P
p45
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Will Starbucks go the way of Dunkin' donuts? (Anyone remember them?)
The R Word
- Thread starter ccbkd
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eileen alana
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I loved Dunkin donuts
Errm try "Reality"... thats the wage i've to accept at the start... 800/1000 will come in time, but in reality i've to start at the bottom
No sooner is the Celtic Tiger dead and gone, but catholic ireland is back alive and kicking!! Please, as the other posters said, your comments are quasi tony quinn/religious... something I don't subscribe to. I place reality and hard work above naive foolhardy positivism. Thats just my view, your entitled to yours.
RE TREEHOUSE:
Of course there is a serious knock on effect on related and semi related industries - but I think that effect is already being felt and that the growth projections take that into account - thats why it's -0.4 forecast rather than +0.4. As I said earlier even if we dropped 2 or 3 percent this year, we've still come such a long way in the past few years.
As for savings, well straight off at a national government level, our debt is tiny at 30% of GDP, nearly an historic low. At an individual level, obviously it depends on a case by case situation, and as I said some people chose to squander the boom, others were wiser. Most people continued the savings habit after the SSIA's. Virtually everyone who's worked over the past 10yrs has had an income far greater than they've needed to survive comfortable and hence should have strong savings - if they don't thats their own fault for being naive. Despite the decline in prices, anyone who bought prior to 2004 should still have decent equity in their homes. In addition redundancy repayments are much greater now than back in the 80's.
I agree with you that things are bad now, but I don't buy the sunday independnent analysis that we're screwed. I think such a generalistic assessment is naive - yes some individauls will suffer, but more from their own over consumption and underinvestment over the past decade than from anything else.
G
Guest117
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My tip for the recession is to get out of all Irish Bank stocks ( Hope not breaching posting guidelines )- I don't believe they have hit the bottom yet and fear that one or two will need to be bailed out of trouble by govt before end of year
Oh and yes the R word is real and getting deeper
Oh and yes the R word is real and getting deeper
This could be a good thread to bet on for it running up about 5000 posts and 200000 views?
Its only about a month ago I seem to remember that the ESRI released a positive report, (a week before the referendum,) suggesting that we would avoid any serious problems and recover quickly. Why the sudden change.
Every month a more pessimistic report comes from somewhere or another. Where are all the positive glass half full men - the "economists" employed by banks who were insistent there would only be good times. I suppose it takes two to lie. One to lie, and one to listen.
Will there be even more negative reports next month? I think there will and this whole story has a long way to unfold.
Its only about a month ago I seem to remember that the ESRI released a positive report, (a week before the referendum,) suggesting that we would avoid any serious problems and recover quickly. Why the sudden change.
Every month a more pessimistic report comes from somewhere or another. Where are all the positive glass half full men - the "economists" employed by banks who were insistent there would only be good times. I suppose it takes two to lie. One to lie, and one to listen.
Will there be even more negative reports next month? I think there will and this whole story has a long way to unfold.
G
Guest124
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Motor trade is in for a bumpy ride and if your thinking of selling a Car - do it now!
newirishman
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This is a rather naive view. I have many examples in my workplace and fom friends where singles and couples bought property in 2005 / 2006 / 2007 We have the single guy who is 29 and has a 480K mortgage which means montly repayments of 2.400 Euro. He doesn't have savings left because the 20K he had are gone with buying the house. Then, the couple with monthly mortgage payment of 3.000 Euro, expecting the first child soon. They are of course on a good salary but there is not much space to built up huge savings.
Why were 95% / 100% / 110% mortgages on the market? Because people needed them to get on the ladder. How many people are trying to get onto the affordable housing scheme?
The avg industrial wage is around 35K, the average house price is 283K. If you have kids and a mortage to server how can you build up savings?
You would be surprised how many people on their early 30ies have good salaries but no savings, but a 35yrs mortgage on a property that was/is 30% overvalued.
As DMcWilliams pointed out, and as you mention it above: The property bubble moved public debt to private debt, made the 45+ generation wealthy but the young generation debt ridden. Public debt low, but private debt is one of the highest in Europe.
Where do all your future entrepreneurs come from if all money they will ever earn goes into repayments?
