The R Word

[dahamsta]

So the ESRI says we're in recession (http://www.esri.ie/UserFiles/publications/20080623114553/QEC2008Sum_ES.pdf), big surprise. Are we in for a long one or is it just a dip? Discuss.

adam

[Macy]

At least we didn't just p*ss the boom times up the wall, and have our world class transport infrastructure, world class health service, world class nationwide broadband to help us attract and develop investment...

I think it could be a long one, given that the last 5 years (at least) has been built on dodgier foundations than some of the crap apartments that were rushed up. We were too relient on one small sector that was fueling itself, and unfortunately are now leader didn't see it coming.

[Block G Raptor]

Well I've just been given notice that my job is at risk

[Angus]

Hard to say - recession is both a technical term (2 quarters of negative growth ?) but is really a state of collective economic mind.

I see difficulties for the rest of year and in 2009 but if managed properly (easy to say but hard to see in reality esp. with industrial relations) we will start to improve in 2010.

I can't see us managing it properly so I am seeing difficulties into 2010 and possibly 2011. Unfortunately we will then be into an election where all sanity is suspended so I am saying this is a 5 year dip.

Not a trough or a slump but a dip. Not a recession of 1980's standard but a drop off in growth, reduced confidence, higher unemployment - not good for anybody in that position but I would be confident that most of the drop off in activity will get us back to even keel i.e. we have been at over capacity for a number of years - no harm having a slower time.

This is of no comfort to somebody who loses their job, natch, but I am still seeing unemployment at very low levels comparitively speaking.

[drummerboy]

Another problem is that our leaders will be so caught up with the European crisis (Lisbon) that they will have little of no time to come up with some solutions to our domestic crisis.

[Reality Bites]

Now we'll see what Cowen is made off! Can't say the so called big brain - Brian Lenihan has impressed particularly with his self pitying remarks last week about taking the finance Ministerial post on the gusp of a recession!

[GavinZac]

At least we didn't just p*ss the boom times up the wall, and have our world class transport infrastructure, world class health service, world class nationwide broadband to help us attract and develop investment...All of which we're supposed to magically develop in a decade when our closest neighbours haven't been able to do so in 60 years.

To quote a song, "Panic Bells, Red Alert, there's something here, from somewhere else". We've imported this 'recession' from the USA. Their current dip is based upon the banks reeling back in their money to protect themselves when they realised they were handing out money willy-nilly. Just as the microcosm here is being blamed on too much credit, the USA needs some time to readjust and drive onward. More importantly, it needs something to pat them on the back and say everything will be ok - confidence has a huge impact on markets and such. I would say something like a new president could be enough to turn the corner, over there.

How about over here? Well, going on that optimistic assumption, we've got a few months to readjust ourselves now. Its probably fair to say that the jobs we got by having cheap, willing labour are probably gone, for the moment. It would take quite a few years of recession to get even factory labour prices down to something competitive with other out-sourcing areas, e.g. Eastern Europe, India. So we've got to find another way to be in a ready position when the good times come calling again. With 0 natural resources and the 'educated workforce' idea pretty much a half-truth at the moment, our best bet would be a cultural cost of living reduction - i.e. stop losing billions by "p*ssing them up the wall" gambling or drinking or buying rubbish in M&S, stop subsidising the insurance cartel, reduce our energy costs. Lower costs encourage business be it foreign or, hopefully, national.

[pete]

Aside from the ESRI reports & such does any one get the impression from their surroundings that we are headng towards recession? Seems to be a bit of the titanic approach from our leaders? I think they said 7% unemployment is on the way

Hard to say how long this will last. Is this mainly caused by drop in construction? Is there evidence affecting other sectors in great numbers?

[anto1208]

The country runs on the construction industry its a very simple solution when the private sector dries up you start spending on the public sector , there is billions of euros worth of work out there if the goverment got off there arse and started building the schools hospitals roads and other infrastructure needed to link all the new housing estates they alloud to be build to the cities.

I cant understand why they havent done this the private developers are sitting on huge projects that they wont move on untill things pick up a quick simple boost from the public sector would get things moving the private sector would come back into it and the country would take off again. That is all that is needed. Its very very simple.


But i was allwasy envious of the guys in the 80's not having to get up and go to work every day imagine just hanging around with your mates all day brilliant !!

