Mark Simpson from the BBC, can I ask you two questions about emigration. I assume that you factor in some sort of projection in terms of emigration, in terms of your overall financial figures, if you have any latest projections, could you share them with us? And secondly, what is your overall attitude to young people here who, rather than putting on the Green Jersey, are putting on the Australian Jersey in many cases.

Minister for Finance, Michael Noonan: Well, we have the Central Statistics Office who monitor these issues and they come up in the statistics. They’re not specifically factored into the budgetary process. What is factored in is employment and unemployment. And employment has remained quite high, we still have 1.8m people working in Ireland. I remember in the 1980s when times were quite bad, employment dropped down to 940, almost half so the situation is quite different . In December, unemployment steadied, actually for the first time in three years the Live Register went down, went down by about 3,000, the last time that happened I think was in 2007, and we hope it wasn’t just a one month event, that there’s a stabilisation. [According to the CSO, the seasonally adjusted Live Register for November 2011 was 446,500 which fell by 3,200 to 443,200 in December 2011. But if the Minister is referring to the monthly fall of 3,200 then it was only in December 2010 that the Live Register was 446,000 and it fell by 4,300 to 441,700 in January 2011 and then rose]

There’s always young people coming and going from Ireland, some of them are emigrants in the traditional sense, others simply, it’s a small island and they want to get off the island, a lot of the people that go to Australia, it’s not being driven by unemployment at all, it’s driven by a desire to see another part of the world. I have five adult children, three of them living and working abroad, I don’t think any of the three would be described as an emigrant, it’s a free choice of lifestyle and what they wanted to do with their lives. There’s a lot of families like that. Now there are other people being driven abroad alright. Now what has happened is that the collapse of the building industry has created a lot of forced emigration. The immediate effect of that was that over about a 15-month period, 100,000 people with building skills lost their jobs. And they’ve lost their jobs with absolutely no hope of for the bulk of them being re-employed in the building industry in Ireland. Because we’re not going back to a building and construction industry that’s 20% of GDP. And we can’t hold down that hope. And in Irelandwe’re trying to re-skill them, going into different categories.

But quite a number of them have emigrated and quite a lot of them are in Australia, some of them are in the UK, some in Germany, Young men in particular with skills in the building industry. It’s a very identifiable tranche of Irish people.

It’s not about putting on the Green Jersey and taking off the Green Jersey, that’s life in modern Ireland, to do their best and I hope that they’re successful abroad. What we have to make sure is, that people have the best possible education right up to third level so when they go, they’re employed as young professionals in their country of destination rather than the traditional image of Irish people from the 1950s.

Villain of the past week, the ECB – which forced IMF bailout-programme country, Ireland to pay €1.25bn to unsecured, unguaranteed bondholders at a defunct bank – really is taking the biscuit for distorting, and in some cases, damaging intervention in the economies and societies of Europe. In Ireland, we have experienced the ECB sit on its hands in the early 2000s as core European banks lent colossal sums of money to Irish banks which was then poured into property, causing a bubble which has now burst with disastrous consequences set to last generations. And the Irish nation has found itself paying back inter-bank lending, partly from a foolish bank guarantee and partly under duress from the ECB. And we have an ECB which doggedly sticks to its primary remit of price stability (keeping inflation in check) when the obvious need for the EuroZone as a whole is to print euros and let inflation rise beyond the 2% ECB target.

But consider the latest wheeze on the part of the ECB – the so-called “Longer Term Refinancing Operation” or LTRO in December 2011.  This saw €489bn lent by the ECB to banks operating in the EuroZone, the ECB loans were for three years and at the main ECB lending rate which is currently 1%. The banks placed collateral with the ECB as security, but it is widely acknowledged that the ECB lowered the quality of collateral accepted. The LTRO operation was undertaken as part of the ECB’s remit in support of monetary policy. Monetary policy is where a Government or central bank seeks to support an economy through interest rates and money supply.