J
jimbob1234
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i was talking to a mortgage broker yesterday thats a friend of mine and he was saying that the banks cant even sell the houses they have repossesed at huge discounts. an earlier poster said an irish bank will go down and need govt intervention, an irish government wont support a bank like that cos they cant afford it,maybe europe will??
i honestly dont think things feel that bad. restuarants and bars are not empty. people are still driving a lot. housing is knackered but commercial is doing very well.
Oil is really holding the whole world to ransom at the moment and it cant go on forever unless we are in peak oil (then we are looking at a depression). the US are making moves to curb speculation in the oil markets. the FED meet today , if they raise rates a quarter point then dollar will firm and oil will fall. ud b very surprised what oil falling back to 90 dollars a barrell would do for confidence all over the world. the ESRI would be out again with a new statement
a person who is 29 and has a 480k mortgage is off their head , who in their right mind would saddle themselves with this much debt?
i honestly dont think things feel that bad. restuarants and bars are not empty. people are still driving a lot. housing is knackered but commercial is doing very well.
Oil is really holding the whole world to ransom at the moment and it cant go on forever unless we are in peak oil (then we are looking at a depression). the US are making moves to curb speculation in the oil markets. the FED meet today , if they raise rates a quarter point then dollar will firm and oil will fall. ud b very surprised what oil falling back to 90 dollars a barrell would do for confidence all over the world. the ESRI would be out again with a new statement
a person who is 29 and has a 480k mortgage is off their head , who in their right mind would saddle themselves with this much debt?
What ireland needs now is a lowering in the value of the currency, if we still had irish pound we could allow its value to drop just like in america, this would erode the huge levels of debt people have and also boost our exports, unfortunately ECB seems to want to maintain the euro at a high level and maintain interest rates which is more in line with the german economy. I think it is the thirty somethings with high debt dependant on high wage jobs which are most in trouble, these high wage jobs will be the first to be cut, as the hibernian workers are finding out, the internet and high tech revolution of the 1990s is now affecting jobs which up to this were unaffected. School leavers should be ok because they wont have built up high wage expectations and will have no debt and can easily emmigrate. In the 1980sthere was a lot more protectionism which meant that thirtysomethings established in jobs were protected by unions unless the company went bust. This time more liberalisation means companies can cut wages or use temporary workers. It is the unjustified high wages that is irelands key problem
ERSI has a poor record in forcasting, so I take anything they say with a pinch of salt.
We're heading for a slowdown alright, but not the 1980s. We're just going back into a normal level of growth rather than the super growth we've had for the past decade.
Property has less of an effect on most peoples lives that people imagine. A very high proportion of Irish people have mortgage free homes and the majority have not bought property in the past 10 years or so. Whereas those who have bought recently may be hit hard, they are not the majority.
There was an interesting comment in the Indo yesterday in their analysis that said that a 1% change in exports has as much impact on the economy as a 10% change in property.
Also, I cant understand how most of the commentators on the "decline of the construction industry" dont see the correlation between the withdrawal of tax breaks and the reduction in output. Tax breaks officially end next Monday (30th June) and surprise surprise, people are going to get laid off in the construction industry. The construction industry output appears to have declined over the past 2 years in line with the tappered reduction in tax breaks. Tax breaks are the same as a subsidy, only not as obvious to the taxpayer. Any industry that is heavily subsidised is naturally going to employ more people and is going to lay these extra people off once the subsidy expires.
We're heading for a slowdown alright, but not the 1980s. We're just going back into a normal level of growth rather than the super growth we've had for the past decade.
Property has less of an effect on most peoples lives that people imagine. A very high proportion of Irish people have mortgage free homes and the majority have not bought property in the past 10 years or so. Whereas those who have bought recently may be hit hard, they are not the majority.
There was an interesting comment in the Indo yesterday in their analysis that said that a 1% change in exports has as much impact on the economy as a 10% change in property.
Also, I cant understand how most of the commentators on the "decline of the construction industry" dont see the correlation between the withdrawal of tax breaks and the reduction in output. Tax breaks officially end next Monday (30th June) and surprise surprise, people are going to get laid off in the construction industry. The construction industry output appears to have declined over the past 2 years in line with the tappered reduction in tax breaks. Tax breaks are the same as a subsidy, only not as obvious to the taxpayer. Any industry that is heavily subsidised is naturally going to employ more people and is going to lay these extra people off once the subsidy expires.
