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Now that we are nine months into a new government term in Ireland, and it is slowly but surely being confirmed that there is little practical difference between the new administration and the old, is it time for Ireland to consider going the way of Greece and Italy and creating a so-called “technocratic” government*? A government which sets aside personal and party-political ambitions so as to restore the finances of the country to an equilibrium which allows growth without the unsustainable burden of legacy debt?

It’s been 10 months since the usual high promises were spread like confetti by all the competing political parties in the 2011 General Election. But remember the commitments given by the eventual victors to burn bondholders, to put Ireland’s future before that of the ECB’s in Frankfurt, to change the IMF deal, to deliver interest rate cuts, to get Ireland working, to ensure banks made efficiencies to absorb 0.25% interest rate rises, to implement changes to Upward Only Rent Reviews. In response to criticism the Government might say that it has only been in power for nine months, that it has changed the IMF agreement by reversing the minimum wage cut and extending the period to balance the budget to 2015, it might say that the unemployment rate hasn’t risen and has been broadly flat now since summer 2010, it might point to the bailout interest now set at a level which is even better than the campaigning parties imagined possible in February, and the Government might point to Ireland’s borrowing costs staying stable at 8% whilst Spain, Italy, Greece and Portugal are trending into the swamps.

But let’s face it, the Government didn’t just turn up for work on March 9th , rub their hands and ask what next. For a good 12 months previously, the prospect of a snap election was appreciated by all, and it was a near certainty since the Greens announced their intention to quit the coalition in November 2010 (remember Paul Gogarty and the crying babe in arms?). So the new administration should have hit the ground running.

But what was achieved? What looks like a damp squib with the Jobs Initiative (Minister Bruton recently claimed that it may have created 17,000 jobs but the general unemployment figures would point to no material effect), the undisputed fact that we achieved an interest rate cut on the coat-tails of Greece’s woes and further had to suffer the indignity of having to offer corporate tax concessions whilst Portugal pocketed the saving without any concession, and the fact that at 8%, our notional bond market borrowing costs are still unsustainable; and we will not forget the ignominy of paying €730m, 0.5% of our GDP, in one transaction to unsecured, unguaranteed bondholders on 2nd November at Anglo, a bust bank in receipt of €29bn of the nation’s wealth.

Taoiseach Kenny to his great credit delivered one of the post powerful coalitions in the history of the State in March, a coalition that hasn’t been at the infuriating mercy of independents or handful of own-party dissidents, and he generated pride in some corners of the State with his attack on the Vatican and all-in-all he has projected a better image of the office of Taoiseach and of the country generally than his predecessor. But he upset our partners in Europe with his grandstanding in March, he has failed to communicate with his peers in the sense that he hasn’t taken the initiative to speak one-to-one or visit European leaders since assuming office, he might as well have been a silent bystander at the summits and hasn’t even sought to put Ireland’s admittedly parochial needs on the agenda, he’s displayed ignorance on a grand scale by telling the nation that Anglo was repaying its bonds out of its own resources, and despite the good intentions of his self-imposed 10% cut in pay, seems to have done very little to cut the cost of government generally – there are more quangos and they’re being stuffed with party apparatchiks and his stance on the cost of special advisers is questionable. And from this perspective he looks like a dreadful man-manager – every piece of new legislation seems to be delayed or mired in indecision: where is the personal insolvency legislation, the house price database, the Upward Only Rent Reviews, a deposit scheme for renters. Why was the Keane report so badly specified and where are the mortgage arrears initiatives that were promised “for a fortnight hence” – with Bill Clinton a witness – at the start of October? Why wasn’t the Comprehensive Spending Review completed in September as required by the IMF? Why wasn’t Minister Noonan able to publish a roadmap of taxes and levies in October? Just three months after establishing a Fiscal Advisory Council why did the Government ignore its main recommendation of expediting the balancing of the budget. Demanding that banks pass ECB cuts whilst ignoring their present interest rates looks economically illiterate. Nominating Secretary General Kevin Cardiff as the most appropriate person in all the land, to the plum €276,000-a year job in Europe, a “relative doddle”, amidst errors and criticism of the Department of Finance just reinforces the old stereotypes of political expediency – we are where we are, and that’s practically identical to where we were; that’s a glib line but it’s hard to challenge its essential truth.

