# Irish economy - are there clouds ahead?



## autumnleaf

I've been lurking around the boards and there seems to be a lot of negative sentiment about the current direction of the Irish economy. From my naive point of view, there do seem to be clouds on the horizon. Too much of the economy tied up in property and multinationals, lack of successful native industry, rubbish transport infrastructure, massive amounts of personal debt.

So what I'm asking is:
- Do you think the Irish economy is heading for a meltdown? 
- Is there anything that can be done on a large-scale level? (invest in infrastructure, diversify industrial base, offere incentives for small local businesses, etc.)
- If a meltdown is inevitable, can an individual do anything to cushion his/herself against it? (pay off debts, sell holiday home, change to a job that can't be moved to Bangalore, etc.)


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## miju

while no expert myself i personally belive selling holiday home and paying off debts (in particular) will greatly help cushion anyone against a downturn in the economy

re: what the government can do , they should really utilise enterprise ireland a hell of alot more so that they can aim funding at "smaller" operations , i run 2 small businesses and both times had to fund it myself / from bank has enterprise ireland weren't interested unless it had high growth / profit potential which is a bit retarded IMHO as it's kind of like shooting yourself in the foot long term 

actually , for the very reasons above i haven't voted for (and will continue to not vote for) fianna failure


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## Ipso_facto

Hi

Yes i agree, there is a few worrying sign's to the Domestic economy, Not just that we rely so much on foreign investment..etc. there isn't many new big Irish companies, investing at home ( lots of Investment money going abroad ) - great for shareholders, no problem with that..of course.

But future problem's in the Political arena here, and abroad will knock the confidence of consumers etc.


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## room305

Inflation, inflation, inflation ...

It should be the number one fear for the economy in the future because it will effect absolutely everything and make us uncompetitive even if it doesn't lead to massively increased wages. In Ireland right now it is rapidly running out of control.

Also the question of how the country is going to foot the ridiculous public sector bill when we finally stop topping up the exchequer with all that stamp duty.

As for what the country could do I think it is getting too late to act now but we should have made much more of the boom years ...

Investment in local business, R&D, education and health, introduce competition in utilities such as telecoms and electricity, reduction of reliance on foreign oil and gas, also on multinationals to produce exports ...


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## Purple

Foreign direct investment from multinationals is not the problem, or even a problem. It is a very efficient sector of the economy. The problem is that we are doing everything we can to drive that investment out of the country.
The problem is that the building and domestic services sectors are driving prices up and efficiency down and will continue to do so for the foreseeable future.
Internationally traded goods and services are what made this economy and the Enterprise, Trade and Employment department (and Enterprise Ireland) are rightly focusing on growing them. The problem is that the rest of the government is doing all it can to screw things up.


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## thewatcher

[broken link removed]

If you'd like to take a little look at this you'll see just how much trouble were in,pay particular attention to the IRISH owner exports in the graph shown and how bad it is !

As Mr Pulrple said,this government is doing everything it can to drive up prices in all the sectors it has some influence,thereby eroding competitiveness and speeding up the relocation of foreign multinationals.

If ever there was a case of killing the goose that laid the golden egg,this government are the experts in it.They should look at what happened to the publicans !


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## bearishbull

How many irish owned and based companies do you know employing significant numbers of people and providing services to overseas customers?? the profits from the multinationals dont stay in ireland and many of them wont stay here either when the benefits(largely tax) dont outweigh the costs.


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## dontaskme

bearishbull said:
			
		

> How many irish owned and based companies do you know employing significant numbers of people and providing services to overseas customers?? the profits from the multinationals dont stay in ireland and many of them wont stay here either when the benefits(largely tax) dont outweigh the costs.


 
The only really Irish-owned companies are private like The Quinn Group and Dunnes Stores or state owned like Aer Lingus. Any large public company is likely to have an international mix of shareholders who are naturally interested in shareholder value rather than the unemployment rate in Ireland.

The Irish economy is flexible and could turn on a sixpence. I´m not sure this is necessarily a good thing though. The growth sector was technology a couple of years ago, now it is construction and financial sector. All this flexibility could lead to more volatility.


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## Itchy

Would it be fair to say that its not all doom an gloom re the financial sector? I mean, it seems there will be a massive revenue gain for the banks in the medium to long term with the quantity of personnel debt out there. 

The next big invesment?


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## thewatcher

Itchy said:
			
		

> Would it be fair to say that its not all doom an gloom re the financial sector? I mean, it seems there will be a massive revenue gain for the banks in the medium to long term with the quantity of personnel debt out there.
> 
> The next big invesment?


 
If/When there is a property downturn/crash,most of the irish banks are highly exposed.Their not going to reposess ppr's but what the hell are they going to do with all them investment properties mainly apartments that they may get stuck with ?

At the end of the day the overvalued irish property market is going to kill this economy at some stage.I know and i'm sure most people on this site know people with 1/2/3 investment properties,who do not have the resources(rainy day fund) to sustain themselves even with a very short period of non rental income (3/4/5 months).At that stage you can either try and sell or default and let the bank take the property back.There is more and more property coming on line,things are only going to get more difficult from the investors/speculators point of view,something like 40% of the properties bought in the first 3 months of this year were by investors/speculators !.


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## room305

dontaskme said:
			
		

> The only really Irish-owned companies are private like The Quinn Group and Dunnes Stores or state owned like Aer Lingus.



This highlights the crux of the problem. We do not really export much ourselves and most Irish firms (with a few notable exceptions) exist primarily to serve Irish demand. So the country derives most of its income by being an export base for large foreign multinationals - particularly technology based companies.

In the event of a downturn in the Irish economy, this leaves the country in a precarious position. While FDI is of course welcome, we should have used the money coming in during the boom years to build our own export base.

In the past five years the amount Enterprise Ireland has invested in seed and venture capital for Irish companies is less than half a percent of the amount Irish investors have ploughed into foreign property (€133 million vs. €30 billion)!


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## Howitzer

bearishbull said:
			
		

> How many irish owned and based companies do you know employing significant numbers of people and providing services to overseas customers?? the profits from the multinationals dont stay in ireland and many of them wont stay here either when the benefits(largely tax) dont outweigh the costs.


 
Paddy Power, C&C, Ryanair, NTR (Airtricity, Greenstar, Bioverdia) .....

There are plenty, just not traditional manufacturing types.


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## Purple

thewatcher said:
			
		

> [broken link removed]


 I can't open the link, Help!


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## bearishbull

Howitzer said:
			
		

> Paddy Power, C&C, Ryanair, NTR (Airtricity, Greenstar, Bioverdia) .....
> 
> There are plenty, just not traditional manufacturing types.


 how many do they employ though? theres a load of small ones ,many irish banks provide services to foreign customers/companies but the amount of employment isnt huge. ireland exports services of around 45billion abroad but are a net importer of services by around 9 billion,of that 45 billion majority is produced by foreign multinationals who get the profits and not ireland.


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## Sherman

thewatcher said:
			
		

> If/When there is a property downturn/crash,most of the irish banks are highly exposed.Their not going to reposess ppr's but what the hell are they going to do with all them investment properties mainly apartments that they may get stuck with ?


 
I think the exposure of the Irish banking sector to the Irish mortgage market is somewhat overblown.

Irish banks have securitised a massive part of their loan books over the last 3 years, and continue to do so almost monthly - e.g. .

This spreads the risk to the international markets, thus lessening the impact on say a Bank of Ireland or PermanentTSB.


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## Itchy

Purple said:
			
		

> I can't open the link, Help!


 
You need to open the link with Real Player.


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## sonar

Sherman said:
			
		

> I think the exposure of the Irish banking sector to the Irish mortgage market is somewhat overblown.
> 
> Irish banks have securitised a massive part of their loan books over the last 3 years, and continue to do so almost monthly - e.g. .
> 
> This spreads the risk to the international markets, thus lessening the impact on say a Bank of Ireland or PermanentTSB.


 
Interesting stuff. Some questions on this though.

Ok so IL&P reduces its exposure by selling the rights to a mortgage portfolio. How do we know that international investors are not getting cherry picked loans leaving IL&P with the riskier ones?
(e.g. tables shows the weighted average LTV of the portfolio to be a nice 63.2% with a majority being fixed term)

What does this say about risk of repossesions in a downturn given that it 
is an overseas entity that holds the rights to an Irish mortgage portfolio?

Also in this case IL&P raises a couple of billion by selling the rights
to a mortgage portfolio. What do they do with the money ? Well they put it straight back into the property market of course !


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## Ipso_facto

Hi.
I think it is about time, Government and interested groups, tried to figure out exactly - to what extent large foreign companies, have on inflation here e.g. on rising - housing and rent, Electricity and water charges, also refuse and recycling increases, not to mention service charges ...etc. Some employ more, temporary overseas workers ( 50% or more ) adding to congestion and commute time also.

Lots of these charges are being passed on to consumers. We have given them enough - state aid, Grants over the past 20 years.

We hear about Growth figures daily, but what about huge increases in our - *Deficit* in infrastructure ..etc. At least - 80 Billion, needs spending over the next 10 years, and even longer im sure, by the time we have caught up to the level of some "real rich" developed E.U. countries. Especially on " Public Services" Schools, Hospital and health Care, Sport facilities & Community centres not to mention updating our Rail network...etc.

We have a 2 speed economy .. ( more like a 5 speed


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## Sherman

Ipso_facto said:
			
		

> Hi.
> I think it is about time, Government and interested groups, tried to figure out exactly - to what extent large foreign companies, have on inflation here e.g. on rising - housing and rent, Electricity and water charges, also refuse increases ...etc. Some employ more, temporary overseas workers ( 50% or more ) adding to congestion and commute time also.
> 
> We hear about Growth figures daily, but what about huge increases of -deficit in infrastructer ..etc. 80 Billion, by the time we have caught up to the level of some "real rich" E.U. countries.
> 
> We have a 2 speed economy .. ( more like a 5 speed


 
Yeah, Johnny Foreigner is the source of all our problems  .

Rising wages are caused by a) a booming economy with virtually full employment - the arrival of foreign workers will only serve to _lessen_ inflation in such regard, and b) ridiculous wage demands by unions acting in concert with idiotic IBEC and Bertie.

We sure do have a two speed economy - the private sector (and most honest, hard-working immigrants) are going full speed ahead. The public sector, and the unionised Irish workforce, are stuck in reverse.


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## Ipso_facto

Sherman said:
			
		

> Yeah, Johnny Foreigner is the source of all our problems  .
> 
> Rising wages are caused by a) a booming economy with virtually full employment - the arrival of foreign workers will only serve to _lessen_ inflation in such regard, and b) ridiculous wage demands by unions acting in concert with idiotic IBEC and Bertie.


 
Johnny .. who ? - them is your words, not mine ok. Well obviously they ( continual influx of temporary overseas workers ) contribute to inflation in - *housing* and the *rental* sector.

But i was mainly suggesting companies like *Intel* or *pharmacuitical* *Co*.for example, have enormous energy needs and extra demands on the water supply ...etc, Hence - recent increases to the consumer here, and more to come in the future ( are businesses paying their fair share or even the *true cost of utilities* ) Maybe Gov. departments should take a closer look at some Co. in the Industry sector ..etc

I don't mean to be argumentative or anything, Sherman ok.


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## dontaskme

sonar said:
			
		

> What does this say about risk of repossesions in a downturn given that it
> is an overseas entity that holds the rights to an Irish mortgage portfolio?


My understanding of securitisation is that the mortgages remain on the bank´s or building society´s books, but the future cash flows generated by the portfolio go to the overseas entity.


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## Duplex

Intel are undertaking a strategic 90 day review of their workforce requirements, they recently announced 1,000 management job cuts. This Indo article suggests that a further 10,000 to 15,000 jobs will be cut from its global payroll. Indian media suggest that 13,000 jobs will go. 

http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1657133&issue_id=14391


Financial Express India


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## room305

Ipso_facto said:
			
		

> Well obviously they ( continual influx of temporary overseas workers ) contribute to inflation in - *housing* and the *rental* sector.


The only thing contributing to house price inflation is the mania of Irish buyers. There is no scarcity of houses and no scarcity of land.

Prices in the rental sector are _deflating_ so your argument does not hold up here.



			
				Ipso_facto said:
			
		

> But i was mainly suggesting companies like *Intel* or *pharmacuitical* *Co*.for example, have enormous energy needs and extra demands on the water supply ...etc, Hence - recent increases to the consumer here, and more to come in the future ( are businesses paying their fair share or even the *true cost of utilities* ) Maybe Gov. departments should take a closer look at some Co. in the Industry sector ..etc


Energy costs are rising because the cost of generating that energy is rising. Ireland's consumption of oil and gas is miniscule in world terms so a reduction in our demand would have little global effect. Business energy costs are priced differently to residential energy costs and in the electricity sector, businesses appear to subsidise consumers.

Are you seriously suggesting it would be good for the country if we lost Intel, Dell and Microsoft etc. because the amount of energy we consume would reduce?


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## edo

Well, as a member that rarely seen, Highly endangered species : an employee of an Irish owned, Irish based (for the mo) high tech manufacturer which exports all its products outside the EU (North America, Japan and the Far east) , the discussion of particular interest to me.

A few observations on the last few years:

The export manufacturing industry surge that revived the irish economy in the  nineties , set up the foundations of the Celtic Tiger and brought home many emigrants like myself is dying, on its knees at the moment. The large multinationals that fuelled this have already made their last serious investments in this state - see previous posters mention of intel etc etc reviewing their operations - as a somewhat industry insider - believe me - its only the tip of the iceberg. 

Ireland was chosen as a destination for these companies as it was relatively low cost , low corporation tax and a relatively skilled workforce for what was required  - assembly and manufacturing work - no R&D - an important point  which i will come to later.

Many local small companies , like my own, were set up the late nineties to service these giants, outsourced R&d for particular projects - most of these startups were blown away in the industry recession 2000/2002  - looking at it 4/5 years later  it is like walking through an elephants graveyard - We survived purely down to the fact that we quickly diversified away from the Irish based mulitnational branches and took on the world market head on, had an extremely strong product in a niche but very profitable market and an a strong R&D base (out of a workforce worldwide of 300 over 70% are in R&D) and  most importantly our investors who have a long term view and the balls to support it.

All manufacturing industries are constantly in state of some  degree of flux - technologies become obsolete , no longer profitable etc etc , old industries either adapt or die  and are replaced. The big problem facing this country is that industries are dying, moving on and are not being replaced. This was unheard of 10 years ago. Every week more and more both domestic and foreign owned companies are shutting up shop . In our canteen every monday its like a roll call of the dead in battle as we discuss who went down the previous week. I havent done any serious statistical analysis on this , but for my own part as an operations manager and junior purchasing officer I will give you this small example.

On an average machine system we would spend approx  800,000 euros on material inputs alone , not including R/D, software and our own assembly costs. We produce approx 60 machines a year(they take 4 months to build) and they sell for 7 figure sums . In 2001 We would have spent approx 35-40% of the material cost in sourcing materials from Ireland. this year that figure has fallen to 14% and next year when we outsource the production of low skill metal parts , doors etc  to Germany and Japan (those  notorious low cost labour centres) that total amount we will spend here will be less than 3%.

Why??? - 

A) the technology involved in the high value areas of a machine(Lasers,robots optical pieces) are simply not done here  - We develop the technology we require with our partners in the US, Japan and Germany.

B) over 60% of our Irish suppliers have gone to the wall in the last 3 years, for the rest,1) they are making so much moolaa fabricating Balcony railings and other construction property related work that they have downskilled their workforces and are no longer in a position to meet our requirements 11) after much effort and expense on our behalf working with them, pulling them up to world industry standard and still getting the same crap service and excuses , we have simply given up on them and moved our business to companies that will fulfill our needs - Cost is normally one the least of our considerations - much more important is that you can produce the product consistently , show consistent improvement and be able to meet deadlines. 

Im afraid in that aspect the domestic irish industry is in the dark ages , a shambles ,and the reason you werent able to deliver components on time to a production line was because the boys were on the piss for a week after Munsters victory doesnt cut much ice in Boardrooms in California or Seoul.

to summarise 

Ireland is going from an average skilled economy to a low skills economy. Our productivity is falling away. We should have built on the prosperity started in 90s and seriously invested in Research and Development for the next wave and moved on up the Value food chain. We should have come up with serious financial incentives for capitalists and entrepreneurs to invest in High tech and environmental tech , which will be next big thing , and make Ireland the inventor as opposed to the hired labour in the technology game. We should have invested the resources and more importantly the brain power in developing proper infrastructure for the country - Its a joke -  It takes a courier an average of 2 1/2 hours to get a package from one end of Dublin to the other on a weekday - 12 miles!

Well other countries , primarily our ever so sensible and long term thinking Scandanavian cousins have done precisely what i've outlined above - What have we done ?- pissed it all away on a consumption spurge, an inefficient and unreformed public service and the least benefical of all "investments" - property

I heard recently that a company closed down after after operating profitably for 30 years with a wealth of experience and market share built up - because the simple bricks and mortar is still worth more than all that combined - you know we are in serious trouble


later


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## Duplex

Edo thanks very much for that post a very interesting insight into the dwindling Irish manufacturing sector. You mention environmental technology as a area that Ireland should consider exploiting, I agree wholeheartedly. Wind turbine technology for instance, we are the best place on Earth in which to generate power from wind, now that we are building all these new houses we could make it a requirement that all new homes have a micro turbine fitted at construction, developing a domestic market and reducing or need to import energy. Government could offer some type of incentive to encourage wind turbine r&d, manufacture etc.


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## Howitzer

edo said:
			
		

> .......We should have come up with serious financial incentives for capitalists and entrepreneurs to invest in High tech and environmental tech , which will be next big thing , and make Ireland the inventor as opposed to the hired labour in the technology game. We should have invested the resources and more importantly the brain power in developing proper infrastructure for the country .......
> Well other countries , primarily our ever so sensible and long term thinking Scandanavian cousins have done precisely what i've outlined above  ......


 


			
				Duplex said:
			
		

> You mention environmental technology as a area that Ireland should consider exploiting, I agree wholeheartedly. Wind turbine technology for instance, we are the best place on Earth in which to generate power from wind, now that we are building all these new houses we could make it a requirement that all new homes have a micro turbine fitted at construction, developing a domestic market and reducing or need to import energy. Government could offer some type of incentive to encourage wind turbine r&d, manufacture etc.


 
One of the world leaders in wind power is an Irish company (Airtricity).

On the other hand the contract to integrate the North and South electricity networks of the island of Ireland has been won by a Swiss/Swedish company, will be designed and built in the US and will use software provided by a Norwegian company.

http://www.abb.ie/cawp/seitp202/75af86d692f8173bc125718c00274aec.aspx


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## room305

Thanks Edo for that very interesting post. 

The number of factories now servicing the building industry rather than a productive exports industry and successful businesses or factories closing because they cannot justify continuing trading when a comparison is made with the "worth" of the bricks and mortar in which they operate really rams home (pun unintended) the senselessness of it all to me.

Being originally from Carlow and having seen the sugar factory there close despite making €30M annual profit in what is essentially a property-play again highlights where we are headed. In Florida, they could not get the oranges off the trees because all the labourers were building houses.

Perhaps, Ireland has hit the _House Event Horizon_?



> Many years ago this was a thriving, happy planet - people, cities, shops, a normal world. Except that on the high streets of these cities there were slightly more shoe shops than one might have thought necessary. And  slowly, insidiously, the number of the shoe shops were increasing. It's a well-known economic phenomenon but tragic to see it in operation, for the more shoe shops there were, the more shoes they had to make and the worse and more unwearable they became. And the worse they were to wear, the more people had to buy to keep themselves shod, and the more the shops proliferated, until the whole economy of the place passed what I believe is termed the Shoe Event Horizon, and it became no longer economically possible to build anything other than shoe shops. Result - collapse, ruin and famine. Most of the population died out. Those few who had the right kind of genetic instability mutated into birds who cursed their feet, cursed the ground and vowed that no one should walk on it again. -- Douglas Adams, _The Restaurant at the End of the Universe_


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## shnaek

edo said:
			
		

> Well other countries , primarily our ever so sensible and long term thinking Scandanavian cousins have done precisely what i've outlined above - What have we done ?- pissed it all away on a consumption spurge, an inefficient and unreformed public service and the least benefical of all "investments" - property



Great post, Edo. I have never been able to understand why our government pisses away so much money on consultants and studies when all they have to do is look abroad at the countries that are getting it right (eg. our Scandanavian cousins) and copy them. I would be afraid to long-term commit to Ireland at the moment.


