boom on rte

ronbyrne2005

anyone see this programme? i think loads of people are gonna be scared stiff about the economy after seeing it!!

Heyes

why, what was mentioned ? did nt see it.

darkman2

Heyes wrote:

why, what was mentioned ? did nt see it.

George Lee saying 'the celtic tiger is dead' at the end. I dont agree with him, I think the program was unduly depressing.

Lemlin

It was about how the bottom is going to fall out of the economy and we'll go back into a recession like the 80s. People have been predicting it for ages now and it will happen.

The minimum wage was set far too high years ago, its just led to prices of everything spiralling and spiralling out of control.

homah_7ft

I know which sectors I wouldn't like to be working in right now.

darkman2

Lemlin wrote:

It was about how the bottom is going to fall out of the economy and we'll go back into a recession like the 80s. People have been predicting it for ages now and it will happen.

The minimum wage was set far too high years ago, its just led to prices of everything spiralling and spiralling out of control.

Blame the unions:mad:

The economy is growing at +5% per year. An excellent performance. Give us a break George.

homah_7ft

darkman2 wrote:

Blame the unions:mad:

The economy is growing at +5% per year. An excellent performance. Give us a break George.

Which economy? Are you talking about the spending economy we have become a world beater at?

ronbyrne2005

darkman2 wrote:

Blame the unions:mad:

The economy is growing at +5% per year. An excellent performance. Give us a break George.

growing at 5% but most is down to immigration,if you bring in more people your economy grows ,sounds good but GDP per capita is rising much slower.

Stephen

i hope the arse falls out of the housing market. tough sh1t for a lot of builders but maybe then i could actually afford a place of my own.

there's no way we can sustain building 80,000 houses a year anyway.

darkman2

ronbyrne2005 wrote:

growing at 5% but most is down to immigration,if you bring in more people your economy grows ,sounds good but GDP per capita is rising much slower.

The two most important issues for this economy are infrastructure and education to offset an enevitable fall in competitiveness. It annoys me when ppl point to the minimum wage. Its the public sector trade unions that are at fault for how high it is. As we type IBEC are urging the unions to water down significantly pay demands because we are pricing ourselves out of competitiveness. The problem is unions get what they want because they just go on strike if they dont. What they are actually doing, perhaps unintentionally is putting our wealth at risk.

Every time wages go up, prices go up. Borrowing is also becoming a problem as is the reliance on the property market.

At least now the infrastructure is being put in place. If we have good infrastructure and a well educated workforce geared toward a knowledge economy then we will be fine. If we dont - were f-ucked.

6ix

Yeah we're building SIX times more houses than Britain per annum :eek:

As someone said on the programme, with the boom comes the inevitable bust.

I'm no economist, so I've no idea when the bust will happen, but the amount of spending (through credit) out there can't be sustained forever.

maidhc

I saw the programme, and although George loves the bad news I think he hit the mark with it. If it painted a slightly more negative picture than really exists, all the better.

There is too much money borrowed, too great an obsession with buying bloody property, and too little real business being promoted. On top of all this we are in a precarious position as regards energy supply.

We really need to stop being such a bunch of self congratulatory eejets, and sort things out ASAP.

Right_Side

Biggest threat to the Irish economy, in my opinion, is the current wage-price inflationary spiral which is basically all the greedy unions fault. Public pay (completely unionised) exceeds private pay by 40%! Our international competitiveness is basically gone.

As someone previously pointed out our high growth rates is down increased output due increased population, per capita increases are way lower.

The end is nigh and the new partnership agreement is the final nail in the wounded tiger.

Get an education, otherwise get ready for the dole.

NOTE: I didn't actually see the programme but have studied a course on the Economy of Ireland in depth.

constitutionus

not to mention the main driving force in the economy is the construction and housing sector. the government now make more money from stamp duty than all the income tax combined. im not one given to scaremongering but its fairly obvious were in the same situation now the brits were in the 80s. they didnt think the good times would end then either then wham negative equity. makes me glad i bought my gaff when i did. even if the crash is bad i can afford to lose over half the value of my house and still make a profit.:D

oh and by the way, it wasnt the minimum wage that started this. it was greedy business men who used the euro change over to top up prices by 10% before and after the euro came in (but not during, so they couldnt be accused of ripping us off:rolleyes: ) just look at the price of a pint 2.50 punt in 2001, that shouldve translated to 3.17euro.by the end of 2002 it was 3.80euro and heading north fast. that started the price/wage spiral which were still in today. believe it or not in real terms im worse off now than when i was 10yrs ago when i was on a third of my salary

Wertz

Stephen wrote:

there's no way we can sustain building 80,000 houses a year anyway.

