Long term economic value: shot but still staggering

[He3]

corelli was quick to identify this as a key passage in yesterday's Supreme Court judgment

"In short there is a complete absence of any objective evidence or material in the affidavits filed by the petitioner (again leaving aside for the moment the independent accountant’s report) which could lead the Court to conclude that there were some underlying objective rationale or material supporting the petitioner’s contention that the market conditions would change in the short to medium term so as to permit the properties in question to be disposed of in an orderly manner so as to enable it to benefit from any enhanced value."

If the NAMA scheme has a mantra it is the words Long term economic value (LTEV). We are hearing it repeatedly now during the adverse commentary about the Court decision, with vested interests maintaining that the decision may bring about a fire sale and thereby prevent properties realising their LTEV.

(We will leave aside what the implications would have been if the Court had torn up the law and made the decision the petitioner wanted)

So LTEV has been winged by the Supreme Court in the paragraph quoted above, but the concept's supporters are still numerous and vocal.

Will it survive?

[H.R. Haldeman]

"LTEV" has a sister term: "assets". What I don't quite understand is why we need this new word when a perfectly good one already exists: "property". The use of the new word gives the whole thing an air of mystery - call them "assets" and not "gaffs" and perhaps people will think there is something wealth-creating or life-giving lurking in there. But in truth, NAMA = wait for another property boom. End of story.

[Libero]

If you look back at the wording of the Supreme Court judgment, the Court was not saying that it cannot ever be convinced of the case for a recovery in the property market (whether imminent or long term). No, the Chief Justice was pointing out that the petitioner/appellant didn't do a convincing job of it in his pleadings.

Of course, there's different conclusions one can draw from that. Either that someone else can do a better job of supporting the concept of LTEV, or that it is incapable of receiving compelling justification.

That leaves unanswered the question of whether, in order to make NAMA a reality, the government needs public belief in the general concept of LTEV.

The cynical side of me thinks that it would suit the government and vested interests just fine to have debate boil down to a lot of back-and-forth over technical concepts over which an already-shellshocked public has only a loose grasp. The proponents of NAMA could even allow that debate rage, lose much educated support, but still convince many of the public by whispering that NAMA will support property prices in general.