Planning review finds ‘no abuses’

http://www.irishtimes.com/newspaper/breaking/2012/0612/breaking41.html

Only a tiny number of vacant units were as a result of people moving out - most, nearly all, in fact, were new-builds. Many were unfinished.
Most of the unfinished in Dublin have since been finished - NAMA & local authorities stepped in.
Ireland was building exponentially to house the new migrants; the construction created enough of a knock-on to ensure there were jobs for most that wanted them, but like a goldrush-town with an exhausted seam, when the building stopped everything else fell apart.
We don’t need to be xenophobes to admit that the whole thing was predicated on unsustainable immigration - emphasising that the blame lies with the govt. & banks (and the developers).
The number of homes in the country doubled in a decade.
There was an overall drop in population for a bit - I imagine it’s levelled off now (ratio of immigration to emigration - though a large number of emigrants will return; Australia are fairly thorough in implementing their rules)

What’s of more concern is that, had things continued a few years more before the sht. hit the fan, the banks would have put a lot more money out there to lose - there was several hundred thousand acres of land zoned for housing in the last three or four years before the bust - enough for at least a million homes (all worth half a mill, of course).
Its this type of madness that makes we worry about that fool onDragon’s Den calling for an extra seventy thousand visas ayear (in addition to the current number) for as yet non-existent ‘IT’ jobs . He’s got the Tribune in on it, a website for the lobbying preogramme, etc.

There were men like that in the drawing rooms of big houses in 1920. And it is a high risk strategy when the political context is lost.

The ‘valuation’ process was a farce. A bloke would come out and checked if the house wasn’t about to fall down (sometimes even that didn’t matter much). Then he checked the (aptly named) daft.ie to see what was on the offer in the neighborhood and that was it.

But this was not the root of the problem. The root of the problem was that the money lost value because there was so much credit around pumped into the Irish banks by all sorts of overseas and domestic investors. This process fed on low interest rates set by ECB and FED. Once there was too much credit sloshing around, the process was always going to be a farce.

Now there is a shortage of oil / capital the financial centres must crush their hinterland and drive them into surplus so …….

The European financial centres are now engaging in massive rail based projects - its no coincidence.
Every time they build another tram , subway , Tram train etc it subtracts from the hinterlands capacity …. less consumption , less house construction etc etc.
Although in the long term it pushes down the price of oil. ( in theory)

en.wikipedia.org/wiki/Public_transport_in_Frankfurt_am_Main

Despite these efforts cities must always be in trade defecit to their hinterland.
In the past the energy was chiefly in Agricultural goods (food is energy)…….they have bypassed this relationship dramatically now as oil resides outside cities tradional hinterlands.
When oil was plentiful we were conduits for this oil - Fois Gras dishes …. now they mean to eat us.

Seniors are sacrosanct, so sayeth the ECB. Subbies might be toasted a bit. Bank equity will be written down but since Spanish domestic banks are trading below book value this should be no surprise.

I wish it were different and if it was, I would be clutching my PN in my right hand and a Ronson in my left.

http://www.independent.ie/opinion/letters/bubble-values-3034584.html
Professor Neil Crosby’s online response to this Irish Independent letter
“Bubble values” 29th February 2012

“The analysis may be simplistic but unfortunately it is not flawed.
Banks ask valuers to tell them what the market value/exchange price is
at a point in time and then lend vast amounts over time based on that
simple number. The surveyor gives them that simple number and do not
think it is their job to tell the banks that the question they have been
asked is stupid on its own and what they should have asked for is the
underlying value. It was obvious in 2005 and 2006 that prices in the
property market were higher than could be sustained by any rational cash
flow analysis. But in a culture that rewards individuals for short term
performance rather than longer term perspective, it was in neither the
bankers’ nor the valuers’ interests to stop it. I cannot see anything in
what the UK regulatory authorities have proposed that makes me think
they understand the role of property valuation in driving asset bubbles
and will prevent it all happening again sometime in the 2020s.”