[pete]

The country runs on the construction industry its a very simple solution when the private sector dries up you start spending on the public sector , there is billions of euros worth of work out there if the goverment got off there arse and started building the schools hospitals roads and other infrastructure needed to link all the new housing estates they alloud to be build to the cities. !

I am all in favour of spending on infrastructure but where will the money come from to pay for it? There is a going to be a massive drop in tax revenues this year. You don't increase taxes in a recession. EU handouts are drying up & Lisbon 2 vote won't make it easier to get new ones.

I think collective bargaining with the unions will be dead as Cowen won't be able to charm them like Bertie. There will be increase in strikes too.

[OneRedArmy]

We've imported this 'recession' from the USA. Their current dip is based upon the banks reeling back in their money to protect themselves when they realised they were handing out money willy-nilly. Just as the microcosm here is being blamed on too much credit, the USA needs some time to readjust and drive onward. More importantly, it needs something to pat them on the back and say everything will be ok - confidence has a huge impact on markets and such. I would say something like a new president could be enough to turn the corner, over there.Gavin, thats not true. The credit crunch will deepen the recession but it didn't cause it. Our own property bubble caused it.

The impact of the credit crunch only really took effect in Q4 last year (arguable Q1 this year to trickle down to consumers), despite the subprime issue "breaking" last summer.

By that stage our housing boom was already on a down-cycle and prices had been falling for quite a while.

I'll re-iterate what I said in my other post, there is no such thing as a soft landing and never has been. We were going to go into recession anyway, unfortunately the credit crunch is going to deepen it.


I am all in favour of spending on infrastructure but where will the money come from to pay for it? There is a going to be a massive drop in tax revenues this year. You don't increase taxes in a recession. EU handouts are drying up & Lisbon 2 vote won't make it easier to get new ones.

I think collective bargaining with the unions will be dead as Cowen won't be able to charm them like Bertie. There will be increase in strikes too.Temporary breach of public sector borrowing limits.

[pete]

Temporary breach of public sector borrowing limits.

How far would we need to go to pay for current planned infrastructure. Infrastructure is vital but I see nothing that has convinced me the government is getting value for money as opposed to the last 10 years where money was thrown at problems.

I think you are correct about house prices. They were already falling before credit crunch started to increase mortgage rates.

Irish Inflation (http://www.finfacts.ie/irishfinancenews/article_1013514.shtml)

Irish inflation is over 1% above the Euro zone. Bizarre we heading for negative growth & inflation at almost 5%.

[jebus]

Aside from the ESRI reports & such does any one get the impression from their surroundings that we are headng towards recession? Seems to be a bit of the titanic approach from our leaders? I think they said 7% unemployment is on the way

Half of my girlffiends graphic design firm were laid off 6 weeks ago (she was part of it but thankfully had been referred to another design company by her then boss so picked up a job straight away)

Pay freezes across the board and talk of voluntary redundancy has been put around my office so I expect heavy layoffs by the start of next year

[Calcio Jack]

Time for Cowen to stick the boot into Public Servants (what an oxymoron !!) and tell them they're getting a 10% pay cut...and if they won't accept that then Cowen needs to publickly declare that Public Servants are the reason behind a slashing of services...

Secondly top rate tax needs to be moved to 43% asap, cgt pushed up to 24%, price control on food and other basic items needs to be implemented and likes of Tescos sorted out.

We need to borrow to the limit and fund the national plan ( but all contractors need to be told we're chopping 5% to 10% off all agreed contracts or projects will be shut down).

Politicians need to also take a 10% pay cut.... and a 'tallaght' style consenus should be broached by all parties.

The above is what leadership is all about... I've no doubt Cowen will fail to deliver because he isn't officer material and secondly the great Irish public have IMO no sense of community and have grown high on the hog over the last ten years and it will be every man/woman for themselves when the real fun starts which I reckon will be around next September.

[Macy]

We wouldn't have time to worry about recession - what with all the industrial action, court cases and people dying on the streets...

[OneRedArmy]

Well I've just been given notice that my job is at risk
Sorry to hear that BGR. Hopefully you're ok.

What line of work are you in?

[Pauro 76]

Was kind of thinking of returning to work in Dublin next year. I take its not a good time to even consider employment in Dublin or anywhere else in Ireland? I work in the printing trade/graphic design... sorry to hear about the job fears too BGR....

