30/7/2013: It ain't recovery until prices start rising, folks...

You know the myth - the one spun by the realtors and the likes of the various business development bodies around the country - that goes something like: "Irish recovery is showing green shoots, as foreign investors are flocking to the Irish market, kicking tyres and snapping all commercial property they can get their hands on".

As usual, there's a basic logic flaw with much of the internal Irish commercial / business world. Normally, when someone is flocking with suitcases of cash to some destination to buy, demand goes up, and prices rise. In the short run, this logic might fail to hold if there is a supply rise of involuntary sales of properties in the market. In the long run, this demand-price relationship must hold, because both voluntary and involuntary supply of properties adjusts to move along with prices. In other words, even idiot bankers would begin to withhold property from the falling market when there are willing buyers kicking tyres in hope of gaining more on sale.

It has been years, that's right - years - since the reports of the alleged 'tyres-kicking' foreign investors first started to percolate. And yet... oh well... just look at prices:

Yes, per Central Bank chart (above), commercial property is still shrinking in terms of prices. The rate of shrinkage is moderating. But that is not the same as saying that prices are rising. They are falling, falling at a diminished rate, but still falling.

The 'recovery' is much more likely in the housing market, where cash-rich farmers (having made their dosh on pre-bust sales of land and still awash with CAP cash), cash-rich and property-secured senior professionals and retirees (having made their surplus money on pre-bust sales of homes in Donneybrook etc) and cash-rich Googlites and Namanoids (the sub-sects of the South Dublin younger professionals in cushioned jobs) are all chasing prime properties in the upper middle class segment of the market. Aside from that, things are not exactly hunky-dory, like...

Still, the housing market is telling a much better story of a 'recovery' (albeit it is still not a true recovery, yet), than the fabled foreign-investors-teaming commercial property markets... The old Widow Scallan's reincarnation as an ex-Spar 'prime retail' space is out for grabs... There's (allegedly) American investment funds-led bidding war going on across the country... so hurry up...

27/7/2013: WLASze Part 2: Weekend Links on Arts, Sciences and zero economics

This is the second post of my WLASze: Weekend Links on Arts, Sciences and zero economics.

The first post is linked here and is referenced below. Enjoy!


I covered superb Irish Pavilion at the Venice Biennale 2013 in my previous post. Now on to one of the best artists exhibiting this year in Venice: Catalan artist Antoni Tàpies, who, sadly passed away just last year, are in the Palazzo Fortuny. Tàpies's canvases of earth, dust, structurally rich and textured paint, and deep in colour and subdued light convey forms in their own space, free of time, interference of artist's positioning, referencing, blinding internal and external fields of view.

You can explore his work - outside Biennale - here. Tate has some excellent Tapies in collection here.
Here's one from Tate selection:

Don't forget and don't miss: ILLUSION show opened today in Trinity's Science Gallery:

I am just back from there… and kids and MrsG loved the show and the MakersFair in front of the Physics building...

By far the most impressive piece for Luca was:

Yet there are other fantastic works and projects there.


Amazing work of Portuguese artist, Henrique Oliveira in Paris. Dynamic, fluid, yet forceful. Integrated into space yet perfectly disruptive to that space…
Here is the artist website (warning - slow loading). Very good overview across three media - a rare combination for any artist.

Amazingly, http://www.theartnewspaper.ru/ let their domain lapse! Seriously poor judgement by the AN.


Cool stuff on 'superfluids': Behavior of Turbulent Flow of Superfluids Is Opposite That of Ordinary Fluids

Via http://www.sciencedaily.com/releases/2013/07/130725152143.htm example: liquid helium. "When cooled to extremely low temperatures, helium exhibits behavior that is otherwise impossible in ordinary fluids. For instance, the superfluid can squeeze through pores as small as a molecule, and climb up and over the walls of a glass. It can even remain in motion years after a centrifuge containing it has stopped spinning. Now physicists at MIT have come up with a method to mathematically describe the behavior of superfluids -- in particular, the turbulent flows within superfluids."

