Year: 2010

Poolbeg: New spin

In yesterday’s Prime Time, Paul Cunningham revealed that there is a break clause in the contract between DCC and Covanta. The write-up is here, and it is about as informative as the broadcast.

Under certain, unspecified conditions, either party is free to walk away tomorrow. Not having seen the contract, I can only guess that a ministerial campaign against government policy is not among those conditions.

Does this change the calculus of the desirability of incineration of Poolbeg? Two arguments have not changed. We’re still in breach of the landfill directive, and the alternatives to incineration are expensive and will take a long time to plan and build. Two other arguments would change their importance. We may need to pay less compensation to Covanta, but the signal “Ireland: Closed for business” would be louder.

It may of course be that both parties have invested so much already that they have no desire to walk away.

Cue the green trolls.

UPDATE: The Dublin City Council says that RTE’s report is incorrect. IWMA says the taxpayer will pay 2 billion euro for the incinerator.

Lucey on Anglo Loss Sharing

Brian Lucey makes the case for senior bond holders to bear a share of the Anglo losses post-September.   You can access his Irish Times opinion piece here.

Lex on Nama

The FT’s Lex column gives its pithy assessment of Nama.

A flavour:

Nama is an odd creature: part debt collection agency, part property developer. As well as toxic loans, it may end up with a portfolio of property which was collateral for the banks’ lending binge. It was meant to fix the broken banks, convince taxpayers they might be repaid and reassure the markets the banks’ liabilities would be met in full. Facing in three directions, it has not appeared convincing in any: slow, bureaucratic, initially indecisive, almost excessively transparent (every toxic loan is assessed individually).

It concludes a bit more hopefully.

IMF: The Fiscal Situation in Advanced Economies

The IMF has released three major studies on the fiscal situation in advanced economies.

The summary is here, while the papers are available at:

Mortgage Arrears: June 2010

The apparently newly branded Central Bank of Ireland has released the latest summary data on mortgage arrears here.  

A total of 36,438 mortgage accounts were in arrears over 90 days in June 2010, up from 32,321 in March. This meant that 4.6 percent of mortgages were in arrears, up from 4.1 percent in March and 3.3 percent in September 2009.  However, mortgages in arrears have a higher average balance (€190,000 compared to an average of €149,000 for the full sample) so the 4.6 percent of mortgages in arrears accounted for 5.9 percent of the total outstanding mortgage balance.

The arrears on the overdue loans totalled €559 million in June. Those in arrears over 180 days are, on average, behind on 10 percent of their total balance.