Graph of the Week
Goldman Sachs thinksIreland’s competitive adjustment is complete. In pre-euro days if we had a financial crisis then our exchange rate with other currencies would weaken and our costs in international currency would reduce. Sadly that can’t happen in the euro which includes Germany at one end and Greece at the other. So we “internally devalue” as wages and other enterprise costs reduce. Goldman Sachs thinks that in our case, the internal devaluation is complete. Unfortunately for the EuroZone, Greece, Portugal, Spain and to a limited extent Italy still need adjustments – can they take more austerity?
Photograph of the Week
When NAMA developer David Agar had a whinge about his treatment at the hands of NAMA, he claimed that NAMA wouldn’t be happy until every developer in the country was living in a 3-bedroom semi and driving a Cortina. Some of the younger members of the audience here mightn’t know what a “Cortina” is, so the sale this week of a 1981 Ford Cortina in Scotland for GBP 10,000 (€12,000) might help you. Now this Cortina is special and has never been driven, and this was the last version of the car which underwent many transformations from when it was launched in the 1960s, the car above is the Mark V, my personal favourite was the Mark III which looks a bit like the American Dodge Charger. It’s a bit boxy but still a handsome enough car. David Agar’s nightmare, though.
And secondly this was the week of another high profile eviction from a family home in Ireland. An elderly couple was evicted from their €2m home in an upmarket Dublin suburb. It transpired that the couple own 21 properties in the State and are therefore landlords of some substance. They are presently camping out in front of their former home which is reportedly subject to a mortgage from Anglo. On the face of it, the couple is in far better financial shape than many in this State. But having said that, the pictures of an elderly couple being dragged from their home, the screams, the manhandling of the husband, the restraint of the wife and a couple left comforting each other as Gardai and bailiffs oversaw the repossession was powerful. This Government has been warned; it needs to fast track bankruptcy reform and better policies for dealing with mortgage distress where one in eight mortgages is either in arrears or has been restructured.
Social phenomenon of the Week
We’re becoming the “no comment” nation.
“A garda spokesman declined to respond to this criticism, saying it did not comment on operational matters.” Response to request for comment on policing the Labour party Ard Fheis in Galway last week end and the use of pepper-spray against protesters.
“We don’t comment on speculation about individual transactions, but we’ve previously indicated that we are optimistic that we will secure a satisfactory deal in respect of this property in the medium term and that remains our position,” NAMA spokesperson April 16th in response to a request for comment on the purchase of the Anglo HQ shell
“We don’t comment on the specifics of individual negotiations” – Central Bank of Ireland, April 16th in response to a request for comment on the purchase of the Anglo HQ shell
“His wife, who remained outside the house from which they were evicted, declined to comment citing legal matters before going into a neighbour’s house.” Asta Kelly, one half of the couple evicted from their €2m home in Killiney during the week
“Mr O’Brien, who owns 22 per cent of IN&M, declined to comment.” The aftermath of the “resignation” of Independent News and Media’s CEO, Gavin O’Reilly, after pressure on the debt-laden, balance sheet-insolvent media company from the company’s largest shareholder, Denis O’Brien
“Fine Gael TDs declined to comment publicly yesterday” following pressure on Fine Gael deputy Olivia Mitchell against whom the Mahon Tribunal made adverse findings about inappropriate payments. Deputy Mitchell disputes the findings. Mind you “no comment” might have been better than the pronouncement of one unnamed FG TD who said “Olivia is a damn fine representative for the people of Dublin South. She was on the wrong side of the heave against Enda and will never be advancing but she’s still enthusiastic”
Quotation of the Week
“We cannot have a position where taps could be left running endlessly” An Taoiseach Enda Kenny struggling to defend the disorganization apparent in the introduction of a new water charge
“I see meters as the friend of the householder and friend of business as they’ll prevent people from paying for water that’s wasted” Minister for Finance Michael Noonan defending the introduction of water meters
“Hurrah for fornication” champion of the turbary sector, Deputy Luke Flanagan during the poignant debate on the limited introduction of abortion in Ireland, a debate that veered from the emotional with Deputy Mick Wallace in tears, to the bizarre such as the 40-year old virgin from Mayo, Deputy Michelle Mulherin – that’s a presumption, by the way, about the unmarried Mayo solicitor and her apparent aversion to “fornication”, the Biblical language of judgment she invoked during the debate. In the end the proposed new legislation to allow abortion in this State in very limited cases was defeated 109-20. Another 80 Irish women are estimated to have traveled to theUK last week to obtain abortions.