We saw during the week that Irish banks have used the LTRO funding to buy Irish government bonds paying 5.15% per annum. Which is pretty good business for the banks – they borrow at 1% and get paid 5.15% on their borrowings. Not only that, but sitting on Irish government bonds for three years is far easier – and cheaper – than lending to pesky households and businesses. After all some of those households and businesses may not repay loans, others may get into difficulty and each represents a small connection and there is great cost in administering such loans. Nicer to kick back and wait for Irish government bonds to mature!

It gets better. In February 2012, the ECB will undertake another LTRO operation and Irish banks may be able to pledge the newly acquired Irish govt bonds as collateral. So they get more funds at 1% and can then buy even more government bonds that pay 5%-plus. Isn’t it great to be a bank! Prior to the December 2011 LTRO, the previous longest LTRO was for 1 year and was issued in 2009. There has been a 6-month LTRO also but generally LTROs are for three months.

Unlike other businesses or industry, banks can get access to this cheap 3-year money from the ECB. By comparison, spare a thought for poor old Michael O’Leary (pictured above, left) who is run ragged as the CEO of Ryanair trying to build the world’s biggest airline. Michael, the schmuck, labours away at providing a real service to consumers, and trying to make a profit on his enterprise. How peeved must he feel when he looks over at other businesses – banks – who simply get lent 3-year money at 1% which they then “invest” in 5%+ yielding investments? God knows what he thinks about the uneven playing field between banks and his own business when trying to attract equity investment. You can only speculate if Michael stays awake at night, sore at the fact that he can’t use the assets in his own balance sheet to get 1% 3-year money from the ECB and then stick that in Irish government bonds. The poor eejit!

On the other hand, if you happen to be say, the CEO of Anglo – or IBRC as it is now called – Mike Aynsley, (pictured above, right) and just happen to have a bank licence or are a bank shareholder, then the ECB largesse is like manna from heaven. Pity that the funding is not demonstrably going into the real economy – households and businesses. And isn’t this what monetary policy should support? And if so, isn’t the ECB queering that as well?

The ECB was asked to comment on any consideration it had paid to competition issues before devising its 3-year LTRO operation in December 2011. Ryanair’s spokesman, Stephen McNamara was asked whether Michael O’Leary felt like a right eejit for slaving away on a proper business whilst banks have been given a licence to print profits and whether Ryanair might consider legal action on competition grounds. Neither has yet commented.

NAMA is apparently about to set up one or more Qualifying Investment Funds. According to the tender document “NAMA intends to establish a Qualifying Investor Fund (QIF) as an investment company in accordance with Part XIII of the Companies Act 1990. The QIF will be established as an umbrella scheme with segregated liability between sub-funds which will invest in property and property related assets inIreland, theUK andEurope.”

The services are required for upto seven years.The Irish Funds Industry Association defines a QIF thusly : “The Qualifying Investor Fund (QIF) is a regulated, specialist investment fund targeted at sophisticated and institutional investors, who must meet minimum subscription and financial resources requirements. The main advantage of the QIF is the removal of the Financial Regulator’s general conditions relating to investment policies and borrowing, thereby enabling sophisticated investors to use this structure for a wide range of investment purposes. The QIF is the preferred structure used in the regulated alternative investment sphere.”

It is understood the minimum investment in a QIF is €100,000. NAMA has not commented on the tender, but it is known that NAMA wanted to see Real Estate Investment Trusts (REITs) adopted in Ireland to allow investors invest in property and loan funds in a tax efficient manner. Perhaps NAMA got fed with waiting for the Government to deliver on another one of its manifesto pledges.

UPDATE: 27th January, 2012. The Irish Times claims that the minimum investment will be €250,000 and that individuals will need demonstrate a net worth of €1.25m or in the case of companies, the company will need have a net worth of €25m. The article referes to Central Bank rules and these have been requested, and an update will be posted when they become available.

