Irish Economy Thread

[odlum833]

Facebook is examining former BOI headquarters and two other office blocks in the docklands area.

Facebook eyes up former BoI site
By Neil Callanan

Saturday, January 21, 2012

FACEBOOK may take over Bank of Ireland’s former headquarters in Dublin as it looks to double the size of its European base.

It is one option being considered as the social networking giant prepares for a possible $10 billion initial public offering, three people with knowledge of the matter said.

Facebook may move and lease as much as 11,150 sq m of office space in the capital over five years, said the people, who spoke on condition of anonymity because the information is private.

Facebook, which set up its Dublin office in 2008, currently occupies about 5,000 sq m of space in the city’s south docklands neighbourhood, according to one of the people.

The Dublin office is responsible for all of the site’s users outside of the US and Canada.

As well as the former BoI headquarters, Facebook is considering two office blocks in south docklands close to the company’s existing location, the people said.

The deadline for building owners to pitch proposals for the new space was January 13.



Some of the biggest technology companies are expanding in Dublin.

Google Inc, based in Mountain View, California, bought two Dublin buildings that make up its European headquarters in March for an undisclosed price.

Twitter Inc will open an international office in the city, the IDA said in September, marking its third location outside the US.

www.irishexaminer.com

[thebig C]

Despite being a bit incongruous to its surroundings BOI is one of the few decent 60s/70s office developments. It will be nice to see it occupied

[Catmalojin]

Some good news.

First sale of Irish bonds since 2010

DAN O'BRIEN, Economics Editor and SIMON CARSWELL

Thu, Jan 26, 2012

PRIVATE INVESTORS bought Irish Government bonds yesterday for the first time since September 2010. The National Treasury Management Agency sold just over €3.5 billion worth of three-year debt.

The new bonds were offered to investors holding €11.8 billion of outstanding bonds maturing in two years. The fact that about one-third of those investors agreed to the “switch” to longer-dated bonds “demonstrated investor appetite for Irish Government paper and will support our plans for a phased re-entry to long-term debt markets”, the NTMA said.

The rate of interest offered was just under 5.2 per cent, only marginally higher than the bonds it repaid.

It is the first time any of the three euro zone economies in EU-IMF bailouts have succeeded in selling bonds of this maturity. The re-entry to the market follows a six-month trend decline in yields on Irish Government debt. In recent weeks yields have fallen close to the levels of Italy, the weakest euro zone economy not in a bailout.

Yesterday’s bond sale served a dual purpose: to test market demand for Irish Government bonds and to reduce the size of the repayments due in January 2014. The latter was considered important because the single repayment of €11.8 billion in two years was unusually large. It would also have taken place just as the Government is scheduled to exit the bailout. Yesterday’s operation lowers the January 2014 hurdle.

A spokesperson for the European Commission in Brussels said the result of the bond auction was “encouraging as it shows increasing confidence among investors in the strong commitment of the Irish authorities to redress the situation and fully implement the EU-IMF programme. The result is particularly positive as the maturity is well beyond the end of the programme.”

Barry Nangle, head of bonds at stockbroking firm Davy, the only Irish dealer of the Government’s bonds, said the “significant majority of investors switching were the Irish domestic banks”.

© 2012 The Irish Times

[pricemazda]

^ so the news is Irish banks either wholly owned or part owned or reliant on the state for their existence, with money the state gave them to stop them going bust, bought Irish government debt with few international investors buying bonds?

[richiek83]

Enda Kenny interview on bloomberg today.


http://www.bloomberg.com/video/84935746/

[odlum833]

Enda Kenny in Davos said we, the people, "went mad". OK. Only that's somewhat at odds with the address he made recently. "You are not responsible" is what he said then. Maybe this is what he meant to say...

[JD47]

I fear for the youth of this country.

[Catmalojin]

Originally Posted by odlum833

Enda Kenny in Davos said we, the people, "went mad". OK. Only that's somewhat at odds with the address he made recently. "You are not responsible" is what he said then. Maybe this is what he meant to say...

Thing is, he's actually more right now. People (not all of us, mind) went insane with credit, in an environment where individual greed was fuelled by the banks, the press, the developers, the government and the opposition (i.e. his crowd as well). Personal responsibility and cop-on has to step in somewhere - no one forced people to buy second or third homes, or buy a few cars, or go on a few holidays a year. I'd be amazed if people genuinely thought the boom times could continue ad infinitum.

In other news, the economist Ronan Lyons (who has a lot of very good and interesting stuff to say) has outlined further his proposed site valuation tax to replace both commercial rates and stamp duty:

'Site valuation tax could be set up quickly'
Updated: 14:17, Friday, 27 January 2012

An economic workshop in Dublin has been told that the Government could set up a site valuation tax quickly, with an average charge of €625 per household.

