One More Thing: Stockbrokers perk up for some tough love from Pippa Malmgren

They were swooning in the aisles at the Convention Centre Dublin on Tuesday for the speech by Pippa Malmgren, former economic advisor to US president George W Bush, at Davy's annual dinner.

Conservatives are supposed to be bland, but Malmgren is definitely a sassier type. The honey-tongued hedge fund advisor wowed the crowd of assorted financial types with a brilliantly-delivered run through of her thoughts on the world economy. A Washington native, she is now based mainly in London, where she runs Principalis Asset Management.

Malmgren’s message to the Davy crowd was that, while Ireland faced some massive challenges, its entrepreneurial spirit should see the country through. She was less optimistic about some other troubled members of the euro.

Prior to her Davy speech, however, she sat down for a chat with The Irish Times in which she was far more blunt about the dangers that Ireland still faces. Perhaps she felt the sensitive stockbroker types couldn't take any more bad news.

As reported here on Wednesday, Malmgren believes Ireland could face 20 years of practically “no growth” unless the ECB goes uncharacteristically bananas and lets inflation take hold. “[20 years of no growth] for Ireland is what euro policymakers expect,” she said.

Jeez. Gives a different perspective to Michael Noonan’s claim that the end of austerity is in sight, doesn’t it? She also predicted that Ireland would soon be under the thumb of a de facto EU finance minister: “There’s already a single EU foreign minister, so it is a true federation. That implies there will eventually be one finance minister.”

Piling on the misery, she predicted Ireland would have to “fight hard” next year to maintain its corporation tax regime. “It will come back on the table and Europe will want you to raise the rates.” She also fired a shot across the bows of the IFSC, predicting a regulatory backlash against asset managers caused by friction between US and EU authorities that will “drive that business out of Ireland”.

No wonder she maintains such a glossy demeanour when delivering bad news. Had she frowned once, I’d probably have burst into tears.