George Lee's Boom-Discuss here

Latest from the George Lee webchat extravaganza...
Maura: Seen the piece you did on SSIAs on last night's news. Are you turning into a bit of a Eddie Hobbs-type guru?
George: Eddie who??
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Just imagine what effect on the local property market in Leixlip/Lucan areas if all of a sudden there were 350 semi houses for sale at 381.
 
Had to laugh at Ray Grehan talking about the new development - The Grange "people want to buy into the lifestyle and the dream of living in one of these superb units".
A one bed ranges from 450k up to 750K for a penthouse (feel free to correct me on the figure for the penthouse).
Some people only want a roof over their heads to call their own not a bloody lifestyle.
The writing is on the wall me thinks
 
How can I view the chat from earlier on on the rte web site? I cant find a link to it anywhere on the site!
 
It was a good programme, by RTE standards, but the analysis, to be charitable, leaved a lot to be desired. What we do or do not do is irrelevant. Ireland is a small and the most globalised economy in the world, as the programme pointed out. So, in reality, it all depends on Paul Bernanke, Chairman of the Fed, not on policy making in Ireland.. If US interest rates are increased by more than what is required to curb US inflation in the near future, US stock markets will decline and will bring down world markets. This will, inter alia, affect inward investment in Ireland and Irish companies that export to the US, and also your pension if it is invested in those companies.. If the US dollar continues to decline precipitously, and if Bernanke doesn’t get it right, any over increase in the US interest rates to prop up value of the dollar would kill off the US, and by implication the international, housing market boom, on which our economy appears to be based. So let’s say three decades of the rosary tonight that Bernanke gets it right, the way his predecessors Volker and Greenspan did. The only serious worrying point that we can control is our continuing decline in competitiveness.
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we can invest more in r&d and try to control rampant property inflation which is distorting the economy.
p.s its ben bernanke
 
PMU said:
So let’s say three decades of the rosary tonight that Bernanke gets it right, the way his predecessors Volker and Greenspan did.
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Some people would criticise Greenspan for flooding the world with cheap money. That money has to be paid for by someone. All he has done is put things off and ensure a large correction in the future, in terms of Dollar value or interest rates.
 
Greenspan was Mr Bubble and Bust. He has sold America into penury by following a monetary policy that has created massive deficits, negative savings rates, falling productivity, falling real incomes and a bursting housing bubble. But singling out the Fed chairman is probably too simplistic, he was following the orders of the new 'corporate government'
 
I think it did illustrate a good point that the latter day boom is a bit of a "zero sum game" in terms of Ireland as a country.

i.e. we are not generating wealth as a nation, we are just redistributing amongst ourselves, with the transfer being from the young to the old (as opposed to the normal other way around) and its all paid for with debt.

So if someone ever shouts stop on the construction industry, we may not have enough to offer the rest of the world to keep us all working and keep cash coming in.

On an individual level all we can do is try to each move up the food chain in terms of skilled employment, pay down our debt and not kid ourselves that we can spend forever with no consequences. Anyone in a manufacturing job should be trying to think about Plan B - and thats not news either, the flight of manufacturing job is on the go with decades, the death of Donegals textile industry was like a ship sailing in from the horizon, everyone could see it, it was just a matter of time before it arrived.

As for the country as a whole, competitiveness and the famed upskilling is probably the name of the game. Lets hope our infrastructure is up to scratch before the tax revenues start to contract, will Fianna Fails next election jingle be "Little done, loads spent".
 
I agree that it will be a rocky road ahead and interest rates and competitiveness
will play a large part in how our future proseprity (or lack of it) pans out but the
negative factors mentioned earlier should be balanced with the positives:

Lowest unemployment in EU
Still among the youngest populations in EU
Expanding population
Good regulatory environment to do business
Among lowest Corporation taxes in EU
Among lowest income tax on earnings in EU
National Pension Reserve Fund (lot done more to do)
English speaking country still a pulling factor
Lowest National debt to GNP ratio in EU

I am sure I am missing some:

I really don’t think things look too bad in the short term. A lot will depend on how
proactive the Government is about trying to head off potential pitfalls, although
the big negative factor, rising interest rates, is beyond it’s control.

The very popular www.propertypricecrash.com UK website is still going strong after 3 years, as the UK goes through a nice soft landing. We have been hearing the same negative sentiment here for even longer and our biggest challenge will be when it comes to trying to manage our own soft landing But for a few more years I can continue to see through the negatives.

It remains to be seen who ends up saying “Told you so!” .
 
Michael said:
<long, unnecessary quote removed by Dr M.>
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So the fastest ever housing price rises doesn't bother you?, gold on the way up also..sure house price inflation can go at increasing rates forever!!

Interesting times...time to save imho.
 
No, house price rises never bothered me since I climbed on the ladder (but I do feel for FTBs).
 

[broken link removed]
 
Michael said:
Lowest National debt to GNP ratio in EU

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Actually no its not. I thought we were second (after Luxembourg) but interestingly from this piece it would seem 3 of the new EU states have lower ratios aswell.
 
Michael said:
Lowest unemployment in EU
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unfortunatly a huge proportion of employment is in the building sector, so if the property market weakers this could change very quickly.
 

To compare our Property Bubble to that of the UK is erroneous for the following reasons.

In 2004 the UK was experiencing almost 20% house price growth in some area's. Their Central bank attempted to cool the market by increasing interest rates from 3.5% - 4.75% (an increase of about 35%). In a short few months the housing market had come to a grinding halt and house price appreciation was down to just about core inflation (2%) and even went negative in some area's. In order to calm fears of a crash the Central bank cut interest rates by 0.25%. The market remains pretty stagnant.

We in Ireland are heading for at least 2.75% this month (increase of 37.5%) and to as much as 3.5% by the end of the year (increase of 75%). How high will they go, who knows but one thing is for sure, if our market begins to stumble the ECB will not be so kind as to cut interest rates to prop up our falling market.

In Ireland we also have 1 person in 8 employed in the construction industry. The UK has nowhere near this figure employed in construction so our labour market is far greater exposed to a slowing construction industry. Also, when UK house prices stalled in 2004, consumer spending plummeted and is still in the doldrums.

Your so called "nice soft landing" for the UK has been far from nice and even when ours materialises it will be ugly as unemployment increases due to lay offs in the construction industry, falling consumer spending due to no more MEW (mortgage equity release) and the harsh reality that we have no control over interest rates.​
 
 
-unemployment now means nothing in ten years time.
-young population has added to problem due to swelling demand for houses,if prices dive and unemployment rockets then young will be first to leave.
-Population is expanding mainly due to construction and consumer spending related jobs,these people will be first to leave in any recesssion/downturn and that will rapidly reduce demand in economy from them for good services and housing.
-regulatory environment may be good but some commentators have said too lax in financial services, other jurisdictions are becoming more business friendly in regulatory stakes.
-lowest income tax wont help stop anything
-pension fund is for the public service and amounts to very little per person.
-Many eastern european speak english as do all uk and many other competitor countries.
-Debt's maybe a plus but again maybe we're better borrowing more to invest in R&D and sustainable wealth creation for the future.
-yes your missing the fact that none of these things will stop manufacturers leaving to lower cost locations,also they wont stop a correction in the massively overvalued and dangerous housing market,they wont make us most competitive innovative or economically sustainable,they wont stop us from not having control over monetary policy and currency levels and they wont stop us from having stagnant exports and booming imports and inflation .
 
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