Greeks bearing??) because they’re populated in the main by timeservers, of the non-IT variety.
      Ask any SME applying for a grant or Farmer looking for REPS. The money is spent in time, effort and paperwork before one can prove one should have it. Bit like the old days when applying for a small loan from the banks.

      So I think we’ve gone from being circled by sharks in a feeding frenzy to barracuda taking judicious nips until the time comes to move in for the kill.

      That’s not negative, nor is it knocking Ireland. It’s the truth. And the only way to break out of this cesspit is to let our own dogs of war loose. It mightn’nt be pretty for a bit but the markets will seek easier pickings if we fight them with every weapon in our arsenal, including telling the DeutchECB to pee or get off the pot.

      We are kow-towing to an outside force again when history tells us that standing our ground is the only way forward.
      F

      • I said it on Constantin Gurdgiev’s blog and I am certain about it, the introduction of the Euro 1999 was based on an essentially flawed concept, ever increasing liabilities of importing countries, a drunk can see this not to be sustainable.

        The Euro is a dead horse and inevitably will be abolished.

  41. David – another very good article by you as usual.Might I suggest that some date in the future that you include – the fine difference between risk taking and recklessness by bank management etc .I believe this important and might reduce the blurr of confusion by the public in general.

  42. Moon Wobble – it has been a while since I made any celestial comments . Just to say now the following:

    1 The Icelandic Volcano was disrupted from its sleep during the Wobble and Blue Moon at Christmas and from Jan there were a series of small earthquakes in Iceland prior to the disruption on 20 March ; and

    2 Full Moon is on the 28 th April so as of today until 29 th it is a very dangerous period and the PULL of the MOON will magnify greatly during this time .So expect anything in these moments .We are due big surprises .Hold tight.

  43. …fwiw, continuing my thoughts on a new emerging fascism in Europe and the US from Davids last article….

    The month of March was somewhat good for the far right throughout Europe in deed. I can only warn people to keep a close eye on these clear tendencies.

    This is not about stereoype comparison of Weimar and today, we live in a a different world, however, we need to be alert to what is happening in this new post Lisbon Europe.

    In France the National Front won 11% in regional elections, 20% ex Sarkozy voters contributed to this gain.

    In Italy Berlusconis right wing coalition succeeded
    again, no surprise here, but in Piedmont and Veneto, normally a traditional working class left wing voter strongpoint, The Northern League captured seats, Umberto Bossi is the brown leader of this fascist group.

    In the Netherleands, Geert Wilder another xenophobist and Anti Muslim populist and anti immigrant activist dominates the political landscape. The 9th of June will be interesting! His agenda is calling fro deporting Muslims, and he is known to get wide spread applause when he compares the Qur’an with Hitller’s Mein Kampf. His Freedon Party came second in the last Europen Elections.

    In Belgium Vlaam Belang has gained 50% support
    with Flemish Voters.

    The most striking tragedy happened this month in Hungary, where Gobar Vona leading Jobbik gained 16%, and literally coming from nowhere. Jobbik maintain the Hungarian Guard, dressed in 1940′s fascist outlook, their goal is to police Roma ‘ghettos’! They encourage violence against Roma publicly, and they openly display antisemitism. Jobbik won 15% of the last European vote.

    Now, of course, we have a bunch of historians and analysts quick to play down these results as protest votes only, but this is incorrect, as they form a pattern in Western Europe, where the far right is going from strength to strength.

    It is not a short term event that goes away with the next elections anymore. In 2002 Jean Yves Camus wrote some articles in Le Monde Diplomatique pointing to this new emerging fascism throughout Europe in it’s slick new face. Camus is a expert on European radical movements working at the Paris Institute of International and Strategic Relations.

    Far Right movements have to be taken serious and can not be dismissed or played down as protest voters anymore. This would be wrong.

    • In Ireland, the events unfolding make me think of the abbreviation FF standing for Financial Fascism.

