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Ben Madigan

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Everything posted by Ben Madigan

  1. In the short-term, the collapse of the pound has been great for NI as shoppers flood across the border to enjoy the cheaper shopping in Banana Republic Britain. It could not have come at a better time of the year either - the pounds collapse is perfectly matched with the absolute pinnacle of Christmas shopping frenzy. Currently, you can't move in Belfast without hearing a Southern accent or seeing a Southern registered car; Lisburn is even more dramatic, so I can only imagine what it would be like in Derry, Newry, Enniskillen, etc. In the long-term, however, this is not good for either economy. The pound:euro exchange rate will continue to fluctuate, as it always has, until the Poms see sense and join the Euro. I'm sure many of you remember the mid 1980s, when the pound last collapsed on the world markets, and despite the fact that Belfast still had bombs exploding regularly and looked the part (this was before Castle Court even opened), and you couldn't move around town without seeing a Cork registered bus or four, especially at this time of year. And if Sterling remains weak, imported inflation will soon cause prices for imports - i.e. any of the things people from Athlone are buying in Enniskillen retail parks - to rise in Sterling terms. What we then get is a huge number of ugly warehouse retail developments along the border which are built expressly to cater for cross-border shopping at a level of frenzy only possible at a particular short term exchange rate conjuncture. We get misallocation of capital into yet another stupid type of property investment, instead of into something that might actually create jobs for NI people in the long term, and we wipe out the retail trade in towns on the other side of the border and consequently suppress demand among our most important export market. But it is getting us out of a serious hole at present, so for that we should all be thankful. In the long term, NI would benefit enormously from being part of the Euro, partly through exchange rate stability, partly because interest rates set for Germany are likely to be better for us than interest rates for the City of London, partly because the stern BuBa bankers who run the ECB were less inclined to become obsessed with Greenspan-style credit bubbles than the eejits in the BoE. Not disinclined, sadly - but certainly less inclined. While the Republic of Ireland has been dreadfully economically mismanaged for the benefit of a shower of gombeen property developers by political chancers who can't think beyond the end of next week, I'm not sure in what respect that differs from the UK. And I'm damn sure that having an economy crash (as in the Republic) is better than never having had an economy in the first place (as in NI). Either way, not much economic good news for anyone on this island or the one next door for some years, I'm afraid.
  2. 10% is not a sharp fall in current circumstances. For example, it represents about 3 months house price rises here in Northern Ireland during 2006. Victor Bland is too afraid to say in public what he knows to be the case in private.
  3. Did anyone else hear Sir Victor Blank of Lloyds TSB on the World at One this lunchtime? When asked what his biggest fear for 2009 was, he replied that it was continued negative sentiment on the economy being pushed out by the media, and that after the New Year, it would be 'time to talk up the economy'. If he believes that the current world economic crisis is caused principally by a lack of confidence, he is too stupid to be Chairman of one of the world's largest banking groups. If, on the other hand, he knows fine well that he and his chums are the principal villains in the piece, and that the mess caused by irresponsible lending will take years to clean up, but wants to get the public spending and borrowing again to keep himself and his mates out of a bigger hole, then he is a shyster of the world order. Either way he is a business failure. You would think after running cap in hand to you and me to save his business, he might show a little humility. Moral hazard is the poison of fiscal responsibility. It is time to sack Sir Victor and friends, and hire people who can do their jobs more competently for a fraction of the pay. After all, we the taxpayer currently have the UK's banks by the short and curlies.
  4. Tories on this thread are slowly confusing me. To deal with the effects of the current housing bubble popping, we need to bring back Maggie, architect of the 1980s housing bubble? Uh, seriously? New Liar is dead but the Tories are still not fit to govern, with their heady mix of copying New Liar in boom times and shitting on the plebs when the economy goes south. What controls are the Tories proposing to prevent taxpayer-funded bailouts of cowboy operations like Goldmine Sachs being frittered away on bonuses? None - and why would they? Goldmine Sachs bonus holders are core Tory supporters and funders. Anyone convincing themselves that the abandonment of sensible credit controls, loose monetary policy and celebration of the bubble we've seen over the past 8 years or so would have been different under the Tories is deluding themselves.
