Shay Conway

The sums of NAMA

2009-09-20T03:43:00.000-07:00

The banks owe 76,000 million on which they pay they pay the EURIBOR rate or 380 million per annum. The banks go to NAMA and ask that this debt is backed, NAMA says OK if you give me 1040 million ( ECB rate plus .5%) per annum NAMA will back 56,000 million. The banks go to the ECB and ask for 56,000 million , ECB says fine that will be 280 million per year. Banks now owe 132,000 million costing 1,700 million per annum. Banks go to the Irish Government and buy 56,000 million euro in bonds and get 2,800 per annum for them. Banks make 1,100 million per annum per year. Irish government gets 56,000 million for 2,800 million minus 1,040 the banks paid to NAMA or a little over 2.5%, and Irish debt to GDP ratio remains one of the lowest in Europe

NAMA Scary Simple

2009-09-19T12:45:00.000-07:00

This is how it works. A bank is owed 12 billion euro, bank goes to NAMA and says I'm owed 12 billion and no one believes that I will get it back. NAMA says OK give me 150 million per year and I will tell the ECB that you are good for 10 Billion. Bank goes to ECB and gets 10 billion for 100 million per year. So at this stage the bank is paying 250 million a year for 10 billion. Bank then goes to the Irish Government and says "I'll give you 10 billion for 500 million a year", Irish Government says "Perfect, because even though I'm paying you 500 million, you are paying me 150 million into NAMA which is a state body, so I am really only paying 350 million a year for 10 billion". The bank says "perfect 10 billion cost me 250 million a year and I am getting 500 million a year for it".

The overall effect - the Irish Government could get up to 50 billion at 3.5%, leaving the debt to GDP ratio at about 60%, still much lower than most EU countries. Very clever Mr Lenihan - scary clever.

Economic clear losers - those in education

2009-06-04T00:56:00.000-07:00

Primary Schools - Up to now schools could allow teachers to do further education studies in areas such as special needs, language development skills, this required that the teacher worked and studied part time or studied full time ( at the teacher's expense ), teachers could take up tempoarary posts in the department of Ed. or in teacher training schools. This is now stopped as teachers have to return to their posts as vacancies created by their absences can not now be filled. Temporary teachers will lose their jobs. Primary school teachers once qualified have to work one years under the supervision of the department of education, this is known as the "dip year" and has to be passed within five years of qualification, there are now no temporary posts for new teachers to do the "dip year". Gradually learning support teachers will be absorbed into classroom teaching, learners with problems will suffer, and classes will grow in size.

Secondary Schools - The same array of non replacement of temorary and retired teachers applies. The first service to fall victim to this will be Transition Year. 50,000 did it last year the numbers will drop to 10,000 over the next five years. Adding 10,000 a year to Leavng Cert. numbers, this will push points up dramatically.
On the subject of inflated points, over the last seven years 6,000 boys per annum with Leaving Cert will now no longer find an an apprenticeship these will have to be absorbed into the third level system ( many apprentices over the last for or five years had over 400 points).

Private Catholic secondary schools will see a drop in numbers. There are a few major drivers here - The most immediate is that less people will have the money, secondly there will be a preference for parents spending the money on third level.

Third Level - Local third level establishments will gain, less locals can afford to go up to Dublin. The entrance exibition examination in Trinity has stopped, thanks to an old guy who with the benefit of a degree from Geneva University got it in the late 70's. The real losers with the reintroduction of fees for third level are rural based students who may have just been able to afford accomodation costs are now knocked off the ladder with the fees and impossibility of getting a part time job while studying.

Those emerging from education are the most likely to become unemployed.

Irish Economic Depression who is winning

2009-06-03T00:49:00.000-07:00

Or who is losing the least. State pensioners and public sector pensioners have only lost on the income levy, 20,000 Irish pensioners with a gross income over €30,000 have lost the medical card. Irish property has halved and will probably half again in the next year, U.K property has stablised and gives a steady rental 5% return. The Ennis wind farm will produce a constant gross profit of 15% (10% after costs) over the next 15 years.

