Here‘s a new report from UCD’s Urban Institute by Brendan Williams, Brian Hughes and Declan Redmond titled “Managing an Unstable Housing Market” (summary here.) It supports earlier calculations from NIRSA (see this post from the Ireland After NAMA blog) suggesting a very large stock of empty houses.
This is a truly dreadful story which should concern all academics (HT 9th Level Ireland).
Gregory Connor, Thomas Flavin and Brian Kelly write on this topic in Irish Economy Note No. 10.
The Icesave talks have collapsed (Update: Elaine Byrne is right. They didn’t collapse, they just didn’t come to an agreement prior to the referendum.) Most likely, negotiations will resume after the referendum gets a resounding no. More positively, Iceland’s economy grew by 3.3% in the last quarter of 2009. This is good news. If indeed it is the case that the difference between Ireland and Iceland is one letter and six months, then we should see an economic recovery here during the summer.
It is obvious that the Irish banks will need very large amounts of new equity capital in the near future, given their NAMA-related loss crystallisation, along with prospective losses on their retained loan portfolios. This confirms the year-ago forecasts of Brian Lucey, Karl Whelen and others, and contradicts the contemporaneous claims of bank and government spokespersons that there would be no need for additional equity capital. It seems clear that the amount of new equity capital needed is equivalent to majority ownership (Lucey was quoted on Frontline stating that the newly issued equity might constitute 95% of total equity after issuance).
There are three ways to inject new equity capital into the two surviving[1] banks: 1) the government directly purchases more equity shares from the banks, 2) the banks try to raise the equity from existing shareholders using a rights offering, or 3) the banks accept a big block acquisition of equity capital from a large foreign institution probably a foreign bank. The Central Bank and Department of Finance should be pushing hard on the banks to use method 3, since this method is in the best interest of the Irish taxpayer and Irish economy.