I would have said that in the normal course of events, Taoiseach Kenny would be given another 6-12 months to demonstrate his mettle before he faced judgment by his own party in the first instance, but can the country wait another year? At the heart of the challenge facing the nation is whether or not the debt which has been shouldered by the country, the sovereign debt and the bank debt, is sustainable. With a projected peak of 120% debt:GDP which is akin to Italy’s and what Greece is on track to “achieve” by 2020 and less than Japan’s 200%, our partners dismiss any protestations. But it will be 150% of GNP which is a more accurate measure of Ireland’s finances, and not just that, a lot of it is for paying the private debts of bust banks, so financially and morally some argue, part of the debt needs to be dis-owned or defaulted upon. Our friends at BlackRock who were feted by the Central Bank of Ireland earlier this year when they led the stress testing of Irish banks said yesterday that certain Irish debt should be haircut 75-80%. And harping back to the 1980s when we had similar debt:GDP but didn’t have the distortion of foreign company operations so GDP was akin to GNP back then, and to a time when we had control over our currency and had the luxury of much low-hanging fruit to improve competitiveness, doesn’t distract from the fact that we are in unprecedented muck.

So can leaders across the political divide put their personal ambitions aside for 18 months and allow an economically literate leadership, charged with putting Ireland on an economically sustainable path, to be installed? Or at least a leadership that will demand to be heard in Europe regardless of how inconvenient it is to have a relatively small nation demand attention whilst there are deep problems with Greece and other countries.

So will it happen in Ireland, will we somehow arrive at a position where we have our own technocratic government? Not from today’s perspective; those in power see the challenges ahead but believe they can be overcome, painfully overcome, but that on the other side the country will return to growth and the debt will be managed, and over time will be demonstrated to be sustainable. But give it another few weeks though; let’s see the Budget 2012 cuts and taxes; let’s see the continuing turmoil in Europe where we seem unable to project our needs into the Euromix and let’s see how the ruling parties feel before Christmas. And if you look carefully, and set aside the usual Opposition shouting, you might find some genuine malaise within the ruling parties. In a short few weeks, a technocratic government might not seem as farcical an idea as it might seem to some today.

[*technocratic government seems to be a recent invention in the Euro crisis context. It seems to imply leaders based on technical competence and qualification rather than those getting the best popular vote. In both Italy and Greece’s case, the leader is a technocrat in the sense of being an economist/banker but it is unclear how the rest of government is to function and whether there will be widespread appointees based on technical qualification. In an Irish context it might mean a collective of economically literate leaders who are prepared to deal with unsustainable debt and an unlistening Europe]

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This morning has seen the publication of the seventh CSO residential property price indices for Ireland. The inaugural series was published by the CSO on 13th May 2011 and covered the period from January 2005 to March 2011. This morning’s release covers the month of September 2011. Here’s the summary showing the index at its peak, November 2009 (the NAMA valuation date), September 2010 (12 months ago), December 2010 (end of year, start of this year) and September 2011.

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.

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, €175,165 (peak €313,998)

In Dublin, €208,618 (peak €431,016)

Outside Dublin, €159,793 (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? Although the monthly decrease of 1.5% is elevated, we have had similar declines in recent months. What is astonishing is thatDublin apartment prices declined by 4.8% in just one month, following the 6% monthly drop last month.Dublin apartments are now down 59.2% from peak.

Are prices still falling? Yes, and the 1.5% monthly drop in September 2011 was similar to the 1.6% decline in August 2011.