So what’s at issue? Reporting suggests that Treasury believe that because two third part investment companies – identified as MacQuarie and Hines – are offering NAMA more for the Treasury loans than NAMA paid the banks. The figures being bandied about are that the Treasury loans have a par value of €2bn, were acquired by NAMA paying just 45c in the euro or €900m in total, and the two third party investors are said to be offering more – just “more”, no numbers yet on the value of these offers – than €900m for the loans. Treasury seem to be suggesting that NAMA should be accepting these offers because they are in excess of what NAMA paid. It’s hard to see how that would succeed in court, if that is indeed the Treasury argument. NAMA is set up to maximise income from its assets and although the Agency has said in the past that its main priority is to recoup what it paid for the assets – plus any additional advances to the developer in question – it is hard to see NAMA being bound by this. For its part, a NAMA spokesman is quoted in the Irish Times as claiming the Agency had “engaged rigorously with Treasury Holdings since 2010. Unfortunately, it has not been possible to achieve a mutually acceptable agreement on the way forward with respect to the group’s NAMA loans . . . NAMA analysed the two proposals made and they were not commercially acceptable. The NAMA board decided to proceed with the appointment of Receivers at the end of today’s standstill period.” It is also noteworthy that Treasury is criticising NAMA’s commercial engagement in this matter, and it is claimed that NAMA has not engaged in negotiation with the two third party investors, but has merely sought clarification of offers.

So the prospects for the injunction don’t look too bright from Treasury’s point of view. But with respect to the second matter, the application for a judicial review, that becomes less clear. We saw in the David Daly case last year that the courts weren’t very welcoming of objections from developers to NAMA’s treatment of its loans, when those objections were made late in the day. Remember Paddy McKillen objected to NAMA’s acquisition of his loans right from the start, and I think that was a critical factor in Paddy being eventually successful. The courts seemed to view developers objecting after NAMA had acquired loans, and after initial consensual engagement with NAMA, as rendering weak any claim by developers to entitlements not previously sought. NAMA acquired Treasury’s loans in the first half of 2010, and until the middle of last year, Treasury was regarded as a NAMA favoured developer, indeed the word on the street was that it might be the first developer to sign an agreement with NAMA – not just a memorandum of understanding and heads of terms. But things seemed to go downhill for the NAMA/Treasury relationship in the second half of the year and in December 2011, NAMA and other lenders had administrators appointed to NAMA’s most valuable asset, the Battersea Power Station which was controlled by a company, which was in turn controlled by Treasury. Since then the writing has been on the wall for Treasury.

So the betting on here is that NAMA succeeds in having receivers appointed. It is not clear what properties NAMA is targeting but reporting today has mentioned the PwC building in north Dublin Docklands (pictured below). Notably there is no mention of the National Convention Centre which was developed by Treasury. Other assets reported to be in NAMA’s cross-hairs include Central Park in Leopardstown and the Ballymun Shopping Centre. There is a related post on here which describes the ultimatum that NAMA had apparently given Treasury in the run-up to yesterday’s decision to appoint receivers. There will be updates here from 11am.

UPDATE (1): 26th January, 2012. Orla O’Donnell, legal correspondent from RTE tweets that there will be a hearing on 21st February 2012 where Treasury’s challenge to NAMA’s appointment of receivers will be dealt with. Orla also tweets that Treasury gave NAMA a commitment on 10th of January 2012 when the so-called standstill agreement was given that Treasury would not seek to challenge the appointment of receivers (“ah now, that’s not fair!” comes to mind). Orla tweets “NAMA says Treasury gave undertaking on Jan 10th that it wouldn’t challenge receivers if NAMA gave 14 day standstill period” and “Treasury Holdings’ challenge to appointment of receivers to some assets by NAMA to be heard Feb 21st”

UPDATE (2): 26th January, 2012. RTE is now providing a report on this morning’s scheduled proceedings. Receivers have now been appointed, apparently, and presumably PwC and Ernst and Young. But undertakings have been given between the parties as to the conduct of the receivers until the court has dealt with Treasury’s applications.  It seems that Treasury secured the services of Michael Cush SC to act as barrister on its behalf today – he was Paddy McKillen’s saviour but wasn’t all that effective in the David Daly case – and the respondents are to be expanded so that they now comprise NAMA, KBC, the Attorney General and Ireland – the last two indicating that constitutional matters will be raised in the course of the proceedings, and specifically the constitutionality of elements of the NAMA Act. It is reported that (unnamed) lawyers acting for NAMA wanted to put on the record “that NAMA received an unequivocal undertaking from Treasury Holdings that Treasury would not challenge the appointment of receivers if NAMA agreed to a two-week standstill period”  but it is further reported that “lawyers for Treasury said they did not agree with that statement” We still don’t have a comprehensive list of assets subject to foreclosure but presumably the January 2012 NAMA foreclosure list (due at the end of February 2012) will give the details.