Where does one buy a repossesed house? And have there been that many of late? I'm sure I read elsewhere on here that there has been <100 this year.
I get the impression there is a fairly populous generation of young recent graduates ( ~<27 )who refused/were unable to saddle themselves with such debts. In recent times they have become more aware of economic factors that influence them, have become save savvy and will learn from the experiences of those slighty older than them who got caught up in all this spend thrift.
One of our major advantages is this young highly educated work force, so all is not lost for the future I feel.
DMcWilliams might end up calling them YECCs or something. Young, Educated,Conservative and Cynical.
J
jimbob1234
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you could just ring the banks and ask them. there are an awful lot more than 100 im sure. the banks keep it out of the news
As for savings, well straight off at a national government level, our debt is tiny at 30% of GDP, nearly an historic low.
But our private debt is at an all time high. Total outstanding Irish private sector credit is equivalent to 95% of GNP according to the Iirsh Central Bank.
But our private debt is at an all time high. Total outstanding Irish private sector credit is equivalent to 95% of GNP according to the Iirsh Central Bank.
Surely the banks attempt to sell these houses on the market? Or is there a repossesedhousesales.ie website?
You call me naive?
Nah, I'd call your friends naive - buying in 2005-2007 was foolhardy, it was a speculative market. As for buying a 500k at 96% financing at 29 in the past few years goes well beyond foolish (unless, the person in question has an income of 100k+.)I stand by my earlier comments:
- This is more of a "technical" recession than anything else, and is very unevenly distributed among sectors
- Growth will resume at a much more realistic rate in a year or two
- This slowdown will punish those who were foolish, greedy or tempted by speculation and short termism
- Hard workers and those who have invested in their education will continue to succeed
- Unemployment will rise, but it will not be anything like the 80's.
- Slowdown will hit some little and some very hard depending on whether they have been prudent or lived beyond their means
- A slowdown is actually excellent news for hard working educated young people as it will make housing more affordable and focus firms on performance. In this climate firms will reward those who work hard and improve productivity, whilst lazy or inefficent workers will be overlooked.
- Entrepreneurs will continue to thrive. A recession will push lots of big firms into the red and they will lose focus; leaving ample room for cunning entrepreneurs. Also a decline in rents for commercial property is good news for new businesses trying to get established
I admire your optimism, and I agree with most of what you are saying.
In my view an entrepreneur is not someone who opens a shoe shop; it’s someone who comes up with a new idea and knows how to commercialise it (or takes an old idea and comes up with a new way to commercialise it). In other words there is a big difference between an entrepreneur and a business owner. In that context entrepreneurial activity is, to a great extent, recession proof. The problem is that most entrepreneurs come from a background where they acquired a technical and business skill base. Since there will be fewer jobs and less VC money around the breeding ground which creates these people will be less fertile.
The bottom line is that high property prices, and the knock on from those prices, were killing this economy. If it takes a recession to get us out of that cycle it will be a price well worth paying.
Good point Purple. However I note with interest the experience of my mother, who unable to get a job after college in the mid 1980's had no choice but to set up a business herself to get by. It turned out to be a great success - much better than many were earning at the time. Indeed despite shutting up shop 10yrs ago or so due to ill health (and two boys to mind), she's still being asked to fill orders (to which she declines). She built a business and a reputation at a time when everything was bleak.
Her experience I feel is mirrored by many others. Have a look at the incorporation dates of many major local businesses in your area. You'll be surprised by the numbers from the mid 1980's. I think unemployment can actually stimulate people to go into business themselves as they are faced with no choice.
Its an interesting notion I know, and I have no statistical backing for it; however I believe it to be the case. In addition I think the large lump sum redundancy payments made these days coupled with strong support from Enterprise Ireland, County Enterprise Boards and the like will help alot of people to go down this route.
As regards VC. I recently was researching this area as part of my work and was quite surprised to see strong activity in the past 12mts despite the slowdown. I believe good ideas, with strong characters behind them will usually find funding eventually.
A lot of entrepreneurs have been able to ramp up their businesses because they could get access to lots of cheap money over the last 10 or so years. The rising tide was lifting all boats, I suspect it will be a lot more difficult to ramp up a new business idea in the new environment.
I agree.