  5. I wasn't aware until I read this thread just how traumatised and disadvantaged I was by my state education. Obviously, the 93% of us educated in the state system are abnormal, and it is a cruel and unusual punishment indeed to make parents send their children to a state school... Seriously, folks, going to a state school is not the end of the world. Almost everyone does. If that is not your experience of life, then I'm afraid your experience is limited. There are some great people working in public schools, and many of my closest friends and, indeed, my partner are public school types. Let's be honest, however - public schools exploit parents' ludicrous fears about state education and to charge extortionate fees and then benefit from charitable status. Another thing that struck me while reading this thread was how public schools' reputation for high academic standards must not be based on their teaching of spelling, punctuation or grammar!
  6. Members of the Conservative Party have been spinning me this line for the past two years, and I'm afraid I see little evidence of it. And anyway, if the Tories really were offering something fundamentally different to New Liar, really capable of transforming the country, Brown wouldn't be able to steal their ideas, would he? Personally, I agree with the Obama assessment of Cameron - a real lightweight.
  7. The Tories did not say anything of any consequence about the debt and property bubble on the way up, there is no evidence that they would have steered the economy differently from Labour over the past 8 years, and they have little of consequence to say about how to get us out of the current mess. A majority of the population - myself included - loathe Tories on prinicple, fear what they will do to public services, note that their senior ranks remain absent of anyone like themselves and need a damn good reason before they'll think of voting for the buggers. Thatcher and Major got them to do it three times with fear, Heath got them to do it once by being one of them, and Macmillan was further to the left than Gaitskell anyway. So far Cameron and Osborne are not giving people who detest Tories a reason to overcome their prejudices and vote for them. Indeed they aren't giving any sense that they have a clue what they are going to do if they win the next election, full stop. They look like the public school debating team that went to Parliament on an open day and missed the bus back to school afterwards.
  8. I was thinking about going along anyway - if anyone else is interested in going please shout as my work can occasionally require me to stay of an evening with next to no notice, but otherwise I will be there.
  9. I'm glad I'm not the only person who reads this as the first serious salvo in a game of beggar-thy-neighbour that has been brewing for a few months now - the bitchy little UK-Iceland catfight being the Spanish Civil War to the about-to-emerge World War Two. The **** is about to drop out of Chinese industry's main export market and the Chinese cannot afford to let the Yuan appreciate in that context. I've also no doubt that the BoE will take falling inflation as a green light to slash UK interest rates to 1% and below. I'm neither remotely as wealthy nor as diversified as many of the posters on this site. I have modest savings and am employed by other people, and am well aware I would make an appalling businessman. Much as one has a sense of schadenfreude at watching the smug ******* proven wrong, frankly, I'm pretty scared at the moment.
  10. The biggest news for the Northern Ireland economy today was the Fed's decision to slash the US base rate to zero: http://news.bbc.co.uk/1/hi/business/7786282.stm The world's largest economy has just seriously escalated the slow burn game of beggar thy neighbour floating around the world. Both the effect of zero interest rates in the US and the likely follow on/retaliatory response from other world economies makes this a crashing step towards possible global deflation and depression. This is really, really, scary stuff and no-one seems to be paying it the slightest bit of attention.
  11. You really think Gordon Brown is a communist? Jesus, you must be even dimmer than he is!
  12. http://news.bbc.co.uk/1/hi/business/7782860.stm Unbefreakingleavable! Destroy 90% of your shareholders wealth and get a €10bn bailout from the government. No heads rolling, no accountability, no nothing. Just ramp the national debt through the roof, leave it for future generations to pick up and screw the moral hazard you create. I feel like my avatar picture at the moment. RTÉ coverage at http://www.rte.ie/news/2008/1214/bank.html
  13. BTW, I've just done a search for rentals in all of Belfast on propertynews.com - is that number of big, sometimes big and unique, houses, on the market in BT9 at very high rents normal? Or is this flippers being flopped in the face by their own petards? PS - is this Malone Road flat - http://www.propertynews.com/brochure.php?r...=1&sort=h2l - the worst value rental in NI?
  14. And don't necessarily believe the people who tell you they can move their tenants out in two months. I had a house I was renting with a mate in London sold from under me, and the landlady told the buyer she could have us out in a couple of months. We found out our legal rights, and a couple of months turned into 9, despite various attempts to bribe us to go early (none remotely high enough value). We did absolutely nothing illegal or immoral, simply expected this wretched woman to honour a contract with us she had signed less than 4 months before. Basically, it is very difficult to get anyone out during the first year of an AST, and if you really piss them off, they could hold out easily for the first 18 months, and that would involved multiple court costs for the landlord.