A lot of middle income Ireland has lost on bank shares, those who had the shares for 20 to 30 years have probably made four times their original investment in the long run.

Mortgages have dropped considerably in the last year, Irish mortgage holders in stable employment, despite loss of relief are still about 10% better off in terms of disposable income. UK property investors have seen the costs of interest dropping to one third of last year's cost eg an IIB mortgage of £85,000 cost £699 (€1050) per month this time last year it now costs £179 (€200). The Manchester rental market has improved.

Back to the losers - almost anybody with anything to do with construction. Seventy five percent of members of the royal institute are unemployed - in reality 90% are not working fully. There are more solicitors unemployed now than electricians. this hasn't been the case since 1982 when I knew a solicitor who was very happy to work as a night shift cleaner in Donnybrook bus station. I know three chartered accountants who are now unemployed - this never happened before in Ireland.

Economic Recession Winners and Losers

2009-06-02T08:59:00.000-07:00

It is clear who the losers are - the new unemployed. Those who are in the system for a while have established themselves, mortgage interest subsity or rent allowance, living allowance in place, the shock has worn off a bit and are slightly better off. For everyone else it is a case of relative poverty. Low paid civil and public servants have probably suffered a quadruple double whammy, decided to take a low risk low pay job, then lost out on the second round of benchmarking "because they had a good pension", lost out on property because they couldn't afford to buy with low pay, had to pay the pension levy "because they had a good pension", then had to pay the employment levy, no further staff being recruited and extra demand on social welfare services. Non commercial public sector are slightly worse off as they have to contribute (or pay for) their pensions. Most earn less than €37,000 pa , so they pay PRSI, Pension, Employment Levy and PAYE. The sad thing is that those paying little or no PAYE are hit harder.

The winners are keeping quiet.

Should Cowen nationalise the rest of the banks ?

2009-03-05T02:59:00.000-08:00

Previously a question only posed by lefties and shinners with the clear intention of expanding the public service and impoverishing the fat cats. The issues of how to restructure and who takes the losses (previously profits) still exist. The sad fact is that we are the banks and no punishment can be meted out without a cost to the ordinary punter.

Share prices have collapsed, even though they are mainly owned pensions and pensioners, and sadly that is what shareholders are for. Since most of the banks assets are funded through borrowing not equity, should the taxpayer instead of creditors now take the losses through nationalisation?

If the taxpayer funds the banks, the cost of the banks failing becomes greater, but there is an upside – old shareholders have the possibility of getting some of their money back and new shareholders will make money.

Garret the Good wants more economists

2009-01-10T14:14:00.000-08:00

I laughed til' I cried when I read in this morning's Irish Tripe, Garret twittering on about the need for loads and loads more economists in the Department of Finance. Maybe I have become harsh and maybe he is trying to be kind pretenting that there is a skill shortage in that area which is being ignored to soften the blow for the scores of unemployed economics graduates their sad parents.

Garret explained that he didn't have his usual Data Bank (no doubt electronic and very complicated and can only be operated by very intelligent people like him) so he could now give an opinion about the important and complicated work that economists him do ( in between betting their shirts on disasterous floatations like GPA and forgetting about valuable art work in the attic). There are lots of economists around, well there were up to a few weeks ago, Dan and gang have gone into hiding, some have been laid off, others are seeking refuge in academia with a few government nixers, poor old Leo is hoarse can't get anyone to do a vox pop.

You have to hand it to them, they predicted the end of the construction boom ( now we all know how complicated, technical and sophisticated that was), pity none of them predicted a global downturn. The fact is they are only sure something is going to happen after it happens.

New Year's Eve in Harare

2009-01-03T14:24:00.000-08:00

Electricity goes again, off we go to the substation where we were sent to yet another industrial estate. We easily find where the action is a man holding court at a desk in the yard, major discussions with a well dressed man pleading his case as to why his electricity should be turned back on. We clearly had what was required so Gaza (a great footballer appearently ) and Shazmo were dispatched with us. We quickly found our local junction box, Gaza opens it half the innards were melted with a quick insertion of a piece of wire the necessary sparks and we with power again. Gaza's phone rang (the mobile network is still quite good) it was the ministers office and off he had to go and fix a diplomats electricity, not before accepting a gift of a few dollars. Single US dollars are in short supply and are very useful in situations like this.