...and there's no way our economy can sustain the huge job losses in the construction industry, on which we're hugely dependen,t were that to happen, and the negative equity anyone who bought property in the last few years would find themselves in.

House prices are a self sustaining reaction at this stage...most of the increase is brought on by huge demand by people who can't really afford a €400K house but are buying one anyway in case they're €440K this time next year...no matter how big the actual demand for actual living space is, that kind of continued growth is improbable.

[edit] I didn't see this TV programme

Hail 2 Da Chimp

Stephen wrote:

i hope the arse falls out of the housing market.

I dont think you're alone there somehow...

solas

good show for what I saw, caught the last 20 mins of it, maybe they will repeat it. Highly recommend viewing. well done RTE.

constitutionus

maidhc wrote:

There is too much money borrowed, too great an obsession with buying bloody property, and too little real business being promoted. On top of all this we are in a precarious position as regards energy supply.

personal borrowing has gone up by 30% IN THE LAST SIX MONTHS:eek:
this isnt just bad, its fecking nuts. if the bust does hits soon it means institutions like AIB will lose over half their book considering over 55% of their money is in mortgages

ronbyrne2005

constitutionus wrote:

personal borrowing has gone up by 30% IN THE LAST SIX MONTHS:eek:
this isnt just bad, its fecking nuts. if the bust does hits soon it means institutions like AIB will lose over half their book considering over 55% of their money is in mortgages

no banks will still have to be paid! plus much of their mortgage debt is securitised

Right_Side

constitutionus wrote:

oh and by the way, it wasnt the minimum wage that started this. it was greedy business men who used the euro change over to top up prices by 10% before and after the euro came in (but not during, so they couldnt be accused of ripping us off:rolleyes: ) just look at the price of a pint 2.50 punt in 2001, that shouldve translated to 3.17euro.by the end of 2002 it was 3.80euro and heading north fast. that started the price/wage spiral which were still in today.

This doesn't make economic sense. The market could clearly support those price increases at the time otherwise there would have a drop in demand and a subsquent drop downwards in prices.

constitutionus

ronbyrne2005 wrote:

no banks will still have to be paid! plus much of their mortgage debt is securitised

yes, but what happens if people cant? a bust will hit the economy as a whole and suddenly all the construction people will leave for greener pastures and the 35% of the housing market that is rented out will collapse because

1. theres no demand now

2. you could buy for the rent required by these landlords to meet their mortgages

the word boys and girls is REPOSESSIONS. and in that market the banks could lose 25% of that 55% book. and this doesnt take defaulters on the credit card sector into account as well. the banks arent secured against this type of thing, that why they keep playing up how wonderfull things are incase we all cop on at the same time and hasten the bust

Wertz

ronbyrne2005 wrote:

no banks will still have to be paid! plus much of their mortgage debt is securitised

Now see there's something i always wondered about...in the event of a disastorous crash where many mortgages were forclosed upon, wouldn't the resultant negative equity hurt even the banks?
In recent months we've seen 100% 40 yr mortgages...the banks are basically funding the huge premiums and creating the bubble by making money so seemingly easily available...but in terms of security, if the actual houses/buildings/property being bought are worth only 60-70% of what's secured upon them, where does this leave mortgage lenders?


