Vlog on the Irish Economy – Ronan Lyons & Karl Deeter

I met up with Ronan Lyons (economist with Daft.ie) to talk about the ideas of property tax in Ireland, how it might be a fairer way to tax people than stamp duty, or indeed the abscence of property tax [because it rewards/doesn’t tax holding certain assets]. The discussion spread to other ideas in taxation, and eventually we made some predictions (I can already say they are bound to be wrong!) and then we took to the streets and asked Joe Public about their thoughts on the economy and whether or not they had any hope for the future.

If you want to watch the full conversation you can check out the playlist on youtube.

Ronan writes a very interesting blog, you can check it out at http://www.ronanlyons.com what I personally like best about Ronan (other than his affable good nature) is the unique take he has on many topics on Irish Propert (a subject I am very fond of), by utilising the daft database he is …

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Pete Peterson formerly of Blackstone, CFR, Lehman and Secretary of Commerce

Pete Peterson is a fascinating individual, he came from humble beginnings and went on to work at executive levels in some of the most well known finance houses in the world. He mentions some of the deficit fears that have been laid out in this blog many times in the past and the inflationary risk that comes with it, Peterson is in agreement with Volcker that there is a serious dollar risk forming.

Peterson is also a human, he is one of the few Wall St. legends to come out and admit that he needed psychotherapy in the past, this interview is absolutely worth watching and learning from.

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Get ahead of the curve on fixed rates… Oops! Too late!

We have been touting fixed rates for quite some time on the basis that people needed to fix at the time rates were heading for historic lows, not after the fact, as well as that, the indications from the ECB that they would not go below 1% and instead would seek alternative options (such as QE) meant that once we got close to the 1% the forward market would price that in, but when we actually reached the 1% base that equally the forward market would price in rising rates.

That is exactly what has happened, it wasn’t front page news when we said it, although the Sunday Times did do a big story in their business section in mid-February, but now that banks are starting to raise their interest rates it certainly is!

It gets back to planning, without exception every client we had that deliberately went for a fixed rate in the interim is in a good position, some who have opted for variable rates are doing well …

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NPR report on Ireland

National Public Radio in the USA have recorded a piece on Ireland it’s about five minutes long and you can tune into it here.

It interviews a first time buyer who bought several years ago and has lost about one third of its value, for many of our readers there is nothing new in this clip, the only remarkable thing is that the likes of NPR are actually covering this story, Ireland is (unfortunately) appearing more often in the international press be it CNBC, Bloomberg, The Statesman, or other well known news sources, for all the wrong reasons.

In some cases the figures are factually wrong, CNBC recently made the research blunder of not doing their homework on our national liabilities, but that wont’ be reported and thus their findings risk becoming the ‘conventional wisdom’.

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Blogs and sites that cover the topic of finance and economics

I was at a meeting last week and the topic of ‘what I read’ came up, I spend on average, about six hours a day reading, granted that is not always books, it can be blogs, websites etc.

The sites that I like are listed, in no particular order below, some are article driven, others are debate/forum driven.

The Economist Financial Times Calculated Risk Across the Curve Credit Writedowns Irish Economy The Property Pin Politics.ie NewDeal2.0 BreakingNews London School of Economics John Mauldin’s Investor Insight (ezine/weekly letter) VoxEU Raging Bear

If you do a google search for any of these sites you’ll find them with ease and they are all sources of very interesting information

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Paul Volcker on Bloomberg

Ex-Federal Reserve Chairman Paul Volcker talks to Bloomberg about the ongoing financial crisis and gives his opinion on the situation, his take on where we are going and what some of the risks are. Volcker is one of my favourite expert commentators, he talks about macroeconomics in a way that is simple to understand, despite his amazing breadth of knowledge and years of experience he doesn’t try to confound people with lofty talk or big words and he bridges the gap between high level ability and the common man.

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Yale economists discuss the financial crisis

Yale hosted a panel discussion with Yale Faculty on the National Financial Crisis, to discuss developments since the February 25, 2009 panel discussion. Panelists included John Geanakoplos (James Tobin Professor of Economics) and Robert Shiller (Arthur M. Okun Professor of Economics). The discussion was moderated by Yale University President Richard Levin (Frederick William Beinecke Professor of Economics).

This talk is a ‘must see’ in terms of viewing, Robert Schiller is not only a professor of economics but also the author of several popular books (the subprime solution and irrational exuberance) and the namesake to one part of the world known Case-Schiller index.

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The Meltdown should have surprised no one

The 2009 Henry Hazlitt Memorial Lecture, presented by Peter Schiff. Recorded at the annual Austrian Scholars Conference, Ludwig von Mises Institute, 13 March 2009. Austrian economists tend to have some very conservative views, and while many of them are unpalatable there are many that are equally pragmatic, Keynesian economics are definitely the popular choice as of late, but the free marketers still have valid points and Peter Schiff has a way of describing the economy and the situation in a very simple manner. He shot to fame for being one of the first practitioners in the USA to say that they were in a bubble and how the fallout would begin and what to expect when it did, his vision was almost 20/20.

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The Creche Crash

As I am a soon to be dad the talk of crèche fees has suddenly started to appear in my day to day conversations with greater regularity, a part of me thought ‘how will the recession affect crèches?’. One part says ‘people will use a crèche more in order to work more hours so they can get by’ and another is countering with ‘if one person in a couple is made redundant then they may opt to stay at home and mind children rather than work to afford somebody else doing the same for them’. Having talked it through with several colleagues the opinion seems to be that if they, or their partner were to find themselves out of work that the choice of staying at home to mind the children would be a viable option.

The interesting point in modern Ireland is that a homemaker parent is no longer standard middle class in their profile, they tend to be either lower income or higher income, and the middle class are predominantly the ones where …

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Save the best until last.

Bank recapitalisation is looking more likely for several Irish players, however, an important precedent must be observed – we saved the weakest first and therefore we will almost invariably need to save the best.

The ongoing Anglo debacle is evidence that we opted to get behind a bank that had falsely represented its balance sheet, over exposed itself to high risk clients and run short of money. So we saved the weakest, and that sets the foundation for saving the strongest. The idea that we should only save strong banks never gained traction and that is unfortunate. The State is being left to foot the bill now, is this fair?

Capitalism is being blamed for the current crisis, banks are also being blamed, but what about Governments? What was their role?

Monetary excess is often the cause of the boom and thus the bust, both the Fed and the ECB kept rates artificially low for far too long, Ireland entered the Euro and availed of low rates and high liquidity that was in …

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