[dahamsta]

Hard to say - recession is both a technical term (2 quarters of negative growth ?) but is really a state of collective economic mind.It is, but so is being nasty to people when you're in a bad mood, and deciding when to go for a poo in an office environment. The hawks were already toeing the "talked ourselves into it" line last night, let's not pander to their weak excuses. The recession has been exacerbated by the credit crunch, property bubble and collective conciousness, certainly, but it was caused by chronic mismanagement by Fianna Fail and the PDs.

adam


* And the Greens to a certain extent, since they've completely lost touch with reality since they went into Government, but we can hardly blame them for the decade of mismangement before them.

[Macy]

Was kind of thinking of returning to work in Dublin next year. I take its not a good time to even consider employment in Dublin or anywhere else in Ireland?
Too early to say what it'll be like next year, or how it'll effect individual, non construction trades I would've thought.

[Pauro 76]

Too early to say what it'll be like next year, or how it'll effect individual, non construction trades I would've thought.

Cheers Macy!

[Reality Bites]

[QUOTE=dahamsta;968326]and collective conciousness, certainly, [I]
adam


I love that phrase the collective conciousness - very esotheric!

[dahamsta]

Collective stupidity is another, less popular, term. There's a lot of it about.

[mypost]

Not a trough or a slump but a dip. Not a recession of 1980's standard but a drop off in growth, reduced confidence, higher unemployment - not good for anybody in that position but I would be confident that most of the drop off in activity will get us back to even keel i.e. we have been at over capacity for a number of years - no harm having a slower time.

This is of no comfort to somebody who loses their job, natch, but I am still seeing unemployment at very low levels comparitively speaking.

The register has just seen it's biggest annual increase since records began, and currently stands at 207k+. We're well and truly in a trough, not a dip, and it's going to get worse, much worse, before it gets better. The government seem unwilling and unable to do anything about it. 600 jobs gone yesterday at Hibernian, coupled with the traditional slack summer period, won't do anything to improve the situation.

Should be merged with the Unemployment thread, imo.

[dahamsta]

LOL

http://www.askaboutmoney.com/showthread.php?p=654546#post654546


Some wag on newstalk said they'd be voting against the recession as they didn't understand it.

[pete]

Does any one else think that Cowan/Lenihan are out of their depth in resource to worsening economic conditions?

Lenihan in particular looks like he doesn't know what to do. He is consistently shaky in his responses to questions. I have seen the opposition have a cut off Ahern & Cowan over the years but rarely troubled them. Saw Richard Bruton verbally "molest" Lenihan on Prime Time last night as he couldn't answer the most basic questions. I suspect he is just doing what the senior civil servants tell him & doesn't really understand.

[Macy]

Does any one else think that Cowan/Lenihan are out of their depth in resource to worsening economic conditions?
Perhaps a bit early to say on Lenihan definitively, but he didn't take him long to not look like a future leader. Even the specifics they outlined, which was sod all, didn't add up. Cowan was out of his depth handling the boom, so nothing to suggest he'll be able to handle a recession when real choices have to be made. Laughably, Cowan was claiming on one news clip I heard that they've moved quickly as they only got the figures last week :rolleyes:

Mind you, Bruton is an economist and always comes across well when talking about the economy. He ran rings around Cowan before the election - it's just people don't listen during booms. Time for Kenny to fall on his sword and pass on to Bruton for the next election if we are in a long term recession. There's elements of their proposal from last week that I didn't agree with, but at least they had real proposal which could kick start the economy not just generalised nonsense about making savings.

[jebus]

Mind you, Bruton is an economist and always comes across well when talking about the economy. He ran rings around Cowan before the election - it's just people don't listen during booms. Time for Kenny to fall on his sword and pass on to Bruton for the next election if we are in a long term recession

That's unfair on Kenny in my opinion. He made great grounds for Fine Gael in last year's election and would have won if he wasn't up against Bertie 'Man of the People' Ahern. Bruton is a far better option to manage this than Cowen or Lenihan but a Kenny/Bruton partnership would work with Kenny as Fine Gael leader and Taoiseach just as much as Bruton/? would work. The real sad part of all this is that the Irish public once again proved last year that they are unable to look past the next 3 months in their lives. Once again can we have a round of applause for all those who voted Fianna Fail back into power

[Macy]

Wouldn't necessarily totally disagree, just think Bruton has a wider appeal outside FG voters. Kenny will live or die on the local election results - it'll be tough for him to repeat the last time as FG did so well.

