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

Auditor #9 wrote:

tonys wrote:

Auditor #9 wrote:

Yeah - this was a clanger on the scale of Bertie telling The Economists to hang themselves.

For Christs sake can no one get that right.
He said 'Sitting on the sidelines, cribbing and moaning is a lost opportunity. I don't know how people who engage in that don't commit suicide because frankly the only thing that motivates me is being able to actively change something,'

"Commit suicide" ... lovely.

Did you read his body language at all tonys - he was playing to an in-crowd I thought. I could translate that expression above for you you know.

do by all means

I thought Bertie expressed

those Economists

"can go and f- themselves because we'll do what we're going to do because we have power and they have nothing"

"are a cheeky, annoying, irritant and a right pain in our hole"

"are a shower of poncey yuppy over-educated c***s - f'ing wankers"

"might as well be asking me to build a pyramid on top of the Spire, I'll do what I have to do and that's that"

"have their finger on it but here's my middle one to them"

Am I any way close ?

Auditor #9 wrote:

I thought Bertie expressed

those Economists

"can go and f- themselves because we'll do what we're going to do because we have power and they have nothing"

"are a cheeky, annoying, irritant and a right pain in our hole"

"are a shower of poncey yuppy over-educated c***s - f'ing wankers"

"might as well be asking me to build a pyramid on top of the Spire, I'll do what I have to do and that's that"

"have their finger on it but here's my middle one to them"

Am I any way close ?

I wouldn’t have thought so. I think his words can be taken at face value.
” I like to do and I don’t understand or have much time for people who don’t”

Normally it's a bit depressing or disturbing when people are telling you what's wrong all the time instead of offering suggestions or proactively moving their arses and having a shot at fixing it. But what else can economic advisors do ?

One lad on that programme tonight said he thought the boom "would go on for another 10 or even 20 years" and he's not alone. A lot of us non-professional armchair economists and financial experts/wizards etc. thought that there would be a crash but I for one thought we'd have around 20 years before something like this would happen. Doesn't make me a great armchair guru.

But it looks like this crash has come now - yet nobody was listening to the moaners even though it would have been wise to have listened.

Maybe Bertie meant very little by what he said or nothing at all but that's my interpretation anyway.

Cowen could have a point although I don't think so given the overall picture elsewhere (Japan Stocks Fall on Slump in Machine Orders, U.S. Retail Sales , Esprit Plummets in Hong Kong on Worsening of Germany’s Economy). It costs nothing to be a little optimistic as long as he's not talking it up to the moon or mars though ..

Quote :

Mortgages to fall by average of €82 Cowen: house price slump nearing end

HOMEOWNERS are in line for a mortgage boost today after international money markets signalled another big cut in interest rates.

Most analysts last night predicted a European Central Bank cut of 0.5pc, which would bring the key policy rate to 2pc, and reduce monthly repayments on a €300,000 mortgage by €82.

The expected move came after Taoiseach Brian Cowen, in a surprisingly upbeat outlook, predicted the slump in house prices could come to a halt this year.

Another ECB cut would be its fourth in four months and would mean mortgage repayments will have plunged by €400 a month, if banks pass on the reductions.

Economists are now predicting that interest rates will fall to as low as 1pc by the spring.

So houses are going to look more and more attractively priced as they head towards the Morgan Kelly evaluation but is there money around in the economy to buy houses, is there enough economic activity around to support house-buying and mortgage repayments ???

How many houses get traded per week anyone know ?

Quote :

A report by the Irish Auctioneers and Valuers Institute found new house prices in Dublin fell by 15pc in 2008, bringing to 25pc the drop since their peak in 2006. A report by Daft.ie found an average national drop of €58,000 in asking prices.

Friends First chief economist Jim Power flatly rejected the Taoiseach's analysis. "He is not basing this on facts. This is a psychological ploy to get people thinking more positively."

However, Mr Cowen's bright outlook cheered other economists including the author of the Daft.ie property report, Ronan Lyons, who said: "The Taoiseach is right in that things could turn around with low interest rates and all the new stimulus packages. Then there may well be a bottoming out of the market in some areas. It's not groundless...

"We won't replace the Dell jobs but it's not all gloom. We got some things wrong but the message the Taoiseach is trying to make is that we got a lot right too."

