Whenever Irish Government and media talk about the fabled hordes of investors wondering around Ireland looking for anything to put their money into, all this talk makes me wonder: why are the actual numbers coming out of capital formation side of the National Accounts showing only weak, leafless 'improvements'? Even with reclassifications of R&D costs as 'investment', and with the FDI (some of which does count as 'domestic') and retained profits (some of which, if reinvested, also count as 'domestic').
Well, I bet the IMF should be wondering too. Because in its latest Euro Area analytical paper, the Fund shows that Irish Gross Fixed Capital Formation in Q1 2014 was the second lowest (relative to 2007 levels) after that of another 'recovering' miracle: Greece.
Run by me again that point where, in theory, higher risks are priced via higher cost of capital?
Or that point where equity valuations should be reflective of debt exposures?