Best to cook in future at midday too much demand on the electricity in the evening. Still can get over the girls' names Sudden, Storm, Marvellous, I have not come across River and Leaf yet.

The architecture in Harare is superb, red brick columns and cast iron and of course like Belfast during the troubles there are well to do suberbs. I feel a lot safer here than in Dorset Street. Climate is also superb does'nt have oppressive heat due to the elevation. Only when you are on the ground that you realise than the Mozambique coastline is only five hours drive away, if you feel like a swim in the Ocean.

I met John Malone from Finglas, he has been here since 1970, has all the angles on how to make a living out here. A bit like a Buy n'Sell lifestyle in a nicer climate.
Zimbabwe is still one of the most comfortable places to live in Africa.

The battery is runnng low so I'll exit and return to this wireless area shortly.

Carbon Dioxide and Sceulionics

2008-10-04T12:15:00.000-07:00

Not long after first graduating from Trinity, a fellow Trinity graduate on the AnCO course we were all on posed the question "how could anyone tell if you were a science graduate ?", "easy" we said, all scientists know about Carbon Dioxide, some even know it as CO2 and some even know about the small figure 2, plant life can't exist without it. No one thought of asking the question, "what if everyone thought they knew about carbon dioxide and they were only just pretending ?", some would say it is sort of like a toxic loan, others would say lets lets drill a hole is the ground and pump it beneath impervious rock, others would say lets put a value on it and trade in it, others would say it is changing the earth's climate. But that was 25years ago and while there was less to do (19% unemployment) nobody went around inventing science. Alas I have given up on facts and I have decided to come up with a new theory, "Sceulionics". It took a bit of time to come up with a new word but with the help of Google, frionics, scionics (the SC for Shay Conway)already existed, finally I settled on sceulionics (school with a dublin accent, ionic to make it sound scientific). This is a theory on the development and transmission of ideas over time. We are all familiar with the concept of ideas passing forward in time, this theory postulates that ideas pass both forward and backwards through time.

Public Sector Pay Cut Myth

2008-07-08T09:38:00.000-07:00

The Public Sector wages myth really bugs me. The reality is that the wages bill for the public sector is less than one fourteenth of the total spend ( look at any semi state annual report) even a very large cut in wages results in a tiny overall cut. In fact the actual take home pay is about one twentyeighth of the total semi state budget.

A more effective way to cut spending is to stop the mad civil servants putting bonkers suggestions in front of the ministers. I remember an eijit in the late late audience screaming "it's my baby" when talking about the electronic voting, incuring a bill of several hundred million. Would somebody stop that crazed senior civil servant who is introducing "quality standards" all over the public sector with very little return and even less resistance ? The thing about a wage is everyone can relate to it, at a superficial level, but few understand that it is a tiny part of the problem.

Mind you concentrating the mind on a wage is a big part of populace rhetoric, and an abstract of the totality of reality that mindless gobby politicians (Senator Shame) rely on to set one part of society on the other.

Maurice Neligan and green bashing

2008-06-23T06:58:00.000-07:00

On Saturday I read a really "right on" letter in the Irish Times on the damage Neligan did to the "cause" in his article last Tuesday. We are fortunate that all our medical doctors are also trained scientists, and in the main can judge facts or lack of facts when it comes to scientific issues. They are also in general not dependent on research grants which are awarded on paying homage to the new green religion. Thankfully Brian Cowan has appointed Peter Clinch as an advisor. Prof Clinch prides himself on evidence based policy making, he will not find any evidence in any of the IPCC (International Panel for Climate Control) reports linking man made CO2 emissions to climate change.