[edit] Godamnit constitutionus, get out of my damn head!

darkman2

Whilst no-one doubts there are problems I do think the program was too negative. Then again maybe some good will come out of it:)

6ix

Mortgage protection insurance (provided by large multi nationals) - that would mostly cover the repayments in such a scenario afaik

constitutionus

Right_Side wrote:

This doesn't make economic sense. The market could clearly support those price increases at the time otherwise there would have a drop in demand and a subsquent drop downwards in prices.

really? so you havent noticed the 20% and rising drop in sales in pubs and subsequent rise in off liscence trade? a down turn so sharp the gov havent even increased tax on "the old reliables" in 2years. and i agree with you about the drop in price, you think rationally thats what should happen in this enviroment . but apparently DIAGEO think when youve drivin off your clientele the solution is to UP the price (guiness now going for 4euro a pint now)

i never said it was rational, its just the reality of business in ireland. particularly in the protected sectors (50euro a doctors visit anyone?)

Wertz

I doubt it's any great cooincidence that this airs on the day that SSIAs begin maturing eh...

darkman2

Wertz wrote:

I doubt it's any great cooincidence that this airs on the day that SSIAs begin maturing eh...

Good point-


16 BILLION EURO


is about to hit the economy:eek:


Nice one McCreevy:D

Right_Side

constitutionus wrote:

really? so you havent noticed the 20% and rising drop in sales in pubs and subsequent rise in off liscence trade? a down turn so sharp the gov havent even increased tax on "the old reliables" in 2years. and i agree with you about the drop in price, you think rationally thats what should happen in this enviroment . but apparently DIAGEO think when youve drivin off your clientele the solution is to UP the price (guiness now going for 4euro a pint now)

Yeah, the market is reacting it's not an instant process. Alcohol isn't a perfect example anyway because it has an inelastic demand so market forces are less effective on it.

constitutionus

Right_Side wrote:

Yeah, the market is reacting it's not an instant process. Alcohol isn't a perfect example anyway because it has an inelastic demand so market forces are less effective on it.

unfortunetly for the publican it may be too late. methinks they've slaughtered the goose that lays the golden egg. theres a whole generation out there now that'd rather drink at home than get ripped off in the pub. were starting to end up like finland (sans the decent social services:D )

Right_Side

constitutionus wrote:

unfortunetly for the publican it may be too late. methinks they've slaughtered the goose that lays the golden egg. theres a whole generation out there now that'd rather drink at home than get ripped off in the pub.

This is exactly my point, pubs are closing regularly now due insufficient demand due to prices being too high for the market to support. Why are you arguing with me and then agreeing with me?

constitutionus

Right_Side wrote:

This is exactly my point, pubs are closing regularly now due insufficient demand due to prices being too high for the market to support. Why are you arguing with me and then agreeing with me?

im not, your the one who said my point about greed was wrong

Triton

constitutionus wrote:

oh and by the way, it wasnt the minimum wage that started this. it was greedy business men who used the euro change over to top up prices by 10% before and after the euro came in (but not during, so they couldnt be accused of ripping us off:rolleyes: ) just look at the price of a pint 2.50 punt in 2001, that shouldve translated to 3.17euro.by the end of 2002 it was 3.80euro and heading north fast. that started the price/wage spiral which were still in today. believe it or not in real terms im worse off now than when i was 10yrs ago when i was on a third of my salary

Of course it wasn't the union bosses

They're just asking for a 10% increase in wages at a time when most Irish SMEs can't cope against the foreign competition.

The argument of the union leaders is that we need higher wages to attrack foreign workers. Could somebody please ask them just where are all these foreign workers going to work when Irish SMEs start closing?

In other EU economies, the average industrial wage isn't near that of Ireland. The minimum wage is far too high, even a simpleton can see that.

Terry

Stephen wrote:

i hope the arse falls out of the housing market. tough sh1t for a lot of builders but maybe then i could actually afford a place of my own.

there's no way we can sustain building 80,000 houses a year anyway.

the celtic tiger bit me in the arse.

i'm sitting here in my inherited house, laughing at all you people with €400,000 mortgages.

Baggly

ill just wait till the property market crashes, and then.....wham.....i win.


of course the bubble is gonna burst. its cyclical economics, with a boom side and a recession side. so unless mccreevy and co came up with a brand new type of economics, then we will hit a recession pretty soon. bubbles burst....it happens. ive been saving, have you!?!?!?!*


*i havent actually been saving, but im not in debt, so that counts

up for anything

Triton wrote:

The minimum wage is far too high, even a simpleton can see that.

