According to the Irish Independent, Liam Carroll the property developer has sold his shares in Aer Lingus - that’s more than 30 Million of them.

He is probably not short of a few quid, but nobody knows whether or not he is.

This is a small  example of what could be happening right now to builders and developers in Ireland and the UK.  Let’s say that over the past 15 years you started from being a small player and had amassed a fortune of 100 million Euro.  You now have this amount of cash and you want to increase this to 300 milllion.  So, you go to the bank with your 100 million and ask to borrow another 150 million to buy a big site in a prime location.  12-18 months ago, sites were being sold for an all-time high price, so if you bought a site for, say, 250 million, then you were probably optimistic that you could build the buildings for another 100 million (which you would borrow) and sell off the apartments/shopping mall, etc for 600 million within four years.  You then pay the bank back the 250 million you owe them, along with, say, another 50 million in interest and you come away with a cool 300 million.

However, the prices started to drop and the site is no longer worth 250 million, it is only worth 150 million.  Furthermore, there is not much point in sinking money into building the buildings because there is nobody going to buy them.   Furthermore, it is costing 900,000 per month to service the loan on 150 million Euro.  So far, this has totalled 16,200,000.

You have to sell - you cannot afford tomake the payments.

This means that the developer that you now sell your land for 150 million, having given the bank 16 million in interest and you have to give the bank back the 150 million they loaned to you. This means that your lifetime earnings of 100 million have now turned - not into the 300 million you were hoping for - into a debt of 16 million.

Bang!! You’re gone.