The David McWilliams thread


#2101

Or, “McWilliams is on holidays is Barbados and makes spurious ‘slave’ analogies with Ireland in order to call it research”.


#2102

Ha, yeah I always skip over the first few paragraphs of his articles.


#2103

With the new bankruptcy legislation, many of these businesses will just die and be reborn, no? While some property and assets will change hands, in the end, they’ll have to be sold back for cheaper to the people who want to use them… essentially the same businesses.


#2104

Or Wall St just dumps the assets to the ‘greatest’ fools, the Irish!


#2105

McDreamy latest - 38m per year to build 50k houses in Dublin
independent.ie/opinion/colum … 43903.html

there’s a lot we could do for very little with the ridiculously low current cost of borrowing; if we’re spending it on infrastructure would the EU really say no? They want to get money flowing into the economy…


#2106

But, employing builders would move money into the economy, or does increasing sales of breakfast rolls not count.


#2107

I know, that’s what I meant. Address infrastructural deficit, and pump money into the economy - win/win.


#2108

That’s the best idea I’ve heard from McWilliams in a long time.

The government surely have access to a NAMA site, they have access to cheap capital, we have a massive pool of labour that is desperate to work, the demand for property in the Dublin are is most certainly there and with prices still well below peak, the risk is low. In ordinary times, the private sector would step into this breach to meet supply. This has not happened so why can’t the government step in to facilitate action? Given the inelastic supply situation with property development, a situation that’s critical in there here and now will only get worse in the short-term, so it’s time to act now.


#2109

Well, it was time to act about 3 years ago, when the lack of a supply pipeline should have been obvious to anyone paying attention.

Still better to act 3 years late rather than 4, of course. Or 5, or 6, or never…


#2110

Sorry Dave, you’ve priced a ten year bond not a 30 year!
30 Year Irish debt is 1.84% — still cheap but changes his numbers a lot.


#2111

I think he must have read an recent but old Coles2 post or maybe even early pin posts.

I do however have general show stopper problems with the opening logic, though the personal anecdote at the start is good.

Define your reality! 8)


#2112

The counterargument from Michael O’Flynn on Claire Byrne the other night was that NAMA can only build “16 or 17%” of required supply. That leaves private developers to do the rest and with NAMA competing on a lopsided playing field (low cost of finance, no particular profit requirements), the vital private developers haven’t a chance. Of course he’s a total vested interest who shouldn’t get an ounce of credence without good cause. But he claims developers need a profit margin of 15% or they are unable to raise funds from backers. He also thinks the CB rules need to be relaxed for the same reason, which blows his credibility in my book. But I’d still be interested to hear the counter-counterargument.


#2113

Conflicting use of the word “build”. The government and its agencies should not “build” anything. They should tender of the building properties to be owned by the councils and used for social housing. Builders will still get paid, and maybe even developers.


#2114

State investment bank lends to the private developers at low rates with conditions attached (use it or lose it planning permission; energy efficiency; social housing provision). Nama releases land for use under these conditions. We really need to build higher close to the city centre though, and improve public transport further out in the metro area.


#2115

McWilliams sums don’t add up.

Sovereigns are perpetual but dwellings are not. If you borrow over 30 years at the end you have to redeem the debt but the matching asset (the dwelling) is much depreciated.

Therefore you do have to consider amortisation to make his case.


#2116

Not if house prices over the past several decades have been anything to go by, I would have thought. At the very least houses have generally held their value.


#2117

Colour me cynical but I honestly cant see the Irish Government doing anything radical to resolve the housing crisis. McWilliams might be taking sense but that doesn’t mean anyone wielding any power will actually listen to him.


#2118

yeah, the building will depreciate and require capex but land value appreciation has tended to make up for that;


#2119

Ireland can conjure a pot of sovereign wealth gold - FT.com on.ft.com/29CqkKM via @FT

McWilliams wants the state to be given a stake in the multinationals setting up in Ireland


#2120

On the face of it, taking shares in lieu of corp tax doesn’t sound like a bad idea.

Problems?