More scientifically, from the authors' mouth: "Superfluid turbulence is a fascinating phenomenon for which a satisfactory theoretical framework is lacking. Holographic duality provides a systematic approach to studying such quantum turbulence by mapping the dynamics of a strongly interacting quantum liquid into the dynamics of classical gravity. We use this gravitational description to numerically construct turbulent flows in a holographic superfluid in two spatial dimensions. We find that the superfluid kinetic energy spectrum obeys the Kolmogorov Formula scaling law, with energy injected at long wavelengths undergoing a direct cascade to short wavelengths where dissipation by vortex annihilation and vortex drag becomes efficient. This dissipation has a simple gravitational interpretation as energy flux across a black hole event horizon." [Few of you who took my derivatives theory few years back would recall, undoubtedly, Kolmogorov scaling in non-normality space...]

And in uber-geeeky terms via MIT: "Holographic description of a superfluid with vortices. The vertical axis is the radial direction z of AdS4. The planes at z=0 and z=1 are the boundary of AdS4 and the black hole horizon respectively.  The green surface is a surface of constant bulk charge density, with the region between the two slices defining a ``slab'' of condensate where most bulk charges reside.  The slab screens excitations from falling into the horizon. This can be seen from the vector field in the plot which indicates the direction and magnitude of the local energy flux;  note that this flux vanishes quickly below the slab. The vortices, with energy flux circulating around them, punch holes through this screening slab, providing avenues for excitations to fall into the black hole.  The surface z = 0 also shows the condensate on the boundary (with blue color representing zero condensate), superposed with flow lines of the superfluid velocity. The flux tubes show a surface of constant  |\Phi|^2/z^4, which coincides with the boundary condensate at z=0. The z = 1 surface also shows the flux of energy through the horizon.  Note that the energy flux is only significant (red and green) in the wake of the moving vortices."

Yeah, I know… WHAAAAT...WHAS...DAT?! Still, cool...


While on the impossible science set, reading through some links, I stumbled upon the ages-old Godel's Ontological proof of the existence of God. Here's the brilliant exposition. And more links on this fascinating effort:

• Prof. Dr. Elke Brendel gives exhaustive background and compendium of actual proof here
• Good backgrounder here
• And more philosophical outline here.

This is why I absolutely love Godel's work. He was, beyond any doubt, one of the greatest thinkers of the 20th century. Godel's greatest contribution was in the form of two Incompleteness Theorems. Am paraphrasing these here:

• Theorem 1: In any logical system it is possible to construct statements that are simultaneously neither true nor false.
• Theorem 2: By Theorem 1, no consistent system can be used to prove its own consistency. 

Theorem 1 is equivalent to the Liar’s Paradox: "Everything I say is a lie" or "This sentence is false". See: http://www.iep.utm.edu/par-liar/. Theorem 2 is equivalent to saying that "No proof can be proof of itself".  Godel's Theorem 2 is, in my view, a more defined logical version of Karl Popper's idea that any theoretical (mathematical) system based on axiomatic (or hypothesis-anchored) structure is falsifiable, but unprovable. Godel actually pre-dates Popper's thesis. Incidentally, this is why, in my view, axiomatic (theoretical) structures of inquiry are more powerful (have greater degrees of freedom) than 'natural' sciences. And hence, arts are more powerful than physical (experimental) sciences.

Time to stop…


And time to see the awesome power of nature. Courtesy of My Modern Met blogs:
http://www.mymodernmet.com/profiles/blogs/veselin-malinov-porto-portugal-hurricane-storm

The extreme and the extremely beautiful power of nature merged with the power of art. Veselin Malinov's work is fantastic. See it here. His other works are also superb, even if less dynamic. By the way - both, the exceptionally movement-saturated photographs of the storm and 'static' images of architectural spaces reveal Malinov's real strength: intuitive composition.

 Compare this with the banality of architectural photography of Peter Marlow, I covered in the first post (linked above).

Enjoy!

27/7/2013: WLASze Part 1: Weekend Links on Arts, Sciences and zero economics

This is the first part of my regular WLASze: Weekly Links on Arts, Sciences and zero economics posts for this weekend. Enjoy...


Let's start with some music: http://www.youtube.com/watch?v=EEB6bX35aHk
H/T to t.j greene @greentak : Gipsy Kings - Duende

And while on music front, memory brings me back to one of my most favourite composers of all times: Arvo Part's his Fratres was recently heard by myself and MrsG in Dublin's NCH. Different performance, but equally sublime: http://www.youtube.com/watch?v=KddCQz_Ru_w


Of Fratres in us all… and science-linked, too: Nothing - emotively or nostalgically - comes close to seeing the Earth from outer space… and this photograph from July 19, 2013, the wide-angle camera on NASA's Cassini spacecraft, showing Saturn's rings and our planet Earth and its moon in the same frame does the job superbly:
http://www.nasa.gov/mission_pages/cassini/multimedia/pia17171.html#.Ue7tE2SglF_