  15. There already is an institution of world governance - it's called the UN. And it has been a great success. Not. The problem is that of shared principles, and related to that democratic accountability. It's difficult to see institutions of serious, if partial, world governance functioning without China and Russia, and neither of those countries are remotely democratic. You really want to share power with Vladimir Putin? Also, it would probably require a few major core Muslim powers to really work given the major current geopolitical crisis. Malaysia, Indonesia and Turkey would qualify, maybe Morocco, but to be honest they are all rather preipheral to the core of the Islamic world, and the former three aren't really and aren't really seen in the Arab core as being properly Muslim states. At least two of Egypt, Saudi, Pakistan and Iran would have to be in, and again the whole question of democracy and human rights kicks in. I just don't see it. Using the EU as a model is all very well and good, but on matters of vital national interest the European institutions are still weak (look at what happened over Iraq), there is little popular support for deepening the EU, and that is despite a deep and often underestimated reservoir of shared values. Please tell me what issues really divide the people of, say, Ireland, the UK, Spain and the Czech Republic and you'll find they are fairly peripheral issues; and still the EU is far from perfectly functioning. You could maybe have serious shared sovereignty over macroeconomics, trade (although look at the problems even the Yanks and Canucks have over that!), migration, environmental governance and possibly even security. And you could probably bring in the EU plus it's periphery (Turkey and the Balkans), the US, Canada, Australia and New Zealand, most of Latin America and the Caribbean except the real basket cases (yes to Brazil and Barbados, no to Venezuela and Haiti!), the established Asian democracies (India, Japan, S Korea, the Philippines... er Taiwan has issues with its neighbour) and the less loopy bits of Africa (S Africa, Botswana, Mozambique, Ghana). That still isn't global governance and in what we might call the Second and upper tier Third World governments have a habit of going crackers pretty quickly - Thailand, Kenya, Venezuela and the Ivory Coast would all have looked safe enough bets 10 years ago, and all have had major bobbles since. The Bretton Woods institutions might well end up being reformed and strengthened on the back of this crisis - not a bad thing after 63 years - but I don't really see global governance progressing much beyond that at this stage. Russia is still playing 19th Century Great Power politics, and so has the US for the last 8 years. And China will do nothing to compromise its sovereignty until it is in a much stronger position to shape the direction of events than it is at present. China is a much calmer presence on the world stage than Russia, but its national goal is still to reclaim what it sees as its natural presence on the world stage after two catastrophic centuries. I really enjoy spouting off about this stuff!
  16. Yes but no would be my rather unhelpful answer! Current oil reserves have been about 25 years since I was a kid. However, there's no question that production in some of the big Arabian Peninsula oil fields is in decline, similarly North Sea, Texas ran into the problem of declining production decades ago, etc. etc. Is there a shortage of oil likely to be a problem in my lifetime? I doubt it. Is there a problem of cheap oil gushing out of the ground in easy to drill places running out pretty soon? I have very little doubt of that. That of course makes the economics of other energy sources more positive - no bad thing in my book. Will we, over the long term, pay more for energy? Of course. But will be paying $100++/barrel or the equivalent on other energy sources? I very much doubt that. The effect will be significant but not earth shattering. That's why I'm not keen on things like ethanol subsidies - the market will eventually do its work, and ethanol subsidies simply cause distortions in the market for grain - which screws the poorest people on the planet over. As usual.
  17. There has apparently been a spate of this sort of incident in new, virtually uninhabited, blocks of flats in London.
  18. Thanks for the great replies everyone. When I came back here late in Summer '07, the first signs of the market going off a cliff were already apparent, and yet people - well meaning friends - told me I needed to get in on the market or I would never be able to afford to buy. I pointed out that no market could survive where comfortably off - not rich or anything like it, but not struggling either - people could just about manage to scrape together a mortgage to buy a 2 up 2 down in the worst part of town. ..and last night, a really good friend, quite sincerely told me I needed to get in on the market this year when prices were low because if I waited for a few years, as I explained was my intention, prices would come back up and I would 'miss the boat'. This person, who is a dear friend so I am not dissing him, has just sold his house for 35% below the asking price!!! Most people have no idea about the structural imbalances in the Northern Ireland property market, the bizarre nature of the NI economy in general or the sheer amount of vacant property lying around at the moment. Most people expect recovery to happen soon and, sadly, most people in NI have a chronic sense of entitlement. That includes a frightening number of people working for NI banks. Even analysts working for NI banks.