Economist Ronan Lyons said the tax would raise about €3 billion a year in revenue. He said that 80% of the information required to set up a tax system, based on an annual charge of 2% of the land value, already exists and could be used to levy a new tax.

In his work he has divided the country into 4,500 districts, five different house types and ten different valuation bands.

Under this system those living in Dublin would pay the most, while those living in rural areas would pay the least, because of the relative values of land in different parts of the country.

However, as the system is based on the size of the site, rural dwellers with big gardens could find themselves paying more than city dwellers living on small sites.

A site valuation tax is based on taxing the square metres of a site, not the value of the property on it. So the key thing is to determine the value of each site.

Using a database of 1.3 million sales and rental adverts posted between 2006 and 2011, Mr Lyons says it is possible to determine the relative value of land in different parts of the country, an in different parts of cities.

"The value of a property is the value of the building and the value of the land it is on. If we know the value of a property type, (eg apartment, bungalow, etc) we can calculate the land value", said Mr Lyons.

The economist also claims that the site valuation tax would be fairer and raise more money than the €100 charge the government is levying on all residential property. It would replace commercial rates and stamp duty.

By taxing property at 2% of the site value annually, the tax could raise €3 billion annually, of which €1 billion would be new revenue.

"Three quarters of Irish peoples wealth is tied up in property, and yet it it untaxed. Those who argue for a wealth tax should support a site tax as it is effectively a tax on wealth", argued Mr Lyons.

He said the system could be amended to make allowances for elderly people with no incomes, or first time buyers who bought property at the height of the boom, and who are under most financial pressure.

Story from RTÉ News:
http://www.rte.ie/news/2012/0127/hou...-business.html

The bit in bold really stood out to me. I wonder how the left-wing parties would react to this?

[thebig C]

Jez, the whole Enda Kenny thing is a storm in a tea cup, and its treatment by the media is just another example of the shrill attitude that applies to everything now!

He said that "Irish people went mad borrowing" which is factually correct! Many people took decisions (without a gun to their head) to borrow more money then they could ever hope to repay. Many people looked on their family home not as a home, but, as an investment. This was naked greed!

That is distinct from saying that "Irish people" caused the problem, because of course the responsibility ultimately lies with the previous Government who didn't do their job in regulating and guiding the country!!

Fair enough, alot of people are now disproportionately suffering but there must be some individual responsibility!

On of the aspects of the storey I found most dissappointing was the attitude of some of the people interviewed in the RTE and TV3 voxpops and also articulated by David Davin-Power on RTE......namely that the Taoiseach is correct but he shouldn't have said it in front of an international audience! Seriously, this is the kind of attitude which kept Magdeline Laundries and child abuse in place because it places a fear of scandal obove actually telling the truth! Sickening that people still think like this.

C

[thebig C]

Originally Posted by Catmalojin

Thing is, he's actually more right now. People (not all of us, mind) went insane with credit, in an environment where individual greed was fuelled by the banks, the press, the developers, the government and the opposition (i.e. his crowd as well). Personal responsibility and cop-on has to step in somewhere - no one forced people to buy second or third homes, or buy a few cars, or go on a few holidays a year. I'd be amazed if people genuinely thought the boom times could continue ad infinitum.

In other news, the economist Ronan Lyons (who has a lot of very good and interesting stuff to say) has outlined further his proposed site valuation tax to replace both commercial rates and stamp duty:



The bit in bold really stood out to me. I wonder how the left-wing parties would react to this?

Catmalojin, that sounds good in theory but in reality it would have to be tweaked an awful lot. Firstly, when you exclude the large numbers of "disadvantaged" people who seem to pay for nothing, the burden would then fall rather heavily on ordinary working people who may be asset rich but who are income poor. Likewise, if there isn't a balance between property size vs property value you will have a wealthy squire with a 6 bedroom pile in the country paying the same as a 30k per year worker with a 2 bedroom apartment in Dublin.

Whilst I actually agree in principle with some sort of tax on property it will have to be formulated very carefully if its not to become an inequitable "City Tax"!!

Strangely, the household charge at its current rate of €100 is actually more fair because everybody can afford it and it recognises that the costs to the state are "generally" the same no matter what your social class. If anything, the benefit of having a flat rate, is that disadvantaged people are gaining more in terms of the extra services they receive, despite paying the same headline figure. However, thats not stopping the usual band of lefties screaming that many people can't afford to pay under €2 per week!!!

C

[Catmalojin]

Originally Posted by thebig C

Catmalojin, that sounds good in theory but in reality it would have to be tweaked an awful lot. Firstly, when you exclude the large numbers of "disadvantaged" people who seem to pay for nothing, the burden would then fall rather heavily on ordinary working people who may be asset rich but who are income poor. Likewise, if there isn't a balance between property size vs property value you will have a wealthy squire with a 6 bedroom pile in the country paying the same as a 30k per year worker with a 2 bedroom apartment in Dublin.

