Iceland to be better off than Ireland in 2015: Morgan Kelly

[kerrynorth]

Another thought provoking article from Morgan. Contrary to the hyped expectations of a return to sustained economic growth he sees Ireland still being in the depths of depression through to 2015. I for one cannot argue with his logic. The anchor of debt, and the rising real cost of servicing both the public and private sector debt, will be a millstone around the neck of the economy for a long time to come.

By 2015 we will have seen what happens when jobs disappear forever, particularly from less educated men who were able to earn a good living in construction. In effect, Ireland is at the start of an enormous, unplanned social experiment on how rising unemployment affects crime, domestic violence, drug abuse, suicide and a litany of other social pathologies.

We will be forced to discover the consequences when people, who had worked hard to make decent lives for themselves and their children, find themselves reduced to nothing. Less than nothing in fact because, unlike the unemployed in the past, people now losing jobs are weighed down with debt and facing the terrifying prospect of losing their homes.


Debt will be the second ghost of Christmas 2015. Back in 1997, when exports drove real growth, Irish banks lent little by international standards. By 2008, Ireland had twice as much debt for its size as the average industrial economy: banks were lending a third more to property developers alone than they had been lending to everyone in Ireland in 2000.

Ghosts of debt and jobs will haunt economy - The Irish Times - Tue, Dec 29, 2009

[Wakeupcall]

depressing stuff

[Wakeupcall]

One response to large-scale home repossessions that will be attempted is to buy ghost estates for public housing to accommodate evicted home owners, providing ample opportunities for good old fashioned petty corruption.

I wonder who will continue to get richer...

[kerrynorth]

He also reckons that property prices in Ireland will fall AT LEAST 67% from their peaks and almost certainly far further because of repossessions etc.

As Irish bank lending returns to ordinary international levels, property prices will fall by at least two-thirds from their peaks. However, five years from now, property prices could have been driven far lower than that by a deluge of sales of unsold, foreclosed and abandoned homes.

[Wakeupcall]

He also reckons that property prices in Ireland will fall AT LEAST 67% from their peaks and almost certainly far further because of repossessions etc.

I might actually change my mind about home ownership within the next 7 years and buy a home!

[conservative green]

.I for one cannot argue with his logic.

I didn't see anything approaching logic in his article. I saw a dose of nihilism masquearading as analysis.

Like you, KerryNorth, he is a weak man and an opportunist. He sees part of the picture, but not all of it.

[kerrynorth]

Like you, KerryNorth, he is a weak man and an opportunist.

Eh? My opinions on matters relating to the economy are well known on p.ie and have been shown to be more consistently correct than those of government or economists working in the banking and property sectors. Not because I have any crystal ball or anything but because I tell people the unvarnished truth rather than a PR concoction masquerading as economic analysis that you find so much of in Ireland. I am purely being straight with people without a vested interest to tinge my analysis.

[tonic]

depressing stuff

It's intended to be.

NAMA is not a bailout for developers as Kelly says it is, only those who are anti Government and anti developer in principle, as Kelly is, continue to maintain this is so, but without showing how this is so.

The bad banks of the 1930's as descried by Kelly have nothing in common with NAMA. NAMA is an asset management agency, not a lending bank, except where it can improve the return for the taxpayer, not for the developer.

A large slice of the growth of our domestic economy since 2000 came from the 20% growth in population, the vast majority of which is still here, it was not just selling houses to one another as claimed by Kelly.

Kelly continues to present a one eyed picture, of appeal and help only to those who see through that same eye.

[conservative green]

Eh? My opinions on matters relating to the economy are well known on p.ie and have been shown to be more consistently correct than those of government or economists working in the banking and property sectors. Not because I have any crystal ball or anything but because I tell people the unvarnished truth rather than a PR concoction masquerading as economic analysis that you find so much of in Ireland. I am purely being straight with people without a vested interest to tinge my analysis.

If you need to rely on Morgan Kelly to prove your point, then you are weak.

Where are your published articles? Where is your published research?

I advise you develop your own analysis, and not base your life on internet forums hanging off the coattails of people with slightly more intellect but little better analysis than you could come up with yourself.

[cyberianpan]

Hmmmmm

Morgan is a great man for conjuring up a picture but:

As Michael Hennigan of Finfacts (IRELAND BUSINESS: FINFACTS IRISH FINANCE & BUSINESS PORTAL - mortgage Ireland, protection, life insurance, Financial Services, Investment, loans, Irish jobs Ireland, Dublin mortgages, Cork, Limerick, Galway, Share, Stock prices,) has pointed out, of the half million jobs created in the last decade, only 4,000 were in exporting firms.

Sounds to me like utter nonsense - in areas of Financial Services that I'm familiar with (e.g. Funds industry , IFSC generally) job creation has been over 10,000 in the past decade - or New Media (Google etc) job creation has been over 5,000 in the past decade - with all of these jobs servicing foreign investors/ments. Sounds to me like someone is muddled and stuck in the industrial age with the definition of export.

Also he seems to think there will be limited paycuts (rather instead folks forgoing pay rises). I've no idea where he gets that notion from.

Morgan is more famous as a polemicist than an economist - indeed he doesn't feature in the top 5% of IDEAS ranking. (Philip Lane , who ranks an impressive 209th is a much better person to listen to)

However he is right about significant aspects, especially the "Millstone of debt" both public and private.

Also :

While many commentators argue that the benefits of the Celtic Tiger flowed exclusively to the wealthy and connected, this is nonsense. The benefits went overwhelmingly to ordinary people in the form of something that Ireland had never seen before: abundant jobs. By 2015 we will have seen what happens when jobs disappear forever, particularly from less educated men who were able to earn a good living in construction. In effect, Ireland is at the start of an enormous, unplanned social experiment on how rising unemployment affects crime, domestic violence, drug abuse, suicide and a litany of other social pathologies.

Indeed - what we thought was the "Breakfast Roll Man" will prove to be the "Breakfast Roll Neanderthal" who'll take up looting and gangbanging to pass the time, feed his ego and augment the Dole payment. We'll need to crack down harshly on the "Breakfast Roll Neanderthal": cage him asap and show no sympathy - else we'll have an epidemic.


cYp