St Patrick's Day Massacre of 2008: Disaster hits financial markets
A violent plunge on stock markets on March 17, 2008 marked the beginning of Ireland's lost decade. It started as investors globally dumped shares in fear that more shocks were on the way following the bailout and emergency sale of US investment bank Bear Stearns.
A blatantly credit-fuelled property boom here meant Ireland was quickly identified as a weak point.
From the start, Anglo Irish Bank was at the centre of events. Its shares were the worst hit among Irish banks in the so-called St Patrick's Day Massacre and stood-out as an underperformer in European terms. Many investors correctly saw the bank's exposure to property as a massive issue.
The news coverage the next day shows that from the beginning, the main players and themes were all on the stage.
It flies in the face of the narrative that has emerged of Ireland sleepwalking its way to a bank bailout six months later, but the Irish Independent of March 18, 2008 (inset) shows that the emerging banking crisis was recognised and commented on. It was the front page story.
Sapped confidence in Anglo Irish Bank was the big news, but shares in listed house builder McInerney Homes and in the other main banks, as well in companies whose share had been buoyed by Irish property assets were all hit.
The Irish stock market closed at its lowest level in three years on March 17, 2008, but the €3.5bn wiped off the value of stocks would prove to be one of the least remarkable of what became a litany of banking and property losses.
Within three years, the value of Irish bank shares declined by almost 100pc. The banking system was largely nationalised. Property values fell as much as 70pc. Construction, in particular of new homes, ground to a complete standstill. Analysts quickly summarised the risk of slowing growth rates and higher unemployment in Ireland, amid fears the downturn that was already under way would be deeper and longer than expected.
In what would become the template for Fianna Fáil's response over the coming three years, the then Finance Minister Brian Cowen's spokesman insisted that what was happening wasn't really an Irish issue.
Cowen was out of the country, like other ministers, for St Patrick's Day events, but his spokesman said: "This is an international development as opposed to a local development."
Blaming global conditions, and eventually the Lehman Brothers' collapse, for Ireland's economic crisis remained common practice as Cowen became Taoiseach later that year and was replaced as Finance Minister by the late Brian Lenihan.
In fact it was both. The so-called credit crunch had first flared up a year earlier. In February 2007, world markets suffered a significant but short-lived sell-off driven by a fear that the global financial system was vulnerable to infection from an explosion in so-called sub-prime mortgage lending in the US.
The fear was correct, but it took more than a year for the true scale of the crisis to become clear. Once it did, US investment bank Bear Sterns faltered and global investors began scanning the globe for other debt-fuelled bubbles that could be next to pop.
Ireland was doubly vulnerable. A credit-crunch slowdown in the US and UK hit the so-called real Irish economy, sapping demand for exports, at the same time as the scale of the property bubble at home was becoming undeniable.
Days before the 'massacre' the Economic and Social Research Institute (ESRI) had revised down its growth forecasts for the economy to 1.6pc in 2008, and said unemployment would rise.
But things were much worse, the Irish economy, and society, was heading into a deep recession, the return of mass emigration, a banking crisis of unprecedented severity, a property crash and a humiliating IMF/EU bailout.