Irish Economy and Budget Watch / / /Emergency Budget Announced for April 7th

This thread needs an update with the welter of economic releases recently...

Retail sales begin to bottom out with a 1.8% fall in value

Exports slip by 3%

Manufacturing prices down 2.6%

and finally...

Irish population to top 6.7 million by 2060

So, as Auditor was talking about earlier, long-term, we're alright Jack!

Was there positive data coming out of America earlier too about house purchases going up in July? Also the dollar giving the price of oil a bumpy ride, whatever that means.

This country can double in population, I know it - we should encourage growth. Let's take it onto the "What should be done about the economy" thread though.

It's simple... oil goes up, economy goes down..... oil goes down, economy shows signs of life again

Goes to show how dependent we are on the stuff

expat girl wrote:

It's simple... oil goes up, economy goes down..... oil goes down, economy shows signs of life again

Goes to show how dependent we are on the stuff

We are however a lot less dependent on it than at the time of the last oil crises, one of which was recounted by tonight's Reeling in the Years.

Ard-Taoiseach wrote:

We are however a lot less dependent on it than at the time of the last oil crises, one of which was recounted by tonight's Reeling in the Years.

Have you ever heard of the Khazoom-Brooks postulate?? It states that for every increase in energy efficiency, more people buy the appliances, thereby leading to a net increase in consumption.

We are more dependent on energy for pretty much everything than we were 50 years ago. The little chink of light is that people are figuring out how to diversify away from fossil fuels for electricity, and there is the exciting algal oil thing going on. However, the CEO of that particular company confidently expects to be producing 10,000 barrels a day in 5 years. Current world consumption is 87 million barrels and rising. Go figure.

expat girl wrote:

Have you ever heard of the Khazoom-Brooks postulate?? It states that for every increase in energy efficiency, more people buy the appliances, thereby leading to a net increase in consumption.

I've heard variations of that argument but I do stand by the reality that we are far more fuel-efficient than in the Seventies. Whether it be boilers, cars, insulation, airliners and so on they are all far and away cleaner and greener than 30 years ago. This oil shock will prompt a further drive towards efficiency and we'll see off the high prices in oil.

This is a natural human phenomenon. We have switched from wood to coal to oil and now we're moving to a new energy age. I'm confident that human ingenuity will provide the next step in that progression.

Ard-Taoiseach wrote:

expat girl wrote:

Have you ever heard of the Khazoom-Brooks postulate?? It states that for every increase in energy efficiency, more people buy the appliances, thereby leading to a net increase in consumption.

I've heard variations of that argument but I do stand by the reality that we are far more fuel-efficient than in the Seventies.

This is a natural human phenomenon. We have switched from wood to coal to oil and now we're moving to a new energy age. I'm confident that human ingenuity will provide the next step in that progression.

Each appliance we have is far more efficient than the 70s, sure..... but we have FAR more of them and there are FAR more of us that can afford them

As for the human ingenuity thing, you'd BETTER be right, because the alternatives don't bear thinking about.... mass starvation and back to the Stone age for the odd survivor.

expat girl wrote:

Ard-Taoiseach wrote:

expat girl wrote:

Have you ever heard of the Khazoom-Brooks postulate?? It states that for every increase in energy efficiency, more people buy the appliances, thereby leading to a net increase in consumption.

I've heard variations of that argument but I do stand by the reality that we are far more fuel-efficient than in the Seventies.

This is a natural human phenomenon. We have switched from wood to coal to oil and now we're moving to a new energy age. I'm confident that human ingenuity will provide the next step in that progression.

Each appliance we have is far more efficient than the 70s, sure..... but we have FAR more of them and there are FAR more of us that can afford them

As for the human ingenuity thing, you'd BETTER be right, because the alternatives don't bear thinking about.... mass starvation and back to the Stone age for the odd survivor.

Energy consumption in Ireland has gone up very substantially in the past 15 years, in a period when other countries managed to decrease theirs. Part of this is because we are one of, or the most, car dependent country in Europe and the other main item would be construction - roads as well as building - CRH on its own emits more carbon gases than Luxembourg (not all in Ireland, but a lot of it is). http://www.independent.ie/business/irish/crh-spews-up-more-co2-than-luxembourg-1462152.html. The stand still of building construction will take the edge off the figures next year.