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## Askar

What availability does a micro turbine in an urban estate have? What do you do on a cold winters night when no wind is blowing, and you need light and heating?

As a conventional turbine in a good wind area will do well to achieve 40% availability (whereas a modern combined cycle gas turbine will have a 90% availability), I think all these fuzzy green notions need to be exposed, just like the concept of moving up the value added chain. Are the engineers and scientist graduating in vast numbers from the low cost economies in China and India less intelligent than Irish graduates? Are Asians less Entrepeneurial and hard working than the Irish? Edo, I think you have answered the last question.


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## Howitzer

Askar said:
			
		

> What availability does a micro turbine in an urban estate have? What do you do on a cold winters night when no wind is blowing, and you need light and heating?
> 
> As a conventional turbine in a good wind area will do well to achieve 40% availability (whereas a modern combined cycle gas turbine will have a 90% availability), I think all these fuzzy green notions need to be exposed


 
See what you do then is link your turbine into the grid and buy when you can't supply yourself and sell when you've an overcapacity.

Similarly on a larger scale windfarms link up with other windfarms across Europe (preferably on an east/west axis to avail of time differentials) so your 40% availabilty goes up towards 90%. Easy peasy. You just need people to link up the networks. Oh wait, they already are ........



An Irish company too!


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## Duplex

Askar said:
			
		

> What availability does a micro turbine in an urban estate have? What do you do on a cold winters night when no wind is blowing, and you need light and heating?
> 
> As a conventional turbine in a good wind area will do well to achieve 40% availability (whereas a modern combined cycle gas turbine will have a 90% availability), I think all these fuzzy green notions need to be exposed, just like the concept of moving up the value added chain. Are the engineers and scientist graduating in vast numbers from the low cost economies in China and India less intelligent than Irish graduates? Are Asians less Entrepeneurial and hard working than the Irish? Edo, I think you have answered the last question.


 
First time I've been called green, (or fuzzy for that matter).  I think that current development in sustainable energy technologies is in some way 'symbolic' a gesture rather than an earnest attempt to replace fossil fuels.  However there is a market for alternative energy sources and the market will grow.


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## Eurofan

Edo thanks for such a detailed and thoughful post, it's a fascinating insight into homegrown industry or rather the lack thereof.

I was particularly interested in the comment about difficulties with suppliers since they, amongst other things, are "making so much moola fabricating balcony railing" etc.

Similarly the notion that long-standing and otherwise capable businesses are giving up due to the development value of the land under them is a scary prospect (petrol stations anyone?).

If we're not quite over the _House Event Horizon_ (brilliant room305!) then we are certainly very close.

For such a small nation once a construction slowdown, never mind crash, materialises the knock-on effect on both the exchequer and the economy in general will be very tough. The timing, higher energy prices/rising interest rates and slowing global economy, couldn't be worse.


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## conor_mc

Great post Edo.

It makes you think though that a property bust sooner rather than later would be a very welcome thing, before we've lost all semblance of a manufacturing industry. At least if it happens sooner, what little manufacturing capacity remains can re-gear themselves for other markets before they've all sold up due to the "bricks and mortar" being worth more than the business itself. Hopefully it will happen before a global recession so that the manufacturing industry gets a chance to re-build some of its capacity, skill-set and reputation.


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## edo

Hi Autumn Leaf

getting back to your original questions:

Do you think the Irish Economy is heading for a meltdown?

Well - thats the million dollar question and really is a matter of what perspective you choose to look at it from and the timeframe you are talking about

It really comes down to where you earn your daily bread. If you are a public servant - no worries mate - I'll be iceskating in Hell before Fianna Fail will start laying off civil servants and there'll be a lot more of them before this election cycle is over guaranteed.

the private sector: 

if like myself ,you are in manufacturing and you're still hanging in there despite this government doing everything in its power to put you out of business - things are starting to look up - companies worldwide are starting to spend capital money again after 5 lean years after the dotcom meltdown. However its a changed world ,and nobody is throwing silly money around apart from Irish property investors. As I said earlier the indigenous Irish manufacturing sector is extremely weak , almost totally devoted to servicing the property monster.

Exports , well 87% are producted by a handful of multinationals and the exchequer sees precious little of that apart from income tax paid by the thousands of people employed by them - depending on what timeframe you are taking - the multis will be on their way to pastures anew - it wont be all of sudden - Jeez if it is - may the lord have mercy on us all - but they will slowly shift their human resources to more profitable sites over time , leaving hollowed out entities here to take advantage of our favourable corporate tax rates - that is, if the rest of Europe will still put up with us tax dumping and the IRS in the US isn't looking for a bit of extra funding for Mr Bushs deficit bonanza - 2 big buts

Services outside property are almost entirely devoted to the multi's and the public service so if they start to wind down and tax receipts decline you will see a reflection of that.


Agriculture -

 again another 2 speed sector - those farmers large enough and the Agribusiness will do ok - commodities are much in demand and if the Doha trade round doesn't descend into complete anarchy and tariff mania there is good business to be had with the Far and Middle east - for the rest - well most farmers are resigned to being welfare junkies with a nice side in real estate and some artisan gear for the foodies - but I think outside the the greater dublin area and the other major commerical centres - tough times lie ahead - there is no plan bar relocating pissed off civil servants to try and compensate for the reduced handouts from Brussels.


then we come to the "Biggie"

the elephant in the room so to speak

 If you are part of the giant pyramid scheme that has taken over the nation called property(EA, banks, auctoneers,dodgy plumbers and assorted cowboys , bouncy castles etc) you should be good for next 2 years at least - that monster stampede has still got lots of legs in it yet - however when it does turn - as it will unless we are living in a parallel universe where the laws of economics have been totally turned on their head - all I can say , having begun my productive working life in Japan in the early nineties , is you sure better have a fast horse or SUV with the engines warmed up because it's not going to be pretty - forget about all that soft landing nonsense - we flew through that junction years ago .

Im not going to go into great detail into the Irish nations psycotic fixation with the accumulation of badly built houses in dead end estates - this site has more than enough of that already. All I will say is that the whole property explosion has completely masked the true economic condition of the country over the last 10 years. 

Our wealth has not increased dramatically due to the usual way ,ie hard work ,producing and selling useful expensive stuff to foreigners, and then spending the proceeds in our own nation - most of the proceeds of our exports ends up far way in more tax friendly climes . Collectively We have gone out and borrowed , borrowed , borrowed to fund the current "boom" (well , to do the monty python thing - except me! - 3 years living in deflationary Japan engenders a certain feeling of profound disquiet when every eejit ya meet on the street these days is a flipping property tycoon and a total expert - prices can only up didn't ya know - Jeez we should find the source of this gravity defying matter , bottle and sell it and our collective economic anxietes would be banished forever. I could say "lemmings" but hey.....

2) Is there anything that can be done on a large scale...........

Well yes and no (another non-committal  - there is definitely political potential in ya yet Dude!) 

All of which you mentioned is on the money - with certain caveats to whether it can be done politically or in relation to our membership of the Eurozone.

The large scale things that could be done , if we still controlled our own economy - which we dont - WB Yeats hasn't been seen in a long time - would be monetary - interest rates , public funding and the like - however as we are now 1% of the economy of the land of Eurozone and like it or not that is the way we will be treated - if our interests coincide with those of Germany and to a lesser degree , France - party on Dude - If they dont , well dont say you weren't warned and go to your room.

the Government still has control of Taxation (for the moment) and can offer public funding , under strict guidelines from Brussels , whose competiiton authority frowns on such activites and when it comes to strict free trade practices makes the US Congress look like a Warsaw pact love in.

Contrary to the various opinions expressed here , the Irish economy is not that fleet footed nimble beast she once was - all this rich lifestyle recently has had an effect. 

Infrastructure , diversifying the industrial base , a proper engagment with the small businesses and a proper entrepreunarial set up will take lots of time, patience and resources and I mean lots - it will also require a new mind set and attitude from the people of this nation - a capability that I have profound doubts about. 

When I returned here in late '99 after 8 years away in which I didn't return once - the mother has never forgiven me - after having been seduced, yes I think that is the correct word , by Irish goverment and all the great stories coming out of the place I kind of expected to arrive back in a country transformed and high tech and modern. Boy, once the novelty of being back has worn off , did I get a comedown.

Yes Superficially the country had an new air about it , people had jobs ,the consumer splurge had begun and it appeared that this was a bright new Ireland for everyone - but when you did a little deeper that facade wears off - on top of the solid foundation of the decisions made in that crucial year of 1987 - where to paraphrase Winstons Churchills remark about the Americans , our body politic finally did the right thing after exhausting all other options - we had basically won the lotto twice , first the biillons pouring from Brussels were finally having a postive effect and secondly the adoption of the euro released a cascade of easy money into the Irish economy - we should have been planning ahead and used this unexpected windfall to secure our futures and build on the splash we made on the world economy at this time .Instead like all receiptents of easy money , we went mental - spending on all those luxuries we were denied in the hard years . The next chapter in our economic history will be the most challenging yet , and we're on our own, no more bailouts from Brussels , We ll have to manage our own financial affairs from now on.

Well whats done is done

 turning around an economy is like trying to turn around an ocean liner - its hard enough when everybody on board can see the rocks - it will be extremely challenging given the condition of the good ship Ireland Inc - with most of the guests still at the party and the captain and crew as drunk as lords at the wheel .

Anything worth doing will have be long term - well thought out and tough decisons will have to be made - something which the current Irish political establishment and the Irish public in general are allergic to - oh for a latter day TK Whittaker and Lemass .

any investment in infrastruture will have to be long term and maintained over a long period financially - given Bertie's addiction to seeing good his friends in the Unions and other vested interests I wouldn't be holding my breath - The cleverest politician of his time is just that - a politician - he measures time in electoral cycles - and the electorate , without wishing to appear elitist (Me -God Forbid) only counts the money in their pockets not in a salary check a decade hence and we are still, I believe, very immature when it comes to choosing our political masters and their policies . Is there something genetic in us that makes us celebrate the "stroke" ,the cute hoer mentality with getting something for nothing or very easily ? A discussion for another day maybe.

Good God is that the time!!! - Im done (Thank Christ the entire forum says in unison!) - if you deciper any thing of interest , value or otherwise out of the above ramblings, dreadful punctuation and brutal grammar - Fair play to ye.

Im off to watch the golf and have beer and cry in it when Harrington Breaks me heart (and me wallet) yet again.

Adios Amigos

Ed


----------



## joe sod

Excellent post Edo its not often you see someone going to the effort of posting such a thought provoking article. Its also unique to hear from someone who is really at the coalface of the irish economy. I would hate to be someone leaving school in ireland now. Everything looks so rosy to them but I think they will get it very hard.


----------



## joe sod

On a completely different note in relation to money wasting in government. I was totally shocked to hear that the tribunal into the Abbeylara shooting cost 18 million and took 4 years. At the end of it all they came to the conclusion that the gardai were negligent. I think it was pretty obvious from watching the news after the incident that this was the case. Who in the public service is watching over taxpayers money. The government allows these tribunals to run and run with no consideration for costs. Barristers and solicitors are allowed charge what they like. It is pretty obvious that an awful lot of foot dragging is going on.It appears that the legal system in this country needs a thorough shake up. However no one in government or the public service has the guts to do it.


----------



## thewatcher

edo,probably one of the best posts on this site,EVER !.


----------



## room305

joe sod said:
			
		

> I would hate to be someone leaving school in ireland now. Everything looks so rosy to them but I think they will get it very hard.



Yeah, it'll be like the bloke who knows he is going to be late for a party but can't get off work early. All night his mates are ringing, screaming down the phone "Jaysuz, it's deadly, come on!". 

Finally, work ends and he gets ready in double quick time and pegs it to the party, bursting in the door, ready to let loose. Only by that time anyone not passed out is busy getting sick and the place is absolutely trashed.

Written in large letters on the fridge is our motto for future generations: "You clean it up."

Still while the party is raging it is futile to point to mess being made or mention the inevitable hangover that will succeed it.

Great post Edo, fantastic insight into modern business in Ireland.


----------



## CelloPoint

joe sod said:
			
		

> Excellent post Edo its not often you see someone going to the effort of posting such a thought provoking article. Its also unique to hear from someone who is really at the coalface of the irish economy. I would hate to be someone leaving school in ireland now. Everything looks so rosy to them but I think they will get it very hard.



I would hate to be 25 - 30 and have a 35 year mortgage in Ratoath right now! At least you can just up and leave when you've no committments... (Up and leave is exactly what I'll do if things go pear shaped - I'm already making precautionary arrangements).

I work at 'the coal face' of the Irish economy too I guess, in that I'm working as an engineer in a multinational. I can see the operation being moved to pastures greener in the not too distant future. The process has begun already (100 jobs transferred to Croatia last year), although the management are maintaining an artifical upbeat position.


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## joe sod

"although the management are maintaining an artifical upbeat position."

Id say the management of this country will also be maintaining an artificial upbeat position for a long time yet


----------



## powderblue78

Interesting posts.

I am also at the coalface as an engineer for one of the big mulitinationals. Theres no innovation or ingenuity going on in the technologies sector in Ireland.  It all about reading the manual from the HQ in the states and copying what they do.  Whether it's manufacturing pharmaceuticals, electronics, or computers, or "developing" software (i.e. translating Word into french), that's what Hi-tech in Ireland boils down to.  Knowledge based economy my This post will be deleted if not edited to remove bad language

There are no bright kids tinkering in their garages, risking it all on hair brained schemes.  They are too petrified that if they take risks, they might not end up on the property ladder.  Better to take the safe job in the US multinational or the Public Sector or one of our over regulated greedy professions than take any of the risks required to grow profitable export driven enterprises.

I think the company EDO works for is the exception.  I have a pretty good idea who they are (cutting semi wafers with lasers, right?), and I always thought they stuck out like a sore thumb in this place considering they research, design, develop and manufacture cutting edge technology all on this Island and are Irish owned.

Got orders this week from the US to start training an engineer in India for "another project".  Why do I think this project my actually be the next one I was supposed to be doing...........


----------



## wolfie

At the end of the day all we do in this country is build houses for each other and make each other salad rolls and take away coffee.We have a small sideline in making computers and tabs for erectile dysfunction.!!!Sound industrial basis for a modern economy methinks.!!!


----------



## bearishbull

http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1658797&issue_id=14403
http://www.timesonline.co.uk/newspaper/0,,176-2281254,00.html


----------



## Marie

That's scary - 100,000 people _directly _employed by US companies with 250,000 others 'directly supported' by them!.........350,000 dependants!  If a high proportion of these are vulnerable then not only the property and construction sector but the service sector (takeaway rolls and coffee etc.) will be also.  That's a seriously anxiety-provoking situation - if you happen to be a responsible adult.  Is there _anything_ that can be done - by business leaders (!) and/or government - to salvage the situation, given the level of developmental imbalance and the ominous signs elsewhere (US etc.)?


----------



## Marie

Oh - I've just read the 'Times' article.........'clampdown on tax-evasion' figures as one antidote!!!


----------



## edo

Powderblue 78

"There are no bright kids tinkering in their garages, risking it all on hair brained schemes. They are too petrified that if they take risks, they might not end up on the property ladder. Better to take the safe job in the US multinational or the Public Sector or one of our over regulated greedy professions than take any of the risks required to grow profitable export driven enterprises."

Well said - could not have expressed it better myself.

As for my place of employment - you're totally on the money - its a small world of Hi tech in this country and getting smaller all the time.

I was at one of the young scientist thingys here recently - one of my nephews was participating in it - and its great to see the wonderful and creative ideas that these young girls and boys come up with it and their wonderful confidence and optimism - pity that this country will soon drive it out of them as it makes getting a roof over their head the be all and end all of their economic existence.

From personal experience when a financial institution will offer , rather get down on their knees and beg you to take, an outrageous amount of money for a tiny piece of land with a few questionably placed bricks on top of it, yet would turn down a request for a tenth of that amount if you have a bright idea to generate exports and employment - you really wonder where its all going to end!

Gotta go work for the taxman

Later


----------



## whizzbang

I have been away the last few months and just got back in the country on Saturday. since then I've heard a few "Payment holidays" adds on the radio. I believe it is in relation to mortgages (I wasn't listening to closely). Are these new or have they been going on the last few months? Are peope starting to feel the pinch?


----------



## autumnleaf

Funny how a bit of distance can change your perspective. I worked in Dublin in the late 90s - a real sense of boomtown about the place - fueled perhaps by the multinationals but also native industries - looked like a non-stop train. Then I lived abroad from 2001-2005 for personal reasons. Returned last year and the boom seems to have turned into a frenzy - but it's all property property property. There've been a few improvements in infrastructure, like the Luas, but nothing like what's needed (or what was promised). That large parts of the Dublin commuter belt lack broadband access is just ridiculous. The native industry hardly seems to feature apart from that associated with property. Nothing wrong with multinationals - i work for one myself - they were the fuel that started the boom - but did we make best use of that fuel? Will they stay much longer with rising costs, lack of infrastructure, and easy relocation?

I've talked to a few people who tried running their own businesses, and whether it was an IT company or a hairdressers they express the same frustrations. Of course there are always risks involved and some will inevitably go to the wall through poor planning or bad luck, but it doesn't sound like an encouraging environment even for the best prepared.

As for people feeling the pinch - well I just had to cancel a holiday - my two travelling companions can't afford to go because their mortgages have increased.


----------



## yawha

Askar said:
			
		

> *What availability does a micro turbine in an urban estate have? What do you do on a cold winters night when no wind is blowing, and you need light and heating?*
> 
> *As a conventional turbine in a good wind area will do well to achieve 40% availability (whereas a modern combined cycle gas turbine will have a 90% availability), I think all these fuzzy green notions need to be exposed, just like the concept of moving up the value added chain. Are the engineers and scientist graduating in vast numbers from the low cost economies in China and India less intelligent than Irish graduates? Are Asians less Entrepeneurial and hard working than the Irish? Edo, I think you have answered the last question*.


 
If every house built in the last 3 years alone(over 200000) had a simple convection solar panel fitted then how much oil and gas could we have saved in the last 2 weeks alone?
Is there an irish company designing and making solar panels?
A trickle of water been pumped over a dark backround contained under a sheet of glass is hardly high tech.


----------



## Nermal

Interesting posts edo, but how much of what you say is happening is just due to a natural shift to services rather than manufacturing? It's not essential for a country to make things to be successful.

Also, decentralised power generation is in some ways a bonkers idea. When a technology advances it's much easier to upgrade one power station than one million.


----------



## edo

Sure Nermal - lets go the "Services" route - do you want fries with that?


----------



## whizzbang

Nermal said:
			
		

> Interesting posts edo, but how much of what you say is happening is just due to a natural shift to services rather than manufacturing? It's not essential for a country to make things to be successful.



Services are even more outsourcable than manufacturing.


----------



## room305

Nermal said:
			
		

> Interesting posts edo, but how much of what you say is happening is just due to a natural shift to services rather than manufacturing? It's not essential for a country to make things to be successful.


 
The problem with the services industry in Ireland is that we are not exporting services, simply supplying local demand. It is hard to imagine us competing internationally on services because of our high costs.

So while there might be jobs in the services industry, someone, somewhere, needs to be exporting something so that we take in the money from other countries to pay for these services. We cannot all get rich taking in each others washing (or selling each other houses for that matter).


----------



## shnaek

edo said:
			
		

> From personal experience when a financial institution will offer , rather get down on their knees and beg you to take, an outrageous amount of money for a tiny piece of land with a few questionably placed bricks on top of it, yet would turn down a request for a tenth of that amount if you have a bright idea to generate exports and employment - you really wonder where its all going to end!