Art merged with (sort of) science, or may be with just raw (accident-driven) curiosity?
http://www.wired.com/rawfile/2013/07/who-knew-golf-balls-could-be-so-arty/?viewall=true
Images are stunning. My favourite?
http://www.wired.com/rawfile/2013/07/who-knew-golf-balls-could-be-so-arty/#slideid-27451
and

Reminds me of Kenneth Noland and Josef Albers. Kandinsky described circular form as one of the most natural and challenging simultaneously. Geometrically-speaking, circle is also conceptually one of the unique basic 'natural' shapes (Platonism)… go figure it is all inside a golf ball…


"The robots are even more baffled by Bernanke than the humans" - yes, I know - this is 'zero economics' post… but this is very, very good...
http://qz.com/108089/the-robots-are-even-more-baffled-by-bernanke-than-the-humans/
Need I to say that at a higher level - more 'Earth from Saturn' of a vantage point - Bernanke is baffling to humans too. But that has more to do with my Impossible Monetary Dilemma (you can search my blog for that to read my musings, or one of the summaries is here).


Prix Pictet photographer, Simon Norfolk, captures harsh reality of life in Afghanistan

Simon Norfolk, "The Disaster Season", 2013. Photo: Simon Norfolk for Prix Pictet

"After winning the coveted Prix Pictet commission, the British photographer Simon Norfolk travelled to Bamyan Province in Afghanistan's Central Highlands in February to shoot the landscape as it changed through the seasons. There the climate can wreak havoc on the local farming communities—May is known as the “disaster season”, when the sun melts the deep winter snow, sending it crashing down the valleys and often ripping through villages in its path. "Every year the beautiful, pristine blanket of white holds within it the possibilities of destruction and death," Norfolk writes in the Financial Times newspaper. Norfolk's series, also called “The Disaster Season”, depicts scenes photographed from the same vantage point roughly six weeks apart. The body of work is due to go on show at Somerset House in London from 10 to 27 October."

You can see more of his work here: http://www.simonnorfolk.com/burkenorfolk/photos.html

His other work - equally stunning:

Oak trees at Blenheim Palace, copyright Simon Norfolk. Read more: http://www.bjp-online.com/british-journal-of-photography/project/1650104/simon-norfolk-trees-blenheim-palace#ixzz2a5qMQuuV


Science and art: take a fixed spot in the sky. Take a shot every 10 seconds. Form a day-long movie of these shots. One movie per day over 360 days. Combine. Get: http://apod.nasa.gov/apod/ap130724.html Creative, imaginative, structured, replicable, not confirmable. Science and art. I loved this.


And then, take the most sacred in science (speed of light) and freeze it:
http://www.newscientist.com/article/dn23925-light-completely-stopped-for-a-recordbreaking-minute#.UfITIWSglF9
"While light normally travels at just under 300 million metres per second in a vacuum, physicists managed to slow it down to just 17 metres per second in 1999 and then halt it completely two years later, though only for a fraction of a second. Earlier this year, researchers kept it still for 16 seconds using cold atoms."


But just taking fixed-point photographs does not guarantee attainment of value.
"A new exhibition by Magnum photographer Peter Marlow - opening today at London's The Wapping Project Bankside" - July 24th is an exemplification of the above statement.

Frankly, I'd run away from this parade of banality. As an architectural cataloguing project, this might fly. And the architecture is rather impressive, beyond any doubt. But as art this photography is static, boring, compositionally unchallenging and exploratively flat. Textures, tonalities, light remain unexplored, space is drained of its meanings.

Quote: "These days, Anglican cathedrals attract more tourists than churchgoers - though in some respects, both are arguably worshipping something greater than themselves. And while we wait with bated breath for the next 'starchitect' masterwork to be erected, it is worthwhile to remember that these religious shrines have withstood a test of fortitude (think two World Wars) far greater than any modern pinnacle might face - for centuries in fact."  Yes. But none of this has anything to do with Peter Marlow's effort, which, in the end, is itself a quintessentially a replica of the shallow tourist view… sans John Baldessari's capacity for sarcasm:

In contrast - a superb, absolutely superb work at the Irish pavilion at Venice Biennale 2013 offers an excellent viewing:

Panoramic landscapes from the range of geographies - rich, luscious, dynamic, juxtaposing war and peace, calm and tension, colour and depth - by Irish artist Richard Mosse's. Mosse uses infrared film to re-narrate space:

Ireland put one of the top 5 pavilions in Venice Biennale 2013, if not the best. Well done!


