Author: Mark Coughlan

Scared ya, didn’t I?

He’s still a sitting TD, in case you’d forgotten. Or at least he’s still being paid and claiming expenses as a sitting TD. Though he has hardly spoken in the Dáil for two years.

… is on Ireland today. It’s written in hard-hitting language.

However, this paragraph slightly undermines the authority of piece;

When a country has gone bust in such spectacular fashion, the causes for its crisis are bound to range far and wide. Primary among them we might count an overreliance on property prices both for the feelgood factor and for public revenues. During the boom, Dublin cut income and corporation tax and relied increasingly on property taxes.

We never had a property tax, at least not a residential property tax. In fact, if we did it probably would have cooled things down and stopped the bubble inflating to the extent it did. I’d guess the author was referring to stamp duty… but that’s a once-off payment, not a tax. Or perhaps I’m being too finicky and should accept ‘property tax’ to mean taxes raised from property development as opposed to property purchase.

Either way, the lack of taxes on property – and the multiple loopholes and tax breaks made available to developers – is what inflated the property market. The banks loan ‘policies’ contributed too, obviously. I’m not sure where property taxes came into it. Perhaps “Dublin cut income and corporation tax and relied increasingly on property development to keep money flowing around the economy”, would be more accurate. Or perhaps I’m wrong. Let me know, if so.

Footnote: this paragraph raised a smile;

As Pete Lunn of Dublin’s Economic and Social Research Institute notes, the elite directing the Irish economy is more tightly closed than an oyster shell – so that the top civil servant in the department of finance would normally expect his tenure to be followed by a stint as chief central banker. Policymakers shrank from calling the property bubble a bubble until it had popped. And when it had burst, they accepted too easily the bankers’ claims that they were merely short of liquidity rather than utterly bust.

You read that right, the ESRI lamenting that an oyster-like elite was allowed to form a group-think which resulted in a lack of dissenting voices.

A report by Carol Jordan broadcast in the last few days on CNN about ghost estates, shot in east Cork. It features Cian O’Callaghan of NÌRSA and Ireland After Nama.

Gav blogged photos of estates in the same region back in 2008.

Minister Brian Lenihan was interviewed by Bloomberg yesterday. You can watch it here.

He’s extremely definite in his views, I’ll have to add a few quotes in the QFBL section for future reference. One in particular caught my attention. “The position with Allied Irish Bank is; it will be fully capitalised and transformed and restored into its greatness”. Poetry, minister Lenihan, poetry.

The DIRT scandal.

Foreign exchange overcharging.

Revelations of €8.6m additional overcharging on a range of products ranging from trust funds to student and graduate facilities, effecting more than 50,000 customers, following anonymous tip-offs to the Financial Regulator.

Insurance Corporation of Ireland (which, if memory serves, we’re still paying for to this day).

The findings of the Moriarty Tribunal in relation to the settling of a £1m overdraft for a Mr Charles Haughey.

Faldor Ltd and the subsequent AIB executives’ settlements with Revenue.

John Rusnak.

Greatness? Jayzuz.

The author of the McGarr Solicitors blog on NAMA…

NAMA’s purpose is to defer the fixing of the valuation of the loans as long as possible. It claims that it is paying prices reflecting “long term economic value”. This is an admission, of course, that the loans are not currently worth NAMA’s estimate.

Long after the Government has left office we will learn the real value of NAMA’s “assets”. So, too, will the Central Bank and the Financial Regulator. Only then will the cost of the Bank Bailout be known.

The Government devised NAMA. It has designated NAMA as exempt from Freedom of Information legislation. When this writer asked for information on the agreement between the Government and the Commission of the EU on the NAMA loan pricing mechanisms, the information was refused.

Everything of relevance in the possession of NAMA is a secret…

Worth reading in full.

EDIT: [As pointed out by Dave Molloy in comments. “Sorry, but, ‘payments made last year’ and “earlier this year said he would forgo his pension” (from then on, presumably) seem compatible, no?”]. I got the relevant years mixed. Post left as was to show the world my foolishness and remind me not to post in such haste again. – Mark

Both myself and Gav are hectic with the day jobs (shocker, jobs!) and haven’t had the time to blog anything too significant of late. We’re getting around to it.

In the meantime; isn’t it amazing that a detail like the following doesn’t get more than 30 words, 12 paragraphs down, 17 pages into your newspaper these days.

Fiach Kelly in the Irish Independent yesterday;

Accounts published last night by the Department of Finance also showed pension payments made last year to former office holders including: former Taoisigh John Bruton (€100,027); Garret FitzGerald (€103,926); Albert Reynolds (€109,358); and Bertie Ahern (€98,901).

Mr Ahern, a sitting TD, earlier this year said he would forgo his pension while he was still serving in the Dail.

I suppose Ahern could argue he’s not actually a ‘sitting’ TD, if he had the neck.

(Eh I agree with Dave below Mark, have you read this incorrectly? – Gav)

… this letter on Conor Pope’s blog.

Stories about Ireland are leading both the Ft.com and WSJ.com.

WSJ:

Ireland’s deepening troubles raise doubts about the wisdom of the stringent fiscal austerity measures that the former Celtic Tiger and other European countries have put in place, which effectively hamper consumers and take cash out of the economy.

At the same time, Ireland’s gloomy prospects mean the government may have to make even deeper cuts this winter to reduce its budget deficit, which is expected to surpass 25% of GDP this year, the biggest in the 16-nation euro area by that measure. The possible doubling in the deficit—now about 12% of GDP—is due largely to the cost of bailing out troubled banks.

FT:

News that Ireland’s GDP fell 1.2 per cent in the second quarter added to the anxiety, as did rumours of a default by Allied Irish Banks. It should be stressed there has been nothing to suggest the latter is anything other than market scuttlebutt.

The markets are confused by Allied Irish Banks (AIB, known as AIB) and Anglo Irish Bank (‘AIB’ known as Anglo)?

Jesus lads, even a name change, just for the next day or so?