expat girl wrote:

Ard-Taoiseach wrote:

arnaudherve wrote:

Would you say good quality houses are going to be available for a low price?

There are many good-quality houses available for low prices in Ireland now. The property supplements are full of well-built houses in good locations with great public transport being reduced. The overall price of houses has fallen by about 20% since May 2006, with a further 15% decline in prospect.

low prices???

Low prices relative to previously.

Quote :

Maybe a lot less than they used to be, but we need, for all sorts of competitiveness and stability reasons, to get house prices back within the 3x income range... and KEEP them there. Since the average industrial wage is in the region of 35K, that means joint average income of 70K, which means yer average 3 bed in average parts of the Dublin near-commuter belt... say... Lucan, Citywest, Blanchardstown, Castleknock, Swords, Shankill, Bray, Greystones, should be about 210,000 euro.

Hmm, 210 grand isn't a bad price for property in the capital's suburbs. It'd mean a good 35% sliced off the average value of property however.

Quote :

We either have a ways to fall, OR, prices could stagnate for ten years while we let inflation have its wily way with the value of the average industrial wage. But given pay freezes and lending shortages........

It'd be better for it to crash now towards the end of the decade so that we enter the next decade on a renewedly firm footing.

Ard-Taoiseach wrote:

It'd be better for it to crash now towards the end of the decade so that we enter the next decade on a renewedly firm footing.

weellll....maybe. Slow declines, on the other hand, tend to play less havoc with banks' balance sheets, and would imply retention of more employment as opposed to "firesale or repo" in the event of defaults.

expat girl wrote:

Ard-Taoiseach wrote:

It'd be better for it to crash now towards the end of the decade so that we enter the next decade on a renewedly firm footing.

weellll....maybe. Slow declines, on the other hand, tend to play less havoc with banks' balance sheets, and would imply retention of more employment as opposed to "firesale or repo" in the event of defaults.

The problem we have is a very indebted system both at personal debt level and the banking system, with a squeeze on income at the same time.
The US has now got stagflation and the ECB has found that the last interest rise has not put a lid on inflation.

There are a couple of optimists on the loose today in the IT - Vincent Browne looks at the ESRI's medium term review and says that things should be OK in a couple of years. I don't share his view of the ESRI - they did well up to the mid 2000s but after that I think lost it in that they underestimated outside factors like end of oil and the US National Debt and underestimated the extent of overheating in Ireland. It seems certain that some people will be insulated from the pain (public service workers included) while about a third of the population will be going through the agonies of the damned. It could become a very divided society.

cactus flower wrote:

The problem we have is a very indebted system both at personal debt level and the banking system, with a squeeze on income at the same time.
The US has now got stagflation and the ECB has found that the last interest rise has not put a lid on inflation.

....It seems certain that some people will be insulated from the pain (public service workers included) while about a third of the population will be going through the agonies of the damned. It could become a very divided society.

I'd say we will see an end to worrying inflation within 6 months, providing the oil price can be kept below $120per barrel. A big if.

I'm not as worried as some about debt here.... unlike the UK where many are using one credit card to pay off the other five, I get the impression that the major problem here is the people who bought houses in the last 5 years and whether or not they can hold their jobs to pay them off. Mortgages in other words. Many of the more extreme mega mortgages are probably in or near the larger cities where one can expect the houses to hold at least some of their value?? Here's hoping that we can keep as many as possible in employment!

You are sadly probably right about the inequality issues, but.....I do think agriculture may be more of a growth industry than we give it credit for. With scarcer oil, we can expect it to soak up more labour, too. Eventually! on the downside though, the airline industry may have to contract A LOT. The public sector is currently taking a 3% payroll cut... they won't be hiring for a long time and the inflation busting pay rises are a thing of the past. On the bright side....hopefully it'll put a halt to the creeping over bureaucratisation

On the upside... our boom wasn't built on building SUVs. Wouldn't wanna be a realtor in Detroit or southern Ontario right now!!!

