Monday, January 24, 2011


House Prices in Ireland have dropped on Average 50-60% depending on location.
Asking Prices are still too high it seems and the average Return On Investment
or Rent Yield is around 3-4% and was 6% at the top of the Boom. House prices
dramatically increased from 1996-2001 when house prices went from 86k to 186k.
Prices escalated from there to over 440k for the same house, topping in 2007. While
the Irish are optimistic that there is only 2 more years to endure until they see a
bottom, past crashes such as Japan tell a different story. See Chart. If we follow the
same trajectory as Japan then its going to be 20 years before the bottom is reached.
Same is true for America. Markets and Crashes are not very forgiving, thats why
they call it a Crash, its not that easy to get off the hook and once Markets have you
under water they are not letting go.

I just listened to Bob Precter of Elliot Wave Fame on TV the Worlds greatest
timer of Markets and he figures also that the Major Markets as measured by
the Dow and S & P 500 is over and we are facing an unprecedented decline that
will shake us all to the core. He also figures its over for the Commodity Boom
Re Metals Gold and Silver. He also figures that the Reflationists have it all
wrong and we have gone through that period re Quantative Easing and the next
trend is deflation. Hang onto your hats. The Dow and S & P 500 are the only
indexes which have not turned down as of last weeks action.

It would take a Braveheart to Buy AIB But all the Bad News is out.
          Sliding in or Dollar Cost Averaging the Trade would be a winning strategy.
   How Does that work?. Keep buying as it goes lower then calculate the
average cost per share.

Allied Irish Banks was Nationalised after a run on Deposits and much
injection of Capital to keep it afloat. AIB and Bank Of Ireland overlent
to Property Developers and Speculators alike. The Irish Government
formed a bad Bank called NAMA in which they moved all the bad or
toxic Loans from the Balance Sheets of the  Banks into NAMA and
forced the Irish Taxpayers to pay back that money around $150 Billion
Euros. On top of that the Irish Government further introduced
Austerity measures to further squeeze the Irish pocketbooks to pay for
the mismanagement of the Banks. The Irish Prime Minister Brian Cowen
resigned as Party Leader from the Fianna Fail party and there are 2 no
confidence votes being proffered next week in the Irish Parliament, the Dail.
The Green Party and Fianna Fail were in a Coalition Government until
yesterday when the Green Party withdrew from the Government and walked out.
The Government can now be 100% easily defeated by a tabling of a no confidence
vote. Opposition Parties Fine Gael, Labour, are also sayiing they will not support
the Finance Bill put forward in support of the IMF/EU bailouts and when the
Opposition gets into power they will withdraw from any such agreement and
attempt to renegotiate the terms. The following are running for the Fianna Fail
Brian Lenihan
Michael Martin
Mary Hanafin       
Eamon O'Cuiv   Grandson of Eamon De Valera, the hero of the 1916 uprising
and the leader of Michael Collins on which the Movie was based.

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