Of the Week…

Estate Agent paddywhackery of the week

With the holidays over and September now upon us, we are entering one of the two busiest periods in the calendar for residential property transactions. Some of you might think you there is little or nothing required to become an estate agent or auctioneer, that you could go down to the zoo in Phoenix Park, pick out any old monkey, strategically shave it, teach it to suppress its urges to throw and consume its own faeces, show it how to open a door and wave its arm around as if indicating and hey presto, you’d have an estate agent. But there’s more to flogging homes than that; requires all sorts of skills, though not arithmetic seemingly.

“Ronan O’Driscoll, director of residential property with estate agents Savills Ireland, said a property tax based on valuation would hit Dublin hardest, and south Dublin in particular. He added: “We don’t know yet what the rate will be but if it is, say, half of one per cent of the value, then a very-good-quality home in Dublin, valued at €500,000, would mean an annual bill of €1,000.”” Savills supreme Ronan O’Driscoll reported in last week’s Sunday Independent.

Na-na-na-naah-na of the Week

 Remember this in the Sunday Independent four weeks ago.

Oh my! With criticism like this, you will no doubt have been expecting a stellar performance from the company which owns the Sunday Independent and a host of other Irish news papers. But when Independent News and Media yesterday published its accounts for the first half of 2012, it revealed a €177m loss! That’s more than all other Irish media companies combined. And its advertising is down 6%, the same as RTE’s.

But unlike RTE, IN&M is balance sheet insolvent with its liabilities exceeding its assets by over €200m. And it has over €400m of bank debt!

The only media companies seemingly making money in Ireland at present are UTV and Johnston Press – both British companies. RTE, TV3, Communicorp which operates Newstalk and Today FM, the Irish Times, Crosbie Holdings which publishes the Examiner and Sunday Business Post, and Independent News and Media are all practically basket cases with IN&M being the biggest basket case of all, which ironically doesn’t stop it being the most shouty when it comes to criticising the performance of rivals…

J’accuse of the Week

The new economist at the Central Bank of Ireland was in action during the week when he gave a speech at an accountants’ do. Lars Frisell’s speech referred to the desirability of some form of debt forgiveness for mortgages and also called for bondholders to be burned as part of a future system for managing banks. The transcript of his speech is not available but the Central Bank has kindlyprovided copies of the slides used , and there is some interesting information in there. But this is the first time I have seen the perpetrators of the banking crisis set out in this form, which is noteworthy. What is equally noteworthy is that there has been little sanction for any of the perpetrators – yes Fianna Fail was voted out of government two and half years after crisis erupted, yes some CEOs of banks resigned with generous payouts, yes the former Financial Regulator and Governor of the Central Bank went, but not without jaw-dropping recompense.

Graph of the Week

Last week the Department of Finance published its monthly note on deposits in Irish banks which tend to depict a stabilising picture of household and business deposits. The data includes deposits at overseas branches of banks, so the Bank of Ireland joint venture with the UK Post Office tends to distort the figures but overall the picture is positive. What was noteworthy was the graph on the dependence of Irish banks on central bank funding. We are no longer where we were in late 2010, and indeed our use of ECB funding is now pretty much in line with our economy proportional to the EurZone’s. Good to remind the ECB of that fact…

Table of the Week

Yesterday Eurostat published its monthly data on unemployment across Europe which shows a dismal picture across the continent with Ireland’s vertiginous unemployment rate of 14.9% making only the Top 5.

Economic lowpoint of the Week

Kevin Bakhurst joins RTE this month as news and current affairs boss. He will bring a wealth of rigour and  experience garnered from his career with BBC News. Kevin arrives in the wake of the mini-clearout after the Prime Time defamation of Father Reynolds, and we all hope that certain news and current affairs strands will be improved with better fact-checking, research, balance and perhaps most important of all, coherency. Kevin might also examine why RTE has a seemingly random approach to reporting economic matters. A month ago, RTE headlined the 0.2% improvement in the GDP outlook for 2012 as forecast by the Central Bank, but yet RTE completely ignored the European Commission forecast this week which lowered 2012 GDP to 0.4% but also reduced the 2013 forecast from 1.9% to 1.4%. Of course, forecasts come and go, but if the European Commission is on the money, then Budget 2013 may not be the toughest between now and 2016!