  19. All markets are ultimately self-correcting. Often slowly and painfully, and rarely in a socially positive way, which is why I'm not a Mont Pelerin Society-style market fundamentalist, but they are ultimately self-correcting. As the global recession persists, and capital gains look more and more like fantasy, shareholders WILL be more and more interested in dividend as other income sources dry up and they seek to gain something on shares on which they have made a massive capital loss. Ultimately, directors will shape up or be shipped out. I'd much rather our governments had acted five years ago to puncture the bubble, but at the end of the day, that was a fault not exclusive to Britain and Ireland, given that gov'ts in the USA, Australia, Spain, China, the UAE, Bulgaria, Turkey , etc., etc., resolutely failed to spot the developing property bubble; and in the rare occasions when Ministers and civil servants in those countries did, they lacked either the authority or the balls to make a noise about it. Just like here. I'm slightly worried by the bashing of the very idea of credit that seemed to be happening on this thread. Credit is vital for any economy. The economic weakness of Ireland, vis a vis Britain and continental near neighbours like Belgium, Holland and Germany in the 19th Century can be traced back to the puny size and overcaution of the banking sector in this island. We were extremely well educated - better than the English or Germans of the same era - and our infrastructure was pretty good, but poor people didn't have access to credit. Eastern Ulster had better and less risk-averse banks which weren't entirely obsessed with agricultural land, and that is a major reason why Belfast became the industrial heartland of Ireland, one of the great cities of the Empire, and one of the world's great industrial cities. Sensible credit is good. Ask the women in Bangladesh or Peru who are making a decent living for themselves and their families - for the first time in history - thanks to available credit. Look at the role that Credit Unions have played in transforming the lives of people here in Northern Ireland. A society without credit is a society where only the rich have the capacity to make their dreams real. You can see the result of such a situation in modern Africa, historical Ireland or indeed, on a less catastrophic scale, in today's Italy, where the difficulties of penalising defaulters means no-one gets credit unless they're already well-off. It's why Italians really do live with their mothers until they're 40. The past 15 years were caused by central banks becoming obsessed with the one-club strategy of using low interest rates to get through periods of economic weakness, consumers not paying off debts in times of plenty, banks forgetting sensible lending rules and a price bubble encouraged by governments looking for a shortcut to re-election. That has nothing to do with sensible credit, any more than the jobless alcoholic down the street has anything to do with you enjoying a few bevvies on a Saturday night. Alan Greenspan is the villain of the piece. He deliberately stoked, against his better judgement, the stock market bubble of the Clinton years, which delivered 'economic success'. When that crashed, September 11 hit, and Central Bankers everywhere got into a panic about global depression, the 'successful' Greenspan model was there for Central Bankers everywhere to copy. With inverstors having an aversion to recently crashing shares, property was the obvious place for the glut of money made available by Central Bankers to flow into. And the information age meant prices were instantly available. Investors chased easily trackable short-term capital gains rather than yield and long term sustainability. Essentially, regulators and investors learned nothing fundamental from Black Monday; they simply developed strategies to make the boom and bust process happen more quickly. Northern Ireland probably had the most spectacular property bubble on the planet (sure - Bulgaria, Istanbul, Cape Verde - but, unlike us, they were largely driven by outsiders). The dangerous catalyst here was a sheltered, economically naive population only to happy to believe the mantra that because we'd stopped killing one another, the world owed us a living and Belfast was about to transform itself into Zurich. And no-one will pay for this, because too many people were in on it.
  20. Some prices are starting to get tempting: nice houses in nice parts of North Belfast - contrary to popular belief, there are a number - but why buy in a declining market? Especially when I'm renting a nice house in a nice part of North Belfast for a lot less money and able to save a bit on top. Of course, I'm a bachelor with no kids so I can take luxuries that other people's personal circumstances don't afford them, but Northern Ireland property is still overvalued in historic terms, and the economy here is very weak.
  21. I wonder who owns the Merc - him or the bank? Still, it could be worse. He could drive a BMW.
  22. Sorry, if I wasn't clear enough in my first post. Conacre has always kept Irish land prices higher than they should have been (and gave a small tax break to well-off culshies just for being well-off culshies!) but the spike of the last 2 years or so is something on a completely different order. On the order of a speculative asset bubble.
  23. Congrats Sophia!!! You will be one of the few people to spit in the teeth of the crash and win - hearty congratulations and enjoy your new home (assuming you've moved to a new home).
  24. Oh, and why do you think the Council of Mortgage Lenders is refusing to make a prediction for the change in house prices in 2009? If you think it's because of the low volume of transactions, I'd guess you believe in Santa Claus as well.
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