Comments on: The Long Con http://www.irishelection.com/2006/06/the-long-con/ Coverage of Irish Politics, News and Current Affairs Thu, 09 Feb 2012 09:23:31 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: S O'SCOLLAIN http://www.irishelection.com/2006/06/the-long-con/comment-page-1/#comment-1038 S O'SCOLLAIN Fri, 16 Jun 2006 14:31:35 +0000 http://www.irishelection.com/06/the-long-con/#comment-1038 It would make absolute sense for the FF/PD coalition to lose the next election and let an alternative government to pick up the pieces of their maladministarion. It happened in the past, in 1977 following the abolition of domestic rates & the mess that ensued. However, it would be difficult for Bertie to surrender. His greed & ambition makes him blind to everything except winning. So I can't imagine him seeing the obvious. He would be unemployable in the real world - except perhaps in some capacity in his beloved Trade Unions. And it is only fair that he remains in office - to clear up the mess created by his incompetence & the waste created by his FF colleagues, notably Martin Cullen. Simon mentions AIB selling their HQ and the liquidation of Irish shares viz. CRH - & the Banks with high exposure to the Construction & development sectors - Anglo Irish in particular. On May 12th I mentioned that I felt that we were entering a plateau, following the release of the inflation rate of 3.8%, and that there would be a correction that would lead to a correction, if not a recession, in 2008. It now seems that the correction is already happening. Cian asked upon what grounds I based my prediction that a "tipping point" had arrived. I could only reply that I was guessing. However, all around there was evidence that a process of liquidation was in train. Now, one has only to review the Property Advertisements in the newspapers to see how many highly-priced houses are being auctioned. And the withdrawal rate is significantly higher. In the last week of May 2006, 53% of the 79 properties for sale by auction were withdrawn. In the same period in 2005, 27% of the 66 properties behaved in similar fashion. This sends out a very clear message to me. People with accumulated profits in their properties are liquidating. As is AIB. Already, interest rates in the US are 7% and they are struggling to correct their economy. European investors are selling Irish shares, not just the banks & construction shares, but also mining & exploration stocks. Bear traders are adding to the sell off, hoping to buy back cheaply and make a turn. Options have moved to "put" across the boards. If there is a perception abroad that the ISEQ is over priced, then the government; the construction industry; estate agents; the legal profession & the various commission agents who are "puffing" the amrket and who prosper as long as house prices remain inflated are living in a fool's paradise. The bullish statements that they are putting out are irresponsible and soon it will all end in tears, with house prices falling by 15 %; unsaleable motor cars & SUVs clogging up traders lots and the Banks making huge provisons for Bad Debts. But it will be Sean & Nuala Citizen that will be left in tears, picking up the pieces - not Bertie; not the fat-cat barristers & solicitors; not the greedy estate agents & the dishonest chairmen of the banks. Maybe I'm wrong. I hope so. It would make absolute sense for the FF/PD coalition to lose the next election and let an alternative government to pick up the pieces of their maladministarion. It happened in the past, in 1977 following the abolition of domestic rates & the mess that ensued.

However, it would be difficult for Bertie to surrender. His greed & ambition makes him blind to everything except winning.
So I can’t imagine him seeing the obvious. He would be unemployable in the real world – except perhaps in some capacity in his beloved Trade Unions.
And it is only fair that he remains in office – to clear up the mess created by his incompetence & the waste created by his FF colleagues, notably Martin Cullen.

Simon mentions AIB selling their HQ and the liquidation of Irish shares viz. CRH – & the Banks with high exposure to the Construction & development sectors – Anglo Irish in particular.
On May 12th I mentioned that I felt that we were entering a plateau, following the release of the inflation rate of 3.8%, and that there would be a correction that would lead to a correction, if not a recession, in 2008. It now seems that the correction is already happening.

Cian asked upon what grounds I based my prediction that a “tipping point” had arrived.
I could only reply that I was guessing.

