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  1. #11
    fatcat fatcat is offline

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    Re: Is David Mcwilliams going too far?

    "Japan's political leaders actually take responsibility for making poor decisions, wheras ours don't"

    The thoughts of Biffo doing hari kari has just made my day a lot brighter :mrgreen:
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  2. #12
    constitutionus constitutionus is offline

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    Re: Is David Mcwilliams going too far?

    Quote Originally Posted by fatcat
    "Japan's political leaders actually take responsibility for making poor decisions, wheras ours don't"

    The thoughts of Biffo doing hari kari has just made my day a lot brighter :mrgreen:
    jaysus that'd be one big sword !
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  3. #13
    constitutionus constitutionus is offline

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    Re: Is David Mcwilliams going too far?

    Quote Originally Posted by riker1969
    I bought an apartment in 2003 Tallaght-its about 20000 grand away from negative equity. Helped out by a couple of hundred Section 23 Apartments being recently built-guess where-the Square Tallaght. God that area really needed urban development. Thankfully builders got Section 23 to help them out. In general Apartments in greater dublin are being hammered.

    ive been documenting those on youtube for the last two years or so. most of em are still empty and ive heard rumours, ONLY that so dont go nuts, that there this close to being bought over by the state to house asylum seekers. the only reason i give it any credence is they did the same thing recently in clondalkin to a new "hotel" near the mill shopping center.

    im not surprised though as theyre looking for some stupid prices for the appartments.at one stage the tallaght cross ones were trying to attract GPs and doctors and charging 700k for some apts. you can get a decent four bed with a garage for HALF the price in old bawn and thats one of the more plush areas. i mean who the feck in their right mind is gonna fork out half a million plus for a three bed apt? untill recently thats what they were looking for at the priorsgate development in the old village too . last time i checked they dropped the price of a bog standard apt from 287 to 247k and their advertising the ones across the road in new bancroft for 199k.

    tallaghts holding up better than most but apts are a very dodgy investment
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  4. #14
    bob3344 bob3344 is offline
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    Re: Is David Mcwilliams going too far?

    If more people listened to McWilliams earlier they wouldnt have bought the snakeoil that the amoral property swindle vested interests have been selling for the last six years.
    David McWilliams, the guy who predicted 8 of the last 1 recessions.

    Guy is a soundbite merchant, should probably be a FG TD.

    If I stood on a street corner in California every day for a hundred years predicting an earthquake & one eventually came, would that make me god or something ?
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  5. #15
    Utopian Hermit Monk Utopian Hermit Monk is offline
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    Re: Is David Mcwilliams going too far?

    DMcW:

    ...
    When I read the silly valuations in the 'Irish Times' property section, particularly the "Take 5 at €400,000" section, I am reminded of the Japanese Imperial Palace delusion. Clearly a two up, two down in Rialto is not worth the same as a seven-bedroomed house in the Dordogne. Now that prices are falling rapidly, the idea that pokey Irish houses are worth more than French chateaux will look increasingly daft.

    The other problem for Ireland is the sheer extremity of the housing boom. Irish house prices have risen 380pc since 1996, compared with 260pc in the UK -- the next frothiest market. ...

    As a result of this binge, Ireland is the most indebted nation in Europe. Outstanding residential mortgage debt now amounts to 192pc of our total GNP! This is truly shocking and depressing when you consider that in Germany, outstanding mortgage debt only amounts to 3pc of GNP.

    Even in the US -- where many disingenuous Irish commentators are suggesting this crisis originated -- outstanding mortgage debt only accounts for 44pc of GNP. We are way out of whack with the rest of the world and our dilemma is very much of our own making.



    I fail to see how he can be accused of going too far when he is merely stating the truth.

    The irresponsibility and incompetence of our politicians - of ALL parties - is absolutely breathtaking. NONE of them were screaming about this until it was too late to do anything to stop it. The "Ireland is awash with money" mantra had them all like particularly dim-witted rabbits caught in headlights.
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  6. #16
    Libero Libero is offline
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    Re: Is David Mcwilliams going too far?

    Quote Originally Posted by riker1969
    I think David Mcwilliams could be accused of putting boot in with his latest Piece. While David was right the last few years to point out that boom would end-he was way out on when it would happen. I think he saw crash coming 2001! But his latest piece in the Indo is I think a case of taking worst case scenario. He also (I think) does not make a compelling case for comparing Japans crash and ours. No two crashes are that identical But beside all that I think he has gone too far with his "I told you so" Mantra. I dont know how to put a link up but if you search under title below you should get it.

    Japan’s housing slump was scary, and ours could be too
    David McWilliams is one of the few people in this country who understand what did happen to Japan in the 1990s and how it could, more or less, easily happen here.

    Japanese bankers fuelled a speculative asset price bubble, most visibly in property.
    The Japanese stock market tanked, followed by the property market and the price of land.
    It became clear that many Japanese companies, especially property developers, were in serious trouble and could not meet their debt repayments.

    Sound familiar?

    The Japanese bankers then faced a choice: acknowledge the bad debts or try to pretend they don't exist. The case for acknowledging them wasn't appealing. Banks 'fessing up to bad loans would have to post losses instead of profits, scrap the dividend, raise capital, and - inevitably - replace senior managers. So like turkeys faced with Christmas, they instead rolled over and renegotiated what were truly non-performing loans. The local financial regulator was politically outgunned and didn't want to bring the house of cards crashing any further by forcing a major bank to go under. In the meantime, the government tried to keep the show on the road by borrowing to fund capital expenditure in the hope of giving the economy a shot in the arm.

    If that doesn't also sound familiar, reflect on yesterday's performance by Ireland's bankers in an Oireachtas committee room. Read Davy's research on how banks are rolling over loans.