Cowen Counting on Academics

2008-06-22T02:04:00.000-07:00

So Brian Cowan has appointed Peter Clinch as an advisor according to the Irish Times ( for goodness sake would someone teach their subeditors how to count, there is a difference between 3 and 7, where I eventually found the article, €2 for innumerate babbling). Let’s hope it is not one well intentioned person appointing another. Peter considers him self very good technically, looked up his CV and couldn’t find any science credentials, let’s hope he did chemistry in the leaving.

The appointment of academics especially economic academics worries me. They are in general not used to working with live economic data. Also it brings back uneasy memories of Garret the Good who after running the country for many years and at the tender immature age of sixty something lost his shirt on the GPA floatation.

So we voted NO !

2008-06-16T07:02:00.000-07:00

So what happened ? Bertie put the treaty together, redid it and put it to the people, and we said no. Probably more people than before realised the the powers of the institutions and said "hey they can do that....I didn't know that.", thanks to the straight forward leaflet which we all got. The intention of the treaty was to make the life of the institutions a little easier, a lot of work went into it, so it is not going to happen. It does not mean the end of the EU, at worst ( for the EU) nothing is going to change at best another attempt to speed up the process will be put in place.

I loved the scare tactics "if you vote No you are a shinner" or "if you vote Yes you are an abortionist", but the best one was the Dustin factor, "all those types from the south will vote together".

Change.ie - some comments

2008-05-13T01:59:00.000-07:00

Re: Carbon foolprint

Before y'all go jumpin the gun i'd just like to point out that i'm no tree hugger.

There is no proven link between man generated CO2 emissions and climate change. I am sick of this nonsense and Frank McDonald ( History and Politics degree) in The Irish Tripe. The most significant greenhouse gas is Water (H20) two thirds of the planet is covered by it. Change.ie site is very carefully worded and does not actually say that there is a link between man's activity and global warming, unlike the TV ad last night which was factually wrong.

Just rang the guy in change.ie, ah jaysus felt sorry for the eijit. He hadn't a clue, he thought science was all about having a good argument and persuading people, facts were there alright but they wern't as important as debate. I complained that the ad last night was misleading as it said that there is a direct link between climate change and mans activity which is wrong.

That is an interesting one - do you have an entitlement to believe fiction is fact ? - probably yes - but you have no entitlement to mislead people, especially stupid and ignorant people.

Thinking people always question consensus. Sometimes consensus is right, sometimes it is wrong, sometimes we don't know whether it is right or wrong. I am saying that we don't know whether consensus is right or wrong in the case of the proposed link between global warming and mans activity, because is not proven. To say it is a fact is wrong, that is not saying there is no link, I am saying there is no proven link and I am not wrong when I say this. I have read all the IPCC reports on climate change, they refer vaguely to a likelyhood. Perhaps you could give me a source that proves the link.

There is no need to be surprised when I used the word "vaguely" because the IPCC findings are not unequivocal.

Luas in Terenure - why not put it in a tunnel.

2008-05-09T03:16:00.000-07:00

I read the report - oh my god (OMG) what a dogs dinner. If it wasn't so serious it would be funny. The report divides the Christchurch to Dundrum line into sections at the end of each section there is paragraph entitled Solution, makes an attempt to describe how little difficulties will be overcome in the construction. There are 6 compulsory purchase order (CPO) solutions involving about 70 houses and business directly. Anybody who has been on the receiving end of a CPO knows all about Irish injustice. This is how it works - first a report is issued - the word is out low and behold no one wants to buy or rent your property ( so all the people East of a line from Christchurch to Rathfarnham are stuck) five or six years later the work on the line begins, this work will take up to 4 years you may be lucky and get your CPO in a year or two or you might have to wait three or four years. It is very hard to take an interest in a property if you know it is coming down in a few years of course there is compensation this is very small.

This Luas report is more a Luasish report, cars will be sharing the track in parts, sort of like the old tram system which was ripped up by that philistine Todd Andrews. The Luasish will now have the pleasure of sharing the traffic jams with the cars and the taxis.