Phonetic boo-boo of the week
Fionnan “stick two bolts in my neck and call me Adam” Sheahan claims this is how you pronounce “fornication”
fawr-ni-key-shuhn
In the backend of Leitrim perhaps, generally it’s pronounced fawr-nee-kAy-shun
NAMA Wine Lake 
We don’t comment on individual NAMA Wine Lake articles.
The mortgage was with INBS (which got rolled into IBRC – so between Deadbeat Kelly shouting about Anglo and all the journos hearing IBRC and thinking Anglo, “Fingers” and his “unusual” loan arrangements continues to go unexamined) and also they are 9-5 campers only!
Property Auction that took place on Friday in Letterkenny
http://www.donegaldaily.com/2012/04/21/donegal-shows-signs-of-recovery-after-successful-auction/
@Patrick, thanks, if I am reading that correctly, there were 8 lots, 3 have sold including one which didn’t sell at its reserve but was sold after the auction. And the auctioneer expects another two to sell. The one lot that did sell had an “asking price” of €220,000 and fetched 3% more than that, €229,000.
The results don’t really seem to support the statements
”
DONEGAL SHOWS SIGNS OF RECOVERY AFTER SUCCESSFUL AUCTION
April 21, 2012
“A well-known Donegal auctioneer said he is hopeful the property market is edging towards a recovery after the county’s latest auction” and
“It was a mixed bag but we are very pleased at the way things went overall. The market is still finding its feet”
“ The results don’t really seem to support the statements”. Correct.
The unthinking support shown to the Killiney couple undermines the political case for debt forgiveness. There is no version of a debt forgiveness which would allow such a couple to retain their home. The size and value of the house is disproportionate to their needs. If the couple genuinely cannot service the mortgage, the most they could expect is some sort of deal where they might be allowed trade down to a smaller home. If, however, as appears to be the case the current value of the house is more than the value of the loan, it is probable that they would not qualify under any debt forgiveness scheme. At all events, the media and pressure groups such as Occupy Dame Streee are doing no favours to those people genuinely in need of debt forgiveness.
I agree but can we stop using the word forgiveness.
This word frames the discussion with connotations of religion, sinner, and God. People may have made bad economic decisions but they have hardly in need indulgences and absolutions.
Can we use debt relief instead?
Primarily, it’s the methods used that rankles. In the end the civil law is enforced with primeval physical force.
We do not know the complete financial facts of the case. We only know the spin. In this market anyone with 21 properties could have 21 liabilities – not assets.
NWL can you stop quoting Goldman Sachs as a source for supposed impartial views? Their double dealing in telling propagating views that boost their profits is well documented.
So please spare us from what Goldman Sachs thinks about Ireland. They have undoubtedly bought long or short on us and want to increase their profits by framing the discussion.
At least any quote should have an extreme health warning that views from this crowd are biased and for their benefit not ours.
“But having said that, the pictures of an elderly couple being dragged from their home, the screams, the manhandling of the husband, the restraint of the wife and a couple left comforting each other as Gardai and bailiffs oversaw the repossession was powerful. This Government has been warned; it needs to fast track bankruptcy reform and better policies for dealing with mortgage distress where one in eight mortgages is either in arrears or has been restructured.”
Bankruptcy reform will not prevent a couple in this situation from losing their home and indeed all their other properties. Indeed, vacating the mortgaged property is going to be an essential element in any bankruptcy reform.