Even the simpletons expected to survive on it!:rolleyes:

darkman2

petermonaghan wrote:

ill just wait till the property market crashes, and then.....wham.....i win.


of course the bubble is gonna burst. its cyclical economics, with a boom side and a recession side. so unless mccreevy and co came up with a brand new type of economics, then we will hit a recession pretty soon. bubbles burst....it happens. ive been saving, have you!?!?!?!*


*i havent actually been saving, but im not in debt, so that counts

Nobody has said a 'recession' is on the way. Lower growth but not recession.

Baggly

up for anything wrote:

Even the simpletons expected to survive on it!:rolleyes:

that depends on what you mean by survive. i know too many idiots who moan about the minimum wage, only to blow half a weeks wages on booze.

not that thats what everyone does, i know there are people on the minimum wage who are struggling in the true sense.

sure all this 'wealth' is false, because everything has risen in price.

darkman2 wrote:

Nobody has said a 'recession' is on the way. Lower growth but not recession.

but do you not agree that boom and recession follow each other in every economy in the world?

darkman2

petermonaghan wrote:

that depends on what you mean by survive. i know too many idiots who moan about the minimum wage, only to blow half a weeks wages on booze.

not that thats what everyone does, i know there are people on the minimum wage who are struggling in the true sense.

sure all this 'wealth' is false, because everything has risen in price.



but do you not agree that boom and recession follow each other in every economy in the world?

No, recession is a 'hard landing', lower growth or a slow down is a 'soft landing'. It happened in 2001 after 9/11. PPL expected a real economic shock, but the economy survived and returned to very good growth, it never entred recession. All economists agree a slow down is more likely but not in the near future. Of course we are vunerable to shocks in the wider world and that would be my biggest concern really.

nesf

Eh, in responce to all those going on about cyclical economics and recessions, we already had a 2 year recession in the past 4 years. Growth being below trend growth is what is termed a recession when speaking of economic cycles. The problem is that people hear the word recession and they think of the 80s. For something like the 80s to happen there would have to be an EU wide recession (imho).

Baggly

ah well this might be a case of perspective. im only 20 and have yet to start working properly or have any real responsibilities. im looking at 10/15 years down the road when i have a house and kids, and the house is overpriced and tiny and the kids want all these...things, that i dont understand and such.

i still think that people have forgotten too easily that 20 years ago we came out of a period of recession (the really bad kind), which happened after le mass' period of boom(altho nothing as much as the celtic tiger).

i guess my perspective is historical rather than economic

plus there is the fact that with the loss of control that the CB had, the only way the gov can 'control' growth is through fiscal polocy. now if anyone but fianna fail gets elected.....we re screwed.

darkman2 wrote:

Of course we are vunerable to shocks in the wider world and that would be my biggest concern really.

fine gael would be one such shock

darkman2

nesf wrote:

Eh, in responce to all those going on about cyclical economics and recessions, we already had a 2 year recession in the past 4 years. Growth being below trend growth is what is termed a recession when speaking of economic cycles. The problem is that people hear the word recession and they think of the 80s. For something like the 80s to happen there would have to be an EU wide recession (imho).

No, thats not true at all. Recession is the deflation of the size of the economy. Negative growth. Ireland hasnt entred recession in over 13 years.

nesf

petermonaghan wrote:

I guess my perspective is historical rather than economic

The biggest issue in this country is either people focusing too much on the historical perspective or ignoring it completely. The middle ground is the better mindset I think. The economy is odd atm and while we are in a very very different situation than the 80s neither should we just blindly ignore the possibility of a downturn.

Baggly

nesf wrote:

The biggest issue in this country is either people focusing too much on the historical perspective or ignoring it completely. The middle ground is the better mindset I think. The economy is odd atm and while we are in a very very different situation than the 80s neither should we just blindly ignore the possibility of a downturn.

i would have said the biggest issue is the general population not understanding why we are in boom(understandable) and trusting a ten second news bulletin every other day on fm104 concerning how 'new experts expect the celtic tiger to roar on for another gazillion years', and then, believing this, go and spend all their savings on magic beans.*

*houses arent magic beans

up for anything

petermonaghan wrote:

that depends on what you mean by survive. i know too many idiots who moan about the minimum wage, only to blow half a weeks wages on booze.

not that thats what everyone does, i know there are people on the minimum wage who are struggling in the true sense.

sure all this 'wealth' is false, because everything has risen in price.



but do you not agree that boom and recession follow each other in every economy in the world?