Now getting back to the solutions, more specifically the traffic solutions during construction and after construction. Oh those underpaid corpo clerks from Cablas are going have some fun sticking it into the southsiders. This fun has already started "Jaysus lads lets run the feckin Luas up the bleedin gardens in Brighton Road". This will progress to "lets hem all them posh mustards Eaton Square and Rathdown did dat and de other, dose mercs will be feckin useless in a one way on left turn no right turn no reverse traffic treatment".

I remember a representative from Harcourt Street traders association nearly in tears on the TV when the street was closed for over a year laying down a couple of hundred metres of track.
Lots of businesses went under where the Luas went on the road.

I don't buy the "we can't afford to tunnel" argument, they can afford it in Spain China and India (Calcutta), it is not because of cheap labour, tunnelling companies use the same people and equipment all over the world. Ireland is one of the richest countries on the planet. I have looked at tunnelling prices in other countries we can afford it. In fact short term and long term we can't afford not to go underground.

Cricket in Rathmines

2008-04-30T01:41:00.000-07:00

Cricket season starts again on Sunday 4th May. Last year was the highlight of my cricket career, my team won the "Plate" ( came second) in the family fun day in Leinster. I will always treasure my trophy ( a spiral bound bratz notebook) . Click below to see me in action.
http://www.flickr.com/photos/irishcricket/1252059491/

Dublin Underground

2008-04-29T01:52:00.000-07:00

As the first budding independent politician to mention the phrase Dublin Underground in election literature I was very interested in Frank McDonald's piece in The Irish Times on 26th April. Very informative, and despite the strong peppering of bias I was able to complete the read. But sorry Frank 100k of Luas line is not a practical proposition. Reading stuff like this I always wonder at the author's credentials, looked up wiki, degree in in history and politics from UCD. Pity he didn't go to Trinity and take the geography freshman course on the history of Dublin, there he would have learnt about the evolution of parks in Dublin and that they are in a continous state of change. Saint Stephens Green had a ridgid formal layout in Gerogean times. Forty years ago local kids from York Street used to play football there. It is only recently that is has taken its parkland type layout. After the initial works, the subway footprint will be no bigger than the Tone instalation.

There is no real benefit in preserving everything exactly as it was 50, 100 or 150 years ago, things have to be adapted so we can live with them. New things can also have a certain beauty or attraction otherwise Frank wouldn't be living in Temple Bar ( wiki again). I love how beautiful old buildings in Italy contain shops and eateries and are incorporated into daily lives, the Irish tendancy to keep monuments aloof and separate is regretable.

Economic advisors and commentators - who should you listen to

2008-04-22T07:45:00.000-07:00

Dan, David, Brian, Shane, Eddie.

Well you have to look at a few criteria before you can bestow celeb status. No one said it would be pretty so they are all in with a chance on that level. Next thing you have to look at is how much they are exposed to market forces themselves, Brian a full time public servant, Shane is a part time public servant, David's and Eddie's RTE money comes from the public purse, Dan is alone here works full time in a real job. They all worked in financial institutions, Dan still does, all the rest have minor or no role in financial institutions. They all like publicity but Eddie, David and Shane need publicity to stay afloat. Dan and Brian don't. They all have at least some basic training in economics.

The crucial thing is who has access to the most up to date data ? Who can make an informed comment ? Hint: 40% of financial transactions are recorded in The Bank of Ireland. If you have access on day to day data on 40% of all business and professional lodgements and loans in Ireland, my bet is that Dan is fully informed. Brian is worth listening to on employment issues. The rest have entertainment value.

How much could your house value fall by ?

2007-09-22T05:51:00.000-07:00

Hard landing, soft landing, 10% fall or 50% fall, you are probably sick of all this economic gobbledygook. There are three parameters that determine house prices, rental value, interest rate and sentiment. To calculate the minimum value of your house, first find out how much you would get for renting it out for a year ( say €2,000 per month or €24,000 p.a.). Now find out how much you could borrow where the yearly interest would equate to the rental value. In this case €24,000 would pay the interest on €480,000 at 5%.