How far off the peak are we? Nationally 44.2%% (also 44.2% in real terms as inflation has hardly changed since 2007). Interestingly, as revealed here,Northern Ireland is some 45% from peak in nominal terms and 52% off peak in real terms. Are forbearance 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 22.5% from November, 2009.  The latest results from the CSO bring the index to 833 (20.0%) meaning that NAMA will need see a blended average increase of 20.0% 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 legislation to give effect to such a register is presently before the Oireachtas – 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.

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About a year ago on here there was an entry about the meeting on the night of 29th of September 2008/early morning of 30th September 2008, the meeting which give rise to Ireland – population 4.5m, GDP €160bn – guaranteeing the liabilities, all €440bn of them, in the Irish banking system. Subsequently that system imploded but was maintained in a quasi-stable state at huge cost to the nation. Although it may take years to assess the final bill and it may never be possible to assess the opportunity cost – what the nation could have done with the money instead of supporting a banking system – it seems that the final bill will conservatively be €50bn and may be in the €60-70bn range. Immediately prior to the banking guarantee, the country had a commendable 25% debt as a % of GDP, a primary budget surplus, nearly a decade of healthy economic growth, almost no real unemployment and we were held up as a model of economic competence.

Today the country has unemployment of 14.5%, the scourge of emigration has returned, we have a national debt heading towards 110% of GDP (130%+ of the more representative Irish GNP) of which 30-40% of GDP relates to the cost of dealing with the banking disaster, we have an annual deficit of €18bn and are only hoping to get it below 10% next year. There has been a reluctant collapse in asset values, particularly property and bank shares, most of the domestic banking system has been effectively nationalised. It would go too far to blame one meeting in September 2008 for the change in circumstances, but it seems that the meeting was a least pivotal – from it flowed the banking guarantee, the placing of unrealised banking losses on the shoulders of the nation, and the repayment of banking debt.

As for the meeting which started on 29th September, 2008 at around 8pm, the entry on here last year, compared it to the meeting portrayed in that HBO film, Conspiracy; the film which told the story of the infamous meeting in Nazi Germany in 1941 which was pivotal to the subsequent murder of Jews and others in concentration camps. When the Financial Times linked to the entry, there was localised outrage that the extermination of the Jews could be likened to the economic disaster in Ireland. For the first time in my life, I came across the term “Godwin’s Law” which refers to the phenomenon of ultimately comparing all misfortune to the World War 2 holocaust. Though to be honest I thought it should be renamed the “Lord Voldemort Law” from Harry Potter as the aim of the Law seemed to be to suppress any reference to that “which shall not be mentioned”. But this is a blog for adults, not children.

As for the infamous meeting which started on 29th September, 2008 – and whose 3-year anniversary occurs today – as a nation there is still a sense of shock and incredulity that what seems like a snap decision was taken which exposed the nation to debts of nearly three times GDP. This entry pieces together most of what is now in the public domain on the context, course and content of the meeting. Alas, from this armchair perspective there is no smoking gun, just an everyday tale of professional politicians with a mediocre grasp of events, making mistakes, not asking the right questions and coming to the wrong conclusion (and by guaranteeing historical bond debt, it was the wrong conclusion). Outside the political circles, some may have suppressed or misrepresented information, but even there, there is evidence of denial and poor assessment of risk; but all of that and the wider context of the 29th/30th September 2008 meeting will be for another day…

27th Saturday, Minister Lenihan is at a Fianna Fail fundraising event inGowranPark in Kilkenny when he takes a call from President of the ECB, Jean-Claude Trichet who reportedly tells Minister Lenihan to expect an urgent call from CBI Governor, John Hurley later that day. Minister Lenihan takes initiative and rings John Hurley
28th Sunday morning, Minister for Finance Brian Lenihan meets with Central Bank ofIreland Governor, John Hurley at the Central Bank onDame Street,Dublin who advises Minister Lenihan that several banks inEurope are facing crisis including Fortis and DEPFA.Sunday Business Post publishes article by economist David McWilliams in which he advocates a guarantee, claiming banks face a liquidity problem, guarantee depositors/creditors but not shareholders.

