Irish Economy Turns Another Corner - The Endgame is Now!

[C. Flower]

Just think about Teu and his tightening spreads.....

So - where are we now ?

[C. Flower]

Bumping this, as it seems relevant to our situation, but probably should merge it with one of the other threads - any suggestions ?

[Theresa]

http://www.neweconomics.org/sites/ne...ansition_0.pdf

This may help someone

[Theresa]

http://www.youtube.com/watch?v=Sqwd_...layer_embedded

this is funny and blows exponential growth out it.

We need to start earning what we actually need to live, within our limitations, those of the planet and our future generations.

[morticia]

You miss the point which is not surprising . . .Many Irish perfer to be lazy and be Dolers than do what they consider work that is beneath them. A substantial cut in social welfare in the budget is to be welcomed in order to motivate the layabouts

This attitude can only be justified where there is a shortage of all sorts of workers. An unemployment rate of 14 % odd can in no way give everyone who wants a job employment, no matter how hard they try.

Would you prefer food riots in Dublin?? That's where "let them eat cake" attitudes get you.

[C. Flower]

Brian Lucey by twitter last night said Bond spreads had widened again in after hours trading.

A very bad week has been predicted for what is left of the ISEQ.It seems to me that last week was another turning point for the Irish economy and its not looking good.

The signs are
1. effective closure of all banks in Ireland except BoI and Anglo Irish - crisis for firms who depended on loans from closing banks. BoI and Allied Irish in zombie/bloodsucker state.
2. Irish sovereign borrowing costs and CDS costs at record level
3. consensus that there is a US double dip
4. growing awareness that NAMA will not "work"
5. collapse of the hotel sector and shift of the cost onto taxpayer
6. increasing unemployment in last CSO figures - thousands more banking and construction jobs certain to go.
7. Admission by Honohan that Anglo Irish must be wound up
8. End of the international markets belief that Irish Gov. knows what it's doing following Honohan warning on the banks.
9. Failure to solve fiscal crisis by ending waste at the same time as damaging the economy through ill-judged cuts.
10. Numerous signs that people simply can't afford to pay higher utility charges, taxes and levies.
11. Increasing numbers of distressed mortgages.
12. Price increases in essentials, including food and heat.

All this looks like a downward spiral heftily contributed to by Fianna Fail policy and actions since 2000. As at the beginning of the crisis in 2008, our Government is absent on leave. There are very many pieces of evidence that the Irish establishment's economic activities mainly consist of salvaging enough for their personal security and pulling up the drawbridge behind them.

It's quite clear also that the Union leadership and mainstream parties are on the same side of the drawbridge as Fianna Fail.

What to do ?

http://www.independent.ie/business/i...w-2307233.html

Seven months to the day since I wrote this, and the can is now pretty well at the end of the road. What has changed?

1. We have a new government (I wish I could say not tainted with graft or corruption),

2. operating now under the thumb of the IMF/EU,

3. we have no prosecution of bankers ("another file has been sent to the DPP"),

4. unemployment is very much higher, nearly 15% and will rise again as a result of Government cuts,

5. foreclosures on houses and businesses are continuing and there is a mass of unrepayable personal debt, both unsecured (car loans, credit cards etc.) and secured mortage debt.

6. Peoples' living standards have been squeezed by pay cuts and services are starting to disappear and this is costing lives. At the same time, up until now, a majority of the population has been able to continue in employment, and up to now are living their lives pretty much as usual day to day. (This is undoubtedly one reason why dissent has been limited to the ballot box and a tame and subdued ICTU march).

7. The wind down of the banks, increased requirements for deposit buffers and the flight of deposit capital from the Irish banks means that there is a rapid drying up of credit for businesses and many more who rely on business overdrafts will fail as a result. Start ups will become much more difficult without bank loans or working overdrafts. Any short term stress on a business will very likely lead to its failure.

8. Fianna Fail's sole strategy (apart from emigration) was that the world economy would expand and that Foreign Direct Investment firms in Ireland would employ more people. But lo and behold, the IMF/EU trap they have led us into means that we having to pay for these jobs with a punitive interest rate charge from the EU, and there are in any event other legal moves that will put our FDI tax take under pressure.