A switch from roads investment to rail and bus service provision could have a very quick impact. Our Green Minister ER was talking tonight about what a long slow process its was to change. That's hogwash. If they were serious they would slap on their speed limit and review the NDP immediately. They would also bring in an renewable energy quota for the ESB on a rapidly increasing sliding scale.

Aldi and Lidl aim to double presence in towns

I love Lidl and Aldi - bread half price, tay half price, cheap pasta next to staple guns, sandkuchen, strange stuff that turns up for sale now and then including clothes, computers and I missed the forty euro bike rack for the car about a fortnight ago ... and the cheese, desserts, sausages, milk coffee yum yum yum

Quote :

As many as 18 locations are likely to be targeted, including towns such as Mullingar, Drogheda, Navan and Kildare.

Aldi and Lidl now have a combined 7.1pc share of the Republic's €8.5bn grocery market, compared to 6.8pc last year. One industry source said that even if Aldi and Lidl secure sites and planning permission for just 13 new locations each, they could be looking at an additional store spend, including site acquisition, in the region of €50m each.

Lidl stores are usually about 17,000 sq ft on one to two acres of land. Aldi typically operates on a similar basis.

It is believed that some commercial development land is now priced at anywhere between 30pc and 50pc lower than 12 months ago.

Dunnes Stores, which has roughly 120 outlets, is believed to have shelved plans for three new stores around the country in recent weeks. It's understood that outlets due to open at Drogheda, Saggart in County Dublin, and at Newtownmountkennedy in Wicklow will not now immediately go ahead. Within the last year it has opened 16 new stores.

Auditor #9 wrote:

Aldi and Lidl aim to double presence in towns

I love Lidl and Aldi - bread half price, tay half price, cheap pasta next to staple guns, sandkuchen, strange stuff that turns up for sale now and then including clothes, computers and I missed the forty euro bike rack for the car about a fortnight ago ... and the cheese, desserts, sausages, milk coffee yum yum yum

Quote :

As many as 18 locations are likely to be targeted, including towns such as Mullingar, Drogheda, Navan and Kildare.

Aldi and Lidl now have a combined 7.1pc share of the Republic's €8.5bn grocery market, compared to 6.8pc last year. One industry source said that even if Aldi and Lidl secure sites and planning permission for just 13 new locations each, they could be looking at an additional store spend, including site acquisition, in the region of €50m each.

Lidl stores are usually about 17,000 sq ft on one to two acres of land. Aldi typically operates on a similar basis.

It is believed that some commercial development land is now priced at anywhere between 30pc and 50pc lower than 12 months ago.

Dunnes Stores, which has roughly 120 outlets, is believed to have shelved plans for three new stores around the country in recent weeks. It's understood that outlets due to open at Drogheda, Saggart in County Dublin, and at Newtownmountkennedy in Wicklow will not now immediately go ahead. Within the last year it has opened 16 new stores.

Just as a background note, it should be borne in mind that Lidl is not a stand-alone company in Germany. The supermarket element is part of a much bigger concern called Lidl & Schwarz, a huge property development company. As far as I know, the supermarket division was started as a means to reduce the tax liability of the bigger concern. It means that they can easily play the long game with those sort of deep pockets. They are here to stay.

Some recent economic releases...

House prices level out with 0.2% fall

Manufacturing comes off record lows

Pension funds enjoy small rally

Car sales falling again

We're not out of the woods yet!

Ard-Taoiseach wrote:

We're not out of the woods yet!

We seem to be still heading for that elusive midpoint in the woods, at least as far as tax receipts are concerned. They have continued to deteriorate and are shockingly poorer when compared to just a year ago. They suggest a fairly profound about turn in the momentum of the economy to the extent that it almost certainly will contract this year. At the moment I'd say a 1% contraction is what we can anticipate but when we get the second quarter National Accounts, due this month, I may have to revisit and revise this forecast.

News report here

Why are you shocked. Did I not say last January that there would be a 10 billion gap and an emergency budget was warranted. You havn't seen anything yet.

youngdan wrote:

Why are you shocked. Did I not say last January that there would be a 10 billion gap and an emergency budget was warranted. You havn't seen anything yet.