And not just the financial institutions. I have attempted to set up my own business twice and the lack of help from any of the agencies (IDA, Enterprise board, forfas etc..) was astounding. I approached so many of them, and their responses to me ranged from 'Can't help ya' to 'Do a course'. They'd break your heart. I guess a meeting with the likes of myself can then be filled into their calander as a job well done. 
I have two colleagues who have attempted to set up their own business also and they have had the same experience. So one of them is now spending what savings he had building a house and the other has moved to Belgium.
A girl who works with me set up her own business in the north and she said they couldn't have been more helpful.


----------



## soma

shnaek said:
			
		

> I have attempted to set up my own business twice and the lack of help from any of the agencies (IDA, Enterprise board, forfas etc..) was astounding.


A bit of advice. Myself and some prospective partners have been seriously looking at establishing a software firm and we've recieved alot of interest and encouragement from Enterprise Ireland but here's the key - they are only intersted in us because we'd be an exporter. In fairness, I don't really blame them (to a certain extent), as the domestic market is so small and incredibly vulnerable to external shocks.


----------



## edo

Sorry about the smart-This post will be deleted if not edited to remove bad language reply earlier *Nermal !

*Its just a reflex action with me when people automatically assume that manufacturing and industry are , _so like totally , 19th century _and services are the way of the future. 

I don't what it is , but I get the impression when you mention the word "industry" or "manufacturing" many people seem to get visions of the opening sequence of the Deerhunter film , or giant posters from the Communist era with all us industrial workers piling into work arm in arm , with our cloth caps on , sitting down the bottom of mineshafts eating pot noodles etc etc - dinosaurs waiting for the end - while services is the shiny new modern future for the western elite - let all them easterners and other assorted foreigners toil away to make the bits and pieces that make up the fabric of our lives while we make our fortunes selling each other expensive coffees and danish pastries! 

 An oversimplification I know - the truth is probably somewhere between the two.

Irelands Service industry remarkably mirrors the manufacturing industry with the vital exception of tourism. The vast majority of the Irish owned entities are small scale and inward looking - servicing the domestic marketplace ,therefore at the this moment in time massively overdependent on property and the public sector spending.

The multinational sector of services has been shrinking , call centres etc etc have been contracting and moving department by department to lower cost locations , primarily the indian subcontinent and even back to Europe and the States as rising costs , lack of skilled labour prepared to work at competitive international wages and most importantly our chronic neglect and deficit in both of physical and electronic infrastructure -something that comes up again and again.
The IFSC has been a great success both in badly needed financial revenue and jobs for the first decade of its existence - more importantly was the image it gave of a country that was ready to do business. That was vital in bringing in so much foreign investment in the 90's - pity the illusion ends the minute you walk out of the place. 

 Currently its importance is less as there is a rapid turnover of companies in the centre apart from the anchor tenants (Nearly all our large commerical banks are dependent on the home market for a large % of their revenue - their foreign adventures , how shall I put it, have been less than awe inspiring) and because of the financial sweeteners given out its impact on revenue is less than it should be - its not for the scenery and the craic that it is listed as a tax haven in the classified section of the Economist magazine- and lets be honest : its not New York , London , Hong Kong or Frankfurt - in this electronic age where would you rather be doing business?

Anyway Im starting to digress and fly off on tangents here so back to main point I was going to make originally in response to your comments vis a vis services taking over from industry as a natural way of things. 

One thing I have noticed in my travels around this air filled bubble we call Earth is that primary economic activity , manufacturing, agriculture, etc etc is the creator of wealth that all other sectors , services and banking feed off, either directly or indirectly- with a few economically perverse exceptions like stock market and property bubbles.

Im thinking primarily of the economy, culture and nation that we try to imitate (whether conciously or subconciously) most here - the USA. I travel there on Business 4 to 5 times a year and lived and worked there for a couple of years and have travelled the length and breath of it as tourist many times - Its a country that drives me nuts - I have a real love- hate relationship with the place but I'll will be fascinated with the country and its people till the day I die. One thing that has stood out to me , with relevance to this thread and Ireland is that the places where services , property prices and general around standard of living are highest , are areas where there is a high concentration of industry , manufacturing and research and development - period. Take any example you want - 

Seattle and the north west - Aviation (Boeing), Computers (Microsoft) , horticulture) Damn nearly 30% of all the apples produced in the world come from Washington State - 

California - the bay area - Computers (HP , Intel , IBM ) , Aviation and defense ( Lockheed Martin)(Raytheon), wine and a vast arrray of pharmautical , Agribusiness and other primary producers

LA and San Diego  - Film/Media, Aviaton and Defense (McDonnell Douglas , Grumman, etc etc 

I could go on and on thru the Sunbelt and midwest and North East - Each time what you will find are the same things - indigenous industry props up and is the main wage earner , whether its the same company or companies 
that have replaced them having sprung and flourished in the fertile soil of big industry spending , the high class educational facilities, great infrastructure and extensive research and development that comes with from the large tax base that manufacturing wages and purchasing bring in - property banking logistics all feed from that - there should be lessons for us here - the US Senators and Congressmen are aware of this too - you should see the fighting that took place over the budget bill when Defense bases and contracts came up for discussion - puts our own mob in the ha'penny place when it comes to bringing home the bacon !

The other side of the American dream should have lessons for us aswell. 

 the next time you go stateside , take a train, say the _Lakeshore Limited_ from NYC to Chicago - or the _Empire Builder_ from Chicago to Seattle . They will take you through the rustbelt - what happens when the Big industry dies or moves away - Ghosttowns , cities falling apart, and rusting away - once the primary generator of income goes , the tax base contracts , public services and facilities are starved , Banks close up , unemployment and crime increase, who the hell would want to live there , property goes south - anyjobs that are left are dependent on the much reduced income of the remaining inhabitants , so the pay and conditions will match , low skilled , low paid unless you happen to be the local drug baron or the pastor of the local evangelical mission (heh Heh If I was a member of the lrish Catholic Clergy I'd be on me fecking knees praying for a property crash - nothing like the end of your financial world to bring you back to God!) . Its an eyeopener Ill tell you - Its Happened here in Ireland before - nothing is written that it wont happen again.

the Arguements I have been making on this thread have been quite simply - we have to start investing seriously in our native industry and our entrepeneurs and industrialists of the future . That means serious investment in our infrastructure, educational and research estabishments, the introduction of a risk taking culture ( in industry and tech and development only - there has been quite enough in property already thank you very much!) backed up by state funding if necessary (As I have been witness to a million and one ways to blow a buck courtesy of our public service - we couldn't do any worse could we?). As a Country that depends massively on the world market for our standard of living (Both exports and Borrowed foreign funds to buy and build our little castles) the above is vital and will be more vital as the free money from Europe is drying up and our consumer / property boom cannot last forever - bills will have to be paid in the end. Get The primary industry right and the rest will follow.

Night All


----------



## room305

edo said:
			
		

> we have to start investing seriously in our native industry and our entrepeneurs and industrialists of the future .



Edo, given that we have an election coming up, have you ever considered running for the Dail?

You have my vote. Nailed down. In fact, I'm happy to dedicate my spare time to canvassing the local area here (along with Sinn Fein probably) and try whip up some support.

Perhaps a new political party is in order.


----------



## walk2dewater

Edo, dont be so hard on "services".  Wealth is created by making ever more ingenious mousetraps, yes.  And agreed, this is fundamental.  But wealth is also created by developing new, better IDEAS.  More ingenious ways of doing abstract things also makes us better off.  E.g.  Paying your bills on-line is far more efficient than queuing up at the local bank/post office.  This is a "wealth" creating invention.  You can build an economy largely based around services, look at Switzerland or Singapore.

Selling each other the same land with brick dwellings on them for ever higher prices creates nothing.


----------



## edo

Well Called W2DW - I was expecting those 2 and Dubai, Macau and Hong Kong to be thrown in me face aswell and its a fair point - on first glance! 

I didn't mean to knock The "services " industry per se - Jeez there'll be a mob lynching seeing as how many people in this country work in services.

The Point I was trying to make , obviously a tad unsuccessfully it would seem, is that services have to "service" something!

Par Example 

I work in an Engineering firm - ok its not your average welding shop - but im not an engineer or designer or researcher or technician - Im an Arts Grad who seems have a vague talent in persuading people to sell me raw materials at a good price, and am able to organise the storage and shipments of those raw marterials , the shipping and expedition of the finished articles to the customer , make sure the facilities are kept in good nick, pay the electiricity bills , organise the waste disposal and still remember the jaffa cakes for elevens - *in essence Im in Services! *- to the rest of my company - But I wouldn't have a job unless the rest of geniuses in my company weren't creating and producing something of value in the first place . Dont mean to be patronising - But do you see what I mean?

Switzerland - kinda hard to compare us with Switzerland - They do have a very big hi tech industry - but its true When we think of Switzerland all we think of is Bank accounts and skiing and very jammy soccer team. As regards their service industry - you have to remember they have centuries of history here as the one place where your gold was safe - too high up in the mountains to invade - but close enough to the richest industrial belt in Europe (the Rhone and Rhine Valleys in the West and North - the PO valley in the South) that you can take your gold too and leave in the knowledge that it was safe from Attilla the Hun and other assorted mad bastards who have charged around Europe over the last millenium. they have built up that banking experience and reputation over centuries - plus they are totally neutral and not in the EU - You can't expect us on the far west corner of Europe ,with no massive hinterland on our doorstep to replicate all that in a few decades.

Ditto Singapore - Im just back from there - We have a couple of multnational cliients who have their Asian manufacturing bases there - the road all the way to Malaysia and then over the border is jampacked with industrial estates making all kinds of everything - Singapore again has a massive hinterland to service - and sitting astride the worlds busiest sealanes and the maritime tradition and history of being part of the British Empire has been no hinderance either 

Ditto Hong Kong and Macau - you gotta have a primary industry hinterland to service.

Dubai -thats an interesting one - I spent a year there - The Sodom and Gomerrrah of the middle East - you can go and have your jollies and bit of hows your father and still be back in Riyadh in time for evening prayers - jurys out on that one - Wait till the petrodollars run out and the revolutionary guard is on the beach and it might be a different story -then again location, location, location - on the crossroads of a mighty trading route - its vital for a good service industry.

Im starting to ramble - but basically what Im trying to say is that a service industry requires an industry be it in trade or manufacturing to service - seeing as Ireland is a) not on the intersection of any great trade routes (but give M O'Leary time - you never know - then again if the baggage allowances get any crazier - maybe not), B) have no great industial /agricultural hinterland to service c) no great history of having been a safe place to put your money - the question is what else and you put your finger on it - ideas ideas ideas and the will and the finance to back them up.

Im Done - Edo has the left the building


----------



## bearishbull

http://www.unison.ie/irish_independent/stories.php3?ca=36&si=1660009&issue_id=14411


----------



## room305

I'm not normally a fan of David McWilliams hyperbole-laden pop economics but I actually thought this article was quite plausible.

The idea that we could go through 13 years of unprecedented boom followed by nothing more than a mild slowdown, smacks of DNG's "everything-will-be-fine" theory.


----------



## ivuernis

room305 said:
			
		

> I'm not normally a fan of David McWilliams hyperbole-laden pop economics but I actually thought this article was quite plausible.
> 
> The idea that we could go through 13 years of unprecedented boom followed by nothing more than a mild slowdown, smacks of DNG's "everything-will-be-fine" theory.


 
"Soft-landings" are becoming so de rigeur in Ireland at the moment after years of being out of fashion. First the property market wants one and now the economy wants one too. However, the hawkers down at the ECB stall are out of stock after selling them all to the Germans and are pushing "hard-landings" as the big thing for next season.


----------



## yawha

In the first half of 2006 Switzerland exported 3.8 billion euros worth of watches alone,this is a traditonal indiginous industry.
Switzerland has 7.5 million population.
http://www.fhs.ch/en/news/news.php?id=477

In 2005 Ireland exported 1.6 billion in software from indiginous companies.
Irish beef exports for 2005 were 1.34 billion.


----------



## Neffa

And a view on our future prospects from across the point - pretty well thought out, imho.

[broken link removed]


----------



## ivuernis

No building dependence, says Cowen


----------



## Neffa

ivuernis said:
			
		

> No building dependence, says Cowen


 
This piece is pure comedy. Apparently, we have no building dependence even though we have the highest number of workers in that sector in Europe and the highest output %age of our economy in that sector!!!! Officially 1 in 8 of employees are in construction - that must be really nearer to 1 in 5 or 6 when you take into account the supply chain and so on which surrounds that sector. Scary.


----------



## room305

Neffa said:
			
		

> And a view on our future prospects from across the point - pretty well thought out, imho.
> 
> [broken link removed]


That's a very well written article. I particularly like their point about investment in foreign property:



> One can only imagine what kind of economic growth could have been generated if even half that money had been invested in innovative and productive Irish firms.


As I mentioned before, Enterprise Ireland has only invested 0.5% of the amount Irish people have invested in foreign property, into venture and seed capital over the last five years.


----------



## dontaskme

room305 said:
			
		

> As I mentioned before, Enterprise Ireland has only invested 0.5% of the amount Irish people have invested in foreign property, into venture and seed capital over the last five years.


 
People are always banging on about Enterprise Ireland but I don´t think government funding is necessarily the best way to promote entrepreneurship.

I would question how effective Enterprise Ireland´s strategy has been in any case. The success stories like Baltimore and Iona are not really the shooting stars they once were.


----------



## room305

dontaskme said:
			
		

> People are always banging on about Enterprise Ireland but I don´t think government funding is necessarily the best way to promote entrepreneurship.



What is? The idea is that EI provide the funds or part of the funds necessary to take a good idea and export it to the global market. Perhaps there are better ways and means of promoting entrepreneurship but I would certainly like to see something done. The bulk of the wealth we have created has been wasted on unproductive assets like property, both foreign and home based. The key point is that we would be in a much more secure postion economically if we had taken at least half of this money and invested it in R&D and innovation.



			
				dontaskme said:
			
		

> I would question how effective Enterprise Ireland´s strategy has been in any case. The success stories like Baltimore and Iona are not really the shooting stars they once were.



A general downturn in the tech-industry from which it has never really recovered rather than a failure on EI's part.

However, which has been more productive for the Irish economy - Iona or a bunch of Irish-owned apartments in Bulgaria?


----------



## dontaskme

room305 said:
			
		

> What is? The idea is that EI provide the funds or part of the funds necessary to take a good idea and export it to the global market. Perhaps there are better ways and means of promoting entrepreneurship but I would certainly like to see something done. The bulk of the wealth we have created has been wasted on unproductive assets like property, both foreign and home based. The key point is that we would be in a much more secure postion economically if we had taken at least half of this money and invested it in R&D and innovation.


 
Government bodies and entrepeneurship go together like fish and bicycles.

I agree that the intention is good, but the end results have not been inspiring. 

I don´t think there are quick fixes, but the education system seems to have been designed by civil servants for the creation of civil servants.

Compulsory Irish is useful for aspiring civil servants, less so for potential entrepreneurs.

Also, computing or computer studies is not a leaving cert subject. 

If you spend 13 years teaching people compulsory Irish and telling them to sit quietly in rows and to learn by rote the irregular French verbs then you can´t really complain when you don´t create a generation of entrepreneurs.

Property is a lower risk investment than r&d - how much r and d spending is wasted? You could spend a million on r&d and end up with nothing marketable. And you have to compete with the microsofts and googles who have billions to spend. Some of Ireland´s most successful entrepreneurs, such as Dermot Desmond and John Magnier have ploughed plenty into property over the years.



			
				room305 said:
			
		

> A general downturn in the tech-industry from which it has never really recovered rather than a failure on EI's part.
> 
> However, which has been more productive for the Irish economy - Iona or a bunch of Irish-owned apartments in Bulgaria?


 
Well, this is debatable, if both are generating positive cash flows and profits for Irish investors then they are both adding value surely. 

It could also be claimed that the tech-industry was oversold and overhyped and that the "downturn" was just a return to realistic valuations.

However, while Iona employs people in Ireland, it has been reporting losses for the past few years. On the other hand, properties in Bulgaria don´t employ people here but they should be generating cash flow for the foreseeable future without the risk of takeover etc.

Don´t get me wrong, Enterprise Ireland is a good idea and they do make a positive contribution, but people seem to expect too much from them.


----------



## CelloPoint

Dell Ireland look to be having serious problems.

Ireland's second largest company (turnover) and employer of 4,500 people (Ireland's second largest ICT employer) has asked 3,000 of their staff if they'd like to move to Poland!

A loss of Dell would be one massive body-blow to the region, indeed economy at large. They've been propped up by the government for years now (including every Irish government department essentially buying only Dell machines), and now it looks to me as if the tipping point between competitiveness and cost savings has been breached.

Here's the article I found:

[broken link removed]

Another one posters might have read already:
http://www.tmcnet.com/usubmit/2006/07/28/1749679.htm


----------



## autumnleaf

dontaskme said:
			
		

> Property is a lower risk investment than r&d - how much r and d spending is wasted? You could spend a million on r&d and end up with nothing marketable.


 
On a short-term basis, yes. But on a long-term basis, my bet would be on r&d. Of course a lot of money is “wasted” with r&d. But research needs to have the freedom to take risks and make mistakes. A lot of science is focused on the seemingly “negative” tasks of creating speculative theories and then attempting to disprove them. But without this rigorous system, we would not have the knowledge of the world that we have today, and neither would we have many of the products (computers, cars, medicines, etc) that make our lives so much easier.

And sometimes you find something you’re not looking for. Wasn’t Viagra originally a blood-pressure medication? 

The U.S. is a prime example of a country with a strong r&d and risk-taking tradition, both with its third-level institutes and its “guys tinkering around in the garden shed”. The oh-so-cautious Swiss have put a lot of money into r&d. In both cases you have economies that have weathered storms over the long term. 

I agree with a lot of what you say about the Irish educational system. The level of basic scientific illiteracy among people who have achieved their Leaving Certs and even third-level degrees astounds me sometimes. As an example, how many people out there use “average” to interchangeably refer to a median and a mode? How many people have no idea of what “scientific method” actually is, and therefore have no way of logically discussing things like evolution, global warming, or MMR vaccines?

As for language learning – well, most Irish people are functionally monolingual despite years of learning the Gaeilge and probably another language such as French. Bilingual or multilingualism is the norm worldwide and there is no reason why we are incapable of it. Instead of banging away at the same methods that have failed us, why not look at other places where language teaching does seem to be working (e.g. Switzerland, Scandinavia, Holland) and adopt their methods?

Anyway, you’ve got me on one of my hobby horses so I’d better stop now!


----------



## SidTheDweeb

CelloPoint said:
			
		

> Ireland's second largest company (turnover) and employer of 4,500 people (Ireland's second largest ICT employer) *has asked 3,000 of their* staff if they'd like to move to Poland!



Nonsense, quotes from the article...



> DELL confirmed yesterday _that some of the 3,000 workers _in its Limerick plant have been asked if they would be prepared to move to a new computer manufacturing facility they want to build in Poland.
> 
> Ireland is well placed to serve our customers in western Europe _but central and eastern Europe are becoming stronger markets_.
> 
> ...we would be looking for people in Limerick who have already got the necessary expertise to help set up a new operation. They would be needed to get it up and running.


----------



## Duplex

This trend of moving production to Poland (etc.) will probably gather pace. 
It sheds some light on where our Polish guest workers will be in a few years time. (Not here). 



http://www.ananova.com/business/story/sm_1938060.html?menu=


----------



## phoenix_n

Duplex said:
			
		

> This trend of moving production to Poland (etc.) will probably gather pace.
> It sheds some light on where our Polish guest workers will be in a few years time. (Not here).
> 
> http://www.ananova.com/business/story/sm_1938060.html?menu=


 
As a frequent business visitor to Poland i can testify to the low wages and low cost of living. I can eat/drink out there all week and still have change out of 100euros for the whole week! Now i know why you dont see many polish out and about in Dublin.