Oh I do. I skimped and scraped for the best part of six years in the UK when the recession hit. My husband works in construction which is always the worst hit industry when recession strikes. We, along with thousands like us, had to move to rented accommodation and rent out our own place in order to try and meet the mortgage, hampered by the fact that it was next to nigh impossible for him to find work and when he did it was at rock bottom rates. My job was also affected by the bubble bursting as were the jobs of nearly everyone I knew. Pay cuts, no pay rises, rising prices... shops to let on every high street, permanent sales in all the shops and no one able to take advantage of them because they didn't have the spare income to do so.

Yes, this country could face such a scenario but the difference between Ireland and the UK is that Ireland has such a huge proportion of home owners compared to the UK that if the same thing happened here, the country would collapse within months. All those people out there with huge mortgages and the personal loans on government encouraged new cars and the Credit Union loans for solid wooden floors, new kitchens and decking in the garden, the holidays already bought and paid for by credit card along with the concert tickets, new clothes, extravagent presents etc., would find it impossible to meet their outgoings in view of the rapid increase in loan interest rates and probable cuts in pay and possible redunancies. Not of course taking into account the amateur property speculators and the now extremely handy new and cheap workforce flooding the country from Europe. It would be worse than the terrible 70s and early 80s without the prospect of EU aid.

It would be a disaster of far greater proportions than New Orleans, the Tsunami and the famines in Africa (relatively speaking )The government cannot afford to let this happen especially because there aren't enough skyscrapers and high places here for us all to throw ourselves off.

Baggly

no, but we could dig big holes so that there would be a greater fall from the second floor

nesf

darkman2 wrote:

No, thats not true at all. Recession is the deflation of the size of the economy. Negative growth. Ireland hasnt entred recession in over 13 years.

When you are speaking of business cycles a recession can be defined as growth at a level below long term real growth, ie the trendline. It's not the only definiton of a recession, I'm only speaking in terms of business cycles here. Look at 2003's real growth of 1.4% versus 2002's 5.2% or 2001's 9.9%.

up for anything

petermonaghan wrote:

no, but we could dig big holes so that there would be a greater fall from the second floor

Maybe but all the construction workers and digger drivers would have fecked off to all points East, West and South (and maybe even North) to find work like in the old days so who would dig the holes?

Baggly

gonna side with negative growth on the definition of recession i was referring to.

sorry nesf

up for anything wrote:

Maybe but all the construction workers and digger drivers would have fecked off to all points East, West and South (and maybe even North) to find work like in the old days so who would dig the holes?

all us marketeers, we re the second to go

darkman2

The economy is growing and performing well. There is no problems at the moment that cant be rectified, to say the country is heading for recession is ignorant scare mongering. No economist has suggested impending recession in fact they are saying the exact opposite - that growth will accelerate over the next two years. The economy is in healthy shape, there were 90,000 jobs created last year alone. 30,000 of these were considered higher productivity jobs. The rest, however were low skilled and as such contibuted little or nothing to the government finances - this is why the IDA is about to remarket Ireland as a knowledge economy. Beleive it or not we are in much better shape then our EU counterparts.

darkman2

nesf wrote:

When you are speaking of business cycles a recession can be defined as growth at a level below long term real growth, ie the trendline. It's not the only definiton of a recession, I'm only speaking in terms of business cycles here.

That may be true but if the economy dosen't contract then its not a recession. Growth did slow but the economy was still growing at twice the EU average during that time.

joebhoy1916

darkman2 wrote:

George Lee saying 'the celtic tiger is dead' at the end. I dont agree with him, I think the program was unduly depressing.

Why do you not agree do you think celtic tiger is alive and kicking!

Great show amazing if house's be built slow down the goverment will
lose about €2 billion a year :eek: and get about €80,000 for a house sold!

Soon enough there will be enough house's that each of us will have 6 each !
Mad stuff and when this all fcuk's up what's gonna happen?

30% of the work force in building sites cant last forever!