UPDATE (3): 26th January, 2012. Just some housekeeping – according to RTE’s Legal Affairs Correspondent, Orla O’Donnell, NAMA was today represented in court by Cian Ferriter SC – details and photo here –  and the receivers appointed are David Hughes and Luke Charleton (both from Ernst and Young); PwC, a tenant in the Treasury-owned building beside the National Convention Centre appear not to be involved.

UPDATE: 27th January, 2012.  A little more detail emerging today in press reporting. The case on 21st February 2012 is pencilled in to last for four days. According to the Independent, NAMA has PwC as well as Ernst and Young appointed as receivers, which is noteworthy as PwC occupy a landmark building – owned by Treasury – beside the National Convention Centre – which is also owned by Treasury, but not referred to in recent reporting with respect to these receivership actions. The Independent names the following assets as now being “understood” to be under the control of the receivers – “PwC headquarters offices in the IFS, the Montevetro building that is in the process of being sold to Google .. and the Ballymun Shopping Centre” The Examiner has what seems like more credible reporting of the case. It refers to Ernst and Young receivers only, and identifies assets as the Alto Vetro on Barrow Street, Central Park in Leopardstown. It says 22 Treasury companies are involved in the action, and that it is yet to be decided if the four days in February pencilled in for the hearing will be for an interlocutary or a full hearing.

Extract from a blogpost earlier this week – who would have thought that all three distractions would happily occur today

I stand to be corrected on this but the last politically-connected arrest in the State was on 9th December 2011 when former Anglo chairman, Sean Fitzpatrick was re-arrested. By “politically-connected”, I mean Anglo is 100% owned by the State and its activities which led to a €29bn bailout from the State, certainly give the State a particular involvement with the bank. The previous politically-connected arrest was on 1st November 2011 when former Anglo finance director, Willie McAteer was re-arrested. That was on the eve of the controversial payment of USD 1bn (€730m) to unsecured, unguaranteed bondholders. Back in 2010, there were remarks at how convenient it was that Sean Fitzpatrick was arrested on 18th March, during then-Taoiseach Brian Cowen’s trip to Washington for St Patrick’s Day where it was coincidentally helpful to be able to show that Ireland was being tough in investigating its disastrous banking collapse. It’s not as if there are politically-connected arrests every week or month in Ireland, so there might be eyebrows raised today at the arrest of former Fianna Fail TD, and subsequently senator, Ivor Callely in connection with claims for mobile phone expenses whilst he was in office. I think it fair to say the public did not appreciate reports of the senator’s expenses in 2010 and his fighting his disciplinary hearing at the Oireachtas.  So politically-connected and involving a member of the Opposition, and dare I say popular – killing three birds with the one stone, wags might suggest this evening over a pint.

Promissory notes were also firmly back in the spotlight earlier today when An Taoiseach Enda Kenny told the Dail that not only were there ongoing technical discussions but it had been the initiative of the Troika to draft a joint set of proposals on dealing with IBRC’s (IBRC is the Irish Bank Resolution Corporation and is the merged entity representing what was Anglo and Irish Nationwide Building Society) €30bn-odd of promissory notes. This proactivity on the part of the Troika is curious because when asked about the promissory notes at the press conference inDublinlast week, the IMF said the Government had merely “requested discussions”. Also it seems obvious that nothing tangible arose yesterday in the meeting between Minister for Finance, Michael Noonan and ECB president Mario Draghi, otherwise Minister Noonan would be broadcasting it from the rooftops.