Sunday, Green Party Minister for the Environment Heritage and Local Government, John Gormley claims to have met with Brian Lenihan to discuss the guarantee/nationalization. Minister Gormley claimed that the guarantee was discussed “on-and-off” for about a week. Minister Gormley claims that the option that he, Min Gormley, had gone for was the nationalization of Anglo and a Bill was drafted to effect that nationalization. Minister Gormley claimed on the Marian Finucane programme on RTE radio on 4th December, 2010 that there was a Cabinet meeting on the Sunday and the “arrangements” were made after going “through it in detail”

British Chancellor to the Exchequer, Alastair Darling says he spoke with Minister Lenihan who “assured him the Government would not give a blanket guarantee to the banks”

29th MondayEarly Monday” – meeting between Department of Finance, Financial Regulator, Central Bank and CEOs of AIB, Eugene Sheehy, BoI, Brian Goggin, EBS, Fergus Murphy and others. There were claims that banks were near “tipping points” (understood to be a reference to liquidity) and that there was speculation that one unnamed bank was at severe risk of going under. Nationalisation was discussed but dimissed.

Morning: Announcement of nationalization of Bradford and Bingley Building Society’s mortgages and loans and plans to sell off its deposit book toSantander

Announcement of nationalization of Fortis bank by Belgian and Luxembourgian governments and the German state/banking sector funding ofGermany’s Hypo Real Estate.

1pm, Anglo CEO and Chairman meet with Bank of Ireland CEO, Brian Goggin in 6th floor office of BoI HQ and ask BoI to take over Anglo. The response was “no”

After 1pm, Anglo CEO and Chairman contact AIB CEO Eugene Sheehy and ask same question and get same response

Mid-afternoon, Minister Lenihan leavesUpper Merrion Street to attend daughter’s birthday party in Castleknock,Dublin

5pm ISEQ closes down 13%, Bank of Ireland shares down 15%, AIB down 16%, ILP down 34% and Anglo down 45%. AIB and BoI CEOs call Brian Cowen’s office to state that the banks couldn’t sustain themselves for another day and needed a plan overnight.

6.43pm, Second Secretary at the DoF, Kevin Cardiff receives report from Merrill Lynch

8pm – An Taoiseach meets with Minister Lenihan and shortly after they are joined by Attorney General, Paul Gallagher, Governor of the Central Bank, John Hurley, Director General of the Central Bank,Tony Grimes, the Financial Regulator Patrick Neary, and core finance people from Brian Lenihan’s team, An Taoiseach’s top advisor, Joe Lennon, economics advisor, Peter Clinch, and Government press spokesman Eoin O Neachtain. There are suggestions of contact with or input from economist David McWilliams, businessmen JP McManus and Dermot Desmond and  former Minister for Finance and EU Commissioner, Charlie McCreevy.

9pm Dow Jones closes down 7% (738 points – the biggest one day drop) following the rejection of the €700bn Troubled Asset Relief Program in the US House of Representatives

after 9pm” (9.30pm) AIB/BoI chairmen and CEOs (four individuals) meet with Brian Cowen and Brian Lenihan in Government Buildings onUpper Merrion Street. The delegation did not make “comment, reference or disclosure of the Anglo Irish approach earlier that day”. The delegation “urged Lenihan to nationalise Anglo and Michael Fingelton’s Irish Nationwide immediately” Brian Cowen is reported to have said “We’re not fucking nationalising Anglo” A plan was agreed that AIB and BoI would put up €10bn to keep it going until the following weekend, when it would more than likely be taken into state control and they would get their money back. A blanket guarantee of all deposits and debt totalling €440bn would be introduced.