Totally agree with the last two sentences though.

[Newryrep]

Wouldn't necessarily totally disagree, just think Bruton has a wider appeal outside FG voters. Kenny will live or die on the local election results - it'll be tough for him to repeat the last time as FG did so well.

Totally agree with the last two sentences though.

Bruton at least puts himself forward frequently for debate on the news programmes but lost a lot of credibility with me for his blantant refusal to answer the question ala Paxman/Howard on the Last Word regarding the increase in TD's/ministers pay whether he would refuse it.

Edna Kenny has as much charisma/personality as a wet fish - make that a dead wet fish. Pat Kenny has a better chance of running the country.

[jebus]

Edna Kenny has as much charisma/personality as a wet fish - make that a dead wet fish. Pat Kenny has a better chance of running the country.

Name me one charismatic politician Fianna Fail have now Bertie has stepped down? I'm not disagreeing with you on Kenny's charisma by the way (on his personality I think that he comes across as a decent sort, I'd trust him more than the criminals in Fianna Fail for instance, who always look like the kid in the shop robbing sweets when the owner has their back turned)

[Newryrep]

Name me one charismatic politician Fianna Fail have now Bertie has stepped down? I'm not disagreeing with you on Kenny's charisma by the way (on his personality I think that he comes across as a decent sort, I'd trust him more than the criminals in Fianna Fail for instance, who always look like the kid in the shop robbing sweets when the owner has their back turned)

Wille O Dea is a character ( but not leadership material at all )who I think got the highest personal vote in the last General election.

Fianna Fail would be robbing sweets as the shop owner stared at them - they havent any shame.

However they cottoned on like Thatcher did that all you have to do is keep a certain percentage of the population happy say 30% and the rest can whistle in the wind as they dont matter.

Arent they the most successfull political party in Western Europe ?

[jebus]

Wille O Dea is a character ( but not leadership material at all )who I think got the highest personal vote in the last General election.


Thats more to do with his on the ground work in Limerick throughout the years than anything to do with Fianna Fail. He's always come across as a politican that actually cares about people at local level and would get high percentage wins if he were independent, Fianna Fail or Fine Gael (maybe not if he were PD though :D). As you say though he isn't leadership material as he is error prone, and wouldn't be able to get his personality across in a national election. Could only imagine what the biased media would make of another Limerickman going for Taoiseach as well

[mypost]

and would get high percentage wins if he were independent, (maybe not if he were PD though :D).

Never stopped Des O'Malley somehow.

[jebus]

Never stopped Des O'Malley somehow.

Yes but that was in the days before Harney and Captain Death (McDowell) sat with the current adminstration. Now the PDs may as well **** off back to the hole they crawled from, they're finished in Irish politics as a party and are kept around to be Fianna Fail's shield to public criticism. The Green Party will be in the same shape once the Failures are done with them

[pete]

Wille O Dea is a character ( but not leadership material at all )who I think got the highest personal vote in the last General election.

Massive difference between getting elected as TD & running as Taoiseach. The antics that appeal to 10-20k people in one area of the country won't work for the country.

For a while I thought charisma would not matter if the opposition produced a credible alternative but I think Kenny has gone as far as he can. Bruton would keep FG an edge in the Dublin & urban vote. Bruton seemed to well as the attack dog last night & if he could combine with viable solutions to improve the economy will pick up votes. Lenihan is a sitting duck now. The opposition also just need to keep asking Cowan how he can accept credit for boom but not the bust.

I think the fact that only thing the government can think to do is try to reduce the deficit is an admission they have no ideas.

[mypost]

Right, what do you want first, the good news or the bad news??

Good news first: :)

http://news.smh.com.au/business/oil-prices-settled-sharply-lower-20080717-3gj5.html

So what's Bord Gais response??

Bad news (http://www.rte.ie/news/2008/0725/gas.html)

Any joy from Aer Lingus??

No:o (http://www.rte.ie/news/2008/0725/aerlingus.html)

[mypost]

http://www.rte.ie/news/2008/0820/employment.html

[pete]

http://www.rte.ie/news/2008/0820/employment.html



Employment in the construction sector fell by 26,800, or 9.5%, compared with a year earlier. This contrasts with a growth rate of more than 6% at the same time last year.