Stay tuned for WLASze Part 2 later… Enjoy… and think… and marvel… and question… 

26/7/2013: Forfas Report 2012: A Handy Guide to 'Egg-Face' Collision

Ireland has been described as a 'Knowledge Economy", a science and R&D intensive economy, and island of Scholars (yes, while ago we also allegedly had saints). We have enough science development policy 'platforms' to fill TCD's Long Room. And we do spend some dish on funding science.

One of the organisations, responsible for shaping policy and assessing effectiveness of all of these and other 'platforms' is Forfas - a state body in charge of economic policy supports. You can read all the glorious descriptions of what Forfas does here: http://static.rasset.ie/documents/news/forfas-annual-report-2012.pdf

And this week, RTE reported the following nice stats about this beacon of knowledge and research (full article here: http://www.rte.ie/news/2013/0724/464489-forfas-pension/?goback=%2Egde_2825341_member_260797418)

• "The pension scheme at State enterprise body Forfas has a net deficit of almost €1.2 billion" (to be more precise: €1,187,674,000 - up 22% from €972,389,000 in 2011). Note: "Forfas administers the pensions of a number of agencies including Forfas, Enterprise Ireland, IDA Ireland, Science Foundation Ireland and the predecessors of those agencies."
• "The report also states that 78% of last year's €51.4m Oireachtas grant to Forfas went to pay pensions - with just 22% spent on policy activities, corporate and shared services."
• "The cost of payments to pensioners rose from by over 23% from €35.3m in 2011 to just under €43.5m last year."
• But wait, there's more: "'non-effective expenditure' of €1.4m relating to rents for unoccupied office space.

On top of the figures highlighted in the RTE article, here are the actual breakdowns from the annual report:

• EUR79.052mln was total income received by Forfas from all sources in 2012, down on EUR79.229mln in 2011.
• Pensions spending was EUR61.372mln in 2012 or 77.63% of total income. In 2011 the same was EUR60.424 or 76.27%.

So: EUR43.5m on pensions, EUR1.4m on wasted rent, our of EUR51.4m grant means that Forfas has managed to spend ca EUR44.9m from EUR51.4m on… err… being a well-housed pension administrator. Less than 12.65% of the organisation grant went to fund its activities.

Seriously, folks, this does not give one much confidence in getting 'value for money'…

Updated: A comment from a senior science body head in Ireland: "I was gobsmacked to see this figure. I wonder how much of the country's so-called €500m 'science' budget goes on pensions? This is not to begrudge retired public servants their entitlements, but we should be transparent about what we spend on science & what we spend on other things."

26/7/2013: Eurocoin signals 22nd consecutive month of recession

CEPR and Banca d'Italia leading growth indicator for the euro area, Eurocoin, is out for July, showing that growth in the euro area economy remained under water for 22nd month in a row.

Per charts above,

• Eurocoin indicator stood at -0.09 in July, an improvement in the rate of contraction on -0.18 in June 2013 and on -0.24% in July 2012.
• Both, 3mo MA and 6mo MA of Eurocoin through July 2013 are at -0.14.
• Q2 2013 forecast for growth is now at -0.15 and Q3 2013 forecast (based on July and trend) is slightly more benign -0.1-0.11, though that is a very high risk forecast.  

Looking at the 'Impossible Monetary Policy Dilemma':

ECB rates are at zero bound and are not stirring growth, with HICP being in the 'safely benign' territory. We are looking at a scenario where the only reason not to drop rates to zero is that doing so will not make any serious difference to growth.

25/7/2013: BlackRock Institute latest survey results for global economic outlook: June 2013

The latest summary of the global growth conditions from the BlackRock Investment Institute. Click on the chart to open larger version. I have highlighted Ireland on the chart.

Blue bars reflect consensus on current phase of economic development (for example, in Ireland's case, current phase is seen as being recessionary by roughly 25% of respondents to the survey). Red dot corresponds to 6mo forward expectation (in Ireland's case, 50% of respondents expect recession in Ireland to either continue or to present itself again in 6 months time).

