May 2008 – Page 2 – Gavinsblog.com

Musical interlude

I must start adding more music… all time classic from the King himself here:

And the ultimate version of Burnin’ Love, great music to drive to:

Ive had enough of those Husseins

Phoenix arrives, MRO snaps a photo

The Mars Reconnaissance Orbiter managed to snap a photo of the Phoenix during its parachute-aided descent to Mars. Our technology continues to amaze me, if we can have an orbiter of another planet take a photo of another satellite descending to that planet, what can’t we do?

This photo is truly historic, and is making the rounds on the web today. People really do get excited about this stuff, and I can see why.

Americans driving less

As petrol prices hit record highs in the US, people are driving less, and taking public transportation more.

According to AAA, the national average price for a gallon of regular gas rose to a record $3.936. That compares with an average price per gallon of $3.23 last Memorial Day.

“With it being near $4 a gallon, you definitely have to drive slower and pick and choose when you’re going to do it,” said Steve Kahn of Roswell, Georgia, at a Memorial Day festival in Atlanta.

Some Americans have turned to public transportation. Ridership increased by 2.1 percent in 2007, in part because of rising gas prices, according to the American Public Transportation Association.

Americans took 10.3 billion trips on public transportation in 2007, the highest level in 50 years, the group said.

The Energy Information Administration says gas consumption for the first three months of 2008 is estimated to be down about 0.6 percent from the same time period in 2007.

For the summer season, gas consumption is expected to be down 0.4 percent from last year.

At current exchange rates I am paying $7.57 a gallon (€1.27 a litre) for petrol here in Ireland, most of that composed of taxes. It would be more if the euro was not so strong right now.

Oh for the days of $3.936 a gallon…(67 euro cent a litre).

Embed diary

I am enjoying David Smith’s latest embed diary from Iraq. Today he writes about an entrepreneur, Dr Moayad Hamad, in the Dora district of Baghdad:

Hamad, wearing an expensive watch, and smoking cigarettes despite his old profession, is the new breed of Iraqi entrepreneur. Captain Russell Matthews, Warrior battalion, 10th Mountain Division, told me: “He’s probably not been seen here before. The entrepreneur becomes leader, taking the place of the sheikhs. The sheikhs are trying to find their own in a world that’s changing around them.”

Later I walked with Matthews up what the Americans call “Airplane Road”. Chickens sizzled in flame ovens, smiling couples walked hand-in-hand, shoppers sought fruit or mobile phones or a haircut, and grandmothers pushed children on swings in one of Hamad’s new parks. Remarkably, Baghdad felt a good place to be. But the question that Hamad – and others I spoke to – don’t want to contemplate is what will happen when the Americans leave. “They must stay forever!” said one. Not likely, President Obama. The US is in danger of creating a culture of dependency here.

Property and petrol

Roger Bootle in the Telegraph has a sane appraisel of the real value of property, and who gets hurt by property bubbles.

One of the effects of a period of falling prices is that much of this excess property holding will now come on to the market, exacerbating the fall in prices. But the benefit is that there will be some people who will now be able to afford to live in decent accommodation which they previously could not afford.

There have been millions of people whose lives have been distorted by property considerations – people forced to move, or prevented from moving, forced to commute long distances and/or live apart from their families, people who have refrained from having more children, or indeed any at all, because they could not afford decent accommodation. As house prices fall, these people’s life choices will be different.

Once the downward adjustment in prices is over, what we need is a long period of broadly stable house prices. This would make an enormous contribution, not just to the efficient allocation of resources, but also to human health and happiness.

And prices here are falling rapidly. About time.

Israel appeasing Syria

Israel and Syria start to talk peace again.

Surely not?

Mahon Tribunal … still going

Yea, you would guess it’s all over since Bertie Ahern resigned as Taoiseach. Well, it isn’t. And there was more explosive evidence. Didn’t hear about it? Quelle surprise. The media, read RTE, seem to be taking their eye off the ball.

Remember that whole B/T account thing? Remember how Ahern’s good friend Tim Collins swore in evidence that B/T stood for ‘Building Trust’? And remember how Ahern himself swore under oath that it stood for Building Trust (Q355)? And all those other St Luke’s workers who swore they knew of the existence of the account, but never asked about it?

Back in March, Blair Hughes and Ken McDonald, both of whom worked at the branch of PTSB that held the B/T account, swore in evidence that they always believed it stood for Bertie/Tim. They have no reason to lie.

Yesterday, two more workers from the branch, Lisa Jordan and Elizabeth Smyth swore in evidence that they also believed it stood for Bertie/Tim. Not only that, Lisa Jordan remembers Tim Collins coming in, and himself referring to it as the Bertie/Tim account. Here is what Ms Jordan swore:

The passbook for the B/T account was kept in this branch. I recollect on an occasion prior to Mr. Blair Hughes joining the branch in 1993, that Mr. Collins in a jocular manner when asking for the passbook for the B/T account referred to as the passbook for the Bertie Ahern/Tim account. I am certain that this was said in a jocular manner. I believed that in relation to the remark made by Tim Collins that it could have been heard by Elizabeth Smyth, Cathy Smith and Richard Buggy.

Smyth said:

I remember Tim Collins well. I would describe Mr. Collins as gregarious with a word for anybody. I would have seen him note only in the branch but around Drumcondra and in Kennedy’s public house where he would often be on a Friday evening with Mr. Ahern and other friends of Mr. Ahern.

