Dame Daxx

Ireland Imposes Some Discipline, Reaches Pay Freeze Deal

Your description of Brian Cowen as the newly "selected" prime minister is very apt.

Unfortunately, Ireland in the past 21 years has degenerated into a One Party State. Elections are irrelevant, and the same faces are in power year in and year out. Inevitably that leads to Sloth and Corruption.

It looks like the Celtic Tiger was a peculiar aberration, and now we're seeing Ireland revert to the mean.

ETF Pick of the Week: New Ireland Fund

Irealnd is going to get worse before it gets better.

The property market is going through an adjustment of Japanese proportions. Folks not only overpaid for houses, but they bought 2, 3, 4 or 10 houses, and rented them out. The only people in Ireland who pay rent are immigrants from Eastern Europe who work in construction. Now they're leaving, either returning to Poland or moving to London to work on the Olympics.

Ireland has very little domestic industry. Its biggest employers are US multi-nationals (Intel, Dell, Pfizer), all of whom are in some degree of distress. It's biggest growth industry in the past 10 years has been providing back office administration for financial services companies (not a great industry now). The Public Sector is massively bloated and has awarded itself huge pay and pension increases.

I could go on. The only Irish stock I own is Elan Pharmaceuticals (ELN). I believe some of Ireland's largest banks will go bust in the next 12 months, when the true scale of their lax lending practices comes to light.