    • Colin_in_exile

      You are completely wrong about Geert Wilders. He has stated that “My allies are not Le Pen or Haider… We’ll never join up with the fascists and Mussolinis of Italy. I’m very afraid of being linked with the wrong rightist fascist groups,” saying instead his drive is issues such as freedom of expression and Dutch iconoclasm. He wants to prevent the islamification of his country. Are you suggesting he should stand idly by and watch muslims take over his country?

      http://en.wikipedia.org/wiki/Geert_Wilders

      He broadly agrees with Robert Spencer who runs the website http://www.jihadwatch.org/

      • s1lverbullet

        Are you one of these people who think that Islam is evil??

        • Colin_in_exile

          Oh no, I love Islam, I love the way you can be murdered for changing your religion from Islam, or stoned to death for committing adultery, or told when and where you can eat one month a year.

          Are you one of these people who loves to see burka-clad women walking down the streets of Ireland? Is it your dream to become a dhimmi in your own country?

          • liam

            Jaysus Colin, where on earth is all this vitriol coming from?

            We have a caliphate here already, its called Fianna Fail.

          • s1lverbullet

            @ colin – To be honest I am against all religion, although you have to concede that it is Roman Catholicism that is the biggest murderer in history. How about over here where you could be put in an asylum for having a child out of wedlock, be put away for years as a child for skipping school, have your pelvis sawed open by ‘doctors’ to enable you to keep bearing children, sodomized by almost anyone you’d come in contact with – priests, swimming coaches, uncles. Oh yeah we have it so good here

      • Colin,

        if you talk about the sociopathic Geert Wilder who was turned back in heathrow airport and refused entry to the UK when he tried to show his film that compares Qur’an with Hitler’s Mein Kampf, yes, then we talk about the same person.

        No, I do not think I got it all wrong here.

        • Geert Wilders in deed is the epitome of a new fascism flaring up in Europe. I guess it is useless to debate this person here, as we will not find agreement on this point Colin.

          My contribution was meant to highlight the dangers of these tendencies in context of the financial heist performed on the working class.

          • Colin_in_exile

            This is not the correct forum to debate this topic so please desist from mentioning Geert Wilders.

          • Currently he is on trial in a dutch court for continuous hate speeches and other offenses related, he might face 2 years in prison if convicted.

    • s1lverbullet

      @ Laughingbear – Although I have no religious beliefs, I can fully understand how antisemitism gathers momentum seeing as how all the major criminal financial institutions are run and owned by zionist zealots. What do you think?

      • Hi Silverbullet,

        First, I reject attempts to treat the Holocaust as a political asset or political leverage.

        Israel is the military outpost of the US and as such it has to be understood in context of the Palestinian conflict. You refer to Zionists; It is them in deed who are partially responsible for the upsurge of global antisemitism. I differentiate between Judaism and Zionism of course.

        It is useful to remember the spanish inquisition (Isabella of Spain) to understand antisemitism in it’s complexity as a cultural meme that has transpired throughout centuries.

        In 1492, the same year Columbus raised funds for his explorations, the muslim Kingdom of Grenada was taken by force, in this year, all Jews who refused to convert to Christianity were expelled from Spain.

        The Pope honored Isabella and Ferdinand by giving them the title ‘The Catholic’ for their success in ‘purifying’ the faith.

        Linking the financial heist to the zionist movement is not entirely accurate, it serves the same purpose that Mahmoud Ahmadinejad pursues when he spat his anti semitic saliva in the UN back in 2008 trying to make Jews responsible for the financial destruction.

        The increased antisemitism is linked to the growth of fascism throughout the world.

        • May be interesting to remember as well, when the black death wiped out 25 million people in europe, Jews were charged with having provoked the Plague by their unbelief and sinfulness.

          It has been a pattern throughout history, probably the longest existing meme of all.

        • Colin_in_exile

          Southern Spain was a re-conquest by the native Spanish Christians, reversing an 8th century violent invasion by muslims.

          Again, this is not the forum to be discussing such material so please desist from it.

          • You know, I explained why I put the new european wide fascism into the context of this financial heist, and Silverbullet asked me a question to which I responded.

            So yes, this is the place to put things into context, as it is an uncensored blog, secondly, it is not a forum.

            This is the second time you ask me to desist from posting such material. I suggest you don’t read it then, instead of asking me to not post my opinion, which covers a wee bit more ground than Ireland alone.