“Primarily, it’s the methods used that rankles.”
Leave aside the details of this particular case and consider the problem in the abstract. There’s a lot of complaint on NWL and other places about developers etc being above the law / not being forced into Ford Cortinas etc. But the moment we have an example of the law being applied in such a case, there’s a tendency to be shy about what is involved. If you want overstretched developers etc to face lifestyle consequences, “the methods used” are part of the deal if the debtors will not voluntarily move out of the mortgaged property.
Put it this way, if the former executives of Anglo-Irish bank or some of their golden circle of property developers were to be forcibly put out of their mansion home by bailiffs seeking repayment of debts, would this cause you a problem?
@Otto, we still don’t have the details of the Killiney eviction and I would like to know, for example, why the Kellys didn’t give notice to the tenants of one of their more modest properties and move in elsewhere but then again, these other properties may well be under water and subject to other proceedings, we just don’t know . On the other hand the couple is getting on but even younger borrowers can be caught in the headlights and bury their heads and hope the problem goes away. People seem to expect this couple to have behaved perfectly rationally, and that may not be fair to them and the stress of their situation.
But what I mean above is, if this eviction can provoke deep-seated emotions, then what will be the reaction if an elderly couple is evicted from their cottage in Leitrim and are left destitute with children emigrated and their life’s wealth taken away, so that they face bed and breakfast accommodation and a wait of several years possibly, before they are socially rehoused. And with the degree of mortgage distress in this country this is the sort of situation that would concern me, that would spark widespread protest and social unrest.
“we still don’t have the details of the Killiney eviction”
That is correct, of course, but we can’t expect publication of full history and details every time a mansion is repossessed. Seriously.
“if this eviction can provoke deep-seated emotions”
Yes, but much of the provoking of such emotions derives from an unconvincing pandering (including in we-need-more-details versions) to one side of the apparent situation. Save your concern for your second scenario for the time that the second scenario actually occurs, rather smudging them all together.
@Otto, by “It’s the methods used that rankles”, I am referring to the fact that we as a society use cretinous, barbaric and physical actions against the citizenship to ultimately settle a civil matter. It is irrelevant whether thise it id used against are developers, bankers, civil servants or any other section of the community. There are more civilized ways to solve an impasse.
For instance, surplus money could be garnishee
Oops … Hit the wrong button on the iPhone!
…garnisheed from from income until the house was vacated. There are a multiplicity of ways that do not include Neanderthal physical force eviction. It just demonstrates how much we need to reform our laws in this area
“Put it this way, if the former executives of Anglo-Irish bank or some of their golden circle of property developers were to be forcibly put out of their mansion home by bailiffs seeking repayment of debts, would this cause you a problem?”
Such a shocking depraved idea, old chap, my god bailiffs, how very disturbing but no need to worry.
Per Mick Clifford (Sunday Times 22 April), we will do just fine. We simply arrange our finances so that our wives get half the family home or pension. Mrs. Drumm got € 1.3M and Mrs. Sean Fitz has a € 1.7m pot from a bank she never worked for.
Those rules and chatter about moral hazard are for the little people.
The rules simple don’t apply to us dear boy!
Try this eviction then,like the nice lady states “who’s peace was disturbed here”
Again,limited details but the actions of the Guards speak for themselves,there is no happy ending for the Govt. if forced evictions continue.
http://awakenlongford.wordpress.com/2012/03/18/the-eviction-of-aisling-hudson-arklow-co-wicklow/
@WSTT I hope it’s not the new one,what happened to your austerity budget!!!
It’s going to end very very badly,its a barbaric sad reflection on a inward,insular backward society.Its NOT a crime to be unable to pay your mortgage,modern humane BK laws should be passed.
