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Archive for April 28th, 2012

Whilst sitting on its €5bn mountain of cash, NAMA isn’t doing an awful lot for the domestic economy generally, but the Agency is stimulating one specific sector of the economy with gusto: the legal sector. We find out today that NAMA is being sued in Dublin’s High Court following an application there yesterday.

The Courts Service shows the plaintiff as “Bumbold Builders” but I think they mean “Rumbold Builders” which has a registered address at Moritz House at the Old Court Centre, Firhouse in Dublin, and it looks as if it is a company in Michael Whelan’s Moritz Group. The case reference is 2012 / 4218 P and the defendant is National Asset Loan Management Limited and there isn’t yet a solicitor on record for NAMA.

Rumbold Builders is represented by solicitors, Noel Smyth and Partners. And as we all know by now, Noel Smyth is a developer as well as a solicitor and was behind the development of The Square shopping centre in Tallaght. Noel is now a NAMAed developer and has seen his art collection handed over to the Agency. It is not clear if Noel is himself dealing with this case, but if he is, he is presumably clocking up the airmiles at an impressive rate given his relocation to an address in south London – not as a precursor to declaring bankruptcy in the UK, Noel assures us.

Rumbold Builders is one of the companies that NAMA itself sued earlier this year, and last month the Agency failed to get a High Court judge to enter a judgment in its favour against Rumbold Builders and other companies in the Moritz Group and a stay was placed on the matter for three months.

We don’t yet know the details of the application yesterday, but NAMA has been sued in the past by an insolency practitioner and building company over unpaid bills.

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Of the week…

Economic initiative of the Week

Merging local authorities. They’ve already done it in Greece, reducing its number of local authorities from 1,134 to 355 which saves €1.1bn annually. And in Spain they’re considering a reduction from 8,000 to 2,000 with the intention of generating savings of €10bn per annum. And what criteria are the Spanish considering? If a local authority has less than 10,000 people then that is merged with an adjoining authority. In Ireland, we have taken tentative steps towards cost-saving mergers – the merger of Limerick city and county should save €15-20m a year .  A quick look at the top salaries and people to whom they are being paid, by local authority area in Ireland, might convince you of the rationale for more mergers.

Table of the Week

As we saw during the week when Eurostat released its economic statistics for the EU in 2011, some countries have been affected by the financial crisis more than others. At 108.2%Ireland has the third highest debt:GDP in the 27-member EU, after Greece and Italy. On a GNP basis which was not shown, we are no 2 after Greece. The betting is that Greece will have further defaults, as indicated by its sovereign bond rates, and eventually leave or be kicked out of the EuroZone even after the debt forgiveness this year. What are the prospects for Ireland?

Chart of the Week

A week ago, the deputy Governor of the Central Bank of Ireland, Stefan Gerlach delivered a speech in Galway on “Housing Markets and Financial Stability”. He reproduced the chart created by Reinhart and Rogoff in 2009 which shows historical property crashes and their duration. Ireland appears near the low end of the chart with a 20% decline in prices from peak and a downturn that had lasted just a year. That was 2009; fast-forward to 2012 and we are in the fifth year of the downturn and, according to the Central Statistics Office this week, prices are now down 49% in nominal terms and 51.8% in real terms. That places us at number two in this chart, marginally behind Hong Kong where prices dropped 53% in real terms in a downturn that lasted six years.

(Mis) Quote of the Week

“From the government point of view there will be no attempts to sort of pressurise people one way or the other., We want to inform the people about our belief that this is very necessary for the future of our country, the future of our children.” An Taoiseach Enda Kenny speaking about the Fiscal Compact referendum on RTE’s The Week In Politics 22nd April, 2012 (from 6:00); oblivious to the paradox of what he is saying. Or else paying tribute to Tony Blair’s “A day like today is not a day for soundbites, really. But I feel the hand of history upon our shoulders. I really do”

The “no” camp wasn’t any better with Sinn Fein rumbled and rapped on the knuckles by Professor Karl Whelan who wasn’t impressed to see his words quoted out of context. The UCD professor had appeared before a special Oireachtas committee which is examining the Fiscal Compact and told the committee

“All that said, although I think the economics of this treaty are pretty terrible, on balance, the arguments favour Ireland’s signing up to it”

Which someone in Sinn Fein re-interpreted as support for a “no” vote and chopped off the pesky unsupportive parts of the sentence which just left

“the economics of this treaty are pretty terrible”

Headline of the Week

While poor old Ned O’Keeffe – who listed his activities in the 2010 Dail register as including “growing grass” (no Ming, not that type of grass!)  – was having his collar felt by the boys and girls in blue yesterday, spare a thought for former Fianna Fail junior minister, and later senator Ivor Callely who had his own bother with mobile phone invoices in the past. But yesterday the Independent reported that the hapless ex-politician had been fined €150m for driving an untaxed car. Some mistake surely? No, the first sentence beneath the headline confirms the amount and reads “FORMER junior minister Ivor Callely has been fined €150m for driving an untaxed car” Well that’s the 2012 household charge sorted so!

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