No longer a Recession - A Depression?

[Reality Bites]

Have we now gone passed the point of a cyclical downturn i.e recession and entered into an official Depression i.e widespread unemployment, continued contraction of economy, decrease in standard of living and huge social consequence associated with same.. An era whose impact will be felt for years to come. I think so.

[OneRedArmy]

We'll know in 6 months.

[pete]

Is there a technical description of a depression? Found this on the interweb which seems a reasonable description... Ireland could very easily lose 10% of GDP in 2 years.

A depression is any economic downturn where real GDP declines by more than 10 percent. A recession is an economic downturn that is less severe.

IMO the key is to keep your job even if taking pay cuts as many large costs like mortgages will be reduced. This old saying seems very true.

A recession is when your neighbour loses his job.
A depression is when you lose your job.

[Fr Damo]

The defenition is fair enough but Ireland only entered recession around March last year by the measure of two consequetive quarter of decline in GDP, Most on the ground will tell you we were in recession a year earlier. I

I see on Sky news last night the are talking about 146000 jobs lost since November 30th. we have lost about 80000 in the same period. They have 60m people we have about 4m. Mass unemployment to my mind is a depression.

[Royal rover]

Good point- i have spoken to many from both a personal and proffessional viewpoint - this will be severe - although i don't think it will reach the heights of 1930's america, in terms depression this is all about how quickly the banks turn things around , i don't know an awful lot about what's happening in ireland only what i read on the indo/times and talking to people, but 4 the UK it will take another 3 years before things start to turn around,

[anto1208]

Good point- i have spoken to many from both a personal and proffessional viewpoint - this will be severe - although i don't think it will reach the heights of 1930's america, in terms depression this is all about how quickly the banks turn things around , i don't know an awful lot about what's happening in ireland only what i read on the indo/times and talking to people, but 4 the UK it will take another 3 years before things start to turn around,

Watched a very good show on the 1930 depression recently that came about from people buying shares, brokers would offer people massive sums of shares if they had 10% of the money themselves. And the share where sold as a cant loose investment. That everyone could make a fortune when in fact it was some very shoddy dealings by the few head guys, heads of brokers and banks that ment only a few made the big bucks and every one else suffered.

Sound familar ??

[bennocelt]

Do people not think that the general Irish population must also shoulder some blame for all this? I do anyway

Watching the three wise men on the Late Late on RTE website, terrible as he is I kind of agree with Harris - nobody forced irish people into paying for these big houses and big cars etc etc etc

Ireland needs a bit of humility now - we were/are way too greedy

I didnt bite the bug, i dont have a mortgage and hence I am happy with the low house prices (which in a normal society should be welcomed!)

Also FF were voted in 3 times!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
And if that plank Bertie was running for the Prez job tomorrow he would get in no probs

Sometimes its hard to be proud of your country!

[Heliodorus]

I, for one, am in a depression. I never bought into the celtic tiger thing. But, my contract is up next month and it was indicated to me that it wont be renewed. My supervisor actually told me this piece of news with a smirk on his face.

[pete]

Do people not think that the general Irish population must also shoulder some blame for all this? I do anyway

Of course people have to take personal responsibility. No one was forced to become an amateur property speculator or take out long term personal loan for holidays or cars.

It would however be cruel not to have sympathy for people buying an ordinary house in the last couple of years with 40 year mortgage only to see it lose 1/4 of its value.

[Royal rover]

yes people have to take personal responsibilty- some more than others, but personal greed has driven this to a new low, from a bricklayer who could earn 2K a week to the estate agent who basically didn't have to run a business for 10 years as houses pretty much sold themselves - i do feel sorry for the ordinary person, however, what's also developed within certain circles is that irish people (certain fractions) believed that some jobs were beneath them be it working in a centra shop anything whch pays minimium wage or just above, and hence caused mass emigration (labour shortage) from eastern europe and other parts of the world. what we will see going forward is Trinity graduates will be applying for all these minimium wage jobs etc, as bad as this sounds it will bring some people back down to earth which isn't bad thing, from the publican to the polish everyone is to blame

[bennocelt]

Of course people have to take personal responsibility. No one was forced to become an amateur property speculator or take out long term personal loan for holidays or cars.

It would however be cruel not to have sympathy for people buying an ordinary house in the last couple of years with 40 year mortgage only to see it lose 1/4 of its value.

no, i dont - again no one forced them to act the fool with their money (edit- or rather the lack of it)

what happened to common sense in their country?

[ruben_sosa]

what happened to common sense in their country?

it depends what you mean by common sense, the definition changes with the Zeitgeist. Two years ago, common sense was to "get on the property ladder", maybe two years from now common sense will be "get back on the property ladder now it has bottomed out". It's easy to be smug in hindsight, but i'd say 99% of people who didn't buy property during the boom did so because they couldn't afford it, not because they foresaw the sequence of events which triggered the current crisis. As a race, it's important we learn these painful lessons though.

[NeilMcD]

I must say I held out because I could not afford it and I think many others should have done likewise. I could have got a mortgage but could I have afforded it and was it good value, I decided against it. I think its different when you have kids because the rights for tenants in this country is a joke and France and Germany are way ahead of us in regards t this. Here a landlord has more rights than the tenant and the government actually made it easier for people to buy 2nd and 3rd homes than it was to buy a 1st home. Madness.

[bennocelt]

it depends what you mean by common sense, the definition changes with the Zeitgeist. Two years ago, common sense was to "get on the property ladder", maybe two years from now common sense will be "get back on the property ladder now it has bottomed out". It's easy to be smug in hindsight, but i'd say 99% of people who didn't buy property during the boom did so because they couldn't afford it, not because they foresaw the sequence of events which triggered the current crisis. As a race, it's important we learn these painful lessons though.

man thats the whole point
smug! sure isnt that why people are in trouble - they couldnt afford it in the first place.
Please explain how it was ever "common sense" to pay silly money like 250,000 or more for properties in places like laois, offaly etc for small 2/3/ bedroom houses, etc!!!!!!!!!!!!!!!
And then we got all those houses in Bulgaria etc.

[stojkovic]

It would however be cruel not to have sympathy for people buying an ordinary house in the last couple of years with 40 year mortgage only to see it lose 1/4 of its value.

Im sure in 40 years time it will have recovered its value !

In fact I'd say 5 years.

Its the greedy muppets who bought 2nd and 3rd homes thinking they were Donald Trump that I have no sympathy for.

I saw the property crash in London in 1989 as a result of Thatchers false economy. I warned people here that the same thing would happen.