Neil Crosby
Professor of Real Estate and Planning
University of Reading

John Corcoran - Neil Crosby is quite right to point out the critical and corrupting role of valuers and banks in the property bubble. RICS and other property related professionals should hang their heads in shame for not raising the alarm bells and not challenging landowners, banks and homeowners about the outrageous rise in property valuations which had no relationship with reality or ‘underlying value’. Their role is similar to that of ratings agencies which were paid to sign off triple A ratings by their clients for junk.financial instruments most of which related to property assets..Sadly it does not require a university professor to point this out.

Anyone with a modicum of experience in property and development knew we were headed for trouble and I am sure I was not the only person to flag it up. If these so called professionals had been held to account by their so called professional bodies ( as the General Medical Council regulates doctors) half of them would have been struck off. Their primary responsibilty should have been to the reputation of the valuation profession and not their commission. In many countries property is taxed and valuers are independent or are part of the state.

Radical reform is required or we will surely revisit this crisis again in the near future.

A downgrade of Spanish Banks on foot of the €100b fund could further suggest that the Spanish banks are in for a rougher ride than our banks got. Of course, it could also just mean that Spanish Sov Bonds and those holding them are being thrashed by the markets. Let’s hope the fomer applies.

ibrc board spotted reading cre na cille … Two_of_7 now as confused as Schroddinger’s cat …. pleading for someone to open the box so that he can figure out if he is dead or alive …

Italy can take more Leeches as it is much less Leveraged then Spain but a decline of 12.2% YoY is quite something.

But Nobody is asking where this blood / oil / credit is going ?

Finland doesn’t want the dosh to go to ‘UNHEALTHY’ BANKS!

WHAT ABOUT DEAD IRISH BANKS?

Yes - I was way out on Gov% at 70 and way way out on the lenght of the hangover … 3hours! Think I need a tutorial

@ceterisparibus

Wee minister of state Hayes is as out of his debth as Lucinda - his piece on Eironewz in praise of the Irish Banking System is a classic worthy of Saddam’s PR Guy ….

@Shay
Blind Biddy still has those two submarines that she picked up on a firesale in Greece - german technology and the german banks loaded the dosh to greece to pay for them …. one is presently lurking in the Kiel canal …. not a bother - a few handy ones picked up from Sarkozy’s folly off the back of a camel in the sahel for a song ….

@colm mccarthy

I hear you have teamed up with Terry Mancini to take on Jedward …. and to fill the gap in the unfit Irish back 4!

http://www.rte.ie/news/2012/0611/100bn-spanish-bank-deal.html

we will only get an edit function once the deficit is eliminated

http://www.rail.co/2012/06/11/german-russian-rail-ferry-launched

She appears to want to Bypass Poland for some reason.

The relief rally in Spanish and Italian bonds lasted precisely three hours. Spanish 10-yr is now yielding 6.45, Italian back up over 6.00. Spanish and Italian banks are stuffed with domestic government bonds and would be showing big mark-to-market losses were it not for magic accounting. The Spanish ‘deal’ over the weekend binds the sovereign to the banks, yet again.

Sprinting Steve Kinsella already has the topic opened up for business on just how well the policy of kicking the can up the hill has been and the Krugmanator is on it too.

I have said it for a very long time but the peripheries interests were always best served by the crisis escalating more quickly before Germany could make itself safe.

I know people here think that that ship has sailed but if we can not swim out to it I think torpedoing it still has to be an option. Even with the No vote did hindering us Ireland can add to the rising tone of public panic and should do so.

Remember the German establishment is flat out crazy and the ECB are desperate to find a solution for the Euro and not us - the current European policy crusade against the well known left wing basis of reality can not continue.

http://ftalphaville.ft.com/blog/2012/06/11/1036501/irish-banks-future-losses-and-awkward-timing/

We may have enjoyed a golden age of Civil Servants with Whitaker and others much as we enjoyed a golden age in soccer with Lawrenson, Stapleton, Whelan and Brady.