However, all around there was evidence that a process of liquidation was in train. Now, one has only to review the Property Advertisements in the newspapers to see how many highly-priced houses are being auctioned.
And the withdrawal rate is significantly higher. In the last week of May 2006, 53% of the 79 properties for sale by auction were withdrawn. In the same period in 2005, 27% of the 66 properties behaved in similar fashion.

This sends out a very clear message to me.
People with accumulated profits in their properties are liquidating.
As is AIB.

Already, interest rates in the US are 7% and they are struggling to correct their economy.

European investors are selling Irish shares, not just the banks & construction shares, but also mining & exploration stocks. Bear traders are adding to the sell off, hoping to buy back cheaply and make a turn. Options have moved to “put” across the boards.

If there is a perception abroad that the ISEQ is over priced, then the government; the construction industry; estate agents; the legal profession & the various commission agents who are “puffing” the amrket and who prosper as long as house prices remain inflated are living in a fool’s paradise.
The bullish statements that they are putting out are irresponsible and soon it will all end in tears, with house prices falling by 15 %; unsaleable motor cars & SUVs clogging up traders lots and the Banks making huge provisons for Bad Debts.

But it will be Sean & Nuala Citizen that will be left in tears, picking up the pieces – not Bertie; not the fat-cat barristers & solicitors; not the greedy estate agents & the dishonest chairmen of the banks.

Maybe I’m wrong. I hope so.

]]> By: Dan Sullivan http://www.irishelection.com/2006/06/the-long-con/comment-page-1/#comment-1003 Dan Sullivan Mon, 12 Jun 2006 07:50:34 +0000 http://www.irishelection.com/06/the-long-con/#comment-1003 Overall stamp duty levels could remain the same if we were building more units at a lower rate of duty. Fact is too much of the housing build has been of the holiday, 2nd home variety and not enough in the areas of peak demand. The other factor is the SSIA provision which won't be there next year and which the government had to allow for which would mean some more wiggle room even with the drop off in income from the property sector. Overall stamp duty levels could remain the same if we were building more units at a lower rate of duty. Fact is too much of the housing build has been of the holiday, 2nd home variety and not enough in the areas of peak demand. The other factor is the SSIA provision which won’t be there next year and which the government had to allow for which would mean some more wiggle room even with the drop off in income from the property sector.

]]> By: adam http://www.irishelection.com/2006/06/the-long-con/comment-page-1/#comment-1002 adam Sun, 11 Jun 2006 16:20:43 +0000 http://www.irishelection.com/06/the-long-con/#comment-1002 A friend of mine who knows these kinds of things tells me that we have another 18 months or so before the downturn really sets in; he figures it won't be really bad, but that the levels of disposable income seen at present won't be around any more (as he put it, we won't be seeing kids getting rented limo's for their confirmation; if that's the worse of it I say 18 months is too long a wait!). On the housing market he says that it's probably going to level but it wno't really drop all that much, but we could benefit (in the long term) from a short, sharp shock... something that probably won't happen. Finally I asked him if the Government could do anything to avoid the downturn and his answer was yes, but it would ruin them... I then pointed out how sweet a deal it would be for FF/PD if they lost the next election, and FG/Lab got in just in time to see the economy drop (but not enough to save it)... his answer was that the Irish economy has done so well in spite of the Irish Government, not because of it. A friend of mine who knows these kinds of things tells me that we have another 18 months or so before the downturn really sets in; he figures it won’t be really bad, but that the levels of disposable income seen at present won’t be around any more (as he put it, we won’t be seeing kids getting rented limo’s for their confirmation; if that’s the worse of it I say 18 months is too long a wait!).
On the housing market he says that it’s probably going to level but it wno’t really drop all that much, but we could benefit (in the long term) from a short, sharp shock… something that probably won’t happen.

Finally I asked him if the Government could do anything to avoid the downturn and his answer was yes, but it would ruin them… I then pointed out how sweet a deal it would be for FF/PD if they lost the next election, and FG/Lab got in just in time to see the economy drop (but not enough to save it)… his answer was that the Irish economy has done so well in spite of the Irish Government, not because of it.

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