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Ireland: The Bubble Is Primed.

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The central fact in Ireland is that we are dangerously over-dependent on multi-nationals and apart from their activity, we are nothing more than an economy that sells houses to one another, financed by other people's money. We have a serious deficiency of native companies doing well and - although there is no shortage of capital - all this spare cash is going into property.

Property creates no value added, no innovation, no patents and no creative long-lasting capacity.

Today, Microsoft, Dell and Intel, account for 20pc of our GDP. Think about that for a moment. The turnover of the operations of three multi-nationals in Ireland accounts for one euro in every five in circulation here! Furthermore, 72pc of all our exports came from two sectors - the "pharmachem" sector (chemicals and pharmaceuticals) and computer sector.

Multi-nationals accounted for an astounding 87.6pc of Irish exports, yet there are only 100,000 people working in the multi-nationals as opposed to 1.9m in the rest of the economy.

Of the remaining 12pc of our total exports, close to 8pc were agricultural goods, so domestic firms only account for a tiny 4pc of exports.

All this makes the property market appear even more attractive for investors, because everyone thinks that prices can only go upwards. So the net result of partnership is to drive even more money into the property monster and away from domestic long-term wealth creating industries.

As long as everyone keeps borrowing and spending, these fundamental structural developments go unnoticed.

Partnership,(n): Charade; fraud; myth

http://www.davidmcwilliams.ie/Articles/vie...=&ArticleID=363

This article is written against the backdrop of talks between unions who effectively only represent government employees, looking for more pay rises, despite not delivering on productivity improvements under the last agreement.

A Leading Dublin Businessman told a judge yesterday he had fraudulently misled Irish Life Building Society into believing a woman worked for his hotel and earned €30,000 a year there.

Brian McGill, owner of the Harcourt Hotel in Dublin, said he had provided a fraudulent Certificate of Earnings to Catherine Fitzpatrick Butler so the society would provide her with a mortgage.

He was giving evidence in a legal row among former lovers.........

You can read the rest at

Hotel owner misled lender to help couple buy house

http://www.unison.ie/irish_independe...issue_id=14096 [registration required]

Exaggerating earnings certificates has been ongoing for several years, if you can find the right connections.

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Any ideas how many interest rate rises it's going to take to tip this baby into the abyss?

I reckon the one on it's way from the ECB will stop the remains of a boom, and another will be enough to tip this little country into a fine mess.

At least they will have endless cheap housing 15 years from now.

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Sounds much like Gordon's "Miracle Econpomy" only much worse. Wealth that comes from HPI and MEW will last as long as the credit bubble can keep inflating. The problem with all bubbles that are not backed by the fundamentals is that they inevitably pop. The house market in the UK and IR is going to crash and because it has been more inflated than HPI bubbles of the past it is more likely to result in a more violent correction when the pop comes.

:o *

( :D )

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Any ideas how many interest rate rises it's going to take to tip this baby into the abyss?

I reckon the one on it's way from the ECB will stop the remains of a boom, and another will be enough to tip this little country into a fine mess.

At least they will have endless cheap housing 15 years from now.

I did some work in Dublin 2 years ago - the Irish contact we were working with said they were very worried about economic sustainability then!

Dell must be in serious trouble the send me a letter offering a cheap computer at least once a week thesedays it was only once a month last year

CS

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Any ideas how many interest rate rises it's going to take to tip this baby into the abyss?

I reckon the one on it's way from the ECB will stop the remains of a boom, and another will be enough to tip this little country into a fine mess.

At least they will have endless cheap housing 15 years from now.

There is just too much momentum in the market for it to be stopped by just one rate rise. However the swaps market seems to be pricing in three more 25 basis point increases this year alone - That will surely hurt.

I have noticed sentiment changing. People who were outright uberbulls last year are starting to have doubts and are talking about possible trouble ahead. You know the sort of thing: "The apartment market will collapse, but it won't affect houses" and "Prices in some areas will fall, but where I live they will continue to go up" :rolleyes:

I read stats around six months ago that suggested that the average monthly mortgage payment in Dublin will increase by 83 Euro for each quarter point rise. We've had two now, four more ought to push it over the edge.

The belief in property as a solid investment is widespread and almost unwavering. Many see their property as their pension fund. The effects of a crash here would be absolutely devastating. It is not exaggerating to suggest that there could be widespread civil unrest.

Edited by Flash

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The belief in property as a solid investment is widespread and almost unwavering. Many see their property as their pension fund.

Even those that may not have invested in a property for their pension fund may not be aware that recent research showed virtually all Irish pension funds have exposure to property. This is abnormal by euro standards.

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There is just too much momentum in the market for it to be stopped by just one rate rise. However the swaps market seems to be pricing in three more 25 basis point increases this year alone - That will surely hurt.

I have noticed sentiment changing. People who were outright uberbulls last year are starting to have doubts and are talking about possible trouble ahead. You know the sort of thing: "The apartment market will collapse, but it won't affect houses" and "Prices in some areas will fall, but where I live they will continue to go up" :rolleyes:

I read stats around six months ago that suggested that the average monthly mortgage payment in Dublin will increase by 83 Euro for each quarter point rise. We've had two now - four more ought to push it over the edge.

The belief in property as a solid investment is widespread and almost unwavering. Many see their property as their pension fund. The effects of a crash here would be absolutely devastating. It is not exaggerating to suggest that it there could be widespread civil unrest.

When the bubble does inevitably pop, we'll see a sharp rise in unemployment as the construction and retail sectors take a hit. The investment market will be worst affected initially as tenant demand evaporates as the guest workers head for pastures greener. Go long on ear plugs as the jingle jangle of keys being dropped through the letter boxes of building societies and banks will reach a cacophony.

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Go long on ear plugs as the jingle jangle of keys being dropped through the letter boxes of building societies and banks will reach a cacophony.

:lol:

I'll leave my CV at the Locksmith's shop on the corner of Merrion Square.

Edited by Flash

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:lol:

I'll leave my CV at the Locksmith's shop on the corner of Merrion Square.

I've actually had some experience in dealing with boarding up and securing abandoned houses on behalf of the Highways Agency. Its a bleedin nightmare. :rolleyes:

North Circular

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I like McWilliams, but last week he was banging on about how dynamic and vibrant Ireland was, with its bars full of Polish, Chinese and Ukranian workers, and you could tell by the phone prices where the next boatload/plane load of people had arrived from, all written in a dreamy tone.

The rising cost base of Ireland - helped by the public sector wage claims - mean that a two tier economy will become more intrenched. As long as the credit tap is turned full on, the deflating real incomes of the private sector in Ireland will balance out the rising incomes in unproductive jobs in the public sector.

Canada has been living on immigration like this for decades, with a notrious bureocracy and high tax economy providing lots of employment in all sorts of madcap public sector Politcally Correct jobs.

In 2001 about 1 in 5 people in Canada was employed in the public sector and the average income was $41,343, while the per capita level of GDP (that means the total sale price of produce

per person - i.e. not wages, not profits, but sales) was only $34,912!

http://www.fraserinstitute.ca/admin/books/...swers-09-QA.pdf

So its perfectly possible to have an entrenched two tier economy if mass immigration is fostered and continued.

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The belief in property as a solid investment is widespread and almost unwavering. Many see their property as their pension fund.

And when everyone has bought and there is nobody left to buy? There is nothing constraining supply in Ireland, the number of building starts exceed even major regions in England.

It is not exaggerating to suggest that there could be widespread civil unrest.

What will they blame, the Euro?

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  • 336 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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