Ireland's Luck Is Running Out

[dryrot]

hi

from Der Spiegel, a German view of the mess we are in...

http://www.spiegel.de/international/busine...,542364,00.html

"The former highflier's troubles began in the housing market, but they predate the global credit crunch by nearly a year. Ireland enjoyed the biggest property boom ever recorded, Ahearne says, with average house prices up more than 300 percent in the past decade, to more than $490,000 at the beginning of last year. Since then, though, both home prices and residential construction have fallen off sharply. The building slump has led many construction firms, which are among the country's biggest employers, to slash jobs. Ireland's housing sector as a percentage of gross domestic product is three times bigger than that of the US, so the downturn, Ahearne says, is having a much bigger impact on the broader economy. "

[Fed Up]

Builders have been slipping money in Bertie's back pocket for years.

The Irish bubble can be best examined via:

http://www.thepropertypin.com/

which should really be on this site's links page.

[slurms mackenzie]

hi

from Der Spiegel, a German view of the mess we are in...

http://www.spiegel.de/international/busine...,542364,00.html

" Ireland's housing sector as a percentage of gross domestic product is three times bigger than that of the US, so the downturn, Ahearne says, is having a much bigger impact on the broader economy. "

Ouch ! Thats gotta hurt, especially when you add in a strong euro, and an economy heavily dependent on foreign multinationals. It'll be interesting to see what happens with their very mobile workforce.

Edited March 23, 2008 by slurms mackenzie

[Waiting Patiently]

from Der Spiegel, a German view of the mess we are in...

http://www.spiegel.de/international/busine...,542364,00.html

As I recently heard one financial commentator remark on RTE: "The Irish have had all the carrots and now all they've got left are the sticks"

[Leonard Hatred]

It's tragic how once the boom busts, it causes everything else to collapse along with it (spiralling job losses, etc.) If only the politicians and bankers had prevented such an unsustainable boom (i.e., had done their job )

[Sour Mash]

It's tragic how once the boom busts, it causes everything else to collapse along with it (spiralling job losses, etc.) If only the politicians and bankers had prevented such an unsustainable boom (i.e., had done their job )

To be fair, a lot of the boom in housing had to do with the low interest rates imposed as a result of Ireland's participation inf EMU. The government could not have raised interest rates if it had wanted to.

However, there's no doubt that the Irish govt. are composed of a bunch of self-serving idiots who are well and truly in the pockets of various vested interests, including of course the building trade.

[scott666]

It's tragic how once the boom busts, it causes everything else to collapse along with it (spiralling job losses, etc.) If only the politicians and bankers had prevented such an unsustainable boom (i.e., had done their job )

.....but they did do their job. The objective was to use the money supply as a weapon of mass destruction to weaken/break up the Euro-zone.

[Confounded]

Where is Tara with all her Irish housing stats and anecdotes, it was good to get an update from the other side of the Irish sea?

[Confounded]

Tara can be found on the Northern Ireland forum - all welcome.

http://www.housepricecrash.co.uk/forum/ind...hp?showforum=52

Thanks

[huw]

To be fair, a lot of the boom in housing had to do with the low interest rates imposed as a result of Ireland's participation inf EMU. The government could not have raised interest rates if it had wanted to.

Well they chose to participate, knowing that eurozone interest rates would inevitably be 'one size fits all'. And there were other (fiscal) levers they could have used, if they'd been minded to do so.

[Sofa Spud]

Ireland and now Iceland! 'r' swapped for 'c'. A c and an r. CR Crash, Credit, Crunch. Who needs tealeaves any more?

Edited March 23, 2008 by Sofa Spud

[StoppedClock]

There was plenty we could have done to prevent the bubble, the gubberment even implemented some recommendations to cool the market in 00, 01 but when the market cooled they got scared and pulled out all the stops. The bubble was actively promoted, it is NOT just a symptom of low IRs. Like in UK salary multiples were relaxed and loans extened to people with nop chance of paying them back. (35 year IO?)

So no one to blame for this but ourselves. Thankfully we are part of the EZ and (so far) prudence is being rewarded.

[Meerkat]

And now they'll show a splendid text-book example for all those in love with Euro. I'm not particularly well-informed as to how severe is the situation in the banking sector, but nevertheless I do wonder if Ireland could be eventually forced to abandon EUR to save financial sector....

[Sofa Spud]

How could Ireland abandon the Euro? They would need to devise and mint a new currency since most of the punt coins and notes are probably long gone. They're hardly likely to want the GBP, which is not looking very healthy at present. I'd say there's more chance of UK being forced INTO the euro that Ireland forced out.

Edited March 23, 2008 by Sofa Spud

[dryrot]

How could Ireland abandon the Euro? They would need to devise and mint a new currency since most of the punt coins and notes are probably long gone. They're hardly likely to want the GBP, which is not looking very healthy at present. I'd say there's more chance of UK being forced INTO the euro that Ireland forced out.

same as spain... and if ireland leaves the euro, does it lose the euro 2k per head subsidy from Brussels?

thx 4 advice re thepropertypin - i've skimmed it but am not a registered member, please pass link on.

more UK relevance:

"Ireland's slump is, in many respects, a microcosm of the challenges facing countries such as the US, Britain, and Spain. It's not just about the global credit crunch, weak banks, or bearish stock markets."

Edited March 23, 2008 by dryrot