Austin Hughes, chief economist of KCB Bank, formerly IIB, said Mr Cowen was trying to puncture the "excessive pessimism" among consumers.

It was a dreadful programme imho. If it were just explaining the impact of the bust on ordinary people then that would have been fine. The stuff about "Joe Soap knows how to fix this" was delusional though. Sure, there are questions over whether the state agencies are genuinely fostering a knowledge economy; sure, the knowledge economy is one aspoect of our medium and long term strategy for recovery.

However, the suggestion from the Joe Soaps that education and science is a way to cure the current crisis is pure codology. There are major macro economic forces at play which have to be addresssed today. Prime Time was just filling us with nonsense that cannot dig us out of the hole we are in. We have people with degrees masters and PhDs who cannot get work. Is the ECL or people going back and doing the leaving going to solve that? I don't think so.

RTE would have done better to televise the presentations at UCD on Monday. In the meantime, they are more effective at attacking currencies than they are at informing us of what needs to be done to get us out of this hole.

Zhou_Enlai wrote:

It was a dreadful programme imho. If it were just explaining the impact of the bust on ordinary people then that would have been fine. The stuff about "Joe Soap knows how to fix this" was delusional though. Sure, there are questions over whether the state agencies are genuinely fostering a knowledge economy; sure, the knowledge economy is one aspoect of our medium and long term strategy for recovery.

However, the suggestion from the Joe Soaps that education and science is a way to cure the current crisis is pure codology. There are major macro economic forces at play which have to be addresssed today. Prime Time was just filling us with nonsense that cannot dig us out of the hole we are in. We have people with degrees masters and PhDs who cannot get work. Is the ECL or people going back and doing the leaving going to solve that? I don't think so.

RTE would have done better to televise the presentations at UCD on Monday. In the meantime, they are more effective at attacking currencies than they are at informing us of what needs to be done to get us out of this hole.

Twas pretty poor. It had a pretty Indie intro inspired by the film Juno (about a precocious, lazy, working class young one who ends up pregnant by a geek and wants to adopt her child to a rich but dysfunctional couple) and after that it was downhill, excluding George Lee's rants to which everyone but Miriam was glued. I thought she was quite rude to him saying "we don't want to hear the George Lee of the news" - which could mean we're tired of hearing it or we need to hear how to fix it.

I'm beginning to trust soubresauts is right - are we just thick through water pollution or something that we aren't able to starkly look at the stark figures and realise where they could go. We've quickly started suffering from GeorgeMcWilliamsEconomics Fatigue Syndrome now. Hopefully this part of the learning curve will pass for us soon and we'll have realised that Ireland actually possesses an economy at all - a system of moving parts where tax earned on one end can affect employment on another end and into the bargain, that the government and the culture of the people can overall affect this system for good and bad. But that's the next part of the curve, I'm jumping onto the mechanics of it too soon.

In the end of the day, Economics is the Dismal Science for a reason. When it's sexy as it is now, watch out because economics is supposed to be dismal.

Cowen's time is surely up. Look what he did in Japan. Dierdre Burke on TV3 was saying it was important the went to Japan to promote the Irish economy - he went, and he nearly sank the euro, and has done serious damage, again to the Irish Economy.

Standard and Poor's are saying we'll lose our triple A rating and government debt costs will soar if our Government does not get its act together.
Saturday January 10 2009

Quote :

LEADING ratings agency Standard & Poor yesterday revised downward its outlook to negative and warned that our triple A rating could be downgraded if there is no pick-up in the economy. While reaffirming the country's existing strong credit ratings yesterday, S&P credit analyst Trevor Cullinan said he had revised the institution's outlook for Ireland from 'stable' to 'negative'.

But the ratings agency said the dire state of the economy could force it to downgrade its rating for the country, especially if the government's €10bn move to recapitalise the banks fails to improve competitiveness and growth prospects. S&P said that Ireland faces "mounting fiscal pressures and deterioration of key economic sectors".
He cautioned that a downgrade of the country's rating is likely if ongoing fiscal measures fail to have substantial positive impact on the ailing economy, and thus result in a more "difficult-to-manage debt burden". "The outlook revision reflects our opinion of the rising economic policy challenges stemming from the contraction of the key housing, construction, and financial sectors, which have spurred many years of strong economic growth and fiscal consolidation," said Mr Cullinan.