          • Colin_in_exile

            Uncensored, yes I agree, so yes you are free to post what you like, but I don’t know how long you are here reading and posting, so just to let you know, we’ve been here before and DMcW and mediator agree that we SHOULD keep away from religion. I just wanted to set the record straight about a political figure you attacked and wanted people to see an unbiased profile about him on wikipedia.

            You don’t speak for all working classes. Working classes coulc have voted for communism in western democracies, but as of yet, no communist government has been voted into power. Maybe you should consider that.

          • Colin,

            Communism? You are the first in this thread who brings up this ideology. Fwiw, I am not affiliated with any political party or ideology, never was and never will be. So why should I consider communism not to be voted into power?

            I am aware about the emerging fascism since long, and yes, I do not speak on behalf of anyone but myself Colin.

            However, it is typical class resentment that is exercised through the ways politicians representing special interests and enabling bank bailed outs with the money of working class people.

            Certainly, I do not have an intentions to discuss religion here, and I fail to see where I would have started a discussion on Religion to start with.

            As for Mr. Wilders, I would not think that your link is giving an unbiased description. Wilders proposed to establish 1,000 euros taxes per annum for wearing a headscarf. Such is his populist mindset as a fearmongerer exploiting the islamophobic trends in a society that faces economical downturn.

            From a psychological point of view, his obsessive compulsiveness is more than evident, a control freak with supremacist fantasies.

            I lived in the Netherlands long enough to know a little bit about the suppressed views that he brings to the surface with his rhetoric.

            Such are the dangers of the new breed of fascists, hiding behind freedom of speech and liberalism.

        • s1lverbullet

          excellent as usual. I too see the huge difference between Judaism and Zionism. I detest everything that Israel stands for but have no ill feeling against Jews as a people. I wonder if you have ever taken a look at “The Protocols of The Learned Elders of Zion” forged/real documents and if you find iocincidental to recent events?

          • Yes this is interesting.

            I was born in Cologne and through my family, my mother was secretary to a very high ranking church representative, as well as my my own interests and education I was confronted very early with genocides and have a life lasting interest in these matters, which to a degree explains my interest in native american culture as well.

            I came across Goedsche and his sickening copycat writings early in my life in that respect. He was a spy for the Prussian secret service, a low ranking postal worker with strong antisemitic views. He lost his work when he forged evidence concerning the
            prosecution of a Democrat Benedict Waldeck.

            Goedsche used MauriceJoly’s ‘Dialogues in Hell Between Machiavelli and Montesquieu’ for his antisemitic Jabber which he called Biarritz, later translated into russian as ‘The Rabbi’s Speech’ and then by the russian Okhrana (think of it as a secret service) in Paris renamed to ‘Protocols of the Elders of Zion’. They became part of their well layed out Okrhana PR and the progrom in Odessa 1905.

            His writings had a severe impact on the Russian liberal reform movement, in fact it gave a weakened Zar the means to crush the movement.

            In civil war after the Bolshevik Revolution of 1917, the reactionary white armies used it again to justify their slaughter of thousands of jews.

            Around 1920, the writings were exposed as a plagiat.

            It is a good example how a meme works and what deliberately spread disinformation can result in.

            If we think about our societies today and the way information is forged, pictures manipulated, truth bend backwards to suit a purpose, and consider the impact of information technology at our disposal, it has become a difficult task for the average citizen to stay ahead of smoke screens and deliberate disinformation spread to maintain control.

            There are many examples of how this works and in deed how it is used on purpose to manipulate masses.

            Interesting context, eight years after the protocols were exposed in an article by Philip Grave in the London Times and other publications, Ortega y Gasset published ‘The Revolt of the masses’ sketching an european that still is around these days, very much so.

            I think we owe it to ourselves to be alert to the way media works and how the numerous manipulations of citizens opinions are performed. Statements like ‘We truned the corner’ are easy to see through, others are less easy to dissect, but practice helps.

            Although the protocols were exposed, denial and the myth surrounding them continued to make an impact and cause more suffering. The continued to be used, and Henry Ford sponsored them until 1927 in the US. The also were instrumental to the Nazi’s, used as justification for their genocide.