----------



## soma

This reminds me of one of my favourite paradoxes that is peddled by some Irish/Overseas Property buyers.

* Immigration from high-unemployment/low-prospect countries will fuel housing demand here for the next 15 years.
* I'm buying that over-priced apartment(s) in one of the above countries as I expect their economies to pick up and to experience great capital appreciation "just like Ireland".

Pick *One*.

In terms of the economy, is there anyone here who hasn't learned how Globalisation works by now..? For now, the likes of Sid will scoff and say "sure they're only being _asked_ to move to Poland _to help setup the place_..".

In other words, they are being asked to _train their low-paid replacements_.

Then further down the line the 'asking' stops.. and the real movement of jobs and capital kicks in.


----------



## Duplex

soma said:
			
		

> This reminds me of one of my favourite paradoxes that is peddled by some Irish/Overseas Property buyers.
> 
> * Immigration from high-unemployment/low-prospect countries will fuel housing demand here for the next 15 years.
> * I'm buying that over-priced apartment(s) in one of the above countries as I expect their economies to pick up and to experience great capital appreciation "just like Ireland".
> 
> Pick *One*.
> 
> In terms of the economy, is there anyone here who hasn't learned how Globalisation works by now..? For now, the likes of Sid will scoff and say "sure they're only being _asked_ to move to Poland _to help setup the place_..".
> 
> In other words, they are being asked to _train their low-paid replacements_.
> 
> Then further down the line the 'asking' stops.. and the real movement of jobs and capital kicks in.


 
Yes I have this rather quaint understanding of Capitalism.  Capital flows to where profits can be maximised.   I know, I know its old hat and no longer applies, but for some reason I cant shake it off.


----------



## Contrarian

This Dell business is looking like the thin end of the wedge, you might as well abolish Limerick if Dell packs up.


----------



## SidTheDweeb

soma said:
			
		

> In terms of the economy, is there anyone here who hasn't learned how Globalisation works by now..? For now, the likes of Sid will scoff and say "sure they're only being _asked_ to move to Poland _to help setup the place_..".



I think you're missing my point. I had no point. I was correcting CelloPoint's assertion that 3000 employees were asked if they'd be interested in working in Polond.

Instead, according to article, a few employees (out of 3000) were asked if they'd be willing to help set up a base in Poland.


----------



## bearishbull

SidTheDweeb said:
			
		

> I think you're missing my point. I had no point. I was correcting CelloPoint's assertion that 3000 employees were asked if they'd be interested in working in Polond.
> 
> Instead, according to article, a few employees (out of 3000) were asked if they'd be willing to help set up a base in Poland.


Yeah but in the future all production will move to plants in low cost eastern europe, sticking pc's together in a high cost economy is only viable when the tax benefits outweigh the higher costs but it looks like this is not gonna be the case much longer. dell will probably maintain a small base here so they can benefit from low cost production europe and low taxes here but the jobs and supplier contracts that pump money into irish economy will not be here.


----------



## RiceCakes

Dell have about 1500 marketing and sales people in Cherrywood Science Park in Dublin whom I imagine are on average better paid on average than most in Limerick. 
Can't see it being cheaper to move these money generators to somewhere else, at least in the short term. 
Limerick is going to shrink no question imho, but the Dublin jobs are reasonably safe as is the huge revenue they generate of the Irish economy. 
My heart goes out to the Limerick employee's, manufacturing in Ireland is becoming less and less viable by the year with huge land and wage costs compaired to the new EU entrants such as Poland. They have worked incredibly hard to make a manufacturing plant - the most efficient in the world apparently for the type of work they do, but simple raw cost will be their undoing probably in the next 5 - 10 years.


----------



## CelloPoint

Interesting article about the changes in the Irish economy (Irish Independent):

The drivers of economic growth are a-changin'


----------



## autumnleaf

Contrarian said:
			
		

> This Dell business is looking like the thin end of the wedge, you might as well abolish Limerick if Dell packs up.


 
Didn't they say the same about Galway after the Digital layoffs way-back-when?


----------



## Contrarian

Digital did'nt employ 4000 people, it would be devastating to Limerick if Dell disappeared.


----------



## phoenix_n

autumnleaf said:
			
		

> Didn't they say the same about Galway after the Digital layoffs way-back-when?


 
Yes didnt they call Salthill the porridge estate or something as that is what (not literally of course) people could only afford to eat!


----------



## Bedsit

Looking at the various stories on the ECB rate hike today (http://news.google.com), it looks like that most economists have taken today's comments by the ECB chief as being hawkish. I guess that means that they are still looking at two further rate hikes this year


----------



## soma

Bedsit said:
			
		

> Looking at the various stories on the ECB rate hike today (http://news.google.com), it looks like that most economists have taken today's comments by the ECB chief as being hawkish. I guess that means that they are still looking at two further rate hikes this year


However a few of those articles imply that the ECB will pause or be unable to (due to a possible recession) raise rates in 2007. I wonder how plausible that scenario is.


----------



## Afuera

soma said:
			
		

> However a few of those articles imply that the ECB will pause or be unable to (due to a possible recession) raise rates in 2007. I wonder how plausible that scenario is.



If the ECB had to choose between maintaining economic progress or maintaining price stability, I'd say they'll go for price stability every time! Their whole reason for existence would be thrown into question if they let inflation get out of control. I'm under the impression that they see economic progress as being the reign of the various governments in their respective countries.


----------



## Remix

US and UK are in a much more difficult position. Interest rates need to rise but there's a real risk of bringing about a hard landing in their respective property bubbles.

The ECB, on the other hand, has no property bubble to worry about in Germany.

There might be a rude balloon deflating sound coming from the Irish side of the zone though.


----------



## whizzbang

Remix said:
			
		

> There might be a rude balloon deflating sound coming from the Irish side of the zone though.



Spain as well I'd say.


----------



## Bedsit

whizzbang said:
			
		

> Spain as well I'd say.



That could be a serious double whammy for some people who may own Spanish investment property.


----------



## room305

Bedsit said:
			
		

> That could be a serious double whammy for some people who may own Spanish investment property.



Yeah, especially if they are not tax compliant on the Spanish villa as well. Spanish revenue going after foreign property owners in a big way.


----------



## SidTheDweeb

Quite strong suggestions from analysts that the ECB rate will rise to 3.5% by year end and pause there. 
This is quite interesting as it's not as significant an increase as quite a few posters on here have believed... maybe a topic should be set up for where people think ECB rates are headed...


----------



## room305

SidTheDweeb said:
			
		

> Quite strong suggestions from analysts that the ECB rate will rise to 3.5% by year end and pause there.
> This is quite interesting as it's not as significant an increase as quite a few posters on here have believed... maybe a topic should be set up for where people think ECB rates are headed...



I think there is an interest rate thread. Might be an idea to post this comment there, maybe with a link. I'd be curious to know who is doing the analysis. I personally think we'll go much higher before settling back to a base rate of about 4.5%


----------



## Remix

SidTheDweeb said:
			
		

> Quite strong suggestions from analysts that the ECB rate will rise to 3.5% by year end and pause there.
> This is quite interesting as it's not as significant an increase as quite a few posters on here have believed... maybe a topic should be set up for where people think ECB rates are headed...


 
Trichet said very clearly today that he considers inflation risks are to the upside throughout 2007.

Can't see them suddenly stopping with rate hikes in 2006 if that's the case. 

A safer assumption - at this point - based on Trichet's statement would be to expect interest rate increases throughout 2007.


----------



## autumnleaf

whizzbang said:
			
		

> Spain as well I'd say.


 
I've heard there's been something of a property boom in Spain as well, partly fueled by foreigners buying up holiday homes and partly because, like "the big European islands" but unlike most of continental Europe, the Spanish have a home-owning culture. But how much is the Spanish economy dependent on construction?


----------



## room305

autumnleaf said:
			
		

> But how much is the Spanish economy dependent on construction?



A lot.


----------



## bearishbull

_Extract sunday times_
_""The largely sunny economic picture has masked hard times in the traded sectors of the economy. Merchandise exports have fallen over the past four years, while some 30,000 jobs have been lost in the manufacturing sector. _
_Exports increased by 160% between 1995 and 2001 but by 2005 the value of exports was 5% below the 2002 level. This decline has occurred at a time when the global economy has performed very strongly. _
_A loss of market share is a danger sign for any company and the same goes for countries. The reduction in Ireland’s share of total European Union exports from 9.5% in 2001 to 7.5% in 2005 should signal something of a crisis for Irish business. __Amid all the euphoria about rising house prices, special savings incentive accounts (SSIAs) and buoyant consumer spending, it has almost gone unnoticed that the traded sectors of our economy are in recession. ""_


----------



## Marie

What a relief to at last hear the "r" word ("recession") in manufacturing sector.  The timescale in this excerpt vindicates my advice to younger family members since 2001 (a good number of whom work in the hospitality and leisure industry) that they should avoid complaicence in terms of their financial commitments as the service sector would be next to be hit..........and it will occur very quickly.


----------



## cooked

Ipso_facto said:


> temporary overseas workers ) contribute to inflation in - *housing* and the *rental* sector.



Two eastern european girls who work in my local supermarket are pregnant. I got to wondering do they plan to return home to have their babies or stay? Are they in a relationship with an Irish national? Migration may not be temporary or simplistic - its human beings that are involved after all not just workers. 

No-one has any idea what is going to happen in three years time let alone ten. Its a big sociological experiment and no-one can be sure of the outcome.

( Not a uselful sample size I know  )


----------



## Remix

Dell's new polish plant will have a manufacturing facility of 600,000 sq ft in size. The Limerick plant is 400,000 sq ft in size.

They will have more than double the current manufacturing capacity in a couple of years and at this time it looks extremely unlikely they will need all that capacity in Europe. 

Not good for expensive Ireland.

It's estimated that over 20,000 irish jobs depend on Dell and Dell exports from Ireland are worth more than agriculture and tourism combined.

http://www.unison.ie/business/stories.php3?ca=80&si=1670510


----------



## shnaek

That's interesting stuff, Remix. Not a surprise though. Might be a good place to buy a house!! Dell are worth a fortune to the Irish economy, and will be worth a fortune wherever they go. It is such a shame we are so reliant on foreign companies and haven't invested in building Irish industry at all.


----------



## room305

shnaek said:


> It is such a shame we are so reliant on foreign companies and haven't invested in building Irish industry at all.



Or rather it is such a shame we invested so much in the Irish building industry.


----------



## Raskolnikov

The Irish plant will go into direct competition with the Polish one. It'll be interesting to see if Ireland's higher cost operation can compete.

More Dell news.



Dell to announce quarter-year profits 30% below expectations this Thursday.


----------



## Howitzer

And more Dell news!



Not such a reliable source though. The date is interesting though considering the recall annouced today.


----------



## Raskolnikov

Howitzer said:


> And more Dell news!
> 
> 
> 
> Not such a reliable source though. The date is interesting though considering the recall annouced today.


Batteries from Dell have have been recalled before due to fears that they might explode! I don't think Dell have actually had a battery explode on a customer though.


----------



## Remix

Raskolnikov said:


> I don't think Dell have actually had a battery explode on a customer though.


 

Take a peek:

http://www.gizmodo.com/gadgets/laptops/dell-laptop-explodes-in-flames-182257.php


http://www.engadget.com/2006/07/31/dell-laptop-number-3-explodes/

And funny enough look at the marketing colours used for this Dell PC:

http://www.finfacts.com/irelandbusinessnews/publish/article_10006927.shtml


----------



## wolfie

This Dell pc Im using is just over 1 year old and the cd/dvd drive is shagged. even though it it was barely used.Their quality is crap and they are losing customers everywhere to hp etc.Im not surprised they are in trouble.Remember the guaranteed irish campaign years ago Yeah! Guaranteed Crap!!!


----------



## thewatcher

I bought a pc from dell last year and the motherboard went belly up after 1 week.
I was supposed to get a free mp3 player as part of the deal (one of the reasons i went for it) but they sent me a webcam instead.
Rang them up and told them i didn't ask for or want a webcam where's me mp3 player,"sorry there all gone" ,"we'll give you an extended warranty instead"
Never heard anything back,emailed them twice no reply.
Won't be buying a Dell again i can tell you !.


----------



## room305

My Dell laptop was the worst purchase ever. Required over €300 worth of repairs about a month after the one year warranty expired. They refused to pay for the repairs and gave the helpful suggestion of repairing the piece of junk and then taking out an expensive 3 year warranty!

However, you could just do what I did. Go short on the companies stock. The profit from doing so comfortably exceeded the cost of the repairs! 

The fact that Dell is our largest exporter and private sector employer but is such a dog of a company makes me feel distinctly uneasy.


----------



## Remix

Just when you think things couldn't get any worse for Dell this week:


Goldman Sachs downgrades Dell to "sell" following 51% profit slide


----------



## joe sod

the leaving cert results this year also are not bright omens for the future. The high failure rates in maths and sciences. Also the reduced numbers taking these subjects at leaving cert. Students don't see the point in studying these subjects in building site ireland. Also they are not prepared to put in the effort required when the job market doesn't seem to demand. To add insult to injury the minister for education is asking the colleges to accept foundation level maths rather than addressing the core problem, that might upset the teachers.


----------



## Marie

Whenever things got rough in the past there was the option of emigration - to the USA, to the UK or to teaching or engineering work in the Gulf or Africa.  This is - on the whole! - no longer an option with globalisation and a very changed economic situation with massive migrant populations following the multinationals.  Can anyone think of a pathway to economic stability for younger Irish men and women if (more likely when - 3 - 5years time!) the economic landscape becomes very bleak.  They can't (for example) follow Dell to Romania or Poland because of the language barrier.  "What next?".....cried Plato's ghost/"What next?"


----------



## Eurofan

Marie said:


> Whenever things got rough in the past there was the option of emigration - to the USA, to the UK or to teaching or engineering work in the Gulf or Africa.  This is - on the whole! - no longer an option with globalisation...



I would have to disagree entirely with this. If anything it is infinately easier to give serious thought to emigration today than it was in the past, you're no longer limited to the States/UK but many are enjoying Australia and New Zealand too not to mention the entire EU now available to those wishing to leave Ireland. Much cheaper air travel/telephone calls/email etc. makes emigration a less daunting thought today too since it is easier to keep in touch with home.

We've been making provisional plans for some years and the point i made above means we've had the leisure of exploring potential spots long ahead of actually making a move.


----------



## dontaskme

Marie said:


> They can't (for example) follow Dell to Romania or Poland because of the language barrier. "What next?".....cried Plato's ghost/"What next?"


 
Nail on the head here. Instead of trying to force mathematics down the throats of students who clearly have no interest and/or aptitude, schools and universities would be much better off concentrating on teaching languages, particularly European languages. And not just to Arts students but also to electronics and engineering and science students.

As you point out, Marie, there is no point in teaching electronics to ever-higher degrees if the graduates don´t speak the language of where the jobs are. 

I don´t mean to learn Romanian or Polish but the universities should be turning out people with, say, electronics AND German or French or Spanish, including the technical vocabulary (especially the technical vocabulary), not just how to order a meal and a glass of wine.

Knowing a second language is no big deal in Europe and Irish people will have to compete with Polish and Romanian engineers who also know German or Hungarian as English is a given these days.

Improved language skills would make Ireland a more attractive place for investment from Europe (as well as the States and elsewhere) and improve the mobility of Irish people and companies, one of the goals of the EU.

I am well aware that English is the international language of business but within national borders most business is in the language of the country, and if we want a piece of that we have to speak the lingau.


----------



## joe sod

dontaskme said:


> Nail on the head here. Instead of trying to force mathematics down the throats of students who clearly have no interest and/or aptitude, schools and universities would be much better off concentrating on teaching languages, particularly European languages. And not just to Arts students but also to electronics and engineering and science students.
> 
> As you point out, Marie, there is no point in teaching electronics to ever-higher degrees if the graduates don´t speak the language of where the jobs are.
> 
> I don´t mean to learn Romanian or Polish but the universities should be turning out people with, say, electronics AND German or French or Spanish, including the technical vocabulary (especially the technical vocabulary), not just how to order a meal and a glass of wine.
> 
> Knowing a second language is no big deal in Europe and Irish people will have to compete with Polish and Romanian engineers who also know German or Hungarian as English is a given these days.
> 
> Improved language skills would make Ireland a more attractive place for investment from Europe (as well as the States and elsewhere) and improve the mobility of Irish people and companies, one of the goals of the EU.
> 
> I am well aware that English is the international language of business but within national borders most business is in the language of the country, and if we want a piece of that we have to speak the lingau.


 
I would have to totally disagree with this suggestion. You are suggesting that third level education should be directed at giving skills to people for immigration. That was essentially what happened in the 80s although it was hardly desirable. Students should be encouraged to do engineering and science for the benefit of this country and to try and generate a home grown technology industry. The reason why less people are doing these courses at third level is because they are among the toughest and most demanding courses. They are also at the coalface of globalisation which means that job security is not as good as in other protected areas of the economy. If you force these students to along with their already demanding schedules to also take on a foreign language you would just force more students away from studying them. Also what would be the point in having arts courses if you forced engineering and science students to study some of their couses also. The logical follow up to this would be to force arts students to study some engineering and science courses and thats where this argument dies


----------



## Archie

Where in Poland will Dell be based please?


----------



## fatmanknows

Archie said:


> Where in Poland will Dell be based please?


 
Unit acquired in Lodz.

They acquired 600,000 sq ft of premises (plus 300K sq.ft for support services).

Above footage is 50% more than Limerick. Quite worrying really.

Dell announced their results Thursday night.  Profits almost half. Pressure on costs and margins. Share price still tanking. They need a lower cost base than Ireland. Polish move very ominous !


----------



## whizzbang

fatmanknows said:


> Above footage is 50% more than Limerick. Quite worrying really.



From talking to people in Dell I think it is almost guaranteed. Just a matter of time really.


----------



## dontaskme

joe sod said:


> I would have to totally disagree with this suggestion. You are suggesting that third level education should be directed at giving skills to people for immigration. ... If you force these students to along with their already demanding schedules to also take on a foreign language you would just force more students away from studying them. Also what would be the point in having arts courses if you forced engineering and science students to study some of their couses also. The logical follow up to this would be to force arts students to study some engineering and science courses and thats where this argument dies


 
I don´t think students should necessarily be _forced _to study anything, they could be given the option to do it and if the marks are available appear to be easier than alternative technical subjects they might choose that.

I wouldn´t think of it as emigration or immigration but as moving within Europe. 

Anyway, it would make Ireland a more attractive location for German or French technical companies if they thought they could get the graduates with the language skills within Ireland.

What would be the point of Arts courses? Now you´re asking  Well, if they got up to speed on the technical vocabulary it would be useful for their careers also.


----------



## StoppedClock

whizzbang said:


> From talking to people in Dell I think it is almost guaranteed. Just a matter of time really.


 

Does anyone know what incentives are in place in Poland for multi-nationals? Have they special tax rates etc?  Also how far are the EU from deciding that tax is due in the country where the profit was generated (i.e. Frnace Germany ) rather than reported (Ireland)?


----------



## Raskolnikov

StoppedClock said:


> Does anyone know what incentives are in place in Poland for multi-nationals?


Corporation tax is 19% as opposed to 12.5% here. Obviously it would have a lower cost base than Ireland. Other than that, I don't think it can offer any other incentives.

The question I ask is, would it be possible for Dell to move it's manufacturing base to Poland and keep a small office in Ireland to funnel it's profits in to?


