Counting the cost of the Kosovo crisis

In financial markets you have access to an incredible amount of information. In fact, most days you see the same story at least half a dozen times in a variety of different interpretations. There can be as many reasons as you like for the market to go down, and each one has a validity all of its own. It's being able to pick the one that'll help you know when it's likely to go back up again that's important.

Anyway, more research than ever blitzed its way over the screens last week. The most surreal pieces, though, were about the Kosovo crisis. Financial markets continue to struggle to decide what effect the Balkan conflict is having - not good, is the obvious answer, but exactly how bad is the inevitable question. There were lots of stories last week about the consequences and results of sending in ground troops versus aerial bombings. When economists start writing about aerial bombings you know that the market has gone mad. Let's face it, the nearest most of us have (thankfully) got to military strategy is spending an hour at a PlayStation. (Mind you, that's probably the nearest half of NATO have ever got to it too.) According to the first piece I read on Monday, a Kosovo peace breakthrough would likely trigger a bullish overreaction in bunds. I bet that's not the first thing most Kosovan's are thinking about.

Markets have, despite some intra-day setbacks, remained remarkably bullish. Mr Michael Camdessus, of the IMF, said that the Asian financial crisis seems to be over even though it still saw considerable risk ahead. Nobody really wants to give the emerging markets a clean bill of health, but investors have been piling back into Asian, Russian and Latin American debt as though they were clambering for the last lifeboats on the Titanic. Last Friday, Brazil launched a $2 billion (€1.89 billion) issue at 675 basis points over US Treasuries and it was heavily oversubscribed. A few months ago you couldn't give away Brazilian paper with a free toaster.

Meanwhile, the rating agencies have upgraded Malaysia to investment grade with a stable outlook from sub-investment grade with a negative outlook. Last September, Malaysian debt was rated "junk". The Malaysian stock index is currently at a one-year high thanks to expectations that interest rates will continue to decline.

So, less than two years after the fan was hit, the Far Eastern economies are getting their act together again. Does this mean that when the Irish bubble bursts, it'll take a mere 18 months to get back on track? The interesting thing about Ireland is the number of people who anticipate everything going horribly wrong very soon.

Every time you look around someone has put up an exclusive apartment block with hundreds of one-bedroomed apartments, carparking space extra. And booking a table in a popular restaurant still requires a few weeks' notice.

But although there are many people who are heavily geared in the current environment, there are many others who are only too well aware that the whole house of cards could come tumbling down at any minute and are doing their best to remember what their parents told them about rainy days. Of course the property market is still the alpha and the omega of everything. If house prices suddenly plunge, then paddles for the creek up which we find ourselves are going to be heavily in demand.

I didn't make it out to the million-pound plus housing development at the weekend in Foxrock to gaze at the phenomenon of barely detached houses with a hefty price tag. Nor will I bother visiting the Malahide equivalent. Despite my best efforts, million-pound properties are not in my price range. It's incredible to think that they are within the price range of so many people if the speed at which these little babies were snapped up is anything to go by. But it's also a little bit sad to think that for a million quid you're going to be living in a fairly average suburban detached house with a not-very-big garden and the possibility that you might hate the neighbours! You'll still have the traffic jams to contend with too, although you get a better sort of traffic jam coming out of a million-pound estate.

Our friends in Britain look at the Irish market with the weary eyes of people who have seen it all before and who are certain that we'll come to a sticky end. However, with some forecasters over there now muttering about the possibility of a housing boom in Britain again, they are wondering if we've managed to get it right. I still can't see that million-pound suburbs are getting it right but I suppose if people can afford to pay their massive mortgages, we've achieved something!

The media was in a frenzy wondering about the professions of the new homebuyers - but stockbrokers were way behind anybody with anything to do with computers and technology. Perhaps a worthy buyer would be Mr Ralph Hinzman, the elderly stockbroker who was, according to news reports, fined by the US Securities & Exchange Commission for not completing a 17-page survey on whether or not his computers were Y2K compliant.

Ralph doesn't actually have any computers as he runs his business from home and, presumably, has got on nicely without them so far. At 87, he seems to have managed to eke out a nice living without being in hock to Bill Gates, Steve Jobs or anyone else who tells you that you need a Web lifestyle. No chance of the back of Ralph's envelope having a breakdown come the millennium, or giving him a rude error message on January 1st. But the authorities suffered a sense of reality failure and slapped a $5,000 (€4,722) fine on him because his answers were "not sufficient".

Research on military strategy. Million-pound housing developments. $5,000 fines for not having computers. I think I need a bit of a reality check myself.

Sheila O'Flanagan is a fixed-income specialist at NCB Stockbrokers