Getting the timing exactly right would be an incredible feat. As we keep getting told it’s not an exact science.
Exactly, just because it took another decade for it to burst doesn’t mean that 1999 wasn’t the early stages of a property bubble. Some figures would certainly suggest it was. Government policy around that time is being roundly criticised by Europe in the media at the moment. If policy had been different it is quite possible that the property crash, banking crisis, bailout etc. wouldn’t have been as extreme in Ireland when the bubble finally did pop.
No. I reckon time will prove the floppy haired one right. We were actually in a property bubble from the mid-90’s on and 2001 was the recession and dip we were supposed to have but instead central banks poured petrol (credit) on the fire in an effort to keep the party going causing even more damage. The 90’s was a “normal” property bubble that could have deflated without too much damage but the subsequent bubble, where we went double or quits is the one that crippled our banking system.
There were two property bubbles, one on top of the other and we’ve repeated the mistake with all our manipulating trying to avert the consequences of the bust.
Do you believe him though?
Sorry gaius you think in inflation adjusted terms we’ll see property significantly below the 1999 levels? That would be my reasonable definition of what has to happen for someone who says housing is in a bubble in 1999 to be right.
The fact that ALL debt was included was known at the time when he was happily taking credit for the idea.
If he had encouraged a carve out of INBS or Anglo you could say “fair play David you were right”. Did he do that? Did he fuck.
I think you may have misinterpreted my quote, missing the double negative with your emphasis.
My point was that 1999 quite probably was the early stages of a property bubble that could, as you stated, have been deflated relatively painlessly if government policy in the early 2000’s hadn’t been geared to wholeheartedly inflating the bubble, if regulation had been enforced and if pragmatic advice had been acknowledged and acted on rather than the total denial that FF (and the Irish electorate for re-electing them in 2007) was in.
Bertie Ahern’s response to Morgan Kelly’s warnings of the impending crisis was the zenith of this denialism
Yeah, that’s my recollection too. I was in the car the morning after the guarantee, & floppy was on the radio then, & he didn’t seem to have any reservations in those interviews, & if it was as plain as a pikestaff to a dumb Engineer like me that the guarantee was a massive fuckup, I’d expect a financial wiz like him to understand the likely outcome
… when you say at the time remind me as it happened right more or less?
If I remember correctly he was then politically out flanked which wasn’t hard because he was not acting politically.
The way I understand it and I’m not totally up on the timeline since it’s been a while. The political boyos were happy to have a name that was not theirs to stick to the guarantee once it got going. I think David may have assumed he would be kept in the loop but clearly and very quickly the boyos stalled any further iterations or phases of the process he thought he was involved in.
We only got the first phase and then there was mention of at least two more phases which I think he might have outlined on a primetime appearance while it were in play and unfolding.
McWilliams might have gone to ground not long after when he realised he was dealing with a nest of political snakes who knew exactly what they were doing. Something that was diametrically opposed to David McWilliams motivation. Stitching up the population for many generations to come for the sins of the fraudulent bankers. Would you want to be associated with that?
Overall I feel David McWilliams motivation was in this instance of helping the tribe, the tribe of Ireland. George Lee motivation I too think were also good of heart but both examples of varying degrees of how the political establishment once they got what they need chewed em’up and spit out by the political establishment.
Keep in mind both David and George were watching the economic realities day in day out while the population at large remained oblivious and drunk on the proceeds of their imminent demise and as your average pinsters knows it was and still is mightily frustrating at the best of times.
Though I haven’t looked at the bank enquiry ongoings I believe it is probably the same motivation that inspires him to keep at it.
Also do not forget once he reveled certain aspects of what went on in one of his books not long after (Sick Lenny garlic in hand) the political knives came out when he made it clear Lenny had gone on a solo run over the permanent government advisors but I think that turned into a political play as outlined above. Lenny was out of his debt so was everyone but not politically. That should inform you more as to what really happened and how David McWilliams were easily used a political pawns and it’s still hanging over his reputation. I’d find that a frustrating place to be if you felt you genuinely tried to help by putting your reputation to help bunch drunks who had no intention of ever reforming.
The 1st to me sounds more like a feature in aggravation, not mitigation ? They both knew exactly what they were getting into bed with; & they still acted all outraged afterward. You only get to be a pawn, if you put yourself on the playing board !
Both McWilliams & Lee held themselves in much higher regard than the people they put in control of the legacy’s. I understand what you’re saying, that maybe they were acting out of patriotism, but in McWilliams case, his courting of publicity, & his dishonesty about his motivation, & his positions at any given moment in time, don’t exactly make him a credible witness. Lee was just a goddamn fool to have spent a career around the cesspool of Irish Politics, & then to take the word of someone within it !
I smell somebody trying to put words into my mouth.
Morgan Kelly said that a typical housing bubble bust sees 70% of the gains lost so it never resets back to zero. Ours has been unusual so who knows what will happen.
Here he is playing a clip of himself. Quite funny to watch him almost miming his own words
If you read the comments on the Journal you’d think he never advocated any kind of guarantee
I’m surprised he wasn’t carried out on shoulders
That depends on how much deflation we have over the next few years…
I was looking at house price, wage and price inflation on the CSO site last year and I think the figures are very interesting - sorry my formatting is crap - feel free to tidy it up
% inflation Year House Wages Prices 1991 -0.26 3.2 1992 3.96 3 1993 1.74 1.5 1994 4.78 2.4 1995 6.28 2.5 1996 14.83 3.90 1.6 1997 16.02 4.14 1.5 1998 31.53 4.99 2.4 1999 20.60 5.80 1.6 2000 20.93 10.00 5.6 2001 12.03 7.97 4.9 2002 6.59 6.49 4.6 2003 17.87 6.83 3.5 2004 12.69 4.67 2.2 2005 10.12 3.59 2.5 2006 14.11 3.50 4.0 2007 2.10 2.30 4.9 2008 -7.84 14.79* 4.1 2009 -19.54 -0.61 -4.5 2010 -2.48 -2.61 -1 2011 -1.65 -0.85 2.6 2012 -8.51 2.39 1.7 2013 3.26 -0.69 0.5
*The 14.79 is an anomaly caused by a change in the way the wages were calculated but I left it in
The figures show that the main damage was done in 96-2001 they also show that the declines certainly haven’t matched the increases.
It might be possible to argue that houses were undervalued in the mid 1990s but thats when I bought and I can assure people that between the low salaries and high interest rates the house seemed pretty expensive to me.
Slasher you’re probably as good as anyone to articulate the position that right now finds David McWilliams the recipient of much criticism and rancor in this thread for his involvement in the embryonic stages of the Bank guarantee fiasco and what else since?