30th TuesdayAt 12 midnight, Minister for Defence, Willie O’Dea said (This Week in Politics, 15th May, 2011)

“Well my role was simply to get a phone call at around  midnight on the Monday night [from a senior civil servant], there was a cabinet meeting the following morning, and I was told something in a very short space of time roughly what the magnitude of this crisis was and this was the decision. I was informed as opposed to being consulted”

after 1am” (2.45am) the Cabinet was presented with a fait accompli, being told the matter could not wait until the morning and that its consent was required immediately. The virtual Cabinet meeting (other than the Taoiseach and Minister Lenihan, the others Martin, Hanafin, Gormley, Ryan, Smith and others were involved via telephone)

2am, according to British Chancellor of the Exchequer, Alastair Darling, it was 2am that the decision to guarantee the banks was taken.

2.30am Financial Regulator, Patrick Neary rings EBS Chairman, Mark Moran who immediately rings EBS CEO, Fergus Murphy to inform him of new arrangements

3am Financial Regulator, Patrick Neary phones chairman of Irish Nationwide Building Society, Professor Michael Walsh to inform him of the new arrangements

6am, Alastair Darling first heard about the guarantee on BBC radio’s Today programme with John Humphrys.

6am Minister for Finance, Brian Lenihan telephones Jean Claude Juncker, chairman of the Eurogroup, FG leader Enda Kenny and Labour leader, Eamon Gilmore to inform them of events

Before Markets open – Department of Finance issues statement that it had decided to  “safeguard all deposits (retail, commercial, institutional and interbank), covered bonds, senior debt and dated subordinated debt (lower tier II)” at the six banks and “the guarantee will cover all existing aforementioned facilities with these institutions and any new such facilities issued from midnight on 29 September 2008, and will expire at midnight on 28 September 2010.”

7.30am INBS Chairman, Professor Michael Walsh telephones CEO, Michael Fingleton to inform him of new arrangements

Night/Early Morning – Minister Lenihan has said “I did not make any external telephone calls

on the night of 29 September and early morning of 30 September 2008 to seek advice in relation to the bank guarantee or other options for resolving the banking crisis. However, I did make telephone calls to the following people to advise them of the bank guarantee:

(a) Irish Ambassador to France, (b) Ms. Christine Lagarde, Minister for Finance, France – Brian Lenihan called her on her mobile phone and claimed that he had no choice and the Ms Lagarde’s reaction was “Oh my God” because of perceived competition issues with other European countries [RTE This Week 12th June, 2011]  (c) Irish Ambassador to UK (d) Mr. Alistair Darling, Chancellor of the Exchequer, UK[“a frank exchange”] (e) Monsieur Jean-Claude Trichet, President, European Central Bank”

Pointedly he did not contact the German Chancellor, Angela Merkel or Finance Minister, Peer Steinbruck

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Jones Lang LaSalle (JLL) will later today publish (free registration required)its commercial property series for Ireland for Q1, 2011 – until the report is published on the JLL website you might have to do with Jack Fagan’s advance reporting in today’s Irish Times. The JLL series is one of the two Irish commercial indices referenced by NAMA’s Long Term Economic Value Regulations (Schedule 2) and is used to help calculate the performance of NAMA’s “key markets data” shown at the top of this page. The other quarterly Irish price series is published by SCS/IPD and will be available tomorrow afternoon; because it is generally published after JLL’s it is not used here but the index does historically show a close correlation with JLL’s.

The Index shows that capital values are continuing to decline though the pace of decline is moderating. The Index declined by 1.5% in Q1, 2011 compared with Q4, 2010. Overall since NAMA’s Valuation Date of 30th November, 2009 prices have declined by 13.1%. Commercial prices in Ireland are now 60.9% off their peak in Q3, 2007. On an annual basis prices are down by 10.0%. The NWL index is now at 888 which means that NAMA needs to see a blended increase of 12.6% in property prices across its portfolio to break even at a gross profit level (taking into account the fact that subordinated bonds will not need be honoured if NAMA makes a loss).