Any more predictions, youngdan stormcrow?

youngdan wrote:

Why are you shocked. Did I not say last January that there would be a 10 billion gap and an emergency budget was warranted. You havn't seen anything yet.

People don't seem to realise that construction is at a standstill. That was 14% of the workforce plus spin off. We will hear about a cut in the dole next.

Here is a prediction. Lieberman and Senator Sadpus-no-jaw made little news when they went to Georgia. Now Cheney is going, to give spine to Suckawillie. Expect him to stir the scour. The crisis is increasing. Nobody is talking about the Armada and a nuke -war is very possible.

youngdan wrote:

Here is a prediction. Lieberman and Senator Sadpus-no-jaw made little news when they went to Georgia. Now Cheney is going, to give spine to Suckawillie. Expect him to stir the scour. The crisis is increasing. Nobody is talking about the Armada and a nuke -war is very possible.

Reuters says Cheney will stir it up alright - Reuters

A nuclear war would have a dramatic effect on our economy alright . We'd have other things to worry us besides dole, exchequer deficits and house prices . I think I might be heading to Rossport myself in such an event. Would anywhere be safe?

Cheney and Co. are mad but are they mad enough to nuke everyone?

Auditor #9 wrote:

youngdan wrote:

Here is a prediction. Lieberman and Senator Sadpus-no-jaw made little news when they went to Georgia. Now Cheney is going, to give spine to Suckawillie. Expect him to stir the scour. The crisis is increasing. Nobody is talking about the Armada and a nuke -war is very possible.

Reuters says Cheney will stir it up alright - Reuters

A nuclear war would have a dramatic effect on our economy alright . We'd have other things to worry us besides dole, exchequer deficits and house prices . I think I might be heading to Rossport myself in such an event. Would anywhere be safe?

Cheney and Co. are mad but are they mad enough to nuke everyone?

I am utterly convinced that Cheney is totally deranged and is capable of anything. It is a compelling agaument in itself to hope that Obama gets in in November simply to remove any last vestige of influence Cheney may have in the Oval Office. With McCain, I fear Cheney will still pull some strings

Have you not watched the debates. Most candidates were in favour of using nukes against Iran. A nuke is nothing but a big bomb. The only question you have is how fast you can get into the Ailwee Cave and how many tins of sardines have you got. Don't come out for 2 weeks and you will be fine except for being lonely. Clare is blessed to have this big hole in the ground for refuge.

Anyway this baby has Shannon Airport written on it.

http://video.google.com/videoplay?docid=6559859261361021232&ei=9iy-SL3TGYvWqQK536SjCQ&q=tsar+bomb&vt=lf&hl=en

Who will be burned 60 miles away so stand behind a tree if you see a Russian plane.

I hope I'll have my €15 admission when it comes around - I might not once I've spent all my cash on sardines, tins of Ambrosia rice, uht milk etc and stocked up on petrol which I will have buried in a less prominent hole than Aillwee.

I'd hope it would take me an hour to get to the cave depending on the number of tourists round the place at the time - I could also take a detour into Lisdoonvarna if it was the right time of year - apparently there's a single oil baroness there at the moment looking for a toy boy.

I wouldn't be stopping at the Cliffts of Moher anyway - it's still €8 to park a car there, nuclear war or not, Clare County Council will not lower those charges ...

I believe that Brian Cowen is launching a tourism scheme in Shannon today too - that could bring a lot of unwanted traffic still more to block us all around Lemenagh Castle outside Corofin... - more shite FF planning - can't even see the potential uses of our natural resources in a nuclear war ..

Auditor #9 wrote:

I hope I'll have my €15 admission when it comes around - I might not once I've spent all my cash on sardines, tins of Ambrosia rice, uht milk etc and stocked up on petrol which I will have buried in a less prominent hole than Aillwee.

I'd hope it would take me an hour to get to the cave depending on the number of tourists round the place at the time - I could also take a detour into Lisdoonvarna if it was the right time of year - apparently there's a single oil baroness there at the moment looking for a toy boy.