Note: this is the view of surveyed economists and not the view of the BlackRock II. The chart is based on the "trailing 3 survey reports for the other regions we poll. In our first month of this initiative, we collected the views of over 430 economists from more than 200 institutions, spanning over 50 countries"

25/7/2013: Entrepreneurship in Ireland, 2012

Here's a recently published report on entrepreneurship in Ireland (data through 2012):  http://www.enterprise-ireland.com/EI_Corporate/en/Publications/Reports-Published-Strategies/GEM-Report-2012.pdf

Some points of note, quotes direct from the text, italics emphasis is mine:

"Less positive trends…….

• The general perception of opportunities for new businesses by people in Ireland continues at historically low levels and is far below that pertaining across the OECD and EU.
• The aspiration to become an entrepreneur remains low, and is far below that generally observed across the OECD and EU, at a time when the perceived need for entrepreneurs is greater than ever.
• Fewer people are currently planning and starting new businesses in Ireland. This is particularly the case among men.
• In respect of early stage entrepreneurs, Ireland’s position relative to other European countries has significantly declined.
• The prevalence of early stage entrepreneurs in Ireland is at historically low levels and is half of what it is in the United States.
• The level of early stage entrepreneurs that are motivated by necessity continues at a high rate.
• A marked lowering of growth ambition may be observed among men starting new businesses.

More positive trends…..

• Successful entrepreneurs continue to be well considered in Irish society, and success at entrepreneurship is considered to confer considerable status.
• There is a growing general perception of supportive coverage by the media of entrepreneurs and their activities.
• The educational attainment level among early stage entrepreneurs in Ireland is one of the highest internationally.
• More than half of all early stage entrepreneurs are focused on overseas markets and many expect a significant number of customers to be from overseas markets.
• The growth expectations among women entrepreneurs have considerably increased and there is no longer a significant gender gap in this area.
• The prevalence of owner managers of established businesses in Ireland is higher than it is across the OECD and EU.
• The level of growth expectation among early stage entrepreneurs remains at a high level."

Another point of interest: "Early stage entrepreneurship is higher among immigrant groups (7.2%) than it is among the non-immigrant population (5.8%) (Table L). This is the case in the other EU-15 countries, with the exception of the Netherlands. Immigrant early stage entrepreneurs are typically motivated by opportunity (73%), which is also the case for non-immigrant entrepreneurs (70%). More specifically, a higher percentage of first generation (3.0%) and second generation immigrants (2.9%) have recently started a business in Ireland, compared to the non-immigrant population (2.2%)."

Role of the recession: "Almost a third of those consulted identified the recession and continuing high rates of unemployment as fostering entrepreneurial activity. The view is that the high unemployment rate has reduced the fear of failure as a deterrent, as people have little to lose. The high unemployment level is forcing people to consider starting up. This point ties in with the continuing high levels of necessity entrepreneurship identified in the 2012 GEM research"

It is worth noting that involuntary entrepreneurship (due to lack of employment) is usually associated with poorer business outcomes.

On funding side: "Informal investors play a vital role in the development of new businesses. In Ireland in 2012, 3.7% of adults reported having provided funds in the past three years (June 2009 to June 2012) to a new business started by someone else. This rate was broadly similar to that reported in 2011 (3.2%). Informal investment is more pervasive in the US (5.4%), across the OECD (4.6%) and the EU-27 (4.5%). The rate in Ireland is more on a par with the EU-15 average (3.4%). The great majority (81%) of the 36,000 individuals, who provided funds as informal investors in Ireland in 2012, provided them to family, friends or work colleagues. Instances of providing investment to entrepreneurs unknown to the investor were much less common (19%)."

Some summary stats:

25/7/2013: More on Sovereign-Banks Contagion risks in Spain and Italy

Two interesting charts detailing continued rise in risk links between the sovereigns and Italian and Spanish banks:

 Both via Ioan Smith @moved_average.

25/7/2013: Ifo Business Climate Survey for Germany: July 2013

Ifo Business Climate Index for industry and trade in Germany is out for July. The index is up at 106.2 from 105.9 in June, marking the third consecutive month of improvements. Current situation index is at 110.1 in July, up from 109.4 in June and also marking third consecutive month of gains. expectations 6 months out remained relatively static at 102.4 against 102.5 in June. Expectations are struggling to gain solid footing, suggesting that businesses are perceiving current conditions (expansion) as being still at risk.