And as for bread and circuses, this afternoon the embattled – following a farcical stymieing of the commercial property market in 2011 and defeat of a poorly drafted referendum proposal – Minister for Justice, Equality and Defence, Alan Shatter published the draft heads of a new bill aimed at “addressing the financial difficulties of  general insolvency; mortgage debt and negative equity” The heads of the bill are here and the ministerial press release is here. The heads are 164 pages long and are still being studied, but it is difficult to avoid the perception at present that the bill offers “debt relief for all”.

And lastly, we had a couple of political interventions today criticising opposition to paying the Anglo bond. Junior minister at the Department of Finance, Brian Hayes accused critics of living in “la-la land” and indeed he managed to resurrect the j’accuse of the last Government of saying critics whose opposed Government strategy were “talking down Ireland” An Taoiseach told the Dail that “to say you don’t pay is nonsensical” This comes on the back of transport minister Leo Varadkar accusing critics of being “misinformed or mischievous” though there is some evidence that the minister himself is “misinformed”. As for “mischievous”, that would be a scurrilous suggestion to level at the Minister. And no doubt it is no more than happy coincidence that the above took place on the same day that insolventIreland paid €1,250m (1% of GNP) to bondholders in a defunct bank.

I leave you with a view of what IBRC’s debts are doing to Ireland.

(Graphic above produced by Japlandic.com, contact here)

“Approved participants in the Investor Programmes and their immediate family members will be allowed enter the State on multi-entry visas and to remain here for a defined period. Ordinarily this will be for a period of 5 years – reviewable after 2 years. The sort of investments envisaged will include a specially created low interest Government Bond, capital investment in an Irish business – which may need it for the protection or creation of jobs, or in some cases the purchase of property – including that held by NAMA.”

Minister Shatter’s press release announcing details of two Irish visa schemes

Yesterday, the embattled Minister for Justice, Equality and Defence, Alan Shatter published details of two new visa schemes aimed at those outside the EU. In essence, the visas are for five years and in return, an investment is required. And whilst the above quotations might poke fun at the idealistic notion of theUSA, in practice it too tries to attract individual investment and provides rewards including visas. So nothing unusual about that at all, and many, perhaps most, will support the new schemes.

What was of note was that investment needn’t necessarily be in productive industry. If my interpretation of “endowment” is correct, then a gift to sporting, cultural, health and educational organizations might be sufficient to earn an Irish visa. Again, nothing untoward about that at all – give a large financial gift that benefits these institutions and come to live here; what was curious was that investment might also be in property, and NAMA’s property is specifically referenced.

Now investing in non-productive property might also be welcomed. It will lead to more transactions, more stamp duty and the simple economics would indicate more demand with existing supply, would tend to raise prices, all other factors remaining constant. And there are strong economic arguments to stabilize house prices, as long as the stabilization is at sustainable levels. Of course if the visa is for five years, then it might mean the stimulus is temporary, and there will be a disposal when the visitor leaves. So there might be concerns of an artificial, temporary stimulus for property.

Of particular note was the reference to NAMA. Despite the official protestations, NAMA is intrinsically tied to the State, but it does compete with non-State companies eg Ulster Bank, Certus, both of which are actively disposing of property loans and foreclosed property. To see NAMA promoted in this way is good news for NAMA – if you’re in the target audience for these visa schemes and you read the press release yesterday, you might be getting in touch with NAMA today; it might mean more money comes a-knocking at NAMA’s door for assets which ultimately we all own as a nation, but competition concerns should mean NAMA and its competitors are on an even playing field.

The Department of Justice has not commented on the reference to property or NAMA in the Minister’s press release.

Unfortunately Eamon Gilmore’s position has shifted over the past 12 months. What was “treason” in January 2011 – Eamon accused Brian Cowen of what “was and is economic treason” – has undergone a 180-degree about-turn and is now the preferred and adopted position of the Government in which Eamon’s party is a vital coalition partner, in which Eamon is Tanaiste (deputy prime minister) and which has a grandly-titled “Economic Management Council” consisting of Eamon, Minister Noonan, Minister Howlin and An Taoiseach Enda Kenny.

