If Irish banks and the government were faced with widespread 'civil disobedience' on the issue of repossession (you can imagine the head of stem such an issue could build up) it would cause financial caos; a liquidity crunch and who knows the collapse of the Irish banking system?.
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If Irish banks and the government were faced with widespread 'civil disobedience' on the issue of repossession (you can imagine the head of stem such an issue could build up) it would cause financial caos; a liquidity crunch and who knows the collapse of the Irish banking system?.
With their vast stockpiles of cash from Sale-Leasebacks they can afford to buy back shares if there's a significant move downwards...
of course they should be investing the money in the American Dream
[broken link removed]
"The most gargantuan feature, though, is the price tag of a cool $125 million (€98.5 million), and it’s not even the most expensive on offer - another mega-house in Aspen, Colorado, is now listed at $135 million (€106 million)"
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zac
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No its not.
BOI
Shares Short (prior month)[SIZE=-1]3[/SIZE]:19.75K
Shares Short (as of 12-Sep-06)[SIZE=-1]3[/SIZE]:11.82K
AIB
Shares Short (prior month)[SIZE=-1]3[/SIZE]:539.21K
Shares Short (as of 12-Sep-06)[SIZE=-1]3[/SIZE]:518.50K
Data from US, but indictive of trends, shorts covering actually, shares are near all time high, no fear in investors yet.
shorts on these stocks are tiny compare to float anyway.
Shorts near highs can fuel further rally when they cover.
If there is any truth to the risk in irish banking sector these trends will reverse in no time.
Some American hedge funds have begun shorting Anglo Irish if I remember correctly.
I've just had a terrible thought - rather than repossess houses, the banks will start offering negative amortisation mortgages!!
howstrange
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If interest rates go to 5% we are in serious trouble!!
fatmanknows
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When we hit negative equity (esp. with all those 100%ers) there is no can't lose scerario. Banks will be swift to act imo....when the writing on the wall becomes a bit more legible
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zac
Guest
Indeed affordability is the KEY, not the interest rates, in worst case currently affordability is 40% net income(in dublin), and thats hitting levels seen in 80's, i saw the affordability graph the other day, so yes we are at the high historic limits, so either prices level off here or incomes rise for any further growth(or else we gonna owershoot historic highs in affordability), provided rates peak is less than 4%.
so if incomes stays constant, and rates go beyond 4, then we are in uncharted teritory, i.e very high risk. currently market doesnt think rates going beyond 4 in this cycle.
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zac
Guest
i took a lot of cr**p from couple of posters yesterday, now i am showing a lot of patience not to reply to this post.
sorry room305
Great offers available in Miami, maybe Diarmaid Condo (who wrote the SBP piece) would be interested.
http://housingpanic.blogspot.com/2006/10/psst.html
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Not much compassion shown in this case.
Repossession proceedings against a cancer patient...
"They put nails in the windows of our home and changed the locks."
http://www.unison.ie/business/personalfinance/stories.php?ca=257&si=823658
Repossession proceedings against a cancer patient...
"They put nails in the windows of our home and changed the locks."
http://www.unison.ie/business/personalfinance/stories.php?ca=257&si=823658
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zac
Guest
room305 apologies if my previous message sounds like a personal attack,
as i have shown in my previous message short interest has gone down in the last two months, plus if a hedge fund is shorting hardly means anything because someone else was buying those shares.
M
MadPad
Guest
The past is a different country... Today, a lot of the new mortgage holders dont know their neighbours, they are in new developemnts. there is no really strong sense of community that will stop/shame other people from buying a reposessed property.... A government may be turfed out of office after the next election but that'll be about it, they can't reduce rates, its out of their control thankfully. o/w rates would be at 1%
Thats if repossessions increase due to rate rises. There are no guarantees that that will happen to the level people are predicting/wishing for....
The Anglo story is from either a Goodbodys or Davys roadshow in New York where hedge funds are obviously reading Fitch reports that say ireland private sector debt means the whole structure is prone to collapse.
See earlier in thread. Also in Davy/ Goodbody/ NCB report this morning they say that BOI and AIB were underpeformers last week in whole 30 banks they cover.
I think irish banks will not show problems until very late as they will not be able to sell mortgage backed debt if foreign banks detect any smell from irish market.
I never implied a hedge fund holding a short position on an Irish bank meant anything. Indeed it is not necessarily even a play on the Irish property market - Anglo Irish has exposure to property in the US and the UK as well. I was just responding to someone's query about short interest on Irish banks.
As has been pointed out by conor_mc, you took crap from people on the board because you turned up and started demanding to know who was a "real bear" without contributing anything of note to the thread.
By all means join in the debate but stop demanding posters "prove themselves" and avoid engaging in personal attacks. Apology very much accepted.
For what it is worth IMO shorting the bank stocks in Ireland is premature. IMO they will make alot of money for the next 12 months as per the Clarehall and as per ivernius above the party still has alot of punters drinking from the punchbowl.
note i think a soft landing in the US may not be good for Ireland as US rates will stay highish, dollar stay strong and US stay importing from Germany where activity remains strong and hence Euro rates keep rising.
A hard landing in US will lead to weaker interest rates, weaker dollar and ECB stops raising rates as German export led growth stalls. China also slows and oil demand drops some and inflation goes back in the box. this would help the property pyramid here even if some job losses as per ersi
Does these arguments hold ?
note i think a soft landing in the US may not be good for Ireland as US rates will stay highish, dollar stay strong and US stay importing from Germany where activity remains strong and hence Euro rates keep rising.
A hard landing in US will lead to weaker interest rates, weaker dollar and ECB stops raising rates as German export led growth stalls. China also slows and oil demand drops some and inflation goes back in the box. this would help the property pyramid here even if some job losses as per ersi
Does these arguments hold ?
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Pretty much although low oil prices won't be enough to put inflation back in the box. Far too much liquidity in the system. Genuine credit tightening is needed on a global scale.
I doubt we'll get it though.
We haven't felt the full effect of rising interest rates on the Irish property market yet and it's already in trouble. Interest rate at 3.5% is more than enough to kill the market IMO. Even if rates don't rise next year, falling prices will gather momentum from the effect of rate hikes this year. If the US has a hard landing, this will make the problem even worse here as a result of job losses. As you mentioned, a soft landing in the US will give ECB scope to raise rates further. There is no way out of this unless rates were to drop suddenly.
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