He said that Ireland's €440bn bank pledge will increase general Government guaranteed debt to an estimated 228pc of GDP in 2009. "Banking system exposure to the property and construction sector of about one-third of total loans (excluding interbank lending) suggests a high risk of asset deterioration at these institutions," added Mr Cullinan. Any downgrade of Ireland's credit rating would make it more expensive for the Government to raise debt on international markets as it attempts to plug the widening gap between expenditure and income.

The National Treasury Management Agency (NTMA), which manages the national debt, said it plans to resume monthly bond auctions in February when it will offer as many as three bonds at a time to attract investors. The NTMA has not conducted monthly auctions for the past three years but will resume the sales from next month with the aim of raising around $1bn during each auction.

According to NTMA officials, a mixture of bonds will make the auctions more attractive to investors in what is looking like a very competitive market. Almost every western European country plans to tap the markets for debt this year, including the UK, which alone is looking to raise some £146.4bn. Other countries such as Germany and France are already out raising new bond debt. This week the NTMA sold €6bn worth of five-year bonds, but over the course of the year will have to raise a total of more than €18bn to meet the Government's ballooning borrowing requirement. Standard & Poor's Mr Cullinan said that Ireland's negative outlook could return to stable if the Government's current fiscal strategy proves to be successful and allows public finances to return to the stronger position of recent years.

Moody's too -

http://www.irishtimes.com/newspaper/finance/2009/0115/1231738224086.html

ECB rate just dropped to 2%.... every little helps!

cactus flower wrote:

Cowen's time is surely up. Look what he did in Japan. Dierdre Burke on TV3 was saying it was important the went to Japan to promote the Irish economy - he went, and he nearly sank the euro, and has done serious damage, again to the Irish Economy.

Standard and Poor's are saying we'll lose our triple A rating and government debt costs will soar if our Government does not get its act together.

Part of getting our act together is reducing borrowing by getting the public service to accept a pay cut. Cowen's remark was made in this context. He shouldn't be castigated for plain talking.

eoinmn wrote:

cactus flower wrote:

Cowen's time is surely up. Look what he did in Japan. Dierdre Burke on TV3 was saying it was important the went to Japan to promote the Irish economy - he went, and he nearly sank the euro, and has done serious damage, again to the Irish Economy.

Standard and Poor's are saying we'll lose our triple A rating and government debt costs will soar if our Government does not get its act together.

Part of getting our act together is reducing borrowing by getting the public service to accept a pay cut. Cowen's remark was made in this context. He shouldn't be castigated for plain talking.

Poor man. At this stage it realy doesn't matter what he says. He has no more understanding of the forces that are driving this than I have of relativity theory. Even if he does understand, that's no help. The problem isn't that he said the words "IMF", it's that the country is effectively bankrupt, and that's the reason the euro was disturbed by him saying it, or thinking he said it. My point really was that he is powerless: if he tries to fix it, he makes it worse. The damage is already done.

The question is not whether the public sector will take a pay cut, it's will Government have the cash to pay public servants at all in 12 months time. Cowen has known for 12 months at least that the ISEQ was in freefall and so far he has done nothing except a few steps to protect the interests of a tiny, monied golden circle. If he wants to save money and protect the public purse, why was the Regulator allowed to "retire" on full pension ?

http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/7831346.stm

BBC Radio 4's From Our Own Correspondent on the end of the Celtic Tiger. Possibly the worst correspondent report I've heard in a long time... in terms of the reporter's quality.

FT - what if a Eurozone nation defaults

"What if one of the member states of the eurozone were to default on its debt? On the occasion of the euro’s 10th birthday, this has become the most frequently asked question about the single currency zone.

The probability of a default is low but clearly rising. The decision by Standard & Poor’s, the ratings agency, to downgrade Greek sovereign debt and to put Spanish and Irish debt on watch seriously rattled investors last week, for good reason. If the financial crisis has taught us one thing, it is to take perceived tail-risks more seriously."

It is being contemplated. The article deals with the effect fo a small country (who ever that might be...) defaulting first and the more unlikely scenario of a large country defaulting. Fiscal sovereignty seems to be the price of survival no matter what the outcome.

