Wednesday 21 February 2018

Bubble trouble

• Nuala Nolan (Letters, October 3) highlights not only the problems of the "property bubble" but also of the "dependency bubble" when the bubble finally burst for Custom House Capital (CHC), after their false accounting activities and gross misuse of clients' money hit to the core of the great and the good of Irish society. However, it is not the first time that the Irish glitterati have been caught in such a "bubble".

Indeed, an Irishman was the originator of the term in the first place. Jonathan Swift coined the phrase 'bubble' in relation to stock (or property) that far exceeded its economic value, when he penned 'The Bubble; a Poem' in December 1720, in response to the notorious South Seas Company scandal in London when many who had invested in shares lost the lot after the 'Bubble' burst.

The South Seas Company was in name a trading company, though its main activity was in fact the funding of government debt (now where have we heard that before?). Its propagation of "the most extravagant rumours" of the value of its trade in the New World led to a wave of "speculating frenzy" that precipitated a spectacular crash. Irish investors were among the big losers (plus ca change!). To paraphrase the end of Swift's poem, in relation to the activities of Ireland's banks, "The nation too, too late will find/ Computing all their cost and trouble/ Directors' promises but wind (of the hot air variety )/ (CHC, Anglo, etc) at best a mighty Bubble.''

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