Irish economy better bloody recover, I've just been down to Blackhall Place to give the Law Society 500 odd euro so I can sit my first few entrance exams.

Is there really a tech sector jobs bonanza going on despite the downturn? Indo Article

I've been receiving emails from agencies who are looking for programmers galore of all shapes and sizes but a lot of the jobs are in the UK... I'm half considering "upskilling" for an auld tech job once again.

johnfás wrote:

Irish economy better bloody recover, I've just been down to Blackhall Place to give the Law Society 500 odd euro so I can sit my first few entrance exams.

The best of luck, johnfàs. It is a long and stony journey you are embarking on and I wish you the very best of luck.

Seconded. No better man for it.

Some economic news for today;

Inflation edges down to 3.6%

ECB holds rates as €urozone slip-slides towards recession

NIB profits hit by economic downturn

The rise in bad debts points to a significant deterioration in conditions, the figure went from €4 million to €25 million. I'd say it'll hit about €100 million next year and probably level off in 2010.

God, everything is crap nowadays. I pine for the sweet, halcyon days of 2006.

Ard-Taoiseach wrote:

God, everything is crap nowadays. I pine for the sweet, halcyon days of 2006.

It will turn, now is the time to plan for 3 years out. What many do in the next 12 months is what will put them in a strong position when the wheel turns. In shares it may be hard to make money in a bear market, but in property you have to buy at a low or you are forever chasing after profit. Same (sort of) applies to investing in equipment and stock purchase. There are going to be very good opportunities in the coming year for those with a bit of cash.

Once it settles down I would rather this than 2006. 2006 was like living on the side of a volcano that was about to blow.

Expat Girl

Quote :

On the upside... our boom wasn't built on building SUVs. Wouldn't wanna be a realtor in Detroit or southern Ontario right now!!!

I went to a workshop called "Wisdom of Recession, call to Greatness in Times of Turbulence" given by a guy called Mario Martinez last night, he's a clinical psychologist.

One of the points he made was about how in the US at the moment there are six month waiting lists for hybrid cars - some of which have gone up 30% in price, because people feel they would save money by selling their SUV for a car that might be cheaper to run in the current climate.

But, he says, that you'd have to do 100,000 miles in two years (I think) to recover the value you'd lose on selling your SUV and buying an inflated-price hybrid.

And apparently, as an indication that the SUV is a status symbol, the Chinese are buying them like crazy. Now the smart man in Detroit is milking that market...

Kate P wrote:

And apparently, as an indication that the SUV is a status symbol, the Chinese are buying them like crazy. Now the smart man in Detroit is milking that market...

General Motors made a $1 billion profit in China last year. It obviously compares to a loss of several billion in USA and overall. But it shows you their profit in China anyway.

EvotingMachine0197 wrote:

Irish economist predicts rate cuts next year.

BreakingNews.ie wrote:

A leading Irish economist is predicting that the European Central Bank
will reduce interest rates by up to three-quarters of one percentage
point during the course of next year.

Bloxham Stockbrokers'
chief economist, Alan McQuaid, says he expects the cuts to take place
as inflation eases across the euro-zone.

Rate cuts are a double edged sword for the banks. Low interest rates undoubtedly drove the banks to lend where no sane lender would go, over the last couple of years, to keep their profits up.

johnfás wrote:

Kate P wrote:

And apparently, as an indication that the SUV is a status symbol, the Chinese are buying them like crazy. Now the smart man in Detroit is milking that market...

General Motors made a $1 billion profit in China last year. It obviously compares to a loss of several billion in USA and overall. But it shows you their profit in China anyway.

GM have made cumulative losses of over $70 billion in the last 3 years. $15.5 billion of that was in Q2 this year. The smart man in Detroit needs to up his game is he is to stay out of Chapter 11.

EvotingMachine0197 wrote:

Irish economist predicts rate cuts next year.

BreakingNews.ie wrote:

A leading Irish economist is predicting that the European Central Bank
will reduce interest rates by up to three-quarters of one percentage
point during the course of next year.

