Time to stop third party meddlers from progress prevention

A common theme in the frustrations of life generally is where you have a third party who can disrupt the intentions of another and in turn remain fairly unaffected themselves. This article appeared in the Sunday Business Post on the 29th of May and was on that topic.

(original below)

A system which allows unfair delays to those trying to deliver housing must be scrapped.

Best known for penning The Prince, a Renaissance-era handbook for unscrupulous politicians, Florentine historian Niccolo Machiavelli advised: “Never attempt to win by force what can be won by deception.”

To that end, if there’s one way to annoy a third-party meddler it’s to identify them. It gets their back up.

The ‘deception’ in this respect is the common acceptance of third-party rights. Unconnected third parties should not (and don’t) have the right to intrude on your private life or private moveable property as long as you aren’t breaking the law. But when it comes to immovable or fixed property, we don’t act the same way. We allow anyone to voice their dissent and disrupt a …

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2008: When banks independently all decided to make a similar decision

This week five years ago is when independent mortgage advisors were in the middle of getting some harsh news, some lenders were pulling out of the market completely, others were informing us of 50% cuts to procurement fees.

Fair or unfair? In light of things like Croke Park it would be seen as totally unfair, you’d never get any other industry that takes a 50% hit like this as fast (and then there is the separate issue of lending dropping 95% on top of the 50% reduction).

Brokerage has already been down the path the public sector are on. I recall sitting across the table from PTsb chief David Guinane who in late 2007 called in the broker bodies and informed them that they were getting a reduction that they might not be happy about, but that this was not something we could negotiate.

There was talk in brokerage of boycotting both them and Irish Life in return, and while we were still debating about what to do all of the other …

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No credit? Try some dodgy tax incentives (they work)

The recent Central Bank report on a property market that has ‘overshot’ is front page news on the broadsheets. This phenomena has been well observed in other jurisdictions and the question now is whether we will be more ‘European’ in our property market or if we’ll turn Japanese.

A key issue pointed out consistently is the role of credit. Cheap credit is often cited as one of the drivers of the property bubble, an NBER paper suggests it is only a component of about 20% of prices. The absence of credit is equally being seen as a downward driver of prices.

One of my minor hobbies is the history of Irish banking from an operational perspective, and on rare occasions it offers a nugget of insight.

In the late 1970’s Irish banks were not involved in mortgages, and only a few years before that they were not involved in hire purchase, they didn’t …

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Should the regulator get involved with mortgage pricing?

We touched on this topic over on MyHome.ie last Friday in our weekly blog contribution to their site.

It is important to look at this from a few perspectives

1. Regulation and the role of the Regulator 2. Past decisions by the Regulator 3. Politics and policy

1. Regulation and the role of the Regulator: The idea of regulation is not for price control, rather it is about prudential control. As galling as it seems to everybody, the Financial Regulator is not (nor should they be) empowered to tell banks what prices they can charge. This is sickening given that we have spent €10,000,000,000 this year alone via the NPRF in supporting our banks (€8.8bn to AIB and €1.2bn to Bank of Ireland).

Readers, if you know of other jurisdictions where regulators set prices please let us know! The idea of a Regulator is that you pay for them …

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Turning points? Back into recession methinks…

I hope you enjoyed the first round of economic history from 2008 to 2011, I think it is time for round 2.

Alan Greenspan was on CNBC last week and his interview is a very interesting take on Europe – which happens to be the first thing he looks at every day (European Bond Markets). Meanwhile Lloyds are reporting that the risk of a 2nd recession in the UK are higher at c. 25-30%.

Greece is the crisis that just keeps giving, The Telegraph has the usual Eurosceptic line but it isn’t about being smug any more. The Greek referendum call of recent days came out of left field and while it may never actually occur the political optics show that the Aegean issues are far from solved, along with the replacement of military officials (the interpretation being the fear of a coup).

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Feasta & Smart Taxes Conference: September 22nd & 23rd

Feasta and the Smart Taxes Network are holding a conference on the 22nd & 23rd of September in the Mont Clare Hotel in Dublin 2. The people who work in Feasta are ideologically diverse (that is one of the things I really like about them!) and a bright bunch, the delivery, debate and data are all sure to be excellent. Hopefully we’ll see some of our readers there! (details below)

It is sure to be a treat, there are great speakers from around the world, to name a few:

Marshall Auerback (Roosevelt Institute Fellow & global portfolio strategist for Madison Street Partners, LLC) Prof. Charles Goodhart (member of the Financial Markets Group at the London School of Economics & former monetary adviser to the Bank of England) Bernard Lietaer (author of ‘The Future of Money’ & international expert in currency systems)

And of course we have our home-side team of heavyweights too! Fergal O’Brien (Chief Economist – IBEC), Richard Douthwaite (Sustainability Economist and Author), Dan …

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The ‘Cost’ of Regulation

David McWilliams hit an interesting point in today’s piece in the Independent about having ‘too much regulation’, and how it may repel new banks from coming here.

in late 2009 I was picked as part of a team that approached PostBank with a view to turning it into an SME business bank – our proposal never even made it as far as board meetings because they were determined to close down rather than continue, we found the whole process perverse at best.

Instead the same investor group will be setting up in the UK, meaning SME’s in Ireland lose out on funding.

It isn’t that new banks don’t want to come here, it is that they are routinely put off from doing so via the Central Bank and the way in which we grant banking licences in this country.

The other regulatory issue is Basel III.

Asking a bank during a time like this to …

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What will come of it all? Eurobonds? Probably not…

If you look at the dynamic of the crisis to date you see the following flow (broadly but not exactly)

1. Sub-prime mortgages in the USA started to go under 2. Interbank lending froze as banks liabilities were unknown & collateral was of unknown quality 3. Interbank rates shot up 4. The crisis was not contained, culminating in the fall of Lehman which triggered a series of world events the most substantial aspect of which was a loss in confidence. 5. Markets fell rates were dropped to record lows in the EU, USA and Britain. 6. Recovery began with several bailouts in the majority of nations affected.

and then….

7. This is critical – bank and private debt effectively became public debt, in Ireland’s example this was via our banks, in other countries it was in the same manner or via quantitative easing. Across Europe the ECB was a key facilitator of liquidity.

The debt has now, in many countries become a public debt issue, in Europe specifically it is a Sovereign debt issue, the like of which the US …

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