Archive for July 14th, 2012

Table of the Week

Remember the Good Auld Days (in 2008) when rents on Grafton Street were the fifth  highest in the world overtaking London and Tokyo? Not any more. According to CBRE’s review of global retail rents this week, Dublin has now fallen to 32nd position, and based on Jones Lang LaSalle’s latest quarterly index and review of Irish commercial property, we are still sliding. Of course these are market rents we’re talking about in CBRE’s figures, some retailers on Grafton Street (see below) haven’t been shy in complaining that they continue to pay boom-time rents because of Upward Only Rent Review leases.

Quotation of the Week

“                            ” The bailout Troika news conference. Which again didn’t happen at the conclusion this week of the seventh review “mission”. The Troika didn’t hold a press conference after the previous review, the sixth, either, citing sensitivities towards the imminent Fiscal Compact referendum. So alas this week, we didn’t get an update on what Dublin Airport taxi-drivers think of the economy, nor did we witness veteran journalist Vincent Browne fillet an ECBer on live TV and we certainly didn’t get to see a master-class in media manipulation by a press officer. Shame!

“But if I say that, my friends in Europe will offer me the minimum. So I’m not going down that road. You must never have been at the Fair of Glen or sold a calf” Minister for Finance Michael Noonan at the Alternative Troika Press Conference (pictured above), where alongside Minister for Public Expenditure and Reform, Brendan Howlin, he fielded questions on the seventh Troika review “mission”. When asked what would be the minimum debt write-down he would seek in Europe, this was his response, which might make far more sense to people than the “we’re involved in technical discussions to re-engineer the debt”.

“Do you want us to continue because we have been with NAMA all day and we actually think that the difficulties they had have been overcome and that they’re an effective organization” Words attributed to the NAMA advisory board by Minister Noonan at the same press conference. The NAMA advisory board comprises Michael Geoghegan, Denis Rooney and NAMA’s own chairman Frank Daly. Which of them actually said those words wasn’t revealed; hopefully it was someone less partial than Frank Daly!

Image of the Week

Over the Border this week, there was the annual Twelfth of July holiday where the victory of Protestant King William III over the Catholic King James II at the Battle of the Boyne in 1690 is remembered. One man’s victory of course is another man’s defeat, so the celebrations that take place each year in Northern Ireland are divisive but thankfully, violence and disorder this week were reportedly down on previous years. Representatives of both “sides” shamed themselves, with rioting in Catholic parts of the Ardoyne district of north Belfast and live rounds shot at the PSNI, condemned roundly by the majority on both “sides”. But the incident at Donegall Street in Belfast city centre (pictured above) was more insidious. A video emerged on Friday which shows a band playing the tune to a song long outlawed at Rangers football matches in Scotland – “The Famine Song”,   lyrics here, for those of us on this side of the Border who’ve never heard it, it’s the tune of the Beach Boys “Sloop John B/Well I feel so broke up, I want to go home” but the words replaced with what would generally be regarded as pretty offensive lyrics. The video apparently shows members of the Shankill Young Conway Volunteers parading in circles in front of a Catholic church, with a PSNI motorcycle policeman and Orange Order looking on. The person doing the video recording – available here – is apparently manhandled, though the PSNI officer comes to his aid. Let’s hope that both “sides” redouble their efforts to stamp out the criminality and stupidity, in which neither side holds a monopoly.

Political carnival game of the Week
Whack a Mole

“It seems to me that Deputy Martin is exceptionally well briefed, even without the help of the Freedom of Information Act, but that is nothing new” An Taoiseach Enda Kenny during Leaders’ Questions on Wednesday last, strongly implying there is a Fianna Fail mole or moles in Government Buildings or indeed buildings close-by, and indeed some might interpret Enda’s comments to signify that there is a three-point conduit between the mole, Fianna Fail and the press whereby confidential information is provided by a civil servant to Fianna Fail who then pass it on to the press, where the leak is publicly verified through Freedom of Information requests. Rumours abound in (some) political circles that there is indeed an ongoing mole-hunt with a career civil servant in his late 40s firmly in the cross-hairs.

Economic confusion of the Week

Were the latest GDP/GNP figures for Ireland good or bad?

“Domestic economy expands for first time in two years. THE DOMESTIC economy grew for the first time in two years in the first three months of 2012, according to figures published accidentally yesterday on the website of the Central Statistics Office.” Dan O’Brien and Mary Minahan in the Irish Times this week.

“The CSO figures are to be welcomed” Minister Noonan at the Troika press conference on Thursday

We found out during the week that during the first quarter of 2012, the economy shrank. GDP declined by 1.1% from the previous quarter and GNP declined by 1.3%. So that was bad? Yes, but what confused matters was the upwards revision of the Q4,2011 quarter-to –quarter figures – GDP was revised from -0.2% to 0.7%, whilst GNP remained the same, which meant that for the whole of 2011, GDP rose by 1.4% (previously 0.7%) and GNP fell by 2.5% (previously 2.5%, unchanged). And that was good in terms of GDP. So overall, were the figures released this week good or bad? Given that the upwards revision to GDP in Q4,2011 was seemingly more than offset by the contraction in Q1, 2012 you would have to say that the figures for GDP were overall bad. And the figures for the domestic economy – the one that arguably matters most and is represented by GNP – remain unchanged for 2012 with a contraction of 2.5% followed by a decline in Q1, 2012 of 1.3%. And these figures are “to be welcomed”!

Many of us are still scratching our heads at the Irish Times claiming “the domestic economy grew for the first time in two years in the first three months of 2012” – perhaps that was Mary Minahan’s contribution to the article, rather than the Irish Times’ own economics editor Dan O’Brien! Economist and UCD professor and Forbes contributor, Karl Whelan felt it was Orwellian (see his tweet above).

Runner-up might go to Minister Noonan who said at the Troika news conference on Thursday “Economists would say that if your debt:GDP ratios are over 100% then you’re getting into difficulties, not that you can’t pay your way, but the point I made earlier that it begins to impact adversely on your growth rates”

Hmm, if it is only at 100% debt:GDP that things go awry, why not increase the 60% cap in the Fiscal Compact? Mainstream economic wisdom is that it is above 90% debt:GDP that future economic growth is so threatened as to make that debt level unsustainable. Let’s hope that the 100% figure is not to the fore of Minister Noonan’s mind in his ongoing negotiations in Europe!


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