----------



## Jimoslimos

joe sod said:


> Students should be encouraged to do engineering and science for the benefit of this country and to try and generate a home grown technology industry. The reason why less people are doing these courses at third level is because they are among the toughest and most demanding courses..........
> 
> Also what would be the point in having arts courses if you forced engineering and science students to study some of their couses also. The logical follow up to this would be to force arts students to study some engineering and science courses and thats where this argument dies


 
Excellent points joe. I'm a recent science graduate (living abroad obviously!) who can attest that to learn a foreign language on top of my 4-yr degree course would have meant either;
a) lower standard of science degree
b) spending an extra two years *at least* in college
AND still coming out of third-level education with a pitifully low salaries compared to other graduates.
Learning a language should mean more than just expanding your CV catchment area (as it happens I'm learning Japanese now for no other reason than I enjoy the challenge)


----------



## whizzbang

Raskolnikov said:


> The question I ask is, would it be possible for Dell to move it's manufacturing base to Poland and keep a small office in Ireland to funnel it's profits in to?



I believe they will still have their sales/services wing run out of Cherrywood, it's just the Limerick manufacturing that would be effected I believe.


----------



## bogwarrior

I'd imagine Dell will do something similar to what APC did in Galway earlier this summer - move the manufacturing to a cheaper location and keep the higher-tec jobs in Ireland (for now at least).  That way they'll be able to keep to tax breaks and the government can bleat about how we're moving 'up the value chain' towards being a 'knowledge economy' blah blah.

We'll see more of this kind of thing in the future.

For a manufacturing plant it surely makes far more sense to be based in central europe if you're deliverying product around the continent.  all the raw material has to come here by air or sea and the finished goods leave the same way.  With fuel prices so high this has got to increase an already significant overhead.


----------



## dontaskme

Jimoslimos said:


> Excellent points joe. I'm a recent science graduate (living abroad obviously!) who can attest that to learn a foreign language on top of my 4-yr degree course would have meant either;
> a) lower standard of science degree
> b) spending an extra two years *at least* in college
> AND still coming out of third-level education with a pitifully low salaries compared to other graduates.
> Learning a language should mean more than just expanding your CV catchment area (as it happens I'm learning Japanese now for no other reason than I enjoy the challenge)


 
I agree that learning a language from scratch would take at least two years.

However, it is a requirement of most college courses, including science (at UCD anyway) to have at least a d3 in a language other than Irish and English, so no-one should be starting a language from scratch. Unless of course they sat Latin or Greek  

One language module for 4 years, even if it is just an hour or two a week, would surely bring your language skills up a level.

Fact is, if you have language skills it makes it easier to get a job in the _soi-disant_  knowledge economy and, as you say, it expands your cv catchment area.


----------



## soma

Absolutely woeful article by Johns Beggs (AIB Economist) in today's Irish Times, declaring that a slowdown in housing need not mean trouble for the economy.

His "arguments" are virtually non-existent and amount to a few half-hearted projection figures, almost aimlessly trotted out. He does not appear to make any suggestions as to what areas of the economy will pick up the slack when this main driver of growth is removed.


----------



## whathome

Intel reportedly to announce job cuts of up to 20,000 worldwide

http://www.marketwatch.com/News/Sto...26B27C}&source=blq/yhoo&dist=yhoo&siteid=yhoo

"The job cuts are likely to weigh particularly heavily on marketing staff"

I think the Irish operation is primarily manufacturing, hopefully jobs here will be spared.


----------



## CelloPoint

whathome said:


> Intel reportedly to announce job cuts of up to 20,000 worldwide
> 
> http://www.marketwatch.com/News/Sto...26B27C}&source=blq/yhoo&dist=yhoo&siteid=yhoo
> 
> "The job cuts are likely to weigh particularly heavily on marketing staff"
> 
> I think the Irish operation is primarily manufacturing, hopefully jobs here will be spared.


----------



## Bedsit

whathome said:


> Intel reportedly to announce job cuts of up to 20,000 worldwide
> 
> http://www.marketwatch.com/News/Sto...26B27C}&source=blq/yhoo&dist=yhoo&siteid=yhoo
> 
> "The job cuts are likely to weigh particularly heavily on marketing staff"
> 
> I think the Irish operation is primarily manufacturing, hopefully jobs here will be spared.



I would suspect that Dell will follow suit in the next few months ...


----------



## Bedsit

Bedsit said:


> I would suspect that Dell will follow suit in the next few months ...


 
Further to my last post, two articles that appeared in the Sunday Business Post on the 10th of September:

*Intel Ireland waits for next move*
[broken link removed]

*Dell under pressure*
[broken link removed]


----------



## bearishbull

www.timesonline.co.uk/newspaper/0,,2769-2350137_1,00.html

More worrying commentary from former deputy chief of central bank.


----------



## Remix

Bedsit said:


> Further to my last post, two articles that appeared in the Sunday Business Post on the 10th of September:
> 
> *Intel Ireland waits for next move*
> [broken link removed]
> 
> *Dell under pressure*
> [broken link removed]


 
Today might be another bad day for DELL on the US stock market:

irregularities


----------



## Maine

This is a bad week for the irish economy with alot of real economy jobs lost. It shows that allowing the construction boom to drive wages and inflation is going to cost us alot of jobs where wages need to be competitive. Long term some of these jobs would go anyway however IMO we have greatly accelerated the rates at which companys are taking the tough decisions.


----------



## whathome

Maine said:


> This is a bad week for the irish economy with alot of real economy jobs lost.


 
RTE mention this today:

*Bad week nationwide on the jobs front*

[broken link removed]


----------



## bearishbull

From todays Irish Times.(not full article)

_The economic boom has been fuelled by domestic demand because easy credit has over-stimulated personal consumption, Pat Crotty said at the SFA's annual conference in Dublin Castle._
_At the same time, the value of our exports last year was 5 per cent below the 2002 level and Ireland is losing share of the European Union's total exports._
_"Amidst all the euphoria about rising house prices, SSIAs and buoyant consumer spending, it has almost gone unnoticed that the traded sectors of our economy are in recession," Mr Crotty said. While exports of goods and services accounted for a major part of our income growth at the start of the decade, net exports had a negative impact on economic growth by 2005 and some 30,000 manufacturing jobs have been lost in the last four years._
_Ireland's economic boom is now entirely dependant on domestic demand, a source of growth that is unsustainable, the SFA chairman warned._
_"In the recent past, the Irish nation has been behaving more like a drug addict than a well-oiled business - high on cheap money," he said._
_© The Irish Times 
_


----------



## Maine

Any analysis of what would happen to tax receipts and rates etc to finance govt in event of say medium slowdown in residential property market and related development market etc ?  How would gap be financed as govt borrowing has to meet eu requirements ?


----------



## kerrybull

Maine said:


> Any analysis of what would happen to tax receipts and rates etc to finance govt in event of say medium slowdown in residential property market and related development market etc ? How would gap be financed as govt borrowing has to meet eu requirements ?


 
The short answer is that there is very little that can be done. I believe that we will again see a 1977 give away budget in an attempt to keep the party going. On a recent trip overseas, I was told by a banker that " Irish people will have to learn that they are not immune to the laws of economics" A return to the nightmare that was Ireland in the 80's is a very real possibility. Debt is the time bomb that is ticking underneath the foundation of our whole way of life. We really are in unchartered waters.


----------



## Maine

kerrybull said:


> The short answer is that there is very little that can be done. I believe that we will again see a 1977 give away budget in an attempt to keep the party going. On a recent trip overseas, I was told by a banker that " Irish people will have to learn that they are not immune to the laws of economics" A return to the nightmare that was Ireland in the 80's is a very real possibility. Debt is the time bomb that is ticking underneath the foundation of our whole way of life. We really are in unchartered waters.


 
IMO the govt has committed itself to levels of expenditure that going forward we will not be able to pay for without significant levels of tax increases.  During the current Japanese bubble bursting they borrowing mountains of debt to keep the economy going, however Ireland is bound by the EU borrowing rules and cannot go that route.  Hence the only escape route is higher taxes.  So just as the economy is heading south the govt will have to start raising additional taxes squeezing and making a bad situation worse.  Falling real wages due to higher taxes will drive house prices even lower.  

Although no one says it the euro may in hindsight been the wrong option for ireland given our cycle was out of whack with Germany.  The  UK was been proven right in staying out without any ill effect.  Lower EU rates in the UK would also have driven its property market to stupid heights.  They have avoided most of that.


----------



## Persius

The Euro interest rates might not have been so low had the UK joined the Euro. The UK figures would have had the same influence as the French or German ones in determining the interest rates (unlike Irish figures which are of negligible importance).

I still think that if things get really grim here, the government of the day might think about withdrawing from the Euro.


----------



## walk2dewater

Persius said:


> I still think that if things get really grim here, the government of the day might think about withdrawing from the Euro.


 
Withdrawing to what? An IR£ thats 3:1 to the €? ... 4:1? Irish debt is denominated in €, and will get paid back in € whatever our new currency might be.


----------



## Persius

Sure, any debt in Euro will remain so, but "going forward", as the economists love to say, we can devalue our new currency to keep wages down, making us more competetive, boost exports etc. Or we could rejoin the Sterling area, if this was advantageous as much of our trade is with the UK.


----------



## Eurofan

I think withdrawal from the Euro would be seriously considered in the most desperate of scenarios only. There are significant penalties for withdrawing and i imagine if the situation were ever to become so bad that it could feasibly be worth withdrawing the EU would facilitate some form of inititatives to avoid that.


----------



## room305

Persius said:


> Sure, any debt in Euro will remain so, but "going forward", as the economists love to say, we can devalue our new currency to keep wages down, making us more competetive, boost exports etc. Or we could rejoin the Sterling area, if this was advantageous as much of our trade is with the UK.



If we went back to the IR£ and deliberately devalued vs. the euro to boost our exports it would be very tough on those who bought houses in euro to repay them in IR£.

Already interests rates in this country are (and have been) far too low when compared to our growth rate and inflation rates. Opting out of the euro to enjoy even lower interest rates will almost certainly result in a crippling stagflation scenario. Not to mention any economic reprisals from the EU.


----------



## ivuernis

We're better in a strong Euro and take whatever medicine we have to than exit the Euro for what would just be a short-term benefit but in the long run would surely be worst mistake. I can only see Ireland ever leaving the Euro if the whole Euro project comes apart at the seams.


----------



## baby_tooth

Persius said:


> Sure, any debt in Euro will remain so, but "going forward", as the economists love to say, we can devalue our new currency to keep wages down, making us more competetive, boost exports etc. Or we could rejoin the Sterling area, if this was advantageous as much of our trade is with the UK.


 


ya what???...

returning to the banana republic route 101.....

so our main benefical advantages of being the only native speaking euro currency country  will be removed by ourselves...

do you honestly think that pegging ourselves to sterling is going to be any better, a country that is also in economic shamble with huge debt levels and a crazily over priced currency that they are paying for through their noses... expensive pride indeed....

we would be foolish to walk away from the euro,,,, the big boys would circle in on us like they are doing elsewhere...they would be bale to play games with our currency and cripple us even further, buying our debt in the international makts and swaping it around, making the country even more untoucable...


----------



## edo

> ya what???...
> 
> r
> 
> 
> 
> 
> 
> 
> eturning to the banana republic route 101.....
> 
> so our main benefical advantages of being the only native speaking euro currency country  will be removed by ourselves...
> 
> do you honestly think that pegging ourselves to sterling is going to be any better, a country that is also in economic shamble with huge debt levels and a crazily over priced currency that they are paying for through their noses... expensive pride indeed....
> 
> we would be foolish to walk away from the euro,,,, the big boys would circle in on us like they are doing elsewhere...they would be bale to play games with our currency and cripple us even further, buying our debt in the international makts and swaping it around, making the country even more untoucable... Today 01:18 PM
Click to expand...

Well Said Babytooth 

- the fact that we are in the euro zone is probably the only thing that has kept export industry competitive the last few years as the rest of the country has gone completely bonkers - if we left we can kiss goodbye to the mulltinationals who are responsible for over 80% of everything we export. Our main problem is that we haven't figured out how to truly expoit a common market of over 450 million customers apart from reexporting German pension funds for property- our biggest export partners are still the UK and the USA . 

As for re-vamping the punt - don't go there - if the  nineties were anything to go by - be afraid - very afraid.


----------



## joe sod

Yea the interest rates with the euro were way too low for this country and encouraged people to take on way too much debt. However I do not believe that the blame can be layed with the euro. The blame lies with Fianna Fail with the government and with ourselves for electing such incompetent people. The sirens have been flashing red for the last 5 years that borrowing and house prices were rising to dangerous levels. Yet the government refused to do anything about it for fear of upsetting all the vested interests making a killing from it. They could have introduced taxes to discourage speculation. They started implementing the bacon report in 2001 and then pulled back from it when they saw that it was working and had stalled house prices.


----------



## edo

Interesting article in todays guardian on the UK economy and the decline in Manufacturing. Can see shades of relevance in it for ourselves - particularly in the fact that they have been slow of the mark in environmental technology , another sin that we are criminallly guilty of here too.

http://politics.guardian.co.uk/economics/story/0,,1890994,00.html


----------



## Maine

Post boom as private sector wages fall how do we get public sector wages and pensions back to pre boom levels. 

Taxes will fall and massive govt borrowing not allowed by Euro rules.

I think Govt wage bill from 2001 of circa 10b euro up to over 16b currently. this is the elephant in the room.

in the past devaluation would have been the answer.


----------



## Calina

joe sod said:


> Yea the interest rates with the euro were way too low for this country and encouraged people to take on way too much debt. However I do not believe that the blame can be layed with the euro. The blame lies with Fianna Fail with the government and with ourselves for electing such incompetent people. The sirens have been flashing red for the last 5 years that borrowing and house prices were rising to dangerous levels. Yet the government refused to do anything about it for fear of upsetting all the vested interests making a killing from it. They could have introduced taxes to discourage speculation. They started implementing the bacon report in 2001 and then pulled back from it when they saw that it was working and had stalled house prices.



You're too kind to the people who took out the mortgage loans and did the equity releases. Responsibility for that lies with themselves first and foremost. Not with the government and not with the banks. 

The people who took out way too high mortgages are the people who signed on the dotted line. Certainly they were enabled by lax lending policies - but they sure as hell wasn't forced. 

One of the big problems we have in this country is a total inability to take responsibility for our own actions. Is it any wonder our politicians won't when we don't ourselves? We get the politicians we deserve. I'm sick to the teeth of people whinging that it's everyone else's fault that people have such high mortgages. A little cop on and clarity might be called for. People borrowed the money. They didn't have to and not all of us did.


----------



## sunrock

its true we get the politicians we deserve
however i think its very irrespnsible of our political leaders not to implement the bacon report
i confess ive no idea what it is  but would stop people getting huge mortgages and huge debt 
thus we are heading for a housing bubble crash
is this a situation without precedent
maybe some small state in u.s. has had a similiar story_the individual states have no control over the fed rate
the short termism of our politicos is alarming especially as the gov and main opp tds _are very similiar i think
we may yet witness the unedifying sight of our finance ministers going begging to brussels for dosh along with their east europ and aspiring members counterparts in a very jostling queue


----------



## Maine

Maine said:


> Post boom as private sector wages fall how do we get public sector wages and pensions back to pre boom levels.
> 
> Taxes will fall and massive govt borrowing not allowed by Euro rules.
> 
> I think Govt wage bill from 2001 of circa 10b euro up to over 16b currently. this is the elephant in the room.
> 
> in the past devaluation would have been the answer.


 

http://www.rte.ie/business/2006/1010/construction.html

Interesting take on the tax fall.

Note I do not work for them but probably wouldnt mind the bonuses.

the ERSI seems to take sensible positions on some items and strange ones on others - are they generally consistent......in this case they say tax up next year by 11% which seems a trifle optimistic


----------



## Sidewinder

Calina said:


> One of the big problems we have in this country is a total inability to take responsibility for our own actions. Is it any wonder our politicians won't when we don't ourselves? We get the politicians we deserve. I'm sick to the teeth of people whinging that it's everyone else's fault that people have such high mortgages. A little cop on and clarity might be called for. People borrowed the money. They didn't have to and not all of us did.



I was at a party on Saturday night, where most of the crowd were around 22-25. The attitude to debt was completely shocking. Not a single one of them seemed to have any understanding of the fact that the debt actually has to be paid back! Every single one of them was just out of college but had already racked up thousands, in some cases tens of thousands, of eurons in credit card, overdraft and car loans.

They all just seemed to assume that "sure it'll be grand", they'd never be out of work, the good times will roll forever, and sure "good old Bertie" wouldn't leave them in the lurch if things did go wrong. There really was no point in even trying to inject some realism, they just wouldn't understand.

It's sad, but that generation is in for a hell of a shock once the boom ends.


----------



## CelloPoint

Sidewinder said:


> I was at a party on Saturday night, where most of the crowd were around 22-25. The attitude to debt was completely shocking. Not a single one of them seemed to have any understanding of the fact that the debt actually has to be paid back! Every single one of them was just out of college but had already racked up thousands, in some cases tens of thousands, of eurons in credit card, overdraft and car loans.
> 
> They all just seemed to assume that "sure it'll be grand", they'd never be out of work, the good times will roll forever, and sure "good old Bertie" wouldn't leave them in the lurch if things did go wrong. There really was no point in even trying to inject some realism, they just wouldn't understand.
> 
> It's sad, but that generation is in for a hell of a shock once the boom ends.



Whatever about the kind of debt the 22-25 yos are in, it's nothing compared to the debt that the 25-35 yos are in. You're right though about the debt culture that is creeping its way into Irish life - a new underclass is breeding.


----------



## Sidewinder

CelloPoint said:


> Whatever about the kind of debt the 22-25 yos are in, it's nothing compared to the debt that the 25-35 yos are in. You're right though about the debt culture that is creeping its way into Irish life - a new underclass is breeding.



I'm in the upper end of that 25-35 group, and I'm looking to be completely debt-free within the next 6 weeks 

Saturday made me pause and think though: if attitudes like that really are common, then there's nothing to stop the banks coming up with all the pure toxic loan tricks in the book to keep the party going a bit longer: and that generation will cheerfully lap it all up. Negative-amortization IO intergenerational car loans anyone?


----------



## thewatcher

As long as nobody expects the tax payer to bail them out,then they can borrow as much as they like afaic !.Thank god for the germans otherwise us savers would be extinct in this country,joining the ecb was the best thing we ever did,it's not their fault the government didn't take prudent measures locally to head off a debt spiral/house price bubble senario.


----------



## baby_tooth

thewatcher said:


> As long as nobody expects the tax payer to bail them out,then they can borrow as much as they like afaic !.Thank god for the germans otherwise us savers would be extinct in this country,joining the ecb was the best thing we ever did,it's not their fault the government didn't take prudent measures locally to head off a debt spiral/house price bubble senario.


 
i totaly agree with you, but unfortunately i don't have much confidence in this or any government having the ability to say tough luck.

did they do this when taxi drivers lost money.

or when aib take bets on the market back with ICI.

or.....or.....

I will not see my tax dollars subsidising someone elses folly, but unfortunately do see this coming, hence am attempting to make myself as transferable as possible, with regard to languages and skills.

any one else share this sentiment.


----------



## Eurofan

baby_tooth said:


> I will not see my tax dollars subsidising someone elses folly, but unfortunately do see this coming, hence am attempting to make myself as transferable as possible, with regard to languages and skills.
> 
> any one else share this sentiment.



Way ahead of you! 

I definately share the sentiment and fear for the general future of the nation. With record surpluses for a number of years our infrastructure, health and education systems, policing etc are all appauling. 

Having sold my ppr late last year and sitting on a tidy sum we've been generally exploring possibilities throughout Europe and considering further afield. We're in a good situation though with no dependents or other ties and reasonably transferable skills.

Just looking for quality of life at a reasonable cost and unfortunately i don't see that in Ireland any longer.

Plus, like you, if it ever came to pass i'd be damned if i'd allow my hard-earned tax euros to go towards subsidising what i consider to be utter recklessness with money.


----------



## bearishbull

Another small example of the trend that will see this economy in a bad state in years ahead.

http://www.finfacts.com/irelandbusinessnews/publish/article_10007571.shtml


----------



## bearishbull

More indication that we are screwed. Who will pay the 35 year mortgages when theres few jobs and less income???

http://www.rte.ie/business/2006/1010/ncc.html

Does anyone trust an irish government to sort out/prevent the impending economic correction????