Not as bad as I would have thought. Up 6% in 2007 & down 9.5% in 2008 Probably means it is back to the level of 2005 or 2006.

[mypost]

No consolation.

In 2005 and 2006, pay deals were in place, there was significant growth in the economy, and there wasn't 20k people signing on per month.

[Macy]

According to O'Dea on Morning Ireland the Government are taking things seriously, and have been for ages. Well since July anyway. :rolleyes:

[pete]

Officially in technical recession (http://www.rte.ie/business/2008/0925/economy.html)



Official figures show that the economy contracted by 0.8% in the second quarter of this year compared with a year earlier, which means that the economy is technically in a recession.

The Central Statistics Office said that the GDP measure of output fell by 1% in the first six months compared with a year earlier. GNP, which excludes profits from multinational companies, fell at an annual rate of 2.1% in the second quarter.

[Reality Bites]

George Lee Wet himself last night on the news when he said - was worst was yet to come, I thought it was slighty inappropriate bearing in mind the Job losses in Cork in the preceding headlines.

[OneRedArmy]

The worst IS yet to come. We shouldn't hide from it.

After all, we'll only learn from our mistakes if we acknowledge them.

By the same token, George Lee and McWilliams haven't covered themselves in glory recently.

But they're still nowhere near Joe Duffy in the Complete Moron stakes...

[Macy]

I suppose McWilliams in particular took a hell of a lot of stick for stating the obvious about the housing bubble.

Imo it's only in recent weeks we're getting into the global issues linked job losses, regardless of what the Government parties would have you believe...

[pete]

Budget deficit at 7 billion now.

Will be interesting to see how the self styled creators of the Celtic Tiger explain how they are going to fix it.

The Dail is largely irrelevant due to the way it is organised but IMO it is pathetic the Taoiseach basically refused to discuss the economy until the announcement of the budget in 3 weeks time. The opposition may not be in government but they are elected to debate with the government & highlight inadequacies.

[Macy]

Cowen is cutting and running to China straight after the budget as well. So he can't be questioned for the 3 weeks before the budget and a week after. :rolleyes:

The Dail is irrelevant because the Government parties treat it with disdain. Look at all the announcements over the summer when the Dail is in recess, or how many policies and bills are launched at Press Conferences rather than in the chamber.

The moniker ZanuFF looks more apt the more you think about it...

[pete]

The Dail is irrelevant because the Government parties treat it with disdain.

It is probably worse now than ever before but I wouldn't be convinced the opposition would change it if they were in power.

I don't know if they achieve anything but at least in the House of Common they have what appears to be open leaders question time with full house.

The Taoiseach & Ministers should at the very least put their positions on the record in the national Parliament. I was unaware we had a Presidential format of government.

[geysir]

The worst IS yet to come. We shouldn't hide from it.
After all, we'll only learn from our mistakes if we acknowledge them.

But a question is how to act in this knowledge?
It looks to me that bailout for the US economy is going to create another problem.
Printing another $700 billion based on very little wealth will just inflate the dollar and not restore confidence.
Maybe exports will have some boost.
Prices will go up and consumers will have less to spend - less is sold - companies will have to act to counteract a loss in sales -closures - layoffs -reduced salaries - hiring cheaper labour. A downward spiral.
Even if you shut down all the speculative markets and tied the dollar to bullion it would only be a temporary stability.
I do not see a fix for this as long as you have a system with a finite aggregate wealth but an individuals right to hoard vast portions of this is largely unrestrained.

[OneRedArmy]

I do not see a fix for this as long as you have a system with a finite aggregate wealth but an individuals right to hoard vast portions of this is largely unrestrained.Capitalism is inherently cyclical, but even once in a while we think we have it sorted.

[pete]

RTE: Political Severance Payments (http://www.rte.ie/news/2008/0929/politics.html)



The Department of Finance has confirmed that Bertie Ahern is set to receive approximately €68,000 in severance payments following his resignation as Taoiseach earlier this year.

Under 1992 legislation, ministers who lose their jobs are entitled to severance pay.

The Department of Finance has confirmed it is to award the severance payments to John Browne from Wexford and Cork East deputy Michael Ahern.

They will each get €53,000 over the next two years.

The news follows reports that €3m was paid out in severance payments to former Oireachtas members who failed to get re-elected at the last general election.

Even when there are no jobs for the boys they still get paid. :(