9. Ireland was a global weak spot in the financial system.The Bank Stress Tests are likely to again be less than complete but nevertheless are expected this month to reveal a horrendous vista of tens of billions of bad debt hitherto concealed.

10. Irish bond prices in response to all this have reached staggering record highs of over 10%. Even with the EU/IMF loan agreement, we are facing insolvency, but as usual, no-one knows exactly when.

11. Reliance on cheap fuel, passed over to western companies by corrupt regimes, while their own populations are on the bread line, is very unlikely to be a future option, whether we want it or not.

Greece, after 6 months of the IMF/EU treatment, has experienced a sharp contraction of its economy and a rise in unemployment. Mass demonstrations and strikes are continuing there. The Portuguese people demonstrated en masse yesterday against austerity and the banks fiasco and today the Government failed to carry the vote on its economic plan. The North African and Middle Eastern uprising has spread as far as Kurdistan. Whether they wanted to or not, western governments have been sucked into what threatens to become another resource war in Libya. Reliance on a shift to nuclear power also poses a problem. Much of the post war expansion of the global population and economy has been reliant on "cheap" fuel.

So all in all, the great FF/FG/Thatcherite/Reaganite experiment has turned out extremely badly.

Time for a major rethink.

Good thing it's a very nice Spring day

[morticia]

Good post.... I'm afraid I'd have to agree with all of that. Oh, for some good news.

[Sidewinder]

7. The wind down of the banks, increased requirements for deposit buffers and the flight of deposit capital from the Irish banks means that there is a rapid drying up of credit for businesses and many more who rely on business overdrafts will fail as a result. Start ups will become much more difficult without bank loans or working overdrafts. Any short term stress on a business will very likely lead to its failure.

To be blunt I'm not convinced this "lack of credit" is a bad thing, long term.

I work in IT and I'm a grizzled old dog who worked in IT all the way through the Dot Bomb. And the stuff that went on has expanded out and now goes on now in every industry - unsustainable, unprofitable and/or badly-run enterprises being kept afloat on an ocean of debt.

Let's get real here and emerge blinking from the darkness of the 19th century. Many if not most of the companies that exist are pointless. The vast majority of jobs that exist are pointless. Majority unemployment is the way things will be in the future and this poses huge challenges to the way we think about a lot of things. Eventually these things will have to be faced up to.

Living standards are being impacted beyond the unemployment issue though because the vampiric parasite global financial system is busy hiking prices of essentials to gouge ordinary people and also draining huge sums from every Govt by extracting fresh State debt and fresh taxes from us all. This parasite has gone rogue and no longer cares about maintaining the health of the host.

This parasite needs to be taken out the back and shot before it does any more damage.

But not a single elected politician on the planet is willing to discuss these matters. Isn't that interesting?

[C. Flower]

To be blunt I'm not convinced this "lack of credit" is a bad thing, long term.

I work in IT and I'm a grizzled old dog who worked in IT all the way through the Dot Bomb. And the stuff that went on has expanded out and now goes on now in every industry - unsustainable, unprofitable and/or badly-run enterprises being kept afloat on an ocean of debt.

Let's get real here and emerge blinking from the darkness of the 19th century. Many if not most of the companies that exist are pointless. The vast majority of jobs that exist are pointless. Majority unemployment is the way things will be in the future and this poses huge challenges to the way we think about a lot of things. Eventually these things will have to be faced up to.

Living standards are being impacted beyond the unemployment issue though because the vampiric parasite global financial system is busy hiking prices of essentials to gouge ordinary people and also draining huge sums from every Govt by extracting fresh State debt and fresh taxes from us all. This parasite has gone rogue and no longer cares about maintaining the health of the host.

This parasite needs to be taken out the back and shot before it does any more damage.

But not a single elected politician on the planet is willing to discuss these matters. Isn't that interesting?

Include private corporations in with the global financial system and I agree with you. They are completely financially intertwined in any case.

The logic of capitalism is that its cheaper to keep a lot of people in poverty on the dole, which depresses wages, than to cut working hours.