“The key focus of Labour’s policy is to assist home-owners currently in mortgage distress, and who make an honest effort to pay what they can, to keep their homes.”
http://www.labour.ie/policy/listing/129820029421486678.html
Any attempt to introduce debt relief or forgiveness will be contentious. It stands no chance of succeeding if it is perceived as allowing a “free ride”. No one wants to see the Kellys homeless, but equally no workable scheme of debt relief could allow debtors to retain a home which is disproportionate to their needs. It is also worth reiterating that the loan is held by a State bank, IBRC via the former Irish Nationwide. IBRC is incurring costs in funding its outstanding loans, and if the bank is going to be criticized in attempting to enforce its security then this has implications and costs for the taxpayer.
It is difficult to understand the criticism made of the bailiffs. The bailiffs were required to enforce an order of the High Court.
The constant description of the couple as “elderly” is also jarring. Mrs Kelly is of legal working age, not a pensioner, and her husband is roughly the same age as the Minister for Finance.
@gadge; In a modern civilised society there are legal ways of inducing people to vacate their homes other than by resorting to the use of thuggery.
There are many interpretations of the circumstances surrounding the eviction of this elderly couple, one point on which I believe all can agree is the physical removal is barbaric, what the financial situation of this couple is, well that’s purely a matter of conjecture, absent the details. What I believe, is that this couple returned to Ireland at the pinnacle of the Tiger era, invested there life savings and the proceeds of their business sale into property, they did, on a larger scale what countless thousands did, they fell into the trap set by the financial institutions with the government and the media complicit in the fraud, they would have paid many many thousands in stamp duties and other charges, the Banks will ultimately absorb all the wealth this couple has amassed over their working life as they will do with every other citizen they have trapped, the bottom line is they should not be permitted to do this, they perpetuated there fraud with money printed out of thin air, from which they will realise tangible real assets, this is wrong on so many levels. None of the banks which operated through the Tiger era deserve to remain in business, none of their executives deserve to retain wages and pensions derived from their ponzi scheme and the same can be said for any politician, senior Civil Servant or regulator who presided over any period after the year 2000.
I can only hope that matters conspire to bring about the complete failure of the European project on a grand scale because the path we are on as a nation to doomed to failure. I believe a no vote in the EU Fiscal Treaty Referendum will be a pivotal step in this direction and I welcome it wholeheartedly.
http://www.awaken-longford.com
In relation to the eviction I think the sentiment towards the the elderly couple is just “so what”. People are becoming numb to the issues as they just want to see some daylight at the end of the tunnel.
The issues I would point out in respect of the couple are. His profession was that of a Landlord. All his rents would be mandated to the banks. He clearly has no money or place to go. Technically under our tax regime as a landlord even though he gets rent and gives it to the bank in full in all likelihood under the interest restriction of 75% he probably has an income tax liability he cannot pay either.
Now my concerns are as follows:-
1) How can you evict an elderly couple when you look at all the facts especially when some (alot) of developers are living still in mansions while owing the state hundreds of millions of euro’s
2) How can you evict people for a full debt when developers are only being asked to repay a fraction of their origional debts and yes we the state all of us have to pay the balance while they can wash their hands of it.
3) Where was the regulator how no disrespect of the couple be given a 2M loan at there age two years ago. It could never be repaid in there lifetime. It might be legally right to do so but morally and ethically it is wrong. Any banker with a shred of decency would not have given that loan.
My point is a banker got sweaty not enough security probably trying to protect himself advanced the 2M to pay interest and service the debts of the other properties and new full well where this would end up.
I actually feel sorry for them at there age. I think we are corrupt and rotten to the core in some areas with little integrity or moral compass. The unfortunate thing by the events as evidenced is many many more people in similar circumstances will become scarred and disenfranchised.
While still developers live in luxury 300 to 600 people held in better stead than the citizens of this state. We really are out of touch.
Comedy of the week should go to Occupy here in the bay area. They “occupied” an empty field,off the freeway near Oakland, they planted crops,even talked of building a co-op, only to find out it is not development land, but land used for agricultural research by UC Berkeley.
Not sure what happened to the carrots,some happy bunnies in the East Bay made out perhaps.