The Irish government created the National Asset Management Agency (NAMA) to acquire property development and commercial real estate assets from banks at a sizeable discount to par... To date, NAMA has recorded €30 billion of losses, or more than 10% of GDP. S&P estimates that ultimate losses will be between 29% and 32% of GDP. To put this figure in perspective, this would be equivalent to U.S. taxpayer losses on Fannie Mae and Freddie Mac of $4.2 trillion, or about 11-times the CBO estimate of $380 billion.
So it's a Spinal Tap crisis for Ireland then -> on our scale, it's an eleven...
Interesting (and very depressing, if you're Irish) article in a newish free-market oriented publication: Economics21.
Ireland first to enter double dip recession.
ReplyDeleteEconomy contracts - unexpectedly!™
They claim they need to export their way to prosperity - trouble is, every country needs to do this - who we all gonna export to - Mars?
As an Irish citizen (whose passport is in a safe deposit box whose key is held by USG!) I feel duty bound to keep up with current events there. Nothing fancy, just tune in to RTE via the web every now and then and read the Irish Times and the Irish Independent.
ReplyDeleteFrom that background, this article rings true to me in the sense that it is clear that the real estate bubble was both more intense and involved proportionally more of the Irish people and Irish financial institutions than in the U.S. It seems to me that just about everyone on the island has been affected in one way or another!
The funny thing is that I always suspected a kind of quiet mania in Ireland with regard to the real estate market, Dublin in particular. There was this sense that the ridiculous prices for left over 19th century horse sheds (to be turned into studio flats) meant that Ireland had arrived in the big leagues. Worse, there was a sense that that in Dublin the Irish were trying to emulate London, with its customary ridiculous real estate prices.
Personally, I am very upset about this as the crisis in Ireland takes my emergency "Plan B" off the table, as I doubt that I could make it work there if I needed to, the situation is so dire.
On the other hand, happiness wasn't doing the Irish soul much good and the art and music suffered....
Jourdan - as for your plan B - remember the first two laws of investment - buy low, sell hi.
ReplyDeleteIreland and Greece (after Iceland) are the financial petri dishes. When the debt rot hits critical and everything restructures, then there could be a very nice point at which to buy real estate. Once Ireland defaults and is ejected from they Euro, there could be something of a boom once again.
If, you know, the country survives the disruption, and the EU doesn't keep "saving" Ireland (thus keeping it a perpetual debt slave).
I didn't know you had dual citizenship, Jourdan. Were your parents born in Ireland?
ReplyDeleteInteresting question, florrie! I've always thought that at age 21 (or something like that) a person had to choose. Shows how much I know! :p
ReplyDeleteHow does that work, Jourdan? I'm really curious.
The financial situation in Ireland is such a convoluted mess that I won't even pretend to understand it. Lewy, you have a really good point: to whom do they plan to export their goods? Is ANYONE importing mass quantities right now?
ReplyDeleteIf Ireland just slipped into a "double-dip" recession, are we far behind? And at what point does Ireland's "recession" become a full-blown Depression, with a capital D?
My head hurts almost as much as my wallet.
Florrie - Believe it or not, I am a TRIPLE national. My mom was born in Northern Ireland. At the time of my birth in Los Angeles, the Irish republic claimed sovreingty over the entire island, so I was Irish and American by birth.
ReplyDeleteAt that time, the UK's nationalities act did not recognize citizenship as passing through the birth of a UK mother, though it did a father, under certain circumstances. However, in 2002, Parliament retroactively amended this law due to complaints over the gender double standard.
Thus, in 2002, by retroactive act of Parliament, I also acquired British citizenship (subjecthood?) by birth.
I have three passports, US, Irish and UK. The latter two are sworn by me not to be used, and are in safe keeping, though as a formality I had to offer to march to each embassy and forswear each, in practice they didn't make me do that because, well, because of the two countries in question I suppose.
Had I been Iranian and Syrian, I expect the gig would have went a bit differently....
That's interesting. Thanks, Jourdan.
ReplyDeleteI always thought that the US didn't allow its citizens to hold dual/triple citizenship?
ReplyDeleteWhat's the deal with that?