In terms of commercial components, Retail was down 1.3% in the quarter, Office was down 1.6%  and industrial was down 1.7%. JLL are, yet again surprisingly, upbeat about the figures saying that the 1.3% decline in Q1 is the smallest quarterly decline since Q4, 2007 (with a single exception of Q3, 2010). The most recent capital declines have been as follows: (2010) Q1 (2.1%), Q2 (4.7%), Q3 (1.1%), Q4 (3%) and Q1, 2011 (1.3%) – personally I feel sympathy for the property companies trying to paint an upbeat picture whilst the market is clearly still very challenging.

Margaret Fleming, the JLL director of investment at JLL says that the Q1, 2011 figures do not include the effect of the proposed abolition of Upward Only Rent Reviews (UORRs) which, she claims, would lead to a “20 to 30 per cent” further decline in capital values. This is the first time I have seen an estimate over 20% to reflect the proposed changes to UORRs. The then-Society of Chartered Surveyors inIreland indicated that the estimated decline would be 20% for its portfolio that it assesses with IPD to produce its commercial prices index which rivals JLL’s.

JLL report that rents fell by 3.1% in Q1, 2011 which represents a moderation in the pace of declines which have been running at over 20% annualized in the previous four quarters.

The outlook for 2011 is challenging. Hopefully NAMA and non-NAMA banks will bring more product to market. There should be some stabilization in the overall economy though domestic demand is likely to decline. Credit for Irish property is still scarce though there are reportedly pots of €10m available for quality assets with reliable rent rolls. The prediction on here is that capital prices will decline 10% this year (25% if the UORR legislation is introduced).

UPDATE: 27th April, 2011. The report from JLL is now available online here. The report shows the present average yield on Irish commercial property to be 8.4%.

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This is a purely housekeeping entry to establish guidelines for the posting of comments. There have been some 2,171 comments posted on this blog since its introduction last January 2010. Some of these will have been generated on this side but most are made by visitors to the blog. With comment volume increasing, and solely for that reason, there’s a need to set out some guidelines.

Commenting versus contacting the blog
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Comment content
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Replying to other comments
(1) Up to now the general house style was to greet with “Hi” – that reflected the small population of commenters and the folksy nature of the exchanges on here. It has become a little tedious for some, and so with a little regret it must be said, the house style of address will henceforth be with “@”
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Editing comments
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Suppressed comments
There have been 10 comments in the past year which were suppressed. An attempt was made to contact all commenters with an explanation for the action taken. The suppressed emails break down as follows:

(1) 2 made allegations that named or identifiable individuals had lied. The commenter declined to offer evidence.
(2) 1 comment inferred that a named individual had committed an offence against the law. The commenter was invited to provide proof or modify the comment and they chose to modify the comment.
(3) 2 used what was considered on here to be personally insulting language to a previous commenter. The commenters were invited to modify their comments and remove the “name-calling”.
(4) 3 comments made reference to a post which was modified soon after it was made at the request of a party that had provided information which they had, apparently, intended to be confidential.
(5) 1 comment made reference to the personal assets of a developer which was border-line intrusive. The email address provided by the commenter turned out to be invalid when an attempt was made to make contact to modify the comment.
(6) 1 comment (correctly) made a claim about an important financial disclosure that had not yet come into the public domain, which would have been damaging had it been untrue.

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RTE transmitted a capable current affairs programme last night which examined the wealth and lifestyles of several top NAMA developers who owe the agency an average €1-2bn. As a close follower of NAMA, I must say that it was the first Prime Time programme on NAMA where I haven’t found myself shouting at the TV screen at the mistakes voiced by presenters, journalists, junior ministers and commentators, and all in all it was an interesting insight into some of the residual private and commercial wealth enjoyed by NAMA developers such as Bernard McNamara, Michael O’Flynn, Gerry Gannon, Seamus Ross, Joe O’Reilly, Sean Mulryan, Derek Quinlan, Paddy Kelly & family and the Treasury duo – Messrs Ronan and Barrett. I couldn’t dispute any of the details.