Bloxham Stockbrokers'
chief economist, Alan McQuaid, says he expects the cuts to take place
as inflation eases across the euro-zone.

Don't listen to that absolute fool. He thinks that the ECB has a dual mandate for growth and inflation. The ECB doesn't care two whits about the growth rate, they are mandated to simply control the inflation rate. With this rate more than twice the desired level of close to 2%, then the only rate movements ahead are upwards. I can't see the ECB cutting interest rates at all for more than a year and certainly by less than three-quarters of a percent. Irish economists have a woeful record predicting ECB movements, I'm not convinced this has changed. Ignore this nonsense.

This site seems to be handy enough to watch the economies of the world
http://www.economywatch.com/world_economy/ireland/index.html

Any idea of the quantity of tourism that makes up our economy? 5% or something? The figures are down 20% from last year and that seems to be Americans, or so they're telling me in Clare. A thread on p.ie is discussing how to make up the shortfall in our budget this year and I'm wondering if the tourist numbers being down could account for some of that 4 billion deficit that Kerrynorth is stating we'll have. I was thinking that maybe the tourist numbers will come back up next year and make up some of that shortfall but he says the economy will contract even more next year ..

Kerrynorth is scaring me

kerrynorth wrote:

junketman wrote:

Ok so we are already 7 Billion behind in our tax take on last year, and heading into the fourth quarter, does that mean we will be 10 billion behind by the time of the budget, which would be approximately 20% of the total budget gone up in smoke.

Added to that the expected pay rise demands of public sector workers and we can expect a budget maybe 5% larger than last year.

So there will be a gap of 25% between what we intend to spend and what we receive in tax, probably about 12 billion euro, to make up.

Where are the government going to get 12 billion euro from? Are they going to borrow it?

Anyone else worried about this? Or is it still an abstract concept to most people, ie so much money, people cannot associate with 12 billion.

And it this happens again next year, and possible for the next five years, we will be 60 billion in debt. We took years to control our national debt and now its been run up once more.

First off we are not €7billion behind last years tax take, it is €2.4billion. The tax take will be over €4billion off projections by year end meaning a deficit of circa €9billion compared to the budgeted for €4.9billion. What this means is that the government are going to have a 2009 opening deficit on the existing level of services criteria of circa 4.5% of GDP on the EU's GGB measure. But it is worse than that. The economy looks set to weaken further next year. Housing output will decline from circa 45k this year to circa 25k next year. Commercial property development will grind to a halt and the services sector will crumble. Maufacturing and exports may be the only areas to hold up reasonably well. All this means is that tax revenue looks set to fall another circa €4billion next year assuming no budget changes.

Therefore, in reality, the government is looking at a circa 6-6.5% deficit, more than double the EU limit, before it makes its budget for next year. Assuming a circa €500million Social Welfare increase, the government is looking at a circa €16billion deficit next year - that is about 9% of GDP.

Accordingly, there is going to serious slash and burn taken to the budget. The scraping of the NPRF contribution will save €1.6billion (does not count in GGB measure). I am sure a couple of billion will be knocked off capital spending (despite protestations to the contrary) plus a billion or so in current spending. This brings the deficit down circa €11billion or 5% of GDP on the GGB measure. However, this slash and burn to public spending will also cripple the economy into 2010. Not a nice picture I grant you but this is the picture that is facing the country for the next 2+years to get the public finances on track yet the government seem oblivious and would rather stick their head in the sand of some foreign climes.

I was offered a job in an HP call center in Kildare. Friends told me not to go because it's too temporary compared to the cost of relocalizing.

The ad offered a gym and a subsidized cantine. But people told me I needed fresh air and could not sit alone in a cubicle all day long.

BTW I don't understand how come there are still call centers in Ireland. Call centers are already moving from India to cheaper countries (!).

arnaudherve wrote:

BTW I don't understand how come there are still call centers in Ireland. Call centers are already moving from India to cheaper countries (!).

Some advantageous effect of hearing an oirish accent me bucko . The irish need to hear the scottish accent - it reassures them.