Also, not everyone can always be a white collar worker. There was a bubble of graduate production in the boom, with much of the education being not so great anyway. There isn't work for half of the graduates being produced - this is one of the drivers of the revolution in North Africa and the Middle East too. People should be able to lead balanced lives and do some physical / skilled work as well as "brain work". Our life expectancy is now so much longer that there is plenty of time for both.

It's a lesser issue, but I take your point that there are businesses that aren't viable and kid themselves with credit, but in business generally things don't move evenly. Some firms for example have big up front purchase costs (not always predictable) and their income comes back in more steadily. A certain amount of working credit is necessary to oil the wheels. What will happen without it is that only a few big companies will survive and prices again will go up.

[Sidewinder]

See? Nobody gets it.

There isn't enough work to be done full stop. There's only enough work that actually needs done, if done efficiently and effectively, to keep about 20% of the "workforce" busy. We've spent the last 3 or 4 decades in the West trying to disguise this reality with millions of pointless non-jobs and pointless non-industries. And now that strategy has run out of road, as it was always going to do.

At some point we have to face up to this. We've built a society where people's entire internal self-image and sense of self-worth is intimately bound up with their job. But most people in the future aren't going to have a job. This has profound implications for just about everything but everybody just wants to run away from even mentioning the notion.

Everyone is still too busy fighting the battles of the century before the previous century...

[C. Flower]

See? Nobody gets it.

There isn't enough work to be done full stop. There's only enough work that actually needs done, if done efficiently and effectively, to keep about 20% of the "workforce" busy. We've spent the last 3 or 4 decades in the West trying to disguise this reality with millions of pointless non-jobs and pointless non-industries. And now that strategy has run out of road, as it was always going to do.

At some point we have to face up to this. We've built a society where people's entire internal self-image and sense of self-worth is intimately bound up with their job. But most people in the future aren't going to have a job. This has profound implications for just about everything but everybody just wants to run away from even mentioning the notion.

Everyone is still too busy fighting the battles of the century before the previous century...

In hunter gatherer society people "work" for about 20% of the time, so perhaps this is a natural human norm trying to reassert itself. I would be very happy to be able to live well working 20% of the day/year, with 80% free time for weaving coconut mats and surfing. Thanks.

The problem isn't peoples' attitudes, it's an entrenched economic system that was very productive in its day, but that now puts a break on all kinds of necessary social change, and that really only benefits a small parastic class of wealth-owners.

The wealth owners don't have a bit of bother living without working - they have financial advisers, and many thousands of other workers, doing it for them.

[Ah Well]

The Irish economy contracted by 1% last year, official figures have revealed today.

The Central Statistics Office said it is the third year in a row that business has suffered a decline but 2010 was not as bad as previous years.

Read more: http://www.breakingnews.ie/ireland/e...#ixzz1HW9nPI5E

And there we go .. so much for the plans based on projected growth of 2.5% etc etc ....

Back to the drawboard folks ....

[C. Flower]

The Irish economy contracted by 1% last year, official figures have revealed today.

The Central Statistics Office said it is the third year in a row that business has suffered a decline but 2010 was not as bad as previous years.

Read more: http://www.breakingnews.ie/ireland/e...#ixzz1HW9nPI5E

And there we go .. so much for the plans based on projected growth of 2.5% etc etc ....

Back to the drawboard folks ....

GNP down by 2.1
http://www.cso.ie/releasespublicatio...qna_q42010.pdf

Imports up.

Overall, the growth in net exports of €5.7 billion at constant prices (24.5%) did
not provide a sufficient counter weight to the decline of €7.9 billion (-5.6%) in the
combined total of the components of domestic demand. Personal consumption,
which accounts for nearly two thirds of domestic demand, fell by 1.2 per cent
while Government expenditure was 2.2 per cent down on 2009. Capital formation
registered the largest percentage decline (-27.8%) reflecting the weakness of the
construction sector. While stocks continued to decline in 2010 the extent of the
fall was not as pronounced as in 2009.

[DCon]

Manufacturing down

Irish manufacturing PMI falls to 50.3 in January

From 51.4 in December. Lowest read in 9 months.

http://www.forexlive.com/blog/2013/0...-3-in-january/

[C. Flower]

"Their Tee-shock is really really pro business"

https://www.youtube.com/watch?v=AAf921BSAHQ