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In my opinion the Financial Regulator should be asking some serious questions of the type of information being disseminated on AAM. While any punter can give their two cents' worth on an interwebbie forum, a regulated practitioner (i.e. Brendan) needs to be careful to issue advice within regulations.

In this thread the advice borders on negligent in my view:

http://www.askaboutmoney.com/showthread.php?t=90565

Quote:

Brendan Administrator Posts: 6,466 Re: Brendan - Property Investment advice 2004 -------------------------------------------------------------------------------- The rates are out of date, but the principle is the same. Over the longer term, equities should outperform property. The only advantage of investing in property is that you can get tax relief on the borrowing. If you are going to invest in property, you should borrow the maximum allowed. You can still borrow 100% of the price of an investment property if you have other properties on which to secure the loan. Brendan

This is outrageous. The most important and essential piece of advice that must be put up front needs to be the point that as you increase the gearing, the risk scales upward, to the point at 100% debt, the risk is infinite in relative terms (i.e. as a % of the capital you have stumped up) and only capped in absolute terms by the size of the borrowing. Investors should tailor the amount of gearing they use (i.e. amount of risk) according to their specific investment needs. Only then, think about tax efficiency.

Still, Brendan only says the the only point is the tax play and you should borrow 100%.

That guy is an abomination to finance. He knows nothing of the personal or financial circumstances of the people he is openly advising. He knows nothing of their financial knowledge or capacity or ability to understand what he is advising. Yet he tells a poster directly that they should borrow 100% of the asset price (infinitely gear). Read more...

You might have noticed that the bulls have a new talking point - that the overhang of new properties is only in Leitrim, or Roscommon, or Longford or ... somewhere else anyway. Dublin is safe, yes siree. No overhang here.

This might be true if you simply look at whether builders have units they've failed to shift. It's certainly not true if you look at the new properties which have been sitting unoccupied for the last few years as owners gambled on capital appreciation and couldn't be bothered with actual tenants.

Here are a few I've spotted lately:

Mount St. Annes - 2 bed apt vacant since 2004? Sold for €475k then, now asking €499k.

Edward Square, Bloomfield Road, Donnybrook - 3 bed townhouse, vacant for two years. Asking €1.65m. Sold for between €1.4 and €1.8 then.

Leeson Place, Adelaide Road - 2 bed mews house unoccupied for seven(!) years. According to the brochure, it's "in show-house condition, c. the year 2000". Asking €850k. Can't find the original price.

Mount St. Annes - 2 bed apt vacant since last year? Asking €705k. Sold for €720k then.

Etc., etc.

How many more of these ghosts are there out there? And what effect will they have on prices? Read more...

Austin whatever was on today saying the Government had one last chance to salvage the economy before it goes proper tits up, together with some great spinning that Consumer sentiment was up (but only to its second worst point ever).

AIB also got in on the act today reducing rates.

This week and next the VI's are going to be very dizzy spinning one last yarn, as with the nights closing in it looks like the lights are going out on the Irish economic 'miracle' come ponzi scheme and it looks like they will not be relit for quite some time.

Will the VI's save the day in the next week or two, or have the great masses finally copped on that you cannot build an economy on a property bubble? Read more...

I look forward with great interest to Biffo's seminal "address to the nation" this September.

What he and his government can do in this situation is beyond me.

Nevertheless, he'll be expected to take the stand and put the country at ease.

I feel however that his speech will consist largely of comical hypicrosy, empty promises and cliche after cliche -- typical of his and FF's shallow thinking of recent times.

He as finance minister played a large hand in the mess that is now being splattered all across the nation. A humiliating and embarassing speech would be a fitting end to a failed leader from a corrupt and failed political party. He's been in power both as Taoiseach and Finance Minister for several years now and has done nothing to improve Ireland's economic situation -- only make it worse.

To Cowen: Step aside and let someone with ideas begin the process of fumigating the country and let your September speech be you announcing your resignation. Read more...

http://www.fraserhouses.com/

'An offer you can't refuse.' Read more...