The programme gave a fascinating insight into the wealth (particularly property wealth) enjoyed by the developers and notably their wives – no interior shots of the houses but the opulence of the properties wasn’t in doubt and RTE made full use of camera masts to provide elevated images of the properties. Transport was also on show – be it Gerry Gannon’s 4-year old silver Range Rover (reg 06-D-7884, shouldn’t RTE be pixelating developer number plates?) and his wife’s red 2008 SL Mercedes (UPDATE: 26th December, 2010 now apparently for sale), Bernard McNamara’s newish S-class Mercedes or Johnny Ronan’s old Maybach (worth about GBP 100k in the UK today where there is a second hand market). And speaking of second-hand values, Michael O’Flynn’s AgustaWestland 8-seater helicopter was valued at €3.5m+ by RTE.

All in all though,I found it difficult to understand the point of the investigation. That developers still have access to immense wealth? That developers made substantial transfers to spouses? That developers still collect impressive rents on their properties? That developers employed offshore companies to manage risk in their businesses? All with an over-arching implication that developers are stiffing NAMA (and by extension the nation). None of this was really new and we didn’t need what looked like expensive covert filming or vaguely threatening background music , not to mention what is now the usual imagery of wealth, the upturned Bollinger champagne bottles, the crystal cut glass champagne flutes, cognac glasses and a bunch of well-fed developers playing Monopoly on the top floor of an unfinished office block – no we didn’t need any of this to confirm what has been reported elsewhere in detail. It is just about noteworthy that 12 months after NAMA finally came into being, developers whose debts are now owned by the State, still enjoy fantastic wealth whilst the citizens have contributed billions to recapitalizing the banks after losses on these loans.

So you would have expected the programme to have given NAMA a hard time, particularly since the NAMA chairman Frank Daly did provide an interview. But for whatever reason the questioning was pretty light, for example

(1) Yes NAMA may have initiated the voidance of the transfer of €130m of property (are those peak values or today’s by the way and are those properties subject to substantial non-NAMA mortgages and liens?) by three (yes, just three!) developers out of 850 developers whose loans have been absorbed. The value of this property is not to be used to set off against the debt now due though, it is to be used for future development. And by the way the €130m of property hasn’t all been transferred back yet – how long does it take to execute a conveyance? Seven days? Prime Time say there was “no evidence” of property being transferred to avoid creditors or NAMA.

(2) NAMA has taken action against one developer (Paddy Shovlin’s partnership with the Fitzpatrick brothers). One action?

(3) On the other hand NAMA is reported to have taken over all the rent rolls it can. The programme made much of the fact that NAMA occupies Treasury Buildings in the centre of Dublin and pays rent to its landlord (Treasury Holdings/Paddy McKillen) but is NAMA not using that rent to offset debts owed to it by the developers. Ditto with the Office for Public Works buildings including those owned by Liam Carroll and Bernard McNamara. The programme’s implication was that developers were still pocketing substantial rent whilst debts to NAMA went unpaid. But is that really the case?

(4) And Prime Time could certainly have dug on the question of business plans. My information is that none have been signed by NAMA *and* the developer. NAMA say that 30 have been “approved”. What does that mean?

Possibly the most newsworthy segment of the programme and it was over in a flash was a comment by Simon Kelly, son of Paddy Kelly who said (35:30 in to the recording)

“I suppose I personally owe the banks about €200m on all the properties that have gone into NAMA. The Kellys will be, you know, €900m so like again under half of that portfolio, just under half of that portfolio will be on our combined shoulders. It’s a vast amount of money. We signed for the loans personally and that’s meant now our day of reckoning has come.”

With NAMA taking over loans at an average 58% haircut, the clear implication is that the developers feel they are in debt to NAMA for what NAMA paid for the loans and no more. Perhaps that was the real revelation from last night’s programme but alas it went unexamined.

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