----------



## edo

> More indication that we are screwed. Who will pay the 35 year mortgages when theres few jobs and less income???
> 
> http://www.rte.ie/business/2006/1010/ncc.html
> 
> Does anyone trust an irish government to sort out/prevent the impending economic correction????     Today 06:32 PM





> Another small example of the trend that will see this economy in a bad state in years ahead.
> 
> http://www.finfacts.com/irelandbusin...10007571.shtml       Today 04:46 PM


Preaching to the choir Bearish man , just preaching to the choir - I feel like John the baptist in the wilderness when I try and point out a few salient points like you have outlined above to my professional friends , comfortable in their closed shop , property fuelled careers and expense accounts.

A goverment composed of "professional public representatives" (There's a contradiction in terms if there ever was one) , teachers and other public employees - who can go back to their safe careers when or if they get turfed off the Leinster House Gravy train, Farmers, law people ,publicans etc etc will sort out the mess currently in creation???? -

 what the hell do you think? - My respect for them would go up more if they were actually aware of the problem (vis a vis Hungary) but I really really doubt that.

Anyway thats my tuppence - got to go talk to pissed off techies in California now about a banjaxed machine system - you know - 8 hrs behind us - export industry - customer service - no overtime but its my responsiblility - Yeah ye're right - its time to join the civil service and start getting guaranteed pay rises for pretending to do something useful !!!

later folks

A Well browned off Edo


----------



## joe sod

On a slightly different point I thought the taxi drivers had a very valid point a few weeks back when they had the big row with the taxi regulator. The taxi industry has been shaken up with deregulation however the government has stalled on derugalation of the legal profession of the pharmacies of the medical professions etc and even of publicans. They made the point that it is unfair that they should be singled out while other occupations are let carry on as before. I think you have a valid point when you refer to the fact that the government is over represented by TDs from the above professions which explains their reluctance to shake them up.


----------



## room305

joe sod said:


> ... the government has stalled on derugalation of the legal profession of the pharmacies of the medical professions etc and even of publicans.



I like to think of them as the protected classes. Ostensibly in the private sector but operating in a cosy atmosphere free from the rigours of anything as dirty as competition.


----------



## Maine

room305 said:


> I like to think of them as the protected classes. Ostensibly in the private sector but operating in a cosy atmosphere free from the rigours of anything as dirty as competition.


 
I tend to see them as part of the greater semi-state sector.

Have some sympathy for the taxi drivers.....now its a wild west sector in terms of regulation


----------



## kramer2006

Maine said:


> Have some sympathy for the taxi drivers.....now its a wild west sector in terms of regulation


 
I have no sympathy for the taxi drivers. Several taxi drivers have told me that most of the protesting is being carried out by the 'old-school' drivers who have been using the taxi as a license to print money. Their arguments are not just about regulation, they don't like competition, they don't like the removal of outlandish charges from their fare structure such as the airport charge. But that's a whole separate thread.

Taxi drivers are a mirror for Ireland right now.  Grabbing all we can, then moaning & striking whenever anyone presents a challenge.


----------



## thewatcher

kramer2006 said:


> Taxi drivers are a mirror for Ireland right now. Grabbing all we can, then moaning & striking whenever anyone presents a challenge.


 
Ah here most taxi drivers are just hard working people trying to make a living.*

*I am not related to nor do i know any taxi drivers.

Senators,Hospital consultants and legal people would come far higher on my list of people robbing the country blind.There's a cosy little cartel at the top of the feed chain in this country,sucking the life blood out of the ordinary decent citizen.Only the politicans are so corrupt,inept or tied to the vested interests that they do nothing about it.


----------



## Maine

thewatcher said:


> Ah here most taxi drivers are just hard working people trying to make a living.*
> 
> *I am not related to nor do i know any taxi drivers.
> 
> Senators,Hospital consultants and legal people would come far higher on my list of people robbing the country blind.There's a cosy little cartel at the top of the feed chain in this country,sucking the life blood out of the ordinary decent citizen.Only the politicans are so corrupt,inept or tied to the vested interests that they do nothing about it.


 
Agreed.  How many taxi men are making E500k a year.  

Do not know or related etc to any taxi drivers.


----------



## bearishbull

Those doom mongers in Irish central bank warning us again. They should live a little and stop worrying , maybe buy a 4x4 on finance and get a mega mortgage  

http://www.finfacts.com/irelandbusinessnews/publish/article_10007607.shtml

*Related to the sharp rise in house prices, has been an increase in the overall level of indebtedness. This high, and still increasing, level of indebtedness constitutes a risk to the macroeconomic environment as well as to individual borrowers and lenders.*
*Ireland’s export performance remains consistently below the growth of demand in our export markets, indicating a worrying deterioration in competitiveness relative to our trading partners.  In the short-term, wage and price pressures need to be kept in check, while it will be important to improve productivity performance across both the traded and non-traded sectors of the economy over the longer term*


----------



## joe sod

thewatcher said:


> Ah here most taxi drivers are just hard working people trying to make a living.*
> 
> *I am not related to nor do i know any taxi drivers.
> 
> Senators,Hospital consultants and legal people would come far higher on my list of people robbing the country blind.There's a cosy little cartel at the top of the feed chain in this country,sucking the life blood out of the ordinary decent citizen.Only the politicans are so corrupt,inept or tied to the vested interests that they do nothing about it.


 
Every time the government comes under pressure about rip off ireland or protectionism it is the bottom tier that move against. First they deregulated the taxi industry, then after the hullabula after Eddie Hobbs rip off republic series they lifted the grocery order. Lifting the grocery order has probably made life more difficult for the modest family owned grocers. however eddie hobbs also attacked the cartels in the pharmacy, legal and publican trades yet the government refuses to move in on these.


----------



## rabbit

Do not forget, to get back to the point of the thread, that we as a country of a million or two taxpayers owe a foreign debt of ...what is it...38 billion ???   All this despite the massive EC grants / structural funds etc we got over the years.   The previous bout of structural funds paid for canals, harbours, railways ..all leading edge infrastructure of the time ...but sin sceal eile !


----------



## Maine

Persius said:


> Sure, any debt in Euro will remain so, but "going forward", as the economists love to say, we can devalue our new currency to keep wages down, making us more competetive, boost exports etc. Or we could rejoin the Sterling area, if this was advantageous as much of our trade is with the UK.


 
http://www.timesonline.co.uk/newspaper/0,,176-2404010,00.html

This article is basically about how the UK were lucky to avoid euro.

Author ( main economics writer, usually reasonably balanced) thinks that euro will not be around in its current format in 10 years.

One of the problem IMO with the euro is that many do not see themselves as Europeans say in comparion to Americans - western europeans all like to stay in their patch of europe rather than moving around hence the lack of French people coming to Ireland etc to avoid 10% unemployment at home. If that was part of the US then far more people would have moved.  That makes one interest rate difficult to work.


----------



## diarmuidc

Maine said:


> One of the problem IMO with the euro is that many do not see themselves as Europeans say in comparion to Americans - western europeans all like to stay in their patch of europe rather than moving around hence the lack of French people coming to Ireland etc to avoid 10% unemployment at home. If that was part of the US then far more people would have moved.  That makes one interest rate difficult to work.



I don't think that's the problem .From living in France part of the problem that france has 9% unemployment is that the dole is WAY too good here. I know a pharmacist who has spent 18 months out of work living on the dole. It's based on a % of your salary when you were made redundant (and reduces slowly after that).  

Plus the language is an issue.  Moving to an counrty in which you can't speak the language is a big deal. It's not like moving from Alabama to California...



Maine said:


> http://www.timesonline.co.uk/newspaper/0,,176-2404010,00.html
> 
> This article is basically about how the UK were lucky to avoid euro.
> 
> Author ( main economics writer, usually reasonably balanced) thinks that euro will not be around in its current format in 10 years.



Yes but his whole argument is based on specualtion.. he even admits it :

_What would have happened had we joined? Three years is too short a timescale to say, but we can estimate what might have happened had Britain gone in at the euro’s inception in 1999

_He also mentions that some countries have done well and some not done so well. But then proceeds to only discuss Italy ...

Maybe it was better for stg to stay out but the Euro has only been around for a very short period of time so far (relatively speaking) so the benefits + downsides really can't be seen yet.


----------



## Maine

diarmuidc said:


> I don't think that's the problem .From living in France part of the problem that france has 9% unemployment is that the dole is WAY too good here. I know a pharmacist who has spent 18 months out of work living on the dole. It's based on a % of your salary when you were made redundant (and reduces slowly after that).
> 
> Plus the language is an issue. Moving to an counrty in which you can't speak the language is a big deal. It's not like moving from Alabama to California...
> 
> Maybe it was better for stg to stay out but the Euro has only been around for a very short period of time so far (relatively speaking) so the benefits + downsides really can't be seen yet.


 
My question was based on this - was one interest rate appropriate given the cultural differences etc lack of labour mobility, languages etc. Besides Italy euro has not been good news for Spain or Ireland. Look at balance of payments for real economy of both. Its been good for the German economy in terms of no pay increases for 5 years which now makes them uber competitive.

Yes it is all guessing by him.

Agreed - it is a short period to compare. However Ireland has been left with two massive long term problems, huge private sector debt and its economy in possibly the least competitive state ever - ref ERSI etc


----------



## edo

> Agreed - it is a short period to compare. However Ireland has been left with two massive long term problems, huge private sector debt and its economy in possibly the least competitive state ever - ref ERSI etc


Interesting and provocative article as per usual by David McWilliams in yesterdays SB post.

[broken link removed]

A good bit of what he says has already been brought up by posters here already - but the chinese angle is a new one for me - but it makes sense - far more sense that the debt addled road we are racing down at the moment anyway


----------



## Maine

http://www.rte.ie/business/2006/1016/fdi.html

This makes McWilliams and Barringtons articles in SBP yday right on the money.

Even allowing for tax transfers and combined with recent ERSI reports it is bad news. IMO it may also show that Irish companies are investing abroad as fast as they can. 

The more I think about the Euro the bigger the disaster I think it has been for this country. Alot think the Celtic tiger was real until 2001 ie pre euro but since then has been based on a massive credit boom in ireland after the ECB over cut interest rates . This has in turn driven construction, benchmarking, inflation and a large loss in competitiveness. The central bank has admitted for years that the interest rates were wrong for us.


----------



## Eurofan

Maine said:


> Alot think the Celtic tiger was real until 2001 ie pre euro but since then has been based on a massive credit boom in ireland after the ECB over cut interest rates . This has in turn driven construction, benchmarking, inflation and a large loss in competitiveness. The central bank has admitted for years that the interest rates were wrong for us.



I suspect you're bang on here. Hindsight in many years to come will probably show this as being one of the chief initiators of the problems in the Irish economy. Sadly though the many other tools available to the government to dampen property speculation/rampant construction dependency and shift our celtic tiger momentum to something longer lasting were shunned in order to aid the relevant lobbies. So sad... there's a book in there somewhere.


----------



## room305

Maine said:


> http://www.rte.ie/business/2006/1016/fdi.htmlThe central bank has admitted for years that the interest rates were wrong for us.



They're hardly blameless themselves. Since they knew interest rates were far too low for such a rapidly growing economy, they should have enforced stricter lending practises to dampen inflation and credit expansion.

The government should have backed this up with taxes designed to soak up all that extra speculative cash, as suggested by the ECB.


----------



## Maine

room305 said:


> They're hardly blameless themselves. Since they knew interest rates were far too low for such a rapidly growing economy, they should have enforced stricter lending practises to dampen inflation and credit expansion.
> 
> The government should have backed this up with taxes designed to soak up all that extra speculative cash, as suggested by the ECB.


 
Agreed.  

However local govts ( CBank is just a wing) almost always take the easy option.  The problem for us was that the Euro facilitated this on a massive scale.  We should have stayed out and come in when we got closer to German cycle. We were a vw polo going along very nicely at 100km when suddenly we were fitted with a V6 4 litre engine with no change to the suspension or brakes.  Expecting the govt driver at the wheel to go slower was always a risk.


----------



## StoppedClock

Maine said:


> We were a vw polo going along very nicely at 100km when suddenly we were fitted with a V6 4 litre engine with no change to the suspension or brakes. Expecting the govt driver at the wheel to go slower was always a risk.


 
Nice analogy.


----------



## Duplex

> Some 63pc of Irish companies confess that they are mature or declining businesses, compared with a global average of 37pc, a new survey from Sage has found.
> Alarmingly, 44pc of Irish businesses expect to see either no change or a decline in their turnover in the next 12 months.
> 
> According to the research, commissioned by Sage and conducted by independent research firm Vanson Bourne on 800 small and medium-sized companies, over half of Irish companies have no plans to move their business to the next stage of growth. This is compared with a global average of 44pc.
> 
> While Irish businesses may be lagging behind with regard to business planning and lifecycle management, they are leading the way when thinking about their exit strategies, with 54pc of those respondents who stated they had a stake in their business actually had an exit strategy in place.


 

The fact that Irish businesses have concentrated their efforts on exit strategies rather than business development speaks volumes. 

[broken link removed]


----------



## dontaskme

Duplex said:


> The fact that Irish businesses have concentrated their efforts on exit strategies rather than business development speaks volumes.
> 
> [broken link removed]


 
Wonder why Sage, a Uk company, commissioned the report?

Sage entered the Irish market by buying an indigenous software firm, so the Irish firm's exit facilitated Sage's entry. 

And if the same people are employed and the same customers are provided with the product, why should it matter whether it is an Irish company or not?


----------



## Duplex

dontaskme said:


> Wonder why Sage, a Uk company, commissioned the report?


 

It seems to be a comparative survey of five nations




> The UK and US provided 200 respondents each, while Australia, France, Germany and Ireland each had 100 respondents.


----------



## edo

This mornings indo


http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1707838&issue_id=14777


need I say more


----------



## conor_mc

edo said:


> This mornings indo
> 
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1707838&issue_id=14777
> 
> 
> need I say more


 
Excelllent article that..... doesn't ram facts and figures down the readers throats, just points out how ridiculous it is to expect the party to keep on rocking indefinitely.


----------



## Afuera

edo said:


> This mornings indo
> 
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1707838&issue_id=14777
> 
> 
> need I say more



Good article. I particularly liked this analogy:



> Doubts are met by the claim that waves of immigrants will keep everything chugging along nicely, which is surely to mistake the cart for the horse.


----------



## cik

I wonder what the 1000s of foreigners who might well be turfed out of their digs at short notice by a landlord who is rushing to sell the place will think of Ireland now?
Probably as miffed as the rest of us but much more willing to up sticks...I've never been bearish about the Irish economy before...doesn't feel nice


----------



## partisan

dontaskme said:


> Wonder why Sage, a Uk company, commissioned the report?
> 
> Sage entered the Irish market by buying an indigenous software firm, so the Irish firm's exit facilitated Sage's entry.
> 
> And if the same people are employed and the same customers are provided with the product, why should it matter whether it is an Irish company or not?



That "report" is pure selling by fear. If your business is in trouble CRM software isn't going to save you...


----------



## Persius

Maine said:


> http://www.timesonline.co.uk/newspaper/0,,176-2404010,00.html
> 
> This article is basically about how the UK were lucky to avoid euro.
> 
> Author ( main economics writer, usually reasonably balanced) thinks that euro will not be around in its current format in 10 years.


 
This author is definetly not an EU basher or Euro basher. He wrote in a recent article how the German economy is probably based on stronger fundamentals than the UK economy despite the low consumer spend in Germany and all the confidence in the UK. He suggested that UK economists or politicians shouldn't be lecturing the Germans as things will look quite different in five or ten years.

I find it ironic that people are saying the Euro was bad for Ireland and Spain (which are currently still, just about, booming) but good for Germany (where at least the public thinks that the economy is in a poor state).

Personally I like the idea of the Euro, but with hindsight think it may have been a mistake for Ireland to join without the UK.


----------



## Duplex

Go figure. 




> The Irish Independent also reports that growing interest rates and inflation have put Irish consumers under increased pressure when dealing with their personal debt.
> 
> *According to new figures from the ESB's customer supply sector, the department's monthly debt levels have increased by 40pc in the past two years. *
> The ESB said that in the two years the average value of customers' arrears has grown from €180 to almost €250.
> 
> According to a spokesperson for the ESB, two years ago about 62pc, or 1.7m, domestic customers paid their bills within the agreed credit term of 14 days. Today, however, that figure has dropped to between 20pc and 52pc of domestic customers.
> 
> According to *NCB Stockbroker's weekly economic commentary non-mortgage debt is currently growing at over 32pc,* compared with just over 7pc three years ago.
> The broker said that €16bn, or 7pc, of total lending was probably unsecured personal debt, while €2.3bn was credit card debt.
> 
> While credit card debt was up 18pc in the year to June 2006, credit card usage per holder is probably increasing.


 
http://www.finfacts.com/irelandbusinessnews/publish/article_10007751.shtml


----------



## doberden

Sage own 3 CRM products so it's not that surprising they are saying people need CRM.  They current own:

Sales Logix
ACT!
Sage CRM

All CRM Products!


----------



## Maine

Per goodbodys report the Govt expects to be in surplus by 1%.

Given the property and related tax receipts boom, SSIA spending, windfall gains by the govt on disposal of property, full employment, strong corporate profits and strong global economy that is some achievement. A 1% surplus.

Any guess as to what the number will look like when the going merely returns to good !! Out on the horizon IMO there are definitely tax increases along with the clouds


----------



## fatmanknows

St Vincent de Paul warns over credit card debt
http://www.rte.ie/news/2006/1023/credit.html


.............He told reporters in Dublin that he was quite alarmed at the level of debt among more than 10,000 people who approached the State's confidential Money Advice and Budgeting Service this year....



Ten Thousand ! How many are there really out there !

There maybe be trouble ahead ...


----------



## bearishbull

Have to laugh at the reports from banks claiming we are one of richest nations on earth as our properties are "valued" at 700billion etc. Do we really think that Ireland after approx 20 years of positive economic growth are anywhere as rich a nation (on per capita basis) as germany or england who have centuries of mainly positive economic growth? We have as a nation a highly overvalued property portfolio considering we have loads of land to develop upon(one of least urbanised countries in europe). We have a stagnant productive sector. 
The infrastructure and public services of a country contribute to its wealth and make its citizens rich in broader sense. We have generally crap infrastructure and public services.
Our gdp/gnp appears on the face of it impressive at present but we are over reliant on construction, foreign multinationals(attracted by low tax etc but other cheaper countries are copying us ) and public sector. Theres no guaruntees these areas will remain strong in the future and its likely that multinational and construction sector will decline significantly over next decade or two. 
The likes of UK and German economy are world leaders in many industries and have more diversified economies plus large element of control over their monetary policy. Which countries citizens would you think will be more comfortable/rich in the decades to come? flash in the pan ireland? or long term sensible. sustainable, industrious, productive, entrepreneurial economies like Germany UK and USA????


----------



## bogwarrior

bearishbull said:


> Do we really think that Ireland after approx 20 years of positive economic growth are anywhere as rich a nation (on per capita basis) as germany or england who have centuries of mainly positive economic growth?



20 years positive economic growth?? more like 11 or 12....


----------



## Maine

The "value of 700 billion" was IMO a sales pitch for the banks who are lending cash to AIB and the other banks.  

IMO as our debt to income ratio now starts to look scary on international comparisons then another more comforting ratio is required.


----------



## conor_mc

Maine said:


> The "value of 700 billion" was IMO a sales pitch for the banks who are lending cash to AIB and the other banks.
> 
> IMO as our debt to income ratio now starts to look scary on international comparisons then another more comforting ratio is required.


 
It's like the couple who can't afford to pay the ESB bill because their mortgage is so huge taking comfort from the fact that their house is worth twice what they paid for it.... might sound great, but bugger all use when it comes to actually paying the bills!


----------



## bearishbull

http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1711437&issue_id=14799

More decline in trade surplus, but not as bad as it could have been due to oil prices falling back.


----------



## Maine

The increase in rents will negatively impact the irish economy as younger  / low paid workers will see their after rent income decline.