Whilst I actually agree in principle with some sort of tax on property it will have to be formulated very carefully if its not to become an inequitable "City Tax"!!

Good point! It's actually much cheaper for local authorities to provide services to urban-dwellers (such as waste, water, road sweeping and salting/gritting, etc.) than to those in the countryside. On the flipside, those in urban areas usually have better access to things like libraries and swimming pools (and exclusive access to some things, such as street lighting).

I think the site valuation tax is the 'least worst' option, as if it's a tax on the value of the property, that discourages people from extending/improving their homes (and also encourages local authorities and planners to readily rezone and approve planning permissions as it increases their income). Of course, there will have to be some changes made to it - the RTÉ News story suggests 'allowances' for the retired, or those in negative equity, for instance.

One option could be to let the local authorities themselves set their own rates (within certain bands), since they would know best what kind of costs they incur to deliver services to their own areas. I also think there needs to be consideration for those in apartments who have to pay management charges (which can be pretty hefty) already.

Strangely, the household charge at its current rate of €100 is actually more fair because everybody can afford it and it recognises that the costs to the state are "generally" the same no matter what your social class. If anything, the benefit of having a flat rate, is that disadvantaged people are gaining more in terms of the extra services they receive, despite paying the same headline figure. However, thats not stopping the usual band of lefties screaming that many people can't afford to pay under €2 per week!!!

Be careful, saying that 'everyone' can afford €100 a year if they own a house - the loonies might hear you!

[odlum833]

Enda Kenny interviewed about his comments on CNN

http://edition.cnn.com/2012/01/27/bu...ml?hpt=ibu_mid

[JD47]

I heard on the radio that the goverment put a charge on you if your house goes on fire so therfore you have to pay the fire brigade €500 to put out a fire.
Thats an awful thing to deem necessary. The minister wont comment on it.
Anyone know the full story.

[thebig C]

Originally Posted by JD47

I heard on the radio that the goverment put a charge on you if your house goes on fire so therfore you have to pay the fire brigade €500 to put out a fire.
Thats an awful thing to deem necessary. The minister wont comment on it.
Anyone know the full story.

I could be wrong but I think its Dublin City Council imposing this charge and it came in a few years ago. I seem to recall a neighbour car going on fire and somebody called the Fire Brigade who sent him the bill:P

[JD47]

Originally Posted by thebig C

I could be wrong but I think its Dublin City Council imposing this charge and it came in a few years ago. I seem to recall a neighbour car going on fire and somebody called the Fire Brigade who sent him the bill:P

I think that is a discrace.
I sometimes hate this country.

[Catmalojin]

Sky call centre to create 800 Dublin jobs
Updated: 07:11, Tuesday, 31 January 2012

800 jobs have been announced with the establishment by digital TV provider Sky of a customer contact centre in Dublin.

The jobs will be created over the next two years and recruitment begins immediately.

Sky's customer contact centre in Dublin will open in August and, according to the company, help it better serve its customers in Ireland.

The company is looking to fill positions in customer service, training and human resources.

The broadcaster says customer questions are becoming more technical because of ever expanding ways of delivering content including through computers, games consoles and phones.

Therefore it wants to bring more of its customer services in house and, ensuring as it put it, its own people deal with the customer issues.

Currently, enquires in Ireland are routed to contact centres in Livingstone and Dunfermline in Scotland.

The new Dublin site, in a building called the Burlington Plaza, will be Sky's tenth customer service centre, with the others in England and Scotland serving the company's 10.5m customers.

Story from RTÉ News:
http://www.rte.ie/news/2012/0131/sky.html

[Seravia]

Excellent news!

[odlum833]

Cost of borrowing for Ireland continues to tumble

2yr borrowing costs are now little above 5%

http://www.bloomberg.com/quote/GIGB2YR:IND/chart

5yr borrowing costs now 5.9%

http://www.bloomberg.com/quote/GIGB5YR:IND/chart

9yr bond is at 7.2%

http://www.bloomberg.com/quote/GIGB9YR:IND/chart

[JD47]

The sky news is great for Dublin and the country.
Its good to hear good news once in a while.

[odlum833]

Ireland's cost of borrowing at lowest levels now since crisis began. Maybe it is time to get in there and really test sentiment with an auction.

2 yr - 4.9%


http://www.bloomberg.com/quote/GIGB2YR:IND/chart

5 yr - 5.7%

http://www.bloomberg.com/quote/GIGB5YR:IND/chart

9 yr - 7.2%

http://www.bloomberg.com/quote/GIGB9YR:IND/chart