Global rankings of competitiveness are widely used, not so much by economists as by policymakers and those trying to attract foreign investment. This post compares and contrasts the WEF and World Bank measures of business competitiveness. The World Bank’s Doing Business rankings lend themselves very readily to policymakers taking action and differ for many countries quite substantially from the WEF rankings. Read more
This post examines three key assumptions underpinning the assertion that NAMA only requires a 10% rebound in property values in 10 years to ‘wash its face’. It looks at the importance of measuring the fall right, questions the yield given for NAMA’s loan book and raises the possibility of any yield correction coming through downward rent adjustment, not a rebound. Read more
This post celebrates Arthur’s Day and 250 years of Guinness with an economic perspective on our national drink, including a look at wages measured in Guinness terms and the fate of Guinness on the stock markets from its flotation in the 1880s to the end of the Roaring Twenties… and of course the magic dates when Guinness was worth 17.59 (million)! Read more
This post looks at the numbers behind NAMA in more detail, producing estimates of how much is in different segments of Irish and international property markets. It also critiques the calculation of long-term economic value, which turns out to be based on about 5% of the loan book, and presents revised estimates based on a broader sets of loans and more realistic assumptions. Read more
This post sets out the key facts about NAMA, as per the Department of Finance’s supplementary information, published on Wednesday. It goes through the amount lent, the number of deals, the loan-to-value, the estimated fall from peak so far and NAMA’s proposed ‘plateau’ level, before raising some issues to be dealt with in later posts. Read more
This post continues the regional review of house prices with an analysis of four-bedroom homes in the different suburbs of Cork. It finds that Cork bucks the trend seen generally in the country and in Dublin and Galway cities that more expensive areas have fallen hardest. The largest falls in Cork have been in Glanmire. It then explores some of the likely explanations for these different regional trends. Read more
This post reviews some initial evidence from the 250 respondents so far to the poll on expected income changes in 2009. About 60% of respondents expect their income to fall this year compared to last. A breakdown by sector and by income level shows that across five broad sectors of the economy, lower paid workers are being spared the worst income cuts. In ICT, wages are expected to be static for the typical worker, regardless of income group. Read more
From one EP to another! Following Electric Picnic at the weekend, which featured Leviathan political and economic discussions as well as more food stalls and music acts than you can shake a stick at, today it was back to business and off to another type of EP altogether.
That was the Environmental Pillar, part of Ireland’s Social Partnership framework which comprises about 30 organisations in the environmental space in Ireland. They held a workshop on NAMA, the Irish property market and economic sustainability in Dublin. There were four speakers including myself. The other three were NAMA tag team Brian Lucey and Constantin Gurdgiev as well as Feasta founder and environmental economist Richard Douthwaite.
There was a good attendance and a great degree of interaction. Fortunately for those who couldn’t make it, including many prominent member of the Pillar who were meeting Cabinet members at the time, the whole thing is recorded.
The talk I gave is available on these three videos:
Blog readers may be a bit tired of my thoughts on these matters, though, in which case I’d recommend watching the other talks. The full list is available on the Environmental Pillar’s channel on Youtube. Some of Brian and Constantin’s thoughts in relation to how the government could have reacted to criticisms of the original NAMA proposal are very interesting, while the panel discussion at the end covers a whole range of topics from ‘What can I do?’ to ‘Does it matter if environmental armageddon is just around the corner anyway?’!
Some of the key things I took away from the talk:
- It does seem bizarre that journalists, financial services executives and foreign politicians are all prepared to listen to the anti-NAMA side, while the only way those opposed to NAMA can get to speak to government is through the media.
- “Long-term economic value” could actually mean larger falls than current market value, because it means using yields/net present value as opposed to the catch-the-falling-knife which could still give totally unrealistic yields by the time rents have stopped falling.
- The idea of a public trust that owns NAMA and that can decide on what to do with NAMA land tracts, for example, is worth exploring, regardless of whether or not we own the banks.
- Our current crisis presents a huge opportunity to reorder things the way we want them. To a lesser extent NAMA, but to a much greater extent the lack of a broad strategy for the next five years and the oddly between-two-stools Commission on Taxation report suggest to me that we are wasting this opportunity.
This post outlines the content of a video discussion between myself and Karl Deeter. Topics included everything from property tax to how to price services like water and roads. Karl and I nail our colours to the mast by making specific predictions about population, unemployment and output per capita in Ireland in 2020 and we wrap up with a VoxPop in Dublin on Ireland’s economic future. Read more
This post looks at what has happened house prices in various areas across Galway city. It finds clear evidence that the more expensive areas, like Salthill and Knocknacarra, not only peaked earlier but have also fallen by more – up to 30% from the peak so far. Read more