            To date you still will find people who use them with their antisemitic poisoned brains, painting pictures of Jews using the blood of christian children for their rituals.

            I am concerned about the generation of people who were educated in the midst of new technologies already fully implemented, and I intend to think, they lack a certain intellectual distance, and they are certainly not educated enough to dissect informations to dig out the the true character and intention behind it, which has become a increasingly difficult task for everyone.

          • P.S.
            Populists like Wilders use the very same methodologies that are used since centuries.

            A friend here from this forum mentioned to me this evening in a call what a difficulty subject fascism would be to touch here.

            I know this, but I also think this is not the time for silence, on the contrary, we have to try to dig out the truth of the events infolding in the world, and this new breed fascism is the biggest danger to our children and future generations.

            If someone would have told me when i was a young man, that i would have to see Nazis marching in Berlin under Police protection in the 80s, I would have laughed out loud. But we live in a world where Scientology is listed as a church in the US, and we have to warn our children on these dangers, and eventually contribute a little but to stop them in their ways, eventually.

          • You know what picture just came to my mind?

            During the G.W. Bush era the color coded terrorist thread levels that became a constant feature on US Television.

            After WWII the UdSSR and USA went into the cold war period. I remember vividly the day the wall in Berlin was demolished, I was in Berlin on this day.

            The Mc Carthy communist hunt was just one aspect of the long lasting enemy picture the american public was indoctrinated with.

            This enemy was suddenly gone and needed a substitute, muslims filled that gap.

            Ever since, this meme spread throughout the world in a contagious manner causing right wing populists to claim moderate muslims would not exist.

            The islamisation of Europe is just a matter of time and demographics, nothing else.

            But this new global enemy has become a meme of it’s own.

            During the Iran Contra crisis, the US funded every militant splinter groups they could get their hands on with intelligence, weapons and money. This was going to bite them in the arse later big times.

            Hussein was educated and supported, in fact he was put in place by the US in the first place. The US middle east policies were always motivated to have control on recourses, and the resulting Palestinian conflict was sponsored by US interests.

            This Islamic world became the UdSSR substitute, Rumsfeld and company the pendant to McCarthy, and it spread like a contagion as well. It is deliberately used in an attempt to maintain dollar supremacy.

            Today we are indoctrinated with muslims being the children eating communists of late.

            I live in Donegal, I have Hindus, Muslims, Christians and Atheists as Neighbors, thanks God no Scientologists, Italiens, Germans, Irish, Pakistani, British, Canadian and so on.

            The new doctrine is that all muslims are on a trip to kill all christians and have to be send back to where they came from to protect our way of life, where the reality is that Europe will be Islamic in a very short amount of time.

            How astonishingly easy it is to spread this hate around and offer the new global enemy to the mob to feast on.

    • Invalid username

      Pls spare us from the anti-sem meme – it’s so tiresome. Besides, Zionists and all other fascists are no better than the Nazis who helped spawn their own, present-day bugbear.

      The real meme today is anti-democrat.

  44. Art1980

    News in – apparently in papers today a drop in the price on affordable housing in Spencer Dock, under 200k for two bed and no claw back restrictions. Sounds like marketing boys are back with sells pitch.

    • s1lverbullet

      oh quick, buy buy buy. You’d be a fool not to get on the property ladder at this time….ha ha ha ha ha ha. I bet there are loads of fools thinking this at the mo

  45. “Negotiations with the IMF, the EU Commission and the European Central Bank on a loan from the proposed rescue fund are due to start today.

    Greek finance minister George Papaconstantinou said that if his country did activate the rescue package of up to €30bn from its eurozone partners, the loans would start arriving within one to three weeks.”

    Seems to me there’s a tipping point being approached this week. On the one hand, SEC (Securities Exchange Committee) investigation into Goldman Sachs http://bit.ly/ay3Wrx is showing up DIRT. There’s mounting opposition in American Senate to the proposals for new regulatory powers in the US. Obama is going to address this today. Its between a rock and a hard place though, the more they try to unwind the paper trail derivative time bombs, the more they scare the markets?