Don't the French need to hear some particular accent?

Auditor #9 wrote:

Don't the French need to hear some particular accent?

Their own.

I was dealing with a company today, they are an "Irish company" based in Malta (I assume for tax reasons) and the two people I was dealing with both were very much English. I'm sure had I not lost the rag and hung up the next person would have been English too, but their Dublin office is in Blanchardstown.

Yes the French distrust call centers as soon as they detect a third world accent.

I suppose it's the same as Indian accent in English.

However, I suspect many IT activities in Ireland can move overnight.

arnaudherve wrote:

Yes the French distrust call centers as soon as they detect a third world accent.

I suppose it's the same as Indian accent in English.

However, I suspect many IT activities in Ireland can move overnight.

See, I think both the french and the British are misguided in their distrust for foreign call centres. As I know form painful experience, ALL call centres regardless of where they are are always bloody useless.

Some economic releases which give a feel for how things are going in the Irish economy;

Industrial production up 6.6%

House Prices down 0.6% in June

Building activity edges up from record low

Interesting Op-Ed piece from the times this morning by Denis O'Brien.

http://www.irishtimes.com/newspaper/opinion/2008/0814/1218477548974.html

Quote :

.................WHEN I READ media coverage on the current state of the Irish economy, I wonder whether most of the younger economists are more interested in building their own profiles than engaging in any constructive analysis. Meanwhile, the Sunday Independent takes cheap shots at the Taoiseach and the Minister for Finance and publishes highly inflammatory "The End Is Nigh" banner headlines each week.

Many of these articles are written by political writers, not economists. There is no constructive or reasoned suggestion from these commentators on how we can trade our way out of where we are.
We are fortunate that we have had very able ministers for finance in succession (Quinn, McCreevy, Cowen and Lenihan) and they are to be commended for not caving in to media pressure, particularly where vested interests are at work. (The issue of State funding for Waterford Wedgwood comes to mind).
Yes there are problems, but talking down every part of the economy every day will not do anything for us. The creation of a panic environment for homeowners, investors (small and large) and the public at large only increases our problems and prompts people into making wrong decisions.
We are in a classic Anglo-Saxon credit bubble and we have become closer to New York in thinking than to Berlin. The French and Germans are not as leveraged compared to the UK, Ireland and the US, hence, they are not suffering to the same extent. There is no big bang idea to solve the downturn in the economy. It is all about holding the head, doing the right things and instilling confidence in consumers and the economy at large.
Personal or corporate investment is as much about confidence as it is about capital. In this downturn we need leadership and there is no better way to show it than by example. If Ireland was a company, the CEO would be gathering all their key managers together to rework the plan to boost revenues and reduce costs.
I believe that Brian Cowen has the ability and the team to inspire this confidence but they must be seen to take charge and be decisive:
• Every Cabinet Minister should be back at his desk on Monday, September 1st;
• All Cabinet Ministers should be involved in selling Ireland, be it in trade, agriculture, tourism and so on;
• There should be a 12-month pay freeze for the Cabinet and senior civil servants to show example;
• Agreement to reduce public expenditure by 5 per cent.
In the part of our economy devoted to property, the question is, are we in denial? Many of the people who have bought homes in the last two years or more are under water on their investment. The value of these homes won't stabilise and start to rise until first-time buyers get the confidence to start to buy houses again.
People who have invested money in property funds (Irish and overseas) can't cash in their units. This will be compounded later in the year when fund managers will have no option but to sell assets to create liquidity, so that they have money available to pay the redemptions......................................

Apart from a few cheap potshots at Beano whom he is currently in a state of corporate warfare with - its an interesting piece

If only my party -FG- Would have the courage to take on board a lot of what he is saying and establish a bit of clear blue water between us and the mish-mashy socialist/populist/squashy centrist road to nowhere that FF,Labour , the Greens and the rest of the dregs are propounding at the moment - but now we are stuck in opposition land - if the gov says its white - then we have to say its black

Pitiful - then again Im not sure Im a true blueshirt - more a PD in exile.