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Media articles from THE REPUBLIC OF IRELAND


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This bit jumped out at me:

For what it is worth, the emerging consensus is that house prices could fall by a further 50 per cent from their current levels, ie a cumulative 75 per cent drop from peak to trough.
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http://www.belfasttelegraph.co.uk/news/local-national/republic-of-ireland/dublins--four-seasons-hotel-for-sale-after-17m-loss-14953401.html

In a move that will “send shockwaves through the industry”, the luxurious Four Seasons Hotel in Ballsbridge, Dublin, is up for sale after posting losses of £1.7m.

The icon of the Republic’s Celtic Tiger era attracted well-heeled and celebrity guests, including Eminem and Mariah Carey, down the years.

looks like the hotel industry is about to swallow a large dose of reality ;)

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http://www.irishtimes.com/newspaper/breaking/2010/0920/breaking10.html

Bond yields rose again today ahead of tomorrow's scheduled auction by the National Treasury Management Agency (NTMA), reaching 6.5 per cent.

Yields on 10-year Government bonds moved to a new record high of 6.503 per cent before falling back to 6.48 per cent by market close. The spread between Irish bonds and German bunds was 401 basis points.

The NTMA is to test market sentiment towards Ireland tomorrow with a sale of up to €1.5 billion worth of bonds.

Fingers crossed for them that the ECB fancies buying some more worthless iou's :ph34r:

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So prices to drop 75% peak to trough.

I'm all for it - but you know where the FF pigs have their snouts? I don't think it will happen too soon.

I for one would like to buy about 10 acres of land in Ireland to put a Grand Designs style house on when I'm a bit older.

Personally, I'd not move back to Ireland this side of 35 (I'm 28 now) - but I keep an eye out.

There must be some nice places where you could have a house.

The problem is that the NAMA arrangement has meant that prices have been prevented from falling to their true value levels.

Why should 10 acres of land in Ireland cost £80,000 Euro - while the same in Latvia, Poland or even Norway cost a Third of this amount?

Answers on a postcard please.

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So prices to drop 75% peak to trough.

I'm all for it - but you know where the FF pigs have their snouts? I don't think it will happen too soon.

I for one would like to buy about 10 acres of land in Ireland to put a Grand Designs style house on when I'm a bit older.

Personally, I'd not move back to Ireland this side of 35 (I'm 28 now) - but I keep an eye out.

There must be some nice places where you could have a house.

The problem is that the NAMA arrangement has meant that prices have been prevented from falling to their true value levels.

Why should 10 acres of land in Ireland cost £80,000 Euro - while the same in Latvia, Poland or even Norway cost a Third of this amount?

Answers on a postcard please.

Because you can't smell the aul sod of Ireland from Poland.

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good article . one of the few journos on the island of ireland who talks some economic sense . unfortunately for every david mcwilliams there are 10 helen carsons....

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good article . one of the few journos on the island of ireland who talks some economic sense . unfortunately for every david mcwilliams there are 10 helen carsons....

David McWilliams is the best Irish Broadcasting economist.

It's a pity we don't have more links to him on this site.

Without exaggerating, he was warning about a fall in House prices before most of the Sheeple knew there was a Bubble!

His articles on the Southern Banking Crisis are well worth reading - they'll probably become the syllabus for future MBA students about crises.

The Government response has been really really bad!

I'm so glad I don't work in the South (or the North :) )

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http://www.belfasttelegraph.co.uk/business/business-news/republic-of-ireland-powerless-stop--fleeing-developers-14956342.html

Irish Finance Minister Brian Lenihan yesterday admitted he was powerless to stop indebted developers and bankers from upping sticks and starting new lives outside the Republic.

The statement came at a heated Oireachtas committee meeting, where Mr Lenihan insisted he would be able to reveal the final cost of Anglo Irish Bank's rescue "by early October".

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http://www.irishtimes.com/newspaper/breaking/2010/0928/breaking13.html

The five-year plan hopes to increase the number of overseas visitors to the country to eight million and attract an extra 780 foreign investment projects through IDA Ireland. Agency-assisted indigenous exports totalled almost €13 billion last year, and the plan aims to increase this by €4 billion by 2015.

No acceptance that the game is up, Ireland is a bankrupt.

It's too expensive too visit and all the hotels are empty :ph34r:

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http://www.irishtimes.com/newspaper/breaking/2010/0930/breaking4.html

The Government has today announced a final estimate for the cost of the Anglo Irish Bank bailout of at least €29.3 billion and has said AIB will require an additional €3 billion in funding and Irish Nationwide a further €2.7 billion.

The Anglo figure of €29.3 billion is based on a haircut of 67 per cent on the remaining €19 billion in loans to be transferred into the National Asset Management Agency (Nama) before the end of the year.

This is being described as Black Thursday for Ireland on Radio Ulster this morning :ph34r:

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In the Irish case, most of the losers will be Irish, one way or another. With shareholders largely wiped out, they will be either Irish taxpayers, as currently planned; Irish pension funds, likely the biggest holders of the bonds; or Irish depositors.

Only one European government has chosen to impose significant losses on unsecured creditors in the latest crisis: Iceland. "In retrospect, Iceland looks pretty good compared to Ireland," says Mr. Gros.

The size of Iceland's banks dwarfed its economy more even than Ireland's did. Bank assets in Iceland were equivalent to 10 times annual economic output, compared with seven times in Ireland.

But Reykjavik had something else going for it: A large proportion of its bank creditors were outside the country. Iceland changed the rules of the game, promised to pay the banks' domestic creditors in full and allowed the banks to default on liabilities to foreign creditors. Iceland's taxpayers saved huge sums.

Iceland did pay a penalty: Its access to international markets was closed and remains so. Mr. Lenihan says that for Ireland that would be too high a price.

Mr. Gros says there are probably other factors influencing the Irish decision. A default on Irish bank debt would push funding costs higher for banks across the euro zone. He says other euro-area governments would be strongly urging Dublin not to let this happen.

But he disputes the idea that allowing the banks to default would hurt the Irish government's ability to borrow. "A government can still make a clear distinction between its own obligations and the entities that it owns which are limited-liability companies."

Bailing out bank creditors provides no incentive for them to undertake proper due diligence among banks. The European Union is currently grappling with this moral-hazard problem as it debates setting up national resolution funds to bail out troubled institutions.

Mr. Gros says the issue could be solved by offering creditors a menu of options to swap their claims—for example, for bonds with a lower face value, bonds paying less interest with later final maturities, or even an equity stake in the bank—that would more fairly share the pain.

wsj

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The interesting thing in this is that NAMA has now lifted the treshold from €5m to €20m, for loans that it will consider. This will reduce dramatically the amount of loans and sites that will go into NAMA.

This is an interesting development and is surely bad news for small developers.

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