    What they maybe need is a system of licensing for new financial products that will stress test each one with similar rigour to FDA regulations for new drug patents!

    While Greece gets ready to grab European bailout money thereby more rock and hard place stuff showing Greek weakness, Prof Schachtscneider constitutional challenge to Greek bailout is going ahead, he wants to see the euro broke up and countries like ours ejected!

    http://bit.ly/cthZHy

    According to Schachtscneider ‘no bailout clause’ policy needs to be reaffirmed and who could disagree with him?

    On a brighter note Dermot Mooney of Light Entertainment RTE was motivated yesterday to do a straw pole of listeners to see if they supported Lenin’s propaganda of the previous day that every day that passed showed greater growing support for NAMA. Result of straw pole phone in, 86% disagreed with Lenin!

    The Irish public are a lot wiser than some people give them credit for!

    Sean Fleming FF shows opposition to Anglo bailout
    http://bit.ly/caB5Kb

    Do you get the feeling the ‘centre cannot hold’

    “Things fall apart; the centre cannot hold;”(Yeats)

    http://bit.ly/5ydwfX

    Time to leave the euro, devalue, dump Anglo, renegotiate with our FF bondolders about that noose they slipped around our neck, default if we can’t negotiate. Hit bottom, bounce back with a new, fresh start and a new currency.

    Most of all, dump the Clown Gang of financial decentralisers who’ve sucked the life out of this place.

    As a going away present electronic voting machines to the moráns for quick disposal in the Bog of Allen. This be can be a sign of the beginning of our new smart economy! Not Clown Smart, as Jay Z would say, ‘really, really smart’ lol

    Obama has a tough speech today to calm the fears of the markets and support the new regulator powers/policies/SEC investigations/probes about which I hope to learn more.

    Meanwhile, I’m guessing its time to Fasten your seat belts, folks:)

    • are new comments noew being moderated?

      • Hi Colm,

        not that I would know of, why do you ask?

        • got “Your comment is awaiting moderation” message.

          • Well, that is astonishing, I did not get such message today, but in case this should become a new standard, I would stop contributing on this site.

          • David,
            Jump in on this and sort it out please?
            I’ve lost a comment calling Cowen a Traitor.
            And I won’t back off on it.
            As you know, there’s Facebook, Twitter and all that. No2Nama has 1000 followers and after Aherns Blasphemy laws, we are all quite nervous.
            CBWEBS moderation question has been hanging all day with no response???
            With respect,
            F

          • To be fair David ,
            This craic happened last Summer when you took a Sabbatical to write your book. Are we blathering here or do we matter?

          • ….taking a back seat until this has been sorted…..

          • liam

            ‘Traitor’ is rather a political notion, probably difficult to define in law. A quick glance through the relevant article of the Irish constitution (A39) suggests it would be hard to convict the current administration of treason since the focus is almost entirely on armed insurgency rather than the kind of white collar crime we have in mind here.

            IANAL, but my reading is that the constitution protects the state rather than the citizen or at least regards the protection of the state as being synonymous with protection of the citizen. It never seems to have occurred to anyone that the citizens sometimes require protection from the state.

            All the more reason to tear the damn thing up and start again.

          • Garry

            I guess you pasted in 2 or more links in the comment

            if you put in a few links, it will be regarded as spam ….

            Put in just one link and you should be fine.

      • webmaster

        Hi cbweb

        There has been no change to the comment moderation system. If you posted more than one link it may be regarded as spam and need to be approved before it appears online. This has always been the case.

        Hope that helps.

  46. WORLDBANK opens data pool

    The World Bank Group said today it will offer free access to more than 2,000 financial, business, health, economic and human development statistics that had mostly been available only to paying subscribers.

    http://data.worldbank.org/

  47. [...] here to read the full text of advice on this subject given by economist and broadcaster David [...]

  48. G

    David McWilliams,

    This is especially for you.

    Just to say, I might not agree with everything you say, but I thank you for the site and for pushing the envelope and making your presence felt!

    I hope you enjoy it……… :-)
    http://en.tackfilm.se/?id=1271935224578RA81

    ~ G.

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