The difference between the calculated value and the market value is determined by sentiment. Sentiment for investors is mainly driven by the expected rise in value over time. Investors were prepared to pay stamp duty and other buying costs on the basis that that this money would be recouped over time, and also that that buying and selling costs are deductible against capital gains tax. Any long term appreciation is only subject to a maximum capital gains tax of 20%.

Sentiment for home owners is mainly driven by status in society, stability in family life not being at the beck and call of the evil landlord. There are other sentimental reasons for paying over the odds for a home.

So what are the rules of falling house prices. Rule one house price reduction is slow and sticky, no one wants to believe that they are losing thousands of euro per week. Rule two the bigger they are the harder they fall, who is going to pay €8,000 per month rent for a €2,000,000 house? More expensive houses lose a bigger proportion of their value.

Who wins ? People moving up the value chain, more specifically those who have sold and are prepared rent for a year as house prices drop.

Who loses ? Those who have bought houses in the past two years. Those who are renting. And last but not least the parasitic auctioneers.

www.shayconway.org

Review of Senate Election - Part 1

2007-09-21T20:06:00.000-07:00

This years general election was my first attempt at getting a Trinity seat in the Seanad. I considered trying in 2002 but decided not to as the three incumbents were fairly active. In the intervening years I got no literature from Mary Henry and I had heard that David Norris had retired from his lecturing job in Trinity and had moved to Cyprus, so it looked like a vacancy was coming up. As it happened Mary decided not to run again, so who was going to replace her another doctor, a scientist who new about climate change and earth science (me), or another woman?

Given that all politics is local I decided to write to all my neighbours ( or more specifically those with Terenure in their address) and asked for support. I was fairly shocked when I one of the recipients ( someone I knew vaguely) started to snub me. I not sure what the complaint was, my discovery of a less than grand address, misconstruing my letter seeking support as a begging letter, or maybe my letter arrived at a bad personal time. Most people greeted the news with delight. One neighbour suffering from the Bolton Street Complex was masquerading as a Trinity graduate and the only time he spent in Trinity was picking up a DU building degree.

After introducing to my neighbours I wrote to a sample of 3,000 electors and introduced myself. I followed these letters up with a call to try and find out what the issues that concerned them were. I only had one negative response ( a relative of a well known Nazi), I now regret not giving her an earful. I had a very enjoyable conversation with Professor Luce who was the Dean of Science when I was a Junior Freshman Natural Science student. He made me aware that my academic prowess was being badmouthed by other contenders and that he was impressed by my approach to the campaign. The Luce family was one of the first victims of drug violence in Dublin, Professor Luce's brother was savagely murdered in his home by an intruder in the late seventies.

http://www.shayconway.org/

The Generation Game

2007-09-20T12:04:00.000-07:00

I missed the programme on Monday night, Dan's unmeasured comment (ridiculous) on Tuesday's Prime Time prompted me look at the programme on the internet today. Definitely not ridiculous, more "why let the facts get in the way of a good story" sort of programme or an abstract of the totality of reality.

A few assumptions about the growing Chinese economy have to to be looked at. The main one is that the growth will continue at the same exponential rate for twenty years, this is not a reasonable assumption it has to taper off. We have to draw parallels with the growth of the Russian economy, communist background and no real understanding of the free market, Felicity was working in the IFSC when the Russian foreign minister singlehandedly destroyed the Russian economy with one well intentioned but naive speech. The communist party is still in control in China, this is not going to change and they can do as they please.

A few positive things about the Irish economy have to be mentioned, overall the number of people at work in Ireland will increase next year. Salary is not the only competitiveness factor, tax regime especially corporation tax is more important. Access to and support of the European Market and the Euro are also important, as well as political stability and accountability.

The notion that products must be made only of bits, widgets and goo is a falacy, computer programs are also products.

So what if the young are giving to the old. In previous eras everyone was handing taxes over to London, up to recently almost everyone in the population handed over money, land and buildings to the church. Least the old are spending the money their money here.

www.shayconway.org