In the fullness of time we will regard the last decade as a time that provided, effectively, what were, massive subsidies to the owners of building land, by allowing them every advantage, and privilege our State could grant them, to indenture our people from 1997 onwards, to allow them extort, the maximum last drop of wealth from our people, by indenturing them for life to massive debt.

Under this system young people and not so young were held to ransom, despite not having any money, but were indentured by banks, for the wealth they could produce for up to forty years less any minimum sum required to keep body and soul together.

Many who could find a mate could not raise the necessary ransom, and yet more who could not raise a sufficient ransom , could not find a mate. Many who choose lower paid occupations, useful to society did so to their detriment to raise or pay a ransom.

For the Children of some small wealthy families it did not matter so much as their parents were in a position to assist with the ransoms.

Slavery has not gone away you know it has just changed its form.


Under our planning system it is the State that confers value on land by:

1) Zoning the land in the public interest from agricultural land to Building land.

2) Increasing the site coverage index and plot ratio (permitted density) on the land.

3) Creating scarcity of building land by prohibiting development on the vast bulk of land. perhaps the most valuable subsidy of all.

Under our Laws and policies it is the Landowner who takes all the benefit of this increased value, in some instances allowing them to hoard the zoned land, since it is untaxed, despite its immense value, and engineer a situation where the value of the individual build plot, or building footprint is several multiples of the cost of constructing the building.

Under this system our people must ensure that both members of a family must work, and that they make all kinds of sacrifices during their lives to pay the Developers ransom, which the banks are quite happy to provide finance for, secure in the knowledge that the system will not change, and that the security for the ransom is secure.

The older cohort of property owners are delighted with the system, while the new cohort of mortgagees and renters, must make all kind of sacrifices from their future labours such as:

1) giving up the luxury their parents enjoyed of inflating their debts away, in order to protect the savings of those who had bought earlier.

2) Forsaking the opportunity to have children

2) paying so much in servicing their ransom debt that they will not be able to afford to save for their own pensions.

3) making do with shoe boxed sized apartments because so much of their ransom debt was paid to reward the landowners, such that home sizes were shrunk to allow more of the ransom to be taken by the Landowners and builders.

To add insult to injury the government had devised a special tax on consumption, called stamp duty, which was supposed to keep prices down, and was to be paid on top of the ransom (ransom tax to reduce the size of the ransom) even though ransoms had risen to 12 times the average wage, from a historical low a ratio of ransom to earnings of 3 :1.

The notion of taxing the practice of ransoming in the first place was not deemed appropriate for the economy, even though a billion euros had been spent investigating the planning system generally, and despite another few bob spent on Bacon Reports. Bacon apparently was a wise old sage who knew everything about what was good for the economy and a lot less about what was good for society and our people, just like our government.

It is very clear as to the benefits the landowners get, a massive increase in wealth while the consumers get a massive increase in debt.

The Government still did not see fit to impose any tax on those who were selling their properties for huge profits, bought with low ransom multiples.

Businesses who wish to set up in the state must factor into their costs a large sum to cover the ransom repayments, as cost they do not have ho bear in other countries or at east not to the same extent.

Now it seemed it was beyond the power of the people of the old Kingdom of of Ireland, (an ancient land that glorified and revered fallen heroes, who had thought to try and improve the lot of its people, though it had been ruled very badly in the past) to influence the FF rulers to make laws that would eliminate the Land Ransom system, even though FF told the people they were there to help them at every election.

However the hero was the little boy who had the courage to cry out, and allowed the people the courage to use a very simple solution, to leave the Ransoming Barons to be prey to their money lenders, and force them into exile.

We did not need the Ransom Barron's after all, as it was the Builders, Architects and Masons who actually do the work, and they would be happy to carry on building better homes now that the a ransom did not have to be paid for the land. Read more...

http://www.rte.ie/news/2008/0824/thisweek_av.html?2413308,null,209

http://dynamic.rte.ie/av/209-2413308-320-180.smil [realplayer required] Read more...