    And Japan tells us what the consequences are when a closed banking sector is allowed to hide bad loans: we get zombie banks. (McWilliams addressed this better in a recent column that didn't mention Japan: http://www.thepropertypin.com/viewtopic.php?t=11203) The banks (and their secretly non-performing debtors) are called "Zombies" because they aren't yet dead and have to feed from the living. The banks do this by hiking up fees, interest rates charged and shunning all kinds of risk. To keep rolling over the bad loans, they also have to hoard capital which in turn starves the whole economy (especially SMEs and start-ups) of necessary and otherwise-rational funding.

    It gave Japan a "lost decade", with a full-on liquidity trap (everyone hoards cash), little lending to enterprise and very little lending on property. Property prices fall to rock-bottom anyhow (though a lot slower than if bankers forced developers into liquidation) but worse than that, the local economy flatlines because access to capital becomes so restricted and nobody wants to take a risk.

    Now ask yourself, do we have a government and a regulator who will demand the banks recognise their losses and provide accordingly? Or would everyone rather we don't cause any more distress in the hope of eventually riding things out? And doesn't Japan show us that this hope that will itself be strangled in the long run by having banks turn zombie?
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  7. #17
    Oppenheimer Oppenheimer is offline
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    Re: Is David Mcwilliams going too far?

    Quote Originally Posted by bob3344
    If more people listened to McWilliams earlier they wouldnt have bought the snakeoil that the amoral property swindle vested interests have been selling for the last six years.
    David McWilliams, the guy who predicted 8 of the last 1 recessions.

    Guy is a soundbite merchant, should probably be a FG TD.

    If I stood on a street corner in California every day for a hundred years predicting an earthquake & one eventually came, would that make me god or something ?
    Yes, "a broken clock is correct twice a day" argument. You are correct of course, but I think that the message McWilliams was trying to put across was prefaced by the "fall will come" message but also further included the fact that nothing was being done when we had all the excess cash to put us in a position to weather a recessionary storm. Now we are in a position, unlike Japan's, were we have no strong indigenous base to point to that will pull us out. Property will not be this, it is an industry propped up on the activities of other parts of the economy, i.e., it is dependent on another sector to lead the way. In the past this was a result of FDI and MNC activities in Ireland, in addition to the IFSC promoting financial sector activity.

    I don't like the tone of his message with respect to the Euro, that we cannot adjust interest rates to get us out, this is correct, but it is not likely at all we will leave the Eurozone so we need to look at other places (and there are several) where we can have the appropriate influence in the economy - they are longer term, more strategic measures and I am not confident these are measures politicians favour because they involve short term pain for long term gain - longer perhaps than their political lifetime. So McWilliams is probably setting up his next piece - where/what is the plan?

    Was it Lyndon Johnson who asked for one-armed economists because they always gave him the "on the other hand" positions too!
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  8. #18
    adamirer adamirer is offline
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    Re: Is David Mcwilliams going too far?

    Williams was right in the same way I'm right saying the recssion will end and a new boom begin... dum de dum...
    Eventually I'll be right. I like Williams, his books are entertaining, insightful and make economics easily digested. But he's no oracle.

    Appts were always going to be hardest hit as the culture here has always been of moving to a house to start family. Until such time as family sized appartments start being built that's the way the culture will be. My guess (guess!!!) is that
    a) all prices will hold up much better within the M50....
    b) 3+ bedroom houses on the main arteries into the city beyond the m50 won't be too badly hit
    c) appts outside the M50 will get hammered (ie: citywest sans LUAS, Lucan, blanch, tallaght and beyond, mulhuddert,
    d) appts within the m50 will hurt badly - particularly anyhting 2 bedroomed or without car parking space.
    e) some will sell and put money into high interested savings account...
    f) 3 bedroomed houses in desireable areas won't be badly hit
    g) 4 bedroomed ones hardly hit at all.. just longer to sell...

    Negative equity on appts outside M50 since 2004, inside since 2006 (depending on area)
    Negative equity on houses outisde M50 since 2005, inside since 2007...
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  9. #19
    adamirer adamirer is offline
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    Re: Is David Mcwilliams going too far?

    Quote Originally Posted by bob3344
    If more people listened to McWilliams earlier they wouldnt have bought the snakeoil that the amoral property swindle vested interests have been selling for the last six years.
    David McWilliams, the guy who predicted 8 of the last 1 recessions.
    LOL. Perfect quote. Very ture. But snake oil for last six years??? house prices more than doubled in last 6 years. They won't drop anywhere near that much.
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  10. #20
    Utopian Hermit Monk Utopian Hermit Monk is offline
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    Re: Is David Mcwilliams going too far?

    Overpriced houses are not the only problem, by any means

    The mindless salary binge of recent years - especially for those at the top of both the private and public sectors - has created more chickens that are now coming home to roost.

    e.g.

    UCD academic on 'secret' package worth €406,000

    By John Walshe Education Editor

    Saturday April 05 2008

    Ten senior staff at UCD are earning €2.4m a year between them, with one academic pulling in a massive salary package worth €400,000 -- €90,000 more than the next Taoiseach Brian Cowen will be paid.

    The figures, obtained under the Freedom of Information Act, were disclosed by a union on the day UCD President Dr Hugh Brady pleaded for more funding for universities....


    To make matters even worse, many (most?) of our over-paid academics, medical mandarins, tribunal lawyers, Late Late Show presenters and many-hued 'experts' (planners, road designers, architects, IT systems designers ...) are, by international standards, outstanding mediocrities. But very rich mediocrities.

    It will be interesting to see if Minister Lenihan's 'savings' include measures to wean some of these people away from the style to which they have, ludicrously, become accustomed.
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