This probably means higher wages will be needed to retain these staff or at the margin the flow of immigrants will decline.  

The over supply of housing has depressed rents and rental yields and thus subsidised renters.  This kept renters post housing costs income higher.  As rents now jump this will force renters to seek higher wages and could push inflation up even further across a number of service industries.

Does this hold....


----------



## bearishbull

http://www.moneyweek.com/file/20809/why-western-workers-are-set-to-become-poorer.html

Wage growth is going to be minimal in ireland over next few decades. House prices will collapse as wages dont move up with globalisation. This economy is screwed as we have'nt even got our own currency/monetary policy.


----------



## joe sod

very interesting article. Essentialy because of the doubling of the world workforce the power of workers around the world to achieve increases in real wages is diminished. However I believe that the real wages of western workers will be reduced by very high rates of inflation caused by energy and raw material costs. The optimists would argue that this huge global workforce can all be lifted to middle class earnings and that everyone will prosper.


----------



## bearishbull

joe sod said:


> very interesting article. Essentialy because of the doubling of the world workforce the power of workers around the world to achieve increases in real wages is diminished. However I believe that the real wages of western workers will be reduced by very high rates of inflation caused by energy and raw material costs. The optimists would argue that this huge global workforce can all be lifted to middle class earnings and that everyone will prosper.


 Eventually the poor countries will catch up but this will take many decades and in between now and that future time there will be a lot of hardship/rough transition in western countries like ireland particularly. Maybe the euro will fall a lot and make us more competitive but i would'nt bet on it.


----------



## Superman

joe sod said:


> The optimists would argue that this huge global workforce can all be lifted to middle class earnings and that everyone will prosper.


Not going to happen - there are simply not enough natural resources in the world for every family to own an SUV.


----------



## Maine

In germany 25% of the workforce is now estimated to be on fixed contracts that either are renewed or not. Germany with export led focus has experienced above big time and is now more competitive. Because we are so construction led real wages in ireland have been able to shoot up (cannot import house from china). However the cost has been the loss of the manufacturing jobs and probably multinational jobs that would previously have come but now do not. 

When people talk about our R&D future though it assumes we will quickly be able to transfer huge numbers of high paid construction workers and followers to high paid R&D.

Hank Paulson ex G Sachs has stated in recent weeks that that middle america have not seen wage increases in current 4 year recovery.

IMO the transfer from huge well paid construction will be massive downward pressure on wages. Same as has been case past couple of years in Germany anyone losing a job will find that their wages will fall say 30% to get a new one.


----------



## joe sod

I think it is only fair that Asia and poorer countries should be able to use more of the world's natural resources in order to achieve decent standards of living which they do not now enjoy and which they can only achieve by increasing their consumption of these. However Western countries have already achieved this long ago and yet consumption of natural resources in the richest countries in the world is still increasing. In Ireland the last 5 years especially and the economic growth has been achieved by borrowing money from the future to buy things encouraged by excessive advertising and peer pressure. We already had a decent standard of living 5 years ago and yet people are encouraged to buy more stuff. The clouds are gathering in the future and this situation cannot and will not continue. Either the world imbalance realigns slowly or it realigns radically with a collapse in the world financial system.


----------



## Michael

joe sod said:


> In Ireland the last 5 years especially and the economic growth has been achieved by borrowing money from the future to buy things encouraged by excessive advertising and peer pressure. We already had a decent standard of living 5 years ago and yet people are encouraged to buy more stuff.


 
You sound like my Economics Lecturer of old. He hadn't got a clue what he was talking about either.


----------



## ajapale

Michael,

Please stay on topic and refrain from commenting on other posters.

aj


----------



## sunrock

joe sod said:


> I think it is only fair that Asia and poorer countries should be able to use more of the world's natural resources in order to achieve decent standards of living which they do not now enjoy and which they can only achieve by increasing their consumption of these. However Western countries have already achieved this long ago and yet consumption of natural resources in the richest countries in the world is still increasing. In Ireland the last 5 years especially and the economic growth has been achieved by borrowing money from the future to buy things encouraged by excessive advertising and peer pressure. We already had a decent standard of living 5 years ago and yet people are encouraged to buy more stuff. The clouds are gathering in the future and this situation cannot and will not continue. Either the world imbalance realigns slowly or it realigns radically with a collapse in the world financial system.


it may be fair but the worlds supply of natural resoucres is limited
china and india are now using so much oil and metals that the world is running out these materials 
its going to be a real power play by the big powers to get their hands on these resoucres
 a chinese  worker makes 3% of what a western worker makes_life is not fair 
this drive to make everyone or at least a large% of the population middle class is doomed to failure as resocres such as oil run out and become very expensive
people will become poorer and be reduced to a more subsistance way of life
just think for a second_ if the average chinese worker made 3 dollars an hour  _the purchasing power to buy the worlds resoucres would increase 10 fold and so the price of oil and metals  would rocket not to mention the price of manufactured goods causing huge inflation
the present status quo suits china lots of jobs investment and exports
and the west  cheap manufactured goods,low inflation
moral   this idea of making poor asian countries richer so they can use more of the worlds resoucres and so become "middle class"  will only happen at our expense


----------



## ajapale

SR, [SIZE=-1]*Please Punctuate*!

[/SIZE]





sunrock said:


> it may be fair but the worlds supply of natural resoucres is limited
> china and india are now using so much oil and metals that the world is running out these materials
> its going to be a real power play by the big powers to get their hands on these resoucres
> a chinese  worker makes 3% of what a western worker makes_life is not fair
> this drive to make everyone or at least a large% of the population middle class is doomed to failure as resocres such as oil run out and become very expensive
> people will become poorer and be reduced to a more subsistance way of life
> just think for a second_ if the average chinese worker made 3 dollars an hour  _the purchasing power to buy the worlds resoucres would increase 10 fold and so the price of oil and metals  would rocket not to mention the price of manufactured goods causing huge inflation
> the present status quo suits china lots of jobs investment and exports
> and the west  cheap manufactured goods,low inflation
> moral   this idea of making poor asian countries richer so they can use more of the worlds resoucres and so become "middle class"  will only happen at our expense


----------



## phoenix_n

Maine said:


> In germany 25% of the workforce is now estimated to be on fixed contracts that either are renewed or not. Germany with export led focus has experienced above big time and is now more competitive.


 
Read today that Germany is set to lower its [broken link removed]


----------



## joe sod

Michael said:


> You sound like my Economics Lecturer of old. He hadn't got a clue what he was talking about either.


 
Well if he got to be an economics professor he must have had some clue


----------



## Marie

bearishbull said:


> Eventually the poor countries will catch up but this will take many decades and in between now and that future time there will be a lot of hardship/rough transition in western countries like ireland particularly. Maybe the euro will fall a lot and make us more competitive but i would'nt bet on it.


 
The impression that the Indian-Asian-African subcontinents will laboriously move in time through the same kind of development as the west is a fallacy.  They are by by-passing all that industrial revolution/social contract stuff and taking _already-existing concepts _formulated by the west and making them cheaper and faster.  The sheer scale is phenomenal and hard to envisage within these 'old' economies.  
The future role of Ireland is increasingly ambiguous and a bit of a worry  .  It _could_  have become the "granary of Europe" having plenty of relatively-unpolluted land and rivers and existing agricultural acumen which were characteristic strengths.  That moment has passed.  Being a small island on the edge of Europe with the high transportation and fuel costs involved nowadays in any kind of physical production fairly excludes salvaging any manufacturing role (though one Irish speciality I learned of recently is an online supplier of waterproof dog-socks to the veterinary sector)   .  What attributes does the current Irish economy have which are unique to it which could be developed?


----------



## sunrock

[quote=sunrock;30948
It might  be fair if the people of poor asian countries could aspire to a western standard of living,but the worlds supply of natural resoucres is limited.
China and India are now using so much oil and metals that the world is running out these materials. 
Its going to be a real power play by the big countries to get their hands on these resoucres.
A chinese worker makes 3% of what a western worker makes_life is not fair. 
This drive to make everyone or at least a large % of the population middle class is doomed to failure, as resoucres such as oil run out and become very expensive.
People will become poorer, and be reduced to a more subsistance way of life, as resoucres decline.This will effect every country, rich and poor until a more sustainable way of life is the only option left.
Just think for a second_ if the average chinese worker made 3 dollars an hour _the purchasing power to buy the worlds resoucres, by china would increase 10 fold, and so the price of oil and metals would rocket not to mention the price of manufactured goods causing huge inflation.
Chinese workers currently earn 30c an hour.
The present status quo suits china _lots of jobs,  investment and exports;
and the west cheap manufactured goods,low inflation.
The lesson of the idea of making poor asian countries richer so they can use more of the worlds resoucres and so become "middle class" is self defeating.

Apologies for previous poor punctuation.


----------



## tyoung

sunrock said:


> It might  be fair if the people of poor asian countries could aspire to a western standard of living,but the worlds supply of natural resoucres is limited.
> China and India are now using so much oil and metals that the world is running out these materials.
> Its going to be a real power play by the big countries to get their hands on these resoucres.
> A chinese worker makes 3% of what a western worker makes_life is not fair.
> This drive to make everyone or at least a large % of the population middle class is doomed to failure, as resoucres such as oil run out and become very expensive.
> People will become poorer, and be reduced to a more subsistance way of life, as resoucres decline.This will effect every country, rich and poor until a more sustainable way of life is the only option left.
> Just think for a second_ if the average chinese worker made 3 dollars an hour _the purchasing power to buy the worlds resoucres, by china would increase 10 fold, and so the price of oil and metals would rocket not to mention the price of manufactured goods causing huge inflation.
> Chinese workers currently earn 30c an hour.
> The present status quo suits china _lots of jobs,  investment and exports;
> and the west cheap manufactured goods,low inflation.
> The lesson of the idea of making poor asian countries richer so they can use more of the worlds resoucres and so become "middle class" is self defeating.
> 
> Apologies for previous poor punctuation.



  This is way off topic but should be answered because it's so wrong.
 On a particular point Chinese/Indian oil consumption is less than 10% of global consumption.
 For the rest google Thomas Malthus. Your arguments are straight out of his book Essays on Population written in the  19th century.   They were wrong then and are wrong now.
The improvements in global living standards are to be welcomed.  Certainly there will be shorterm  pressures on resources  but these problems can be   solved as they were in the past. The huge increase in human capital will provide the brain power to do so.
 Regards


----------



## room305

Marie said:


> What attributes does the current Irish economy have which are unique to it which could be developed?



Spectrum. We've got lots of it going spare and it will be an increasingly rare resource in the future. We'd make a create testbed for dynamic spectrum allocation technologies.


----------



## Marie

Apologies for my ignorance but what is Spectrum?


----------



## room305

Marie said:


> Apologies for my ignorance but what is Spectrum?



Essentially the range of available electromagnetic frequencies - such as those in use by TV, radio, mobile phones and wireless broadband.

http://en.wikipedia.org/wiki/Electromagnetic_spectrum


----------



## conor_mc

room305 said:


> Essentially the range of available electromagnetic frequencies - such as those in use by TV, radio, mobile phones and wireless broadband.
> 
> http://en.wikipedia.org/wiki/Electromagnetic_spectrum


 
Indeed. A cunning plan by the gubberment to make an This post will be deleted if not edited to remove bad language out of developing our telecommunications infrastructure.....


----------



## whathome

Finfacts article - Irish economic dependency on property

*Comment: Irish Property Boom - It's easy to underestimate how much economic prosperity depends on it*

http://www.finfacts.com/irelandbusinessnews/publish/article_10007932.shtml

Another interesting look at how dependent the economy is on the property market.  As David McWilliams said, if you exclude property - there's not a lot going on here!


----------



## ajapale

Whathome,

Please familiarise yourself with the posting guidelines and in particular PG 17



> 17. Posts with links only may be deleted        Posts containing only links with no associated commentary or expression of an opinion may be deleted.* The purpose of AAM is to encourage reasoned discussion. Unfortunately some people have resorted to simply posting links to articles with no accompanying commentary, expression of an opinion or overall contribution to the substantive discussion.* In many cases such posts seem to made simply to cause controversy. Where this is suspected to be the case such posts will be deleted. Where the link seems to be posted in good faith and makes sense in the context of the ongoing discussion the post will not be deleted.


aj



whathome said:


> Finfacts article - Irish economic dependency on property
> 
> *Comment: Irish Property Boom - It's easy to underestimate how much economic prosperity depends on it*
> 
> http://www.finfacts.com/irelandbusinessnews/publish/article_10007932.shtml


----------



## Dipole

I noticed a lot of people in Lidl yesterday.  A larger proportion than normal appeared to be Irish.

I figure one of the first indicators we will get that things are changing is when we see Lidl and Aldi's market share start to increase again - it's stalled for the last while.


----------



## edo

> whathome :    Finfacts article - Irish economic dependency on property
> 
> *Comment: Irish Property Boom - It's easy to underestimate how much economic prosperity depends on it*
> 
> http://www.finfacts.com/irelandbusin...10007932.shtml
> 
> Another interesting look at how dependent the economy is on the property market. As David McWilliams said, if you exclude property - there's not a lot going on here!


absolutely concur with that. Actually I've been singing it from the rooftops on this thread and the one about property prices over the last 6 months or so.

I'll be watching Mcwilliams programme with interest tonight - more so to see the reaction to it than its actual content - I've read the book and pretty much agree with his take on "bubble economy" that has emerged over the last 3 years or so. He has been saying this for ages and has been derided as an overwrought cassandra by all our "new paradigm" economists (who all co-incidentally have very definite VI in the continuing acceleration of the Property sector - all "independent" economists have been sitting the bunker with the crash helmets on for quite a while now) so now that there has been a wobble? stall? soft landing? start of crash? in the property sector I wonder will he be taken a tad more seriously this time? hmmm!!!

view from the ground.

In our industrial estate , down here in the Dublin docklands , is becoming quite a lonely place recently - compared to 3-4 years ago it is positively depressing - at least 4 companies have closed down, 3 other seriously downsized in the last months alone - the only replacements have been a gourmet coffee and cakes shop and an importers office - sign of the times or what? - this in an enterprise centre incubating Ireland's next technology generation - I wonder... as I watch the cranes swinging over the next lot of overpriced yuppie hutches going up across the way.

 No surprise tho - Despite all the promises , and more listening to the FF Ard fheis on Saturday (NB _never never watch a political lovefest at the same time as ironing shirts  - bad for the temper - bad for the shirts!_) getting venture cash for new tech businesses is harder than ever. There is a generation of financiers coming of age knowing only property as the only sure thing - tech is way too risky - This could stunt our development here for generations - never mind all the promises and visions from the gang in citywest on Saturday - as B.A. well knows - cash is your only man!.

Later


----------



## macbri

The fundamental point in website link above is that the "government collects $100k in taxes(direct/indirect) for every house built.At projected 2006 new house build rate of 100k ,thats' a massive tax take of $10billion from new builds alone.
Add in another $5b for stamp duty on 2nd hand houses,cgt on property and indirect construction related jobs.

I believe ytd tax take at October was $33b so say $40-$42b for full year.

Construction accounts for 35-40% based on figures above-any down turn in new house builds will have serious implications for Irish economy unless alternative revenue streams can be found(highly unlikely and only sources would be increasing VAT/PAYE or reducing public spending).

The gravy train has stopped(EEC Contributions) and there are lower cost alternatives for new industry to set up in within EEC and obviously beyond.
 Ireland is in for some tough times unless we keep building at close to 100k pa or discover oil of coast.


----------



## Hibernicatio

India is facing job shortages in the IT sector of 1,000,000 trained graduates.  350,000 per annum.  

That is a large workforce.  The jobs are only going in one direction...

http://news.bbc.co.uk/2/hi/south_asia/6124872.stm


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## thewatcher

http://www.moneyweek.com/file/20809/why-western-workers-are-set-to-become-poorer.html

When i hear our "financial experts" say that a slowdown in house price inflation is a good thing as it will allow wages to catch up with salary multiples,i wonder what pipe dream their living in.

Why do we think we are so special that we can continue to give ourselves pay rises regardless of what the rest of the world is doing ?

There is only 1 solution to our present difficulties,you just have to read between the lines !.


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## macbri

The employment boom in the last 4 years has been built around 3 main areas.

1-Construction employment has doubled adding approx 100-130k jobs

2-Public Sector employment has increased dramatically accounting for another 100-150k jobs

3-Finally retail/finance sector employment has increased 25-30% due to consumer credit boom & construction boom.

I can't see any of these factors continuing in the near future,in fact for all three,I will be amazed if current employment numbers are held. 

Pay in Ireland is not out of sequence with old EEC members(average industrialised wage $32k from memory) but employment growth cannot continue at current rate.

Given the above,Irish economy is in for some very tough times and I can only see recession ahead in the near future but hopefully I'm wrong


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## room305

thewatcher said:


> http://www.moneyweek.com/file/20809/why-western-workers-are-set-to-become-poorer.html
> 
> When i hear our "financial experts" say that a slowdown in house price inflation is a good thing as it will allow wages to catch up with salary multiples,i wonder what pipe dream their living in.
> 
> Why do we think we are so special that we can continue to give ourselves pay rises regardless of what the rest of the world is doing ?
> 
> There is only 1 solution to our present difficulties,you just have to read between the lines !.



Interesting article. This quote was illuminating:


> Some would argue that the worst of the arbitrage is over – as wage inflation now takes off in China and India.  Don’t count on it. Our estimates suggest that even after five years of double-digit wage inflation in China, hourly compensation for Chinese manufacturing workers remains at only 3% of levels prevailing in the major industrial economies.


 The fact that we are hoping to grow our economy sufficiently to justify our extraordinary house prices just shows how muddled our thinking is.


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## Maine

http://www.rte.ie/business/2006/1108/central.html

Central Bank is talking to the banks about tightening of lending rules. Clearly this is to prevent banking collapses at the margin if there is a hard landing in the property sector. 

The Central bank senior management do not want to be exposed if a building society were to go under.

This will slow further speculative property developments.


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## JayDub

*Central Bank warning on house prices*
http://www.rte.ie/news/2006/1108/housing.html
"The report estimates that house prices are overvalued by 14%." 

Is this the first time the central bank issued such a statement?


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## shanegl

JayDub said:


> *Central Bank warning on house prices*
> http://www.rte.ie/news/2006/1108/housing.html
> "The report estimates that house prices are overvalued by 14%."
> 
> Is this the first time the central bank issued such a statement?


 
I think so. I was shocked they included an overvaluation figure. I can't reconcile this with their other report that says the economy is in good shape.


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## makindye

shanegl said:


> I think so. I was shocked they included an overvaluation figure. I can't reconcile this with their other report that says the economy is in good shape.


 
You shouldnt be shocked - the property prices are overvalued by a lot more than 14% - The Central Bank is trying us to show they are doing their job by just hinting at what is certain to become a crisis but their lords and masters are telling them in no uncertain terms not to rock the boat.  Therefore we get double speak.  The Central Bank dont have any real work to do since power went to Europe and there is little justification for many of the positions so they aint going buck when they get a kick.


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## SherryTrifle

makindye said:


> You shouldnt be shocked - the property prices are overvalued by a lot more than 14% - The Central Bank is trying us to show they are doing their job by just hinting at what is certain to become a crisis but their lords and masters are telling them in no uncertain terms not to rock the boat. Therefore we get double speak. The Central Bank dont have any real work to do since power went to Europe and there is little justification for many of the positions so they aint going buck when they get a kick.


If they revealed their truw feelings they could be accused of precipitating a crash. The dogs in the street know the market is very very overvalued.


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## whizzbang

I'd recommend reading the report at [broken link removed] 

They used a few different models to guage the "overpricedness". Each different model would give a different percentage for how overvalued the market is. 

The 14% figure was quoting the model that gave the lowest percentage overpricing. The model which resulted in the highest overpricing gave 73%!

So it looks like RTE cherry picked the low number to make it look not that bad. 