Tomorrow on 25th January, 2012 Anglo – a bank that is insolvent save for IOUs signed by former Minister for Finance, the late Brian Lenihan and accompanied by some murky “letters of comfort”, none of which was brought before the Oireachtas, the parliament of the country, for oversight – will pay €1,250m of our money to bondholders who are unsecured (that is, they don’t have any charge over any specific asset in Anglo) and unguaranteed (that is, not benefiting from the September 2008 guarantee that has expired).  Anglo is a defunct bank, that doesn’t take deposits – having sold the majority of its deposits to AIB last year, retaining only modest sums that are connected with legacy loans – or advance new lending. It exists to wind down and work out its legacy loans which were not transferred to NAMA and its bonds are now, according to Minister Noonan, “what has become speculative investment”.

Now Eamon might have been able to dismiss the infamous “it’s Frankfurt’s way or Labour’s way” as pre-election “chapel gate rhetoric” but surely he would accept that he is, by his own measure, a traitor to Ireland and its people; or if not that, a rank hypocrite. Of course, the Dail’s “Salient Rulings from the Chair” forbid one deputy from referring to another deputy as a “hypocrite” – there’s no such ban on “traitor” or “treason” though.

Now that the Permanent TSB/ESRI has abandoned its quarterly house price index, the CSO’s isIreland’s premier index for mortgage-based transactions. It analyses mortgage transactions at eight financial institutions : Allied Irish Banks, Bank of Ireland, ICS Building Society (part of the Bank ofIrelandgroup), the Educational Building Society, Permanent TSB, Belgian-owned KBC, Danish-owned National Irish Bank and Irish Nationwide Building Society. The index is hedonic in the sense it firstly groups transactions on a like-for-like basis (location, property type, floor area, number of bedrooms, new or old and first-time buyer or not) and then assigns weightings to each group dependent on their value to the total value of all transactions. The index is an average of three-month rolling transactions.

Cash transactions: there is increasing concern that although the CSO captures data from the mortgage market, it omits cash transactions. The latest figures from the Revenue Commissioners are for 2009 which show that just 6% of transactions (by volume) were in cash. Last week, estate agents DNG claimed that cash made up one third of the market. At the start of January 2012, Sherry FitzGerald said that 29% of its registered buyers were cash buyers, and mortgage expert Karl Deeter said on here that “what Mark Fitzgerald [of Sherry FitzGerald] said at the AIB meeting in December (we were at the same table) is that 30% of purchases were cash – I’d take that as being completions unless this is a case of crossed wires”. In addition, the Sunday Independent reported the former acting CEO of the Irish Auctioneers and Valuers Institute saying that “I would say a quarter of deals at present are being done in cash”. The Allsop Space auctions won’t be representative of the general market but the latest analysis from it says that almost three quarters of its auction transactions were in cash. The CSO expects to have monthly data from the Revenue Commissioners from mid-2012 and it expects that it may subsequently be able to show the market size with its monthly release of the residential index. The perception is that cash transactions will be at keener prices than mortgage transactions because the buyer can move quickly and doesn’t need credit. If that perception is correct then the CSO may be understating – and potentially, understating substantially – the decline in prices.

As for the key questions:

How much does property now cost in Ireland? The CSO deliberately doesn’t produce average prices. The former PTSB/ESRI index did, and claimed the average price of a property nationally hit the peak in February 2007 at €313,998, inDublin in April 2007 at €431,016 and outsideDublin in January 2007 at €267,987. If, and it is a big “if”, you were to take PTSB/ESRI figures as sound and comparable to the CSO series, then these would be the average prices today:

Nationally, €165,781 (peak €313,998)

In Dublin, €194,918 (peak €431,016)

Outside Dublin, €152,511 (peak €267,987)

I don’t think the CSO would be happy with this approach but it seems to me that the PTSB/ESRI series as represented by its historical indices closely correlates with the performance of the CSO indices.