I wouldn't be stopping at the Cliffts of Moher anyway - it's still €8 to park a car there, nuclear war or not, Clare County Council will not lower those charges ...

I believe that Brian Cowen is launching a tourism scheme in Shannon today too - that could bring a lot of unwanted traffic still more to block us all around Lemenagh Castle outside Corofin... - more shite FF planning - can't even see the potential uses of our natural resources in a nuclear war ..

I think its time that Cheney was got out of his bunker. Anyone got a digger?

http://www.thenation.com/blogs/notion?pid=170390
http://news.bbc.co.uk/2/hi/americas/2559617.stm
http://www.funnyordie.com/videos/0ab2cc86c3
http://www.washingtonpost.com/wp-dyn/articles/A50745-2004Jun17.html

Ard-Taoiseach wrote:

Ard-Taoiseach wrote:

We're not out of the woods yet!

We seem to be still heading for that elusive midpoint in the woods, at least as far as tax receipts are concerned. They have continued to deteriorate and are shockingly poorer when compared to just a year ago. They suggest a fairly profound about turn in the momentum of the economy to the extent that it almost certainly will contract this year. At the moment I'd say a 1% contraction is what we can anticipate but when we get the second quarter National Accounts, due this month, I may have to revisit and revise this forecast.

News report here

Things have really gone to sh_t since the start of the summer. I think we have passed a tipping point in terms of the Irish economy and everyone will be affected very soon.

The spectre of banks going wallop looms over everything while it looks harder and harder to muddle through. Nevertheless, that is what we will have to try to do.

Zhou_Enlai wrote:

Ard-Taoiseach wrote:

Ard-Taoiseach wrote:

We're not out of the woods yet!

We seem to be still heading for that elusive midpoint in the woods, at least as far as tax receipts are concerned. They have continued to deteriorate and are shockingly poorer when compared to just a year ago. They suggest a fairly profound about turn in the momentum of the economy to the extent that it almost certainly will contract this year. At the moment I'd say a 1% contraction is what we can anticipate but when we get the second quarter National Accounts, due this month, I may have to revisit and revise this forecast.

News report here

Things have really gone to sh_t since the start of the summer. I think we have passed a tipping point in terms of the Irish economy and everyone will be affected very soon.

The spectre of banks going wallop looms over everything while it looks harder and harder to muddle through. Nevertheless, that is what we will have to try to do.

Agreed. Pretty well everything since 2002 has been a house of cards.

Brown is going to try to help the housing market in England by trying a few bits of trickery with money

Quote :

UK: BRITISH PRIME minister Gordon Brown launched the first phase of his promised recovery programme yesterday with a package of measures designed to revive a stagnant housing market and protect those at risk of repossession, writes Frank Millar , London Editor

But Liberal Democrat leader Nick Clegg dismissed the package - including a 12-month UK-wide stamp duty holiday on properties costing £175,000 or less - as "a hotchpotch of measures thrown together to save Gordon Brown's political skin".

The Conservatives, meanwhile, seized on the fact that the treasury will not reveal how the estimated £600 million stamp duty exemption is to be funded until this autumn's pre-budget report.
...

Other measures announced included "free" five-year loans of up to 30 per cent of a property's value for first-time buyers of new homes in England; and the extension of council and housing association powers to pay off debt for homeowners unable to meet mortgage commitments, and then charge rent.

The UK's biggest mortgage lender, the Halifax, welcomed the announcement on stamp duty as "a sensible measure", but the Council of Mortgage Lenders said the move did not go far enough.

Irish Times

The value of some houses has dropped nearly by 50% over the last number of years but as long as people have their jobs they continue to pay for their houses. We could see banks getting a lot more hammered if the interest that customers are supposed to be paying somehow gets waived or suspended for a few years. Of course the sh£t would have to be flying at the fan for a sustained period. This is not unthinkable.

Link to FT Article

As previously posted on the "what needs to be done" thread, the american experience is that people are more likely to default when they have negative equity.

The difference appears to be that in the USA the mortgages are generally non-recourse, i.e. they affect the property only.

It is not clear if default will run with negative equity here but I suspect it might. People who have been trying to sell for some time will probably be the first to default. Perhaps it is happening in Ireland and the UK already and is one of the stimulii for new Government action.