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Thread: The Irish Economy: where are we?

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    Default The Irish Economy: where are we?

    Just looking for an over view from those in the know.

    The Good:
    - 1.6m in employment (including much higher women participation).
    - Employment levels have stopped dropping (emigration is keeping unemployment rate stable at 13%).
    - The Current Revenue figures are in line with expectation ie they have stablised.
    - the ECB interest rates are currently low.

    The known knowns:
    - we must take (at least) €15bn out of the economy through cuts/tax hikes, with a third to a half of that this year.
    - the bondmarket thinks we are junk status (7%+).
    - the British will take £83bn out their economy, with £4 billion out of their economy will lead to a double-dip recession.
    - interest rates from ECB must rise this year as German economy grows.
    - the Croke Park deal has tied the hands of the government to cut public sector spending further.
    - private debt is massive and limits the capacity of people to take further hits.

    The known unknowns:
    - the price the bond market will charge in January and thereafter.
    - the final cost of the bank bailouts.
    - the effect NAMA sale of property will have on the market.
    - the effect on the economy if social disorder breaks out.
    - the effect that a change of governement will have.

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    Quote Originally Posted by Congalltee View Post
    Just looking for an over view from those in the know.

    The Good:
    - 1.6m in employment 1.85m to July '10 (including much higher women participation).
    - Employment levels have stopped dropping (emigration is keeping unemployment rate stable at 13%).
    - The Current Revenue figures are in line with expectation ie they have stablised.
    - the ECB interest rates are currently low.

    The known knowns:
    - we must take (at least) €15bn (could turn out to be a lot less, depends on future growth) out of the economy through cuts/tax hikes, with a third to a half of that this year.
    - the bondmarket thinks (does it?) we are junk status (7%+).
    - the British will take £83bn out their economy, with £4 billion out of their economy will lead to a double-dip recession.
    - interest rates from ECB must rise this year (I'd question that) as German economy grows.
    - the Croke Park deal has tied the hands of the government to cut public sector spending further. (if it works it will decrease spending, if it doesn't, it can be scrapped)
    - private debt is massive and limits the capacity of people to take further hits. (Private savings are massive, still some room there.)

    The known unknowns:
    - the price the bond market will charge in January and thereafter.
    - the final cost of the bank bailouts.
    - the effect NAMA sale of property will have on the market.
    - the effect on the economy if social disorder breaks out.
    - the effect that a change of governement will have.

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    Politics.ie Member Thac0man's Avatar
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    In the employment figures, be they 1.6 or 1.85 million, how much of that is currently taxable? And how much aswell is State employment which is actually paid for by the state through borrowing? Semi-states are not even breaking even.

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    I am delighted that an optimist has got in before the realists tear the economy apart.

  5. #5

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    The economy is insolvent. A large part of the consumption in the economy leaks out of the country. Too much debt, a flawed banking and currency system. A neofeudal corrupt government and plenty pathetic sycophants defending them with their lives.
    We cannot continue much longer in this lethargic comatosed melincholic state.

    We are a large island, rich in resources including human capital. Best thing is let the state go broke and then let the people start trading free from the chains of statism.

    The statist parasites are wlecome to trade among us, but they can forget about any privilieges or ivory tower lifestyles or else they will simply starve to death or move to some other communist kip of a country.
    “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” - Friedrich A. Hayek

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    Politics.ie Member Socratus O' Pericles's Avatar
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    Bond yields rise above 7 per cent - The Irish Times - Mon, Nov 01, 2010

    "The spread that investors demand to hold Irish 10-year bonds instead of German bunds rose to 455 basis points, taking it a basis point above its previous euro-era high."

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    Quote Originally Posted by Socratus O' Pericles View Post
    Bond yields rise above 7 per cent - The Irish Times - Mon, Nov 01, 2010

    "The spread that investors demand to hold Irish 10-year bonds instead of German bunds rose to 455 basis points, taking it a basis point above its previous euro-era high."
    That is a judgment about which we can do nothing but cut spending, raise taxes and hope for the best. If it is 7% now, what will be in 5 weeks when the budget is delivered? What will it be when the NTMA dip their toes back into the bond market. If Cowen and FF, realise the game is up in the New Year and that we must go the IMF/Stability fund, will they pull the plug first on the government to allow FG/Labour deal with the mess. I think that this government have zero credibility and a change is needed if we have any hope of maintainng what is left of our economic independence.

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    Politics.ie Member hammer's Avatar
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    Known Knowns

    We cannot borrow forever

    When will we balance the budget 2030 ?
    When will there be a surplus

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    Bonds now at 7.2%.
    Do we bring forward the budget and slash and burn, or wait until someone else makes lending conditional on sacrificing Holy Cows like no property tax, third level fees, Croke Park or Child benefit and the social welfare we give to the banks?

    On a personal level, cash is king, stock up on essentials, get a bike and learn a foreign language and acquire a transferable skill. Is this over-reacting?

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    Few will look back at 2010, as being a good year for Ireland, but the following did occur:

    - Ireland emerged from recession (twice).
    - The IMF plan requiring quarterly implementation is objectively good (shame about the part of paying the money back).
    - land prices continued to fall.
    - the country became more competitive.
    - emigration has acted as safety valve to stabilise unemployment. Employment figures have stabilised.
    - All major parties are committed to 3% deficit by 2015 and the next general election will be fought on that basis.
    - a general strike and violence were avoided after the €6bn budget cuts/taxes.
    - the ISEQ is 900 points higher than the low of February, 2009.
    - retail sales have rebounded after the disaster of 2009.

    We also learnt:
    - Our governments' politicians are utterly incompetent.
    - the Dept of Finance is not fit for purpose.
    - combined they cannot negotiate their way of a brown paper bag.
    - our partners in Europe see us as an irritiating colony.
    - UK and Sweden are willing to lend to us, even though they don't have to, on assurance of repayment in their currencies, and at a decent return.

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