What’s surprising about the latest release? Apartment prices inDublin were up 1.3% in the month (compared with an astonishing 4.7% increase last month though still down 15.6% in the past 12 months).Dublin house prices fell by 19.9% last year which is an even greater fall thanDublin apartments. Price drops outsideDublin continue to be more modest.

 Are prices still falling? Yes, and the 1.7% monthly decline nationally in December 2011 is up from the 1.5% decline in November  2011 but in the same range as the 2.2% decline in October 2011, the 1.5% decline in September 2011 and the 1.6% decline in August 2011.

How far off the peak are we? Nationally 47.2% (49.1% in real terms as inflation has increased by 3.7% between February 2007 and December 2011). Interestingly, as revealed here,Northern Ireland is some 44% from peak in nominal terms and 52% off peak in real terms. Are forbearance measures by mortgage lenders, a draconian bankruptcy regime and NAMA’s (in)actions distorting the market? Or are cash transactions which are not captured by the CSO index so significant today that if they were captured, the decline in the Republic would be even greater?

How much further will prices drop? Indeed, will prices continue to drop at all? Who knows, I would say the general consensus is that prices will continue to drop. This is what I believe to be a comprehensive list of forecasts and projections for Irish residential property [house price projections in Ireland are contentious for obvious reasons and the following is understood to be a comprehensive list of projections but please drop me a line if you think there are any omissions].

What does this morning’s news mean for NAMA? The CSO index is used to calculate the NWL Index shown at the top of this page which aims to provide a composite reflection of price movements in NAMA’s key markets since 30th November 2009, the NAMA valuation date. Residential prices are now down 26.6% from November, 2009.  The latest results from the CSO bring the index to 831 (20.3%) meaning that NAMA will need see a blended average increase of 20.3% in its various property markets to break even at a gross profit level.

The CSO index is a monthly residential property price index. Irelanddoes not yet have a publicly available register of actual sale prices, but one is expected in mid-2012 following the passing of legislation last year – read the latest on the House Price Register here. There are three other residential price surveys, based on advertised asking prices or agent valuations – for the latest see here. Lastly the Department of the Environment, Community and Local Government produces an index based on mortgage transactions, six months after the period end and not hedonically analysed, it is next to useless.

This latest NAMA receivership is not yet recorded in the State official publication, Iris Oifigiuil. Remember you can see a comprehensive list of Irish foreclosure actions by NAMA here and in this regularly updated spreadsheet.

But having hauled the protagonists in lickey-split on the 3rd November 2011, which was impressive given the error was only revealed on 1st November, it was particularly disheartening to see the Committee fobbed off with responses which deflected investigation into the long grass. The Secretary General at the Department, Kevin Cardiff had testy exchanges with deputies and senators and said that there would be an internal review completed by the end of the month – that is, by the end of November 2011 – and there would be a separate external review. In both cases, it was, astonishingly Kevin who was drafting the terms of reference and selecting the reviewers which prompted unease amongst committee members, but not enough so as to write to the Cabinet demanding external responsibility for the reviews.

In any event that was the end of the matter back then. But the end of November 2011 came and went, as indeed so did the end of December and still no review was forthcoming from the Department. So the Committee wrote to Kevin Cardiff on 4th January 2012, seemingly asking for an update. The response from Kevin is here. The relevant extract is reproduced below.

So what could probably have been an inexpensive expedient review carried out by the Comptroller and Auditor General under the auspices of the Committee, has now been dragged out to what looks like five months – three months for the internal review and five months for the external review – with costs unknown. And the €3.6bn error has grown to €3.719bn, according to the CSO.  All we wanted to know is what checks the Department has to ensure the accuracy of its debt calculations and that appropriate checks are in place to prevent the recurrence of such errors, and why the communication from the NTMA about the error was not appropriately responded to. It seems incredible that it will take until March 2012 for an external review to be produced. What started out as a badge of honour in the performance of the public accounts committee no longer looks so worthy.

Meanwhile Kevin shuffles off to the €276,000 plum role at the European Court of Auditors in Luxembourg in February 2012, following intense lobbying by the Government for the appointment, despite widespread opposition.