FRANK MCDONALD AND KATHY SHERIDAN keep writing about Irish property developers who have saved €260m in stamp duty through a loophole in tax laws. Another tax break allows investors in developments to write off all but the site costs of an apartment or townhouse against their total rental income for the first year, including rents from other properties owned, with any unused tax relief being carried forward indefinitely. This is happening all around us and it's overheating the Irish economy. Underneath the surface, there are some really rough spots that no amount of financial smoke and mirrors will tile over. Take the contracts for difference (CFDs) that Brian Cowen is allowing to run unbridled on the Irish Stock Exchange. Brokers use CFDs to bet on oscillations in share prices. They can take fees they would normally earn only on real purchases. Traders in the Irish Financial Services Centre are pumping up their bank balances with CFDs and it's not productivity, just gambling on the stock market.
We're actually too small to play in this kind of market but from the outside looking in, there's nothing underneath these creative financial dealings. We're just tiling over problems that are going to surface later on.