Per Ifo release: "Conditions in the German economy remain fair. The business climate indicator in manufacturing rose slightly. Satisfaction with the current business situation increased for the third month in succession. Business expectations declined minimally, but remain positive. …After last month’s sharp in-crease, export expectations fell somewhat. Firms nevertheless expect expansionary impulses from export business."

24/7/2013: Few Links to Thought-Provoking Articles in Economics

Few reading links on economics of inequality and income growth trends links to human capital: "Is Inequality Inhibiting Growth?" by Professor Raghuram Rajan

"Starting in the early 1970’s, advanced economies found it increasingly difficult to grow. Countries like the US and the United Kingdom eventually responded by deregulating their economies.

"Greater competition and the adoption of new technologies increased the demand for, and incomes of, highly skilled, talented, and educated workers doing non-routine jobs like consulting. More routine, once well-paying, jobs done by the unskilled or the moderately educated were automated or outsourced. So income inequality emerged, not primarily because of policies favoring the rich, but because the liberalized economy favored those equipped to take advantage of it.

"The short-sighted political response to the anxieties of those falling behind was to ease their access to credit. Faced with little regulatory restraint, banks overdosed on risky loans."

Another interesting link on income inequality data 

War for Talent is covered here: "It’s the Market: The Broad-Based Rise in the Return to Top Talent" Steven N. Kaplan and Joshua Rauh

And a very provocative, and thought-provoking paper "Defending the One Percent" by N. Gregory Mankiw.

On G20 Tax Proposals: "OECD bureacrats in new diversionary plan to harm business and hike taxes" by  Daniel J. Mitchell covers the OECD proposals for dealing with tax anomalies presented to G20. 

I wrote about these here: http://trueeconomics.blogspot.ie/2013/07/2272013-g20-spells-out-squeeze-on-tax.html and http://trueeconomics.blogspot.ie/2013/07/272013-sunday-times-june-23-2013-g8-and.html

and http://trueeconomics.blogspot.ie/2013/02/1822013-oecd-on-corpo-tax-havens-for-g20.html

24/7/2013: CBRE Q2 2013 Irish Commercial Property Report

A very good quarterly report from CBRE on Irish Commercial Property markets in Q2 2013.

Some highlights:

In the above, I added the red line for referencing current yields to other urban locations across the EU. Pretty much suggests current valuations are in line with current macro fundamentals. Also, the chart above shows just how much more dramatic the swing has been from the cycle high to the cycle low in Dublin - wider than anywhere else.

Does this mean the market is now priced about right? Barring any dramatic improvement in the fortunes, I can't see much of an organic upside here. That said, external investment demand and longer-time investment horizons can (and probably will) push prices up. On the downside, there is the pressure of cost of long term funding news acquisitions.

On the shorter end, there are strong signs of market recovery. Per CBRE: "There was a significant improvement in transactional activity in the Irish investment market during the first half of 2013. In total, there were 34 investment transactions of more than €1 million in value completed in the six month period. In total, €603 million was invested in the first half of 2013, compared to a full year spend of €545 million in 35 transactions in the entire year last year."

More on the good news side: " Total returns in the Irish market in Q2 2013 increased by 2.3% while capital values were flat in the period according to the Investment Property Databank (IPD) Irish Index. Indeed, total returns in this index have been positive for seven consecutive quarters now." However, the chart shows continued negative capital returns:

The chart also shows that cumulated total returns over the positive 7 quarters are just about cover total losses cumulated from Q4 2009 -Q1 2010.

The headwinds remaining in the market, in my opinion are:

1. Risk to growth fundamentals in the economy: any further significant compression on current yields will have to be factoring stronger growth than recorded in 2010-2012,
2. Risk to the future long-term interest rates
3. Risk to supply/demand balance: current demand is driven largely by lack of other asset classes with comparable returns, plus surplus cash positions built up by some domestic investors. These are at risk of reversals on foreign demand side and exhaustion of domestic cash reserves. On supply side, there is a risk of NAMA eventually starting to dispose of domestic assets in earnest. 

For now, however, my feeling is that the yields are close to fundamentals-determined equilibrium.

24/7/2013: Q2 2013 CDS report: spotlight on Irish CDS performance

CMA published Q2 2013 report on CDS markets. Here's the top 30 table of riskiest sovereigns (ranked by probability of default over 5 years):

Note Ireland's significant improvement from Q1 2013, moving from 20th most risky (5 year CPD of 15.7% and mid-point CDS  at 188.64) to 27th most risky (5 year CPD down to 14.0% and CDS at 165.22).