Ireland’s big week got started off with a bang when economist Morgan Kelly penned a very long piece in the Irish Times about how screwed the country was, noting, in particular, the coming mortgage default wave.
Anyway, the Irish Times has published a long rebuttal written by Donal O’Mahoney, a strategist at a brokerage, and it will probably get about 1/100th of the attention, but we figured we’d link to it and let you decide.
THE ARTICLE was equally breathtaking for its thinly veiled attempt to conscript a “powerful political constituency” of 200,000 would-be defaultees to engage in a “Mortgage War”, on the basis that “you too were mauled by the Celtic Tiger after being conned into taking out an unaffordable mortgage”.
It is apparent that the author believes strongly in his own powers of persuasion, those expectations for “mass mortgage defaults” guiding his apocalyptic forecast of additional €42 billion taxpayer losses at Bank of Ireland and AIB. His expectation for AIB losses appears particularly heroic, covering the vast bulk of AIB’s €27 billion mortgage book.
Most breathtaking of all, however, is the hubris displayed in second-guessing the “stress-test” findings of the independent financial regulator regarding Irish bank balance sheets. One can only guess at the superior font of knowledge out of which the author sups, as his €42 billion loan loss forecasts are without substantiation, and therefore appear more designed to scarify the readership than to make a genuine attempt to inform.