“There was obviously an insularity to the Irish mentality during their bubble. I feel something of that insularity here in Vancouver.”

Froogle Scott at VREAA 10 Feb 2011 1:44am“I’m halfway through the Vanity Fair article (“When Irish Eyes Are Crying,” by Michael Lewis [hat-tip to Nick for alerting us all to it -ed.]). Every couple of paragraphs I’ve been struck by the parallels to our situation here in Vancouver. Ireland is interesting, because in some respects it might be a better parallel for Vancouver than the United States. The US is such a vast economy, that even down on one knee, it’s still a heavyweight. Ireland is the provincial society that suddenly blew up grand — with a bad result. Something about that dynamic feels closer to home than what’s occurred across the entire US real estate market. Although BC is part of a much larger country, our geographic isolation, our relatively small population, our history of being outside the centers of power, does have an “Irish” aspect to it. And perhaps that isolation can lead to becoming ungrounded, or disconnected in certain ways. There was obviously an insularity to the Irish mentality during their bubble. I feel something of that insularity here in Vancouver.”

Thanks for the thoughts, Froogle, very interesting associations. We don’t have the overbuilding that the Irish had, but the fact that we are ‘insulated’, as you describe, may make us vulnerable to some of the same engines that popped their bubble. It is possible that, with a simple turn of sentiment & loss of imagination, we rapidly find ourselves less a cosmopolitan capital and more a medium sized provincial city with almost no discernible means of economic support. Another way in which we are ‘insulated’ is one which is, of course, common to all bubbles: statements like “All real estate is local” and “It’s different here” are used unconsciously by bubble-players to ‘insulate’ themselves from glaring external realities. When the history of our boom and bust is written (by you, perhaps?), we are sure that one of the most remarkable features will be how long prices chugged on up to more and more preposterous levels despite the glaring examples of bubble implosion all around. US, Spain, Ireland, etc, etc. All a testimony to the ability of the human mind, in particular the ‘group mind’, to ignore that which is inconvenient to face. -vreaa

While we’re partly on the subject of Ireland, ‘Charlie Mackay’ is a blogger who has archived quotes from their bubble. Take a look; Spot the similarities.
Here’s a nice one, from Sean Dunne, Property Developer, in 2006, just before their bubble imploded: “Every economist associated with every stockbroker in Ireland mistakenly forecast the end of the housing and property boom in Ireland”. They had been “vociferous and repetitive”, in the process encouraging outside commentators, including the Economist, the IMF and the OECD, to issue warnings about Irish house prices being overvalued. Well, “The hyenas have stopped laughing . . . each and every one of them was wrong. Instead, the price and supply of housing units has continued to break records.”
[For examples of quotes from Vancouver Sean-Dunne-equivalents (and a few ‘hyena’ naysayers), recorded here, in real time, while our bubble is actually still a bubble, see the ‘What Bubble?’ sidebar.]

5 responses to ““There was obviously an insularity to the Irish mentality during their bubble. I feel something of that insularity here in Vancouver.”

  1. Thanks for the linking to the Irish website. It’s pretty amazing to see the similarities. What I find most interesting (and I think it’s what VREAA is about) is the human narrative that’s behind bubbles. Our psychology as individuals and groups so drives this market. Seeing the similarities of sentiment in the Irish quotes as we’ve seen locally brings this into focus again.

  2. restaurant employee

    praise be to nm

    the power of narrative strikes deep

    perception, as our betters amongst the landed gentry must well know by now, is of course, reality.

    until the S hits the F, of course.. then there is a brief window of confusion where the wild men in the wings can whisper seditious nothings in the ears of the masses, only to be ignored once more when the global news hour starts over dinner.. and look, they brought that nice man from Fox to read the headlines!

    • …”the power of narrative strikes deep[.]”…

      Never were truer words spoken, RE. Stories are ‘equipment for living’.

      And even UncleSam understands this – Nay, he breaks into a cold sweat at the thought of ‘uncontrolled narratives’!… which is probably why….

      LtColonel CaseBeer (and no, Nem didn’t make that up – if he had, it would have been LtColonel Case’OBeer) is waiting for you…

      Special Notice DARPA-SN-11-25 Narrative Networks (N2): The Neurobiology of Narratives
      WORKSHOP DATE: April 25-26, 2011
      REGISTRATION DEADLINE: April 15, 2011, 4:00 PM ET
      TECHNICAL POC: LtCol William Casebeer, DARPA/DSO

      CaseSensitiveUserID: DARPA

      CaseSensitivePassWord: NarrativeNetworks

      http://tinyurl.com/3boyzwp

      AllHail!, “[the] brief window of confusion where the wild men in the wings can whisper seditious nothings in the ears of the masses”…

  3. Lets look at it another way. During the 20th century, there was a huge shift in wealth from the old financial center ( London ) to a new financial center ( New York), as the US took its rightful place as the global economic superpower. Now a new shift is happening. The wealth is flowing toward Asia. If we look at this geographically, then we see where Vancouver sits in this global picture. Vancouver has been a recipient of this shift and will continue to be. This is not a short term phenomenon. This is the rise of Asia as the place for future growth , and the new economic superpower(s) (YES at the expense of Europe and North America). Vancouver is/ will be an Asian city. Vancouver will benefit from being an Asian city.

  4. Pingback: Reader Makes ‘Simple Supply and Demand’ Argument For Ongoing Vancouver RE Market Strength – “This is not a short term phenomenon. This is the rise of Asia as the new economic superpower. Vancouver is/will be an Asian city, and will

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