For some reason or another my blog is reasonably highly ranked for the above mentioned former hack. There has been a distinct spike in traffic thanks no doubt to the New York Times article about her husband Sean Dunne.
It’s an interesting piece. I particularly liked this passage from the ESRI:
“We have repeatedly warned that the government’s housing policy was extremely dangerous,” said John Fitz Gerald, an economist at the Economic and Social Research Institute, a leading policy center in Dublin, who has long urged that the government stanch housing demand by raising taxes. “You will now see unemployment going to 10 percent and we will experience a sharp drop in output.”
He shakes his head and sighs: “This was predictable, but the government just did not deal with it.”
Ya wha? The ESRI were cheerleading right up to the very end. The ESRI failed to predict anything. Indeed only six months ago they were predicting unemployment far lower than 10%.
There is also this:
But he says the [Ballsbridge] project will be completed, assuming that it wins approval of the planning board. “If anyone wants to bet I can’t do this, I will take that bet,” he says, citing, without specifics, talks with Asian banks and a sovereign wealth fund. “You have to have steel in a certain part of your body to do this job, and as one of my bankers recently said to me, ‘Sean, the only thing that will take you out is a stray bullet.’ ”
…
“This is the way God made me, with heavy shoulders and an ability to carry a great load,” he says, forcefully rejecting the rumors of his financial demise buzzing around Dublin. (One of the more fantastic claims was that his financial troubles had forced him to take a month’s recuperation in a mental institution.)
“Failure is not an option for me,” he says. But others aren’t so sure.
Nope. I would argue that he will never make money on the project. And that’s not begrudgery, that’s reality. He paid hyper-inflated prices for the land. Even if he does build, he is highly unlikely to get sale prices on the apartments that he expected when buying the land in the first place. And that’s if they even sell.
Sean Dunne perhaps typifies the connection between politics and developers in Ireland. A friend of our former esteemed leader, and a regular at the Galway Tent, one wonders what conversations went on over the years between FF and developers like Dunne.
We shall see if he survives the turmoil of 2009, I guess.
I’m not sure you’re being entirely fair to the ESRI Gavin. Of course they didn’t predict what was coming (but none of us did in its entirety) but they did express concern about house prices. This from page 29 of their Spring 2006 Quarterly Report:
That I know of, this sort of statement (though couched in rather moderate tones) is repeated across a number of reports. It may not be much, but they did say, in as much as economists ever say, that there was a bubble and that it was partly a result of policy.
Perhaps youre right… but what was all that talk about soft landing…? Even at the time i was reading commentary that completely dismissed it, simply because there had never been a soft landing from a property bubble as big as ours in known history…
I’m naturally disposed towards pessimism in everything I do, but I also remember thinking that the we were not entering the world of soft landings. Still, I think that we should expect a place like the ESRI to have an entirely forgivable conservatism bias when it comes to forecasting. They point out that the longer the bubble expands the more likely it is that things will go haywire (and this is two years before it became absolutely obvious that haywire was what we got). To go further would risk them being placed in the Ann Coulter school of public policy statements.
Hi Gayle,
Just found your site/blog. Hope all is good with you and that the”depression” has not affected you too much.
Haven’t seen you for a long time but it was really sad what happened to Lucy in Thailand.
All the best .
Chris