Quote :

Fiscal sovereignty seems to be the price of survival no matter what the outcome

.

Sorry Zhou, I'm not understandin that?

The article linked posits two possibilities:
(a) The ECB and IMF step subject to their conditions as to fiscal behaviour being met, or
(b) The whole of the EU agrees to pool fiscal sovereignty to stop the defaults of some bringing down the whole currency.

The article explains it better.

I'll read it, thanks

Quote :

CREDIT RATING agency Fitch has affirmed Ireland’s “AAA” credit rating and declared its long-term outlook stable in a move that will give some assurance to international institutional investors that Ireland is a safe place to invest.

In a statement, Chris Pryce, director of Fitch’s sovereigns group, said Ireland was in the midst of a deep recession but that the strong initial starting point of public finances meant that net Government debt was just 29 per cent of gross domestic product (GDP), which is substantially below most of its AAA-ranked peers such as the UK.

Wednesday's Irish Times

http://www.irishtimes.com/newspaper/finance/2009/0121/1232474670952.html

Quote :

Despite the reassurances made by Fitch, concerns about Ireland’s ability to raise money are growing.

Irish Credit Default Swaps have ballooned to 283 basis points, up eight points yesterday alone. This means the cost for Ireland to raise money on world debt markets is now higher than the cost for Poland and is almost as high as the cost for Greece, the eurozone country with the lowest sovereign rating.

“Obviously, this puts further pressure on Ireland’s funding requirement,” Bloxham Stockbrokers said in a note to shareholders yesterday.

Doubts about Ireland’s and other eurozone states’ ability to service their growing debts has pushed up the differential between the interest they must offer and that paid by Germany, the strongest economy in the zone.

The “spread” relative to Germany has soared to its highest since 1999.

http://www.irishtimes.com/newspaper/finance/2009/0121/1232474670952.html

The UK is going bankrupt which could knock us over for a few months as they liquidate themselves in a fire sale. What a rollercoaster this is.

I think I need a strong coffee ...

Bit of good news (for Ireland at least) amidst the gloom...? Intel announced closures but Irish facilities seem unaffected.

Link to Article

Got this from the pin

unaligned wrote:

Bit of good news (for Ireland at least) amidst the gloom...? Intel announced closures but Irish facilities seem unaffected.

Link to Article

Got this from the pin

I saw that too and it is good news. The article says that Intel are slashing prices of chips too ... mad stuff but the future had to come at some point.

On other news - Apple's shares surprised analysts and sales defied consumer conservatism around Christmas according to Bloomberg - Apple Profit Tops Analyst Estimates on Holiday Sales (Update3)

Quote :

Jan. 21 (Bloomberg) -- Apple Inc. surpassed analysts’ estimates for profit and sales last quarter, overcoming the worst U.S. holiday shopping season in at least four decades. The shares jumped as much as 12 percent in late trading.

First-quarter net income climbed 1.5 percent to $1.61 billion, or $1.78 a share, Apple said today. Sales rose 5.8 percent to $10.2 billion in the period ended Dec. 27. Analysts surveyed by Bloomberg estimated profit of $1.39 and sales of $9.76 billion.

However, Microsoft Cuts 5,000 Jobs as Recession Curbs Growth (Update1)

Quote :

Jan. 22 (Bloomberg) -- Microsoft Corp. will cut 5,000 jobs, or about 5 percent of its workforce, as the global recession eats into demand for software.

The reductions, Microsoft’s first companywide firings, will take place in nearly all areas, including research, sales and marketing, the company said today in a statement. The measure, announced with the company’s second-quarter earnings, will save $1.5 billion, Microsoft said.

Was thinking of having a thread on computer news specifically - business good and bad, technical, political - whatever comes in the news. What do you say, unaligned, will I cut a new one starting with your post above?

If there is a decent recovery going to come then you'd imagine computers and other electronics could be a big part of it. It's very interesting and important regardless.

ahh some good news for a change...

Microsoft cut 17 jobs in Dublin... which could have been a hell of alot worse.

Actually, on other good news, one of the thingys mentioned re the loss of 450 odd jobs in Superquinn was that Aldi and Lidl had created 650 jobs over the last few months, I guess that's a net gain of 200....