It was my understanding from conversations in the branch, including some with Mr. Collins, that the B/T account was an account operated by Mr. Collins and that the B/T stood for Bertie and Tim. I recollect that Mr. Collins would ask for the passbook for the account, which was kept for safekeeping in the branch.

I do not recollect any reference to the B/T account as being a Building Trust account. I believed that the only connection of the B/T account to Fianna Fail was that Mr. Ahern was a minister and a Fianna Fail TD.

So. Four witnesses, with no apparent reason to lie, have directly contradicted the evidence of Bertie Ahern and Tim Collins in sworn evidence. Grainne Carruth directly contradicted her own and Bertie Ahern’s evidence, once physical evidence was produced.

The game is up.

Testing, testing

Myself and Anthony are testing out possibilities for podcasting. This test one lasted 45 mins and covers a range of issues, including DCC/Fyffes, Lynn, bank fraud and HSE incompetence.

Anthony refers to the Nacchio case. (His conviction was overturned on a technicality and a retrial is pending)

Here is the audio. It is a test podcast, so we will be tightening up on stuff as we go. It is strictly make it up as you go along!

Comments welcome.

[display_podcast]

Ghost estates

If there is one untold story of the past 12 months, it is that of the housing crash. Why is it untold? I guess because the media find it hard to talk about, or at least when they do talk about, they tend to paint a more bullish picture thanks to the input of vested interests, the property industry, auctioneers, overly bullish economists… the list goes on.

The real story of the Great Irish Property Crash is one that has yet to be told, and in this country you might not read about it until it is near its end, or over. But what does the internet allow? It allows us to get around all the guff and collaborate, and find out what the real situation is.

Personally, I am bear when it comes to Irish property. I believe we are nowhere near the bottom, and if anything, things are going to get much worse in the coming years. That is, worse for all those people who bought at the peak in 2006 and early 2007. Worse for the buy-to-let investors who are sitting on vacant houses or desperately trying to let them out. Oh and rents are falling too.

Did you know that the number or houses listed for sale on Daft.ie was just 16,000 in September 2006? As the ECB began raising rates and people began to dump investment properties that number has soared. As of today there are almost 70,000 houses for sale on Daft. But there are important provisos about that figure.

First, there are many, many houses sitting vacant that are not for sale. That is, many houses that have never even been lived in are sitting idle. Second, in September 2007, realising that houses were not selling, banks began to tell developers to put up their houses for rent rather than try to sell them. This, it was hoped, would allow them to ride out the property bust. The number of houses available to rent soared in September, rising from 6,000 to almost 13,000 today.

Third, is the fact that prices are falling everywhere. Real prices. Real asking prices. See a house for sale for €300,000? It’s not worth it, invariably. In fact any bidders out there are putting low ball bids, in many cases over 10% below asking. So the house is on offer for €300k, you put in an offer for €250k. But even those figures are not low enough.

As the housing stock continues to rise, and the number of buyers dries up, things can only go one way. IMHO the return to normal lending conditions (we were living in a credit bubble since at least 2000), will lead to things getting rather hairy.

When all the main banks ended the 100% mortgages and tightened lending conditions back to normal, it means that not only are first timers affected, but the whole market, developers included. It could take 6 months for these decisions to filter through the market, so as we hit the end of 2008 we could see a real problem: Tens of thousands of houses for sale, buyers unwilling or unable to buy, banks unwilling or unable to lend; developers sitting on massive loans and big tracts of land they bought at inflated prices with unrealistically cheap money and a housing market sitting on a knife edge.

Furthermore, we have the problem of denial. In the current market, prices have fallen to some degree from the highs in late 2006. 10%-15% is the consensus but it is probably more. Prices IMHO will fall much further, as far at 50% from 2006 highs. But vendors, auctioneers and developers are in denial. They don’t believe the value of these assets are falling, and to that end they are failing to reduce asking prices. They are also creating denial in the market through false sale prices published in national papers. Vendors are in denial, failing to understand that the value the property they bought has fallen, and fallen to a greater degree than they are willing to accept.

Vested interests like Liz O’Kane, much to my chagrin, are given free reign on the national broadcaster to tell us all that there’s never really a bad time to buy property, even in a falling market. All of the vested interests are trying to tell us, and have been telling us all the way through the crash, that ‘now’ is a good time to buy. Erm, no, it’s not. In reality prices are still falling, and they are set to fall a hell of a lot more. Nothing the vested interests can say will stop it, they can only try and delay it.

For now though, if you are thinking of buying, read the Pin, install the Property Bee Firefox extension, browse Daft and Property News (MyHome displays prices as graphics, breaking Bee) and watch the prices fall. Be aware that most auctioneers are fibbers, and will try and tell you things are picking up. They are not. Figures speak for themselves.

I think it’s time for something of a reality check. To that end I took a quick drive around some towns and villages in East Cork, on the look out for empty houses. You won’t be surprised to learn that I found lots, none of which are listed individually for sale on Daft.

First off, Mogeely. A tiny village with a Church and a couple of pubs. Gleann Fia is a new development and is listed on Daft here. It does mention that there are a ‘group’ of three and four bed houses for sale. By my reckoning the estate is 80% vacant. I took some photos to show it:

Did the auctioneer get carried away with ‘sold’ signs?

By my count there were about 38 houses. Of which about 6 were occupied. Another 6 had ‘sold’ signs on them, but I can’t see any sign they are occupied at all, or about to be.

On to Ladysbridge, to the estate known as the Maples. While Daft list just a couple of houses for sale, there are in fact at least a dozen vacant houses. That is, they have never been occupied by anyone.