Check out the graph on the bottom left of page 28 on the full report. 

scarey.
Here is a snap of it:
[broken link removed]


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## Marie

The rather anodyne 'Daft' quarterly report (published today) notwithstanding, the other economic news today relevant to the Irish economy is the rise of UK interest rates to 5% (which strong indication of another quarter-point rise in February 2007) and the news item that B&Q Ireland have announced a 48% drop in profit.


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## Maine

Central bank thinks property over valued by 15% and 60% of all lending is for property.  Now if there is a soft landing in property what are the banks going to lend to ?   IMO parts of the property lending has been very lucrative for the banks particularly the development piece.  

A fall off in lending could wipe out the profits and the need to restructure could cost huge amounts just as profits are falling.  

Hence the reform of the pensions is on the agenda at the moment just in case things get tough in future.  Much easier to push this thru in good times.  However if times gets tough it makes existing employees with big pension entitlements much more expensive than new employees.

Germany has seen this with older employees being replaced by contract employees who now make up 25% of the total.


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## bearishbull

*[broken link removed]*
More worrying commentary on IRish economy.


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## Marie

That is very sobering and illustrates the widening 'stretch' between anything resembling production and the services/public sector.  This clear reasoning and vision indicate an almost-total absence of economic understanding or planning.  Really sad!


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## Maine

bearishbull said:


> *[broken link removed]*
> More worrying commentary on IRish economy.


 
IMO as above the growth in public sector costs is the real elephant in the room as these costs cannot be pared back if times get tough.

Readjustment to slower growth in taxes will take years and will as McDowell states require higher rates of tax to drive taxes up to a balanced budget as required by the euro. These higher rates of tax could be necessary just as economy need the opposite.


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## Afuera

Maine said:


> Central bank thinks property over valued by 15% and 60% of all lending is for property. Now if there is a soft landing in property what are the banks going to lend to ? IMO parts of the property lending has been very lucrative for the banks particularly the development piece.


 
Clearly the CB is getting a bit antsy about the speculative nature of a lot of its lending; as demonstrated in their report this week:
[broken link removed]

Their proposals look to try and cut speculative lending down while extending other types of lending further:


> The Central Bank is proposing to force banks to increase capital reserves on speculative property lending, but it will reduce the capital reserves required by banks lending to owner-occupiers of property.



In reality, I wonder how they could force the banks to do this however. If a Dutch or British bank decided to provide loans to the Irish market but desregard the Irish CBs recommendations, what can they do?

Maybe this is just doublespeak by the CB to cover themselves should they be accused of doing nothing about (or worse, facilitating) a possible bust?


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## StoppedClock

Can someone post a link to a breakdown of Irish GDP by sector?


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## Remix

David McWilliams will be online for an RTÉ webchat on Tuesday 14 November from 1 to 2pm. Post questions here.


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## murray

Would anyone here consider emmigrating to US/Oz/NZ should lifestyle tighten up here due to economic slowdown ???


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## Sidewinder

murray said:


> Would anyone here consider emmigrating to US/Oz/NZ should lifestyle tighten up here due to economic slowdown ???



Did the US thing already in 1998, and Oz/NZ are too far away. I might spend the next year learning German though...


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## murray

Sidewinder said:


> Did the US thing already in 1998, and Oz/NZ are too far away. I might spend the next year learning German though...


 
Oz & NZ still only a day away by plane if you have to hot foot it back to the aul' sod! Fair comment though , doesnt get much further ! 

But if you find yourself just teading water here , and you could be treading water in Oz (beaches,lifestyle,great outdoors,sun,cheaper cost of living , cheaper property(on the whole), etc etc etc...)

Tempting huh ?!?!?! 
Deopends on family situation as well I s'pose....


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## Duplex

The Eurozone M3 measure of money supply growth is currently running at 8.5% (the ECB target is 4.5%) . In the UK M3 is growing at 14%. In the US M3 is estimated to be growing at 10% (the Fed stopped reporting the figure last year as they deemed in no longer relevant )  And in Ireland M3 is growing at an ahem healthy 33% . (_Latest Monthly Statistics _Irish Central Bank October 2006).    One definition (possibly the only definition) of inflation is 'an increase in the supply of money'.  Which would suggest that we are experiencing hyper inflation in Ireland.   



http://www.centralbank.ie/frame_main.asp?pg=sta_srr.asp&nv=sta_nav.asp


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## walk2dewater

Duplex said:


> The Eurozone M3 measure of money supply growth is currently running at 8.5% (the ECB target is 4.5%) . In the UK M3 is growing at 14%. In the US M3 is estimated to be growing at 10% (the Fed stopped reporting the figure last year as they deemed in no longer relevant ) And in Ireland M3 is growing at an ahem healthy 33% . (_Latest Monthly Statistics _Irish Central Bank October 2006). One definition (possibly the only definition) of inflation is 'an increase in the supply of money'. Which would suggest that we are experiencing hyper inflation in Ireland.
> 
> 
> 
> [URL="http://www.centralbank.ie/frame_main.asp?pg=sta_srr.asp&nv=sta_nav.asp"]http://www.centralbank.ie/frame_main.asp?pg=sta_srr.asp&nv=sta_nav.asp[/URL]


 
yep.


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## room305

Duplex said:


> Which would suggest that we are experiencing hyper inflation in Ireland.



Double-digit inflation in services and housing has become the norm over the past few years. This appears to be slightly offset by deflation (in real terms at least) of food, clothing and electronics.

If Ireland is experiencing severe inflation (certainly feels like it) then it leads to the interesting conclusion that the government record on spending isn't as bad as the opposition makes out. As the return on money spent by the government (inflationary in itself) must be measured against the depreciating worth of the money invested. I doubt the government will use it as a point in their defence though as it would be one step towards admitting that post-2001 Ireland has been experiencing an unsustainable economic boom brought on by credit expansion and little else.


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## StoppedClock

*Re: Irish economy - are there clouds ahead? A simple reason for why we are in trouble*

I went shopping yesterday, fairly typical shop, fresh fruit, veg, meat, breads, dairy, household, booze.

As I unpacked I started checking the origin of items, no surprise with the booze, wine from France, Spain, Oz, NZ (stocking up – not just for one week) beer from Northern Europe). 
Then the household – pretty much all UK, toilet paper from Ireland. 
Dairy - good score for the basics, milk, cheese, butter, not so good on high value sort of stuff (Danone/Yakult etc.).
Breads – 100% Irish, phew.  
Meat – good on pork and beef, some NZ though. 
Fruit and veg - well this should be good… no 0%, not one item!!

Oranges from Spain, Banana’s from Costa Rica - fair enough; potatoes from Israel – disappointing, corn from Germany – surprising, but the one that got me was apples and pears from China!!! FFS it is autumn here, what are we doing importing apples and pears from China in autumn!!  

So in summary by value 15% Irish, 85% imported.

Obviously this is all offset by our massive consumer electronics and car manufacturing export industry, (I presume we have these, Japan, Germany, Korea, USA do so we must if we are the second richest country in the world)


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## Howitzer

No offence, but if you were so concerned with the origin of these items why didn't you look BEFORE you put them in the trolley? As often as not there is an Irish equivalent. Those items are on the shelf because there's a demand for them, maybe the Chinese apples are redder than ours or something. Maybe they're cheaper but at the end of the day YOU put in them in your trolley, I don't think you can then turn around and start moaning about their origin.


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## StoppedClock

Howitzer said:


> No offence, but if you were so concerned with the origin of these items why didn't you look BEFORE you put them in the trolley? As often as not there is an Irish equivalent. Those items are on the shelf because there's a demand for them, maybe the Chinese apples are redder than ours or something. Maybe they're cheaper but at the end of the day YOU put in them in your trolley, I don't think you can then turn around and start moaning about their origin.


 
You miss my point which is that the goods on offer in our supermarkets are such that for the vast majority of people who shop on quality and price they will end up buying imported goods.  
I agree that had I set out to buy Irish I could tilt the balance (although there are many things we simply do not produce) but as you also implied I would need to sacrfifice on either quality or price to do so.  

The worry is that a chinese farmer can produce an apple of higher quality and ship it half way around the world with all the intervening middle-men for resale at a lower cost than an Irish farmer.


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## edo

This from the the Guardian this morning

http://www.guardian.co.uk/usa/story/0,,1958632,00.html

dum de dum dum dum..........................sure we're grand - nothing to worry about here - we'll be able to afford even more shiny dollar denominated apples from China now and our German produced Euros will go even further in Macys Christmas Sales !!!!

Now - if I could only work out how to get those damn Yanks and Far Easterners to pay in Euros rather than Dollars..............................


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## soma

StoppedClock said:


> The worry is that a chinese farmer can produce an apple of higher quality and ship it half way around the world with all the intervening middle-men for resale at a lower cost than an Irish farmer.



What will be interesting to see in the next 5-20 years, is just how long a situation like this can last. The reason this price is so low is the extraordinarily low cost of transporting these goods. 

If we see any global squeeze on energy supplies over this period, we had better be prepared to source our food from alot closer (preferably home grown).


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## Howitzer

soma said:


> What will be interesting to see in the next 5-20 years, is just how long a situation like this can last. The reason this price is so low is the extraordinarily low cost of transporting these goods.
> 
> If we see any global squeeze on energy supplies over this period, we had better be prepared to source our food from alot closer (preferably home grown).


 
Soylent Green anyone?


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## StoppedClock

Howitzer said:


> Soylent Green anyone?


 

Thanks for that link.  

As an aside does anyone know how New Zealand apples get here?  Are they flown?


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## edo

Potentially more bad news for the Export services sector - this could be a big one and will hit a few nerves - its been on the cards for a while 

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1735937&issue_id=14967

the same issue coming up again and again - its getting too expensive to do business in this country.

At the rate things are going our biggest export will soon be jobs themselves


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## room305

edo said:


> At the rate things are going our biggest export soon be jobs themselves



Job losses should be high on the government agenda but the current attitude seems to be "ah well, loads more elsewhere". We're storing up some huge problems for when the US economy slows and it is a case of battening down the hatches everywhere.

It is ideas like [broken link removed] that make me extremely worried. 2000 jobs? There are already two huge tax incentivised blocks of apartments on the river that are nearly empty and we have more free office space than we know what to do with.

I'm pretty sure Carlow is not the only town in Ireland that is looking at becoming a 1980's style unemployment blackspot once the construction industry starts laying off people.


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## edo

edo said:


> Potentially more bad news for the Export services sector - this could be a big one and will hit a few nerves - its been on the cards for a while
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1735937&issue_id=14967
> 
> the same issue coming up again and again - its getting too expensive to do business in this country.
> 
> At the rate things are going our biggest export will soon be jobs themselves



DEJA - VU? 

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1736326&issue_id=14968

Good day to bury bad news - although nothing has been confirmed - its a good way to soften up your workforce and prepare them for the worst.

there is a definite trend developing here - yet the unemployment rate for " the native Irish" in this economy is 2.8% - where the hell are they all working? . I know that there have been a couple of hundred new R/D jobs created around the country this year - nothing spectacular I know but its a start. Are we really that dependent on the property monster and associated spending?

Looking at another thread on AAM this morning - I notice that a poster has quoted FF as saying that less than 20% of earners are paying the top rate of tax - that would imply that 80% of paye workers are earning less than 32 grand a year - now (brain starting to overheat a little here) 32 grand is not a lot of money in todays Ireland - yet our current economic good health (or not ) is driven by consumer spending - are we really borrowing this much to keep the ship afloat? - In a way we have replaced public borrowing with private borrowing which the Gov taxes to keep spending without recourse to public borrowing - which looks great on Budget Day - but is pushing the cost of doing busines thru the roof here . I fear the impact of a sustained weakened dollar here. 

All business that simply require a phone and a PC screen are going - a) because it is manifestly clear that overheads here are becoming too expensive and B) because we have let our electronic comms network go to the dogs here over the last 5 years .

A Good question right now to ask will be - what kind of industry and employment will be available for the Baby boomers in 10-15years time? - surely they can't all the Estate Agents and Developers?


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## Duplex

An envelope manufacturer in Kilkenny is to cease production and has sold its premises to a property development company.   I suppose it’s refreshing to read stories about property development and envelopes that don’t involve corruption. 





> Bong Ljungdahl is to close its envelope production factory in Kilkenny. The announcement was made on Friday last and the remaining 35 employees in the factory have been given notice of termination. Some 12 people have already been let go at the factory.
> It's understood that the company has begun its wind-down with the complete closure expected to take place by the end of March 2007.
> The building in Purcellsinch, where the factory is located, has been sold to a real estate development company for €3 million.
> Bong’s President and CEO Anders Davidsson said that manufacturing costs are one of the main reasons for the closure.


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## Maine

Duplex said:


> An envelope manufacturer in Kilkenny is to cease production and has sold its premises to a property development company.


 
This is going to be a big problem for Ireland. If you are sitting in global HQ looking for a few factories to close so you can move manufacturing to Far East then Ireland will score highly. Because you can sell the site for a huge price and pay off the workers and you are gone with low exit costs.

Then the IDA will in a year or two later will give you grants and the low tax rate for all the profits you want in exchange for a few "R&D" jobs .....which probably is easier to get the tax authoritiesback home off your back anyway.

I think the "we are creating 5000 jobs by opening a new shopping centre" headlines are simply brilliant.

Finally on someone asking to explain about how good things are - we are borrowing 280million a day goes a long way to explaining it.  Xerox and Vodafone out and shopping centres in.


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## bearishbull

more jobs leaving ireland, thus time its creative labs in Blanchardstown

http://www.rte.ie/business/2006/1219/jobs.html


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## Raskolnikov

bearishbull said:


> more jobs leaving ireland, thus time its creative labs in Blanchardstown
> 
> http://www.rte.ie/business/2006/1219/jobs.html


There was a particularily funny line on RTÉ about Creative switching to lower cost economies and then mentioning Holland  

In fairness, the news wasn't as bad as I feared. We're losing the manufacturing and logistics side but they're keeping the European HQ here, which is where the the higher earning jobs and tax Euros are. Using Ireland as a logistics centre for Europe is becoming more and more untenable given rising energy costs. As for manufacturing? There's no short-term future for it here unless it's making blockbuster drugs for the pharmaceuticals or high-end technology.

My fear is what's going to happen to this country in the long-run. Our financial services sector is being built on essentially a single foundation, low corporation tax. If this advantage is removed or even diminished, then we're in serious trouble.


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## Marie

It's a big worry and there's the precedent of the "Buy Irish" campaign alongside the tax-concessions to foreign manufacturing waaay back in the 1950's.  Businesses came, built shabby environmentally- and socially-destructive hangars in the middle of nowhere, availed of unskilled Irish manual labour and then at the end of the tax-concession period moved on elsewhere, leaving nothing behind but demoralisation.   Multinationals and globalisation are that much faster and more ruthless now.  What remains after this contemporary version of that old, old story?  Back to the question - what does Ireland have that's unique?  An earlier poster said "spectrum technologies" but they are not (surely?) specifically Irish but rather a general IT phenomenon.


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## room305

Marie said:


> An earlier poster said "spectrum technologies" but they are not (surely?) specifically Irish but rather a general IT phenomenon.



Not a general IT phenomenon but a precious natural resource which is used for all wireless information transmission.

Historic regulation of spectrum by government authorities the world over has led to a huge amount of inefficiency in its allocation. For example, much of the spectrum allocated to analogue TV remains unused and could be put to much better use. Many researchers are now suggesting adventurous dynamic spectrum allocation setups to perhaps avoid needing regulation at all - or at the very least cut down on the inefficient allocation process. This can take years and is not really practical for the fast paced technological era in which we find ourselves. However, spectrum allocation is not an area countries like to mess around with lightly.

Because we came quite late to the developed world, a lot of spectrum that has fallen into disuse in other countries was never even allocated in the first place here. We are also a small island nation and now a reasonably technologically adept one. This puts us in a great position to act as a testbed for other countries and researchers wanting to experiment in this arena.

Indeed ComReg are actively promoting this as an idea and have been very progressive in the area. It gives me (some) hope for the future.


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## StoppedClock

room305 said:


> Indeed ComReg are actively promoting this as an idea and have been very progressive in the area. It gives me (some) hope for the future.


 
I agree with your sentiments and on the whole I think the agencies in Ireland do fantastic work *in spite of *the government.

Who could have watched George Lee's boom and not been proud of the IDA, they really were/are brilliant.  

Unfortunately what has happened today is that people have forgotten the bad times and think prosperity is a right and that the government actually can do something to sustain it forever.  So while these initiatives are important they cannot provide a bulwark to the coming** recession.

What the vast majority do not realise is that it was they (the people of Ireland at home and abroad) who by deciding that things were on the up became confident and started borrowing, spending and investing.  They were the ones who started the Celtic tiger but ironically it will be they who decide that when things are no longer on the up that they no longer have the same confidence and begin to feel they should exercise prudence (laudable sentiment) that they will stop spending.  This will be done to protect against a downturn but in cutting back they will precipitate it.  And like everything in life the down will be as big as the up and thus will start the crash.


**no idea when


----------



## EvilDoctorK

Interesting Irish Times front page story today

"ESRI warns economy could be on unsustainable path"
[broken link removed]

(it's in their free content so no need to be a subscriber to read it)
Key figures

Current A/C Deficit 
2004 - 0.7% of GNP  
2007 - 5.6% (!)
Inflation to peak at 6.1% in Jan '07


----------



## Duplex

EvilDoctorK said:


> Interesting Irish Times front page story today
> 
> "ESRI warns economy could be on unsustainable path"
> [broken link removed]
> 
> (it's in their free content so no need to be a subscriber to read it)
> Key figures
> 
> Current A/C Deficit
> 2004 - 0.7% of GNP
> 2007 - 5.6% (!)
> Inflation to peak at 6.1% in Jan '07


 
So the current course of the Irish economy is unsustainable, this would seem to infer that we have to change course.   A change in course would require the government to take action to bring the ship of debt to a shuddering halt.  The chances of this government taking any action to change from this untenable course are beyond remote, much easier to blame  unforeseen and uncontrollable external forces; if and when we hit the rocks.


----------



## conor_mc

Duplex said:


> So the current course of the Irish economy is unsustainable, this would seem to infer that we have to change course. A change in course would require the government to take action to bring the ship of debt to a shuddering halt. The chances of this government taking any action to change from this untenable course are beyond remote, much easier to blame unforeseen and uncontrollable external forces; if and when we hit the rocks.


 
Expansion of the BES is a slight rudder deflection, but at least its in the right direction of fostering indiginous growth.

Mind you, it'd want to - GNP is on the slide.

http://www.rte.ie/business/2006/1221/economy.html



> Gross domestic product (GDP) expanded at an annual rate of 7.7%, the fastest rate for five and a half years, while gross national product (GNP) grew by 5.4%. GNP excludes the profits from foreign-owned companies. GNP growth was sharply lower than the 9% recorded in Q2.


 
Still over-reliant on MNC's then


----------



## Marie

room305 said:


> Not a general IT phenomenon but a precious natural resource which is used for all wireless information transmission.
> 
> Historic regulation of spectrum by government authorities the world over has led to a huge amount of inefficiency in its allocation. For example, much of the spectrum allocated to analogue TV remains unused and could be put to much better use. Many researchers are now suggesting adventurous dynamic spectrum allocation setups to perhaps avoid needing regulation at all - or at the very least cut down on the inefficient allocation process. This can take years and is not really practical for the fast paced technological era in which we find ourselves. However, spectrum allocation is not an area countries like to mess around with lightly.
> 
> Because we came quite late to the developed world, a lot of spectrum that has fallen into disuse in other countries was never even allocated in the first place here. We are also a small island nation and now a reasonably technologically adept one. This puts us in a great position to act as a testbed for other countries and researchers wanting to experiment in this arena.
> 
> Indeed ComReg are actively promoting this as an idea and have been very progressive in the area. It gives me (some) hope for the future.


 
Thanks for this background........yes, it _does _seem very hopeful if managed intelligently for the common good.


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## conor_mc

350 jobs in the balance at Motorola in Cork....

http://www.rte.ie/business/2007/0129/motorola.html


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