Ultimately, however, we know that periodically our best civil servants will be in the nature of Whelan & Andrews who despite their heart and ambition are no match for the Xavis, Iniestas, Alonsos, Modrics, Pirlos and Schweinsteigers of this world.

(Otherwise, I make no apology for my myriad typos in continuance of my doomed crusade for an edit function)

Yes, we seem to be witnessing a dead bank bounce. I thought it might last until at least later on this afternoon after the US had been open for a while and the cold dawn of realisation seeped in through the cracks in the currency union.

I have to agree with Zhou above, it will be interesting to see what Spain is allowed to do with the money. My guess is most of it will end up in the hands of bondholders as they form a queue for an orderly exit asap.

My suggestion is that an optimal solution would have involved the state taking control of Anglo, advising people that the bank was in an insolvency/resolutuion process, confirming the state was providing funds to cover deposits up to a certain level (€100,000) but that other creditors would could take debt for equity or such amount as would be available for distribution if the bank were to be wound up immediately (such amounts to be caculated according to a specifiec model/mechanism).

To deliver this we would have bneeded a credible resolution system and the funds to back up the guarantees to depositors.

This is just a currency union, with a multilateral currency board masquerading as a central bank. If there is no move to a proper monetary union, quickly, this arrangement is just not sustainable.

Another missed opportunity.

Is there any chance that this Fund will require banks to go through a resolution process wiping out shareholders and forcing debt for equity swaps on creditors above a certain size?

Doesn’t the fact thatt here is a feedback loop between the banks and sovereigns allow you to break the cycle by curing the resolving banks?

I would re-iterate my previous view that the currentl legal structure provides that National authorities are responsible for bank resolution and resuce for the moment at least. Accordingly, the ECB and its call to protect all creditors must be sidelined in the absence of an EU level solution. Individual states must be encouraged to resolve their banks and enforce losses on bondholders. The rest of the EU must provide individual nations with the financial and political support to embark on such difficult and risky tasks.

The Spanish bail-out may fit within this prescription if the funds can be used to enforce losses on bondholders rather than making all bondholders whole. As of yet, I am not aware of any guarantee of bank debt. Rather the sovereign is only guaranteeing the moneys out into the restructuring fund. It is how Spain is allowed to use that fund which counts.

French and to a lesser extent Spanish Investments seems more rational.

http://www.eib.org/projects/loans/regions/european-union/index.htm

People just don’t seem to understand whats happening in France - from a energy perspective Lyon is becoming a walled city.

http://www.sytral.fr (go to the Projects window)

With villages 40 Km from the citadel wishing to enter the defensive curtain.(not covered in the above projects)

Google :
Nord Isère | Tignieu-Jameyzieu Tram Lyon-Cremieu : le collectif …

fr.wikipedia.org/wiki/Crémieu

Also a very long tram train line in the works using a old line (not covered above)
Google :Nord Isere Tram train Lyon-Trévoux : feu vert en vue d’un lancement en 2017

fr.wikipedia.org/wiki/Ligne_de_Lyon-Croix-Rousse_à_Trévoux

Its hard to get your head around the scale of Lyons public transport investments …. but it is also very smart - using the existing infrastructure to the max.

fr.wikipedia.org/wiki/Trolleybuses_in_Lyon
fr.wikipedia.org/wiki/Tram-train_de_l’Ouest_lyonnais

“Irish decide against asking Europe for better bailout terms: Irish ministers yesterday did not, as some had expected, attempt to use the Spanish deal as leverage in their continuing efforts to ease the country’s debt repayments in the wake of Ireland’s own bailout.”

http://www.independent.co.uk/news/world/europe/irish-decide-against-asking-europe-for-better-bailout-terms-7834910.html