The house of cards comes tumbling down
It’s probably a safe bet that very few property developers and bankers are regular OTR readers. They have other things to do this weather and I reckon they’re all Celine Dion fans to boot. Yet it’s probably a good assumption …
It’s probably a safe bet that very few property developers and bankers are regular OTR readers. They have other things to do this weather and I reckon they’re all Celine Dion fans to boot. Yet it’s probably a good assumption that the misadventures and mishaps of these lads in the building and banking sectors is going to impact on the lives of every single Irish reader of OTR in the years to come because we’re about to bail them out of the trouble their greed got themselves into.
Some of you, like me, have probably spent the last few weeks following this sorry saga and trying to make sense of it all. From the sight of one-time masters of the universe running to the courts to seek protection from their creditors (funny how these anti-regulation champs always end up using regulations to try to save their own skin) to the increasingly unbelievable stuff flying around about how NAMA will operate, it makes for a lurid, quite far-fetched economic bonkbuster. You really couldn’t make up what you’re hearing as this tale of banks’n'builders’n'bandits continues to unfold in courtrooms and on abandoned building sites.
But this is not some fantasy Truman Show (the Zoe Show?) where we’re just watching on and eating popcorn. As this one goes down, it’s the Irish taxpayer who will be footing the bill. Yes, the same taxpayer who gets a nasty letter for going a month or two behind with his or her mortgage payments is going to pick up the tab down the line for banks who appear quite happy to let developers walk away from their huge multi-million-euro loans.
I have little time for conspiracy theorists but they might something to poke in the current situation. Look at the amount of economic hand-wringing which occured over the last few days as Liam Carroll’s (no relation) Zoe empire came tumbling down. Many who’ve lived in his apartments in his past may have wondered about how secure those bricks and mortars were in the first place, but they probably never expected this to happen.
But as Carroll’s legal eagles scurried from the High Court to the Supreme Court trying desperately to prevent one determined bank from getting what it was owed, the other creditors sat back and worried what this would mean for NAMA coming in saving their skins. Liquidating some of Zoe’s property will, say the so-called economic experts who got us into this mess in the first place, lead to a fire-sale and a much lower current market valuation for the property under the hammer. This, in turn, will mean NAMA will get to pay less for toxic loans when the day comes for them to kick the wheels, spit on hands and do the deals.
And this, say the bankers and economists, is A Bad Thing.
A bad thing that the Irish tax-payer will end up paying less for damanged goods? A bad thing, say the gallery.
A bad thing when a judge finds the rescue plan put forward by an “independent” bean-counter to be “fanciful” and “lacking in reality” and refuses to go along with the charade? A bad thing, nod the gallery
A bad thing when this whole nasty scam created and maintained for the last decade by builders and bankers is finally seen to be the illusion it always was? A bad thing, sigh the gallery.
While we don’t know what will happen next with Zoe – there is speculation that the other banks will do a whip-round to find the cash to pay off ACC and stop this liquidation in its tracks – we sure as hell ain’t seen nothing yet. There will surely be more of these escapades because this is one saga which is going to run and run and every week will bring another tale of woe as outlandish as the last.
But we can be sure of another thing too. This weak, cowardly, unimaginative government – Fianna Fail, Greens and a few aul’ independents tacked on for good measure like a safety pin on a pair of suit trousers – we’ve lumbered ourselves with are going to do absolutely nothing to help us out of this one. We’re just the constituency who’re going to end up footing the bill. That’s something which is much clearer than the bottom line on any Irish bank’s balance sheet.