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 Post subject: Re: The David McWilliams thread
PostPosted: Wed Mar 16, 2016 3:01 pm 
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HouseBuyer wrote:
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.

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.

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 Post subject: Re: The David McWilliams thread
PostPosted: Wed Mar 16, 2016 7:33 pm 
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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.

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 Post subject: Re: The David McWilliams thread
PostPosted: Fri Mar 18, 2016 12:12 pm 
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ps200306 wrote:
HouseBuyer wrote:
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.

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.



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.


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 Post subject: Re: The David McWilliams thread
PostPosted: Fri Mar 18, 2016 8:18 pm 
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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.


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 Post subject: Re: The David McWilliams thread
PostPosted: Fri Mar 18, 2016 8:23 pm 
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Skippy 3 wrote:
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.


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.


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 Post subject: Re: The David McWilliams thread
PostPosted: Fri Mar 18, 2016 8:46 pm 
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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.


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 Post subject: Re: The David McWilliams thread
PostPosted: Fri Mar 18, 2016 10:06 pm 
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muirgheasa wrote:
Skippy 3 wrote:
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.


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.


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

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 Post subject: Re: The David McWilliams thread
PostPosted: Sat Jul 16, 2016 7:13 am 
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Ireland can conjure a pot of sovereign wealth gold - FT.com http://on.ft.com/29CqkKM via @FT

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


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 Post subject: Re: The David McWilliams thread
PostPosted: Thu Jul 21, 2016 8:34 pm 
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slasher wrote:
Ireland can conjure a pot of sovereign wealth gold - FT.com http://on.ft.com/29CqkKM via @FT

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

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

Problems?

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 Post subject: Re: The David McWilliams thread
PostPosted: Thu Jul 21, 2016 9:14 pm 
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gaius wrote:
slasher wrote:
Ireland can conjure a pot of sovereign wealth gold - FT.com http://on.ft.com/29CqkKM via @FT

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

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

Problems?

This is probably the stupidest thing I've heard him say. Someone should tell him that it's possible to acquire shares in exchange for tax money.

You really don't need to read further than this: "Shares are permanent wealth, whereas taxes are transitory income." My eyes wanted to puke a little just reading that.

Let's look a public MNCs first: if the government wants to spend tax money on shares in US MNCs, they can already do it. No advantage here. And the MNCs who have an Irish tax liability probably have decent cash stores outside the US and would prefer to give us €€ rather than shares. It's a stupid idea for public companies.

Now let's look at this applied to private companies. What McWilliams seems to be suggesting is that we give up tax in exchange for untraded, illiquid shares in MNCs. In other words, give up a liquid asset in exchange for an illiquid one, that we cannot use to pay public servants, or pensions. So we would need to borrow even more in order to invest in these companies. In other words, we'd be borrowing from the bond markets in order to invest in tech stocks.

And we wouldn't even be able to direct these investments; presumably only companies that were profitable, with a tax liability, but with no free cash would give us shares. We'd be stuck with a random assortment of stocks in MNCs, some of which would never be liquid.

Does McWilliams forget that only a short time ago we had no money to pay salaries, and no ability to borrow that money? And now he's advocating that we borrow even more to speculate on tech and pharma stocks. Jesus.

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 Post subject: Re: The David McWilliams thread
PostPosted: Fri Jul 22, 2016 12:32 pm 
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Read the comments section in the FT under Mcw article.

I think this effort of his will not enhance his reputation or bring him more op-ed opportunities.


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 Post subject: Re: The David McWilliams thread
PostPosted: Fri Jul 22, 2016 12:35 pm 
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Just like we got "shares" in banks right?

And shares in what exactly most of these are registered as LTD companies, they can be folded up as quickly as they can be started, with most of the money moving onto warmer Caribbean shores


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 Post subject: Re: The David McWilliams thread
PostPosted: Fri Jul 22, 2016 5:49 pm 
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maybe he means preference shares or a separate class or something?
he's not very bright so I think he can get in over his head very quickly, he's a great self promoter and I think he can communicate quite well, but deep intellect isn't his thing....

If he just means normal equity then the NTMA could just buy some equity in every company with a market cap above €XBln that is domiciled in Ireland.... 99% of them will be publicly tradeable....

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 Post subject: Re: The David McWilliams thread
PostPosted: Fri Jul 22, 2016 9:25 pm 
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Daniel Plainview wrote:
he's not very bright so I think he can get in over his head very quickly, he's a great self promoter and I think he can communicate quite well, but deep intellect isn't his ..


:lol:
Luckily he makes his living as a journalist


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 Post subject: Re: The David McWilliams thread
PostPosted: Fri Jul 22, 2016 9:57 pm 
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Let's hitch our economy to FDI through out fiscal policy and let's double down by buying their shares? FFS, I don't think so.


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