The recession??

Quazzie

Is it the fear of the recession that is actually causing the recession. Everyone seems to be tightening their purse strings now when it comes to shopping nowadays, but that not increase the effect of the recession? Is it the threat of it that caused it?

Captain Darling

We have nothing to fear, but fear and the recession itself.

R0ot

But is it the thought of the fear of the recession causing a recession that's causing the fear that is leading to the recession?

I for one welcome our recession overlords. :pac:

Hal1

Heh

Black Swan

It's very real in the USA, even if Bush won't say so before the presidential election. The number of people losing their homes is scary, so this is not just a fear, but real for many families.

CountingCrows

I'm sure the thousands of construction workers who lost there jobs will say its real!

R0ot

CountingCrows wrote: »

I'm sure the thousands of construction workers who lost there jobs will say its real!

There goes every student that didn't sit the leaving cert in favour of that highly paid construction related job. :pac: My heart bleeds

Wazdakka

R0ot wrote: »

There goes every student that didn't sit the leaving cert in favour of that highly paid construction related job. :pac: My heart bleeds

Oooohhhh...

Controversial..


*Gets popcorn*

FunkZ

R0ot wrote: »

I for one welcome our recession overlords. :pac:

Please stop, please. Or I'll have to blow up Buncrana.

Princess Consuela Bananahammock

Yes of course! Let's all spend the money we don't have on things we don't want to impress tahe neighbours we can't stand! Now if only I could get more credit.... dammit.....

I need a hovercraft!
http://www.iwantoneofthose.com/hovpod-acx-52/index.html

yeah, baby! No more recession for me!

R0ot

FunkZ wrote: »

Please stop, please. Or I'll have to blow up Buncrana.

You and I both know if Buncrana falls there would be nothing to stop the onslaught of Derry people into Inishowen and the rest of Donegal!

JohnCleary

Ikky Poo2 wrote: »

Yes of course! Let's all spend the money we don't have on things we don't want to impress tahe neighbours we can't stand! Now if only I could get more credit.... dammit.....

I need a hovercraft!
http://www.iwantoneofthose.com/hovpod-acx-52/index.html

yeah, baby! No more recession for me!

I actually plan on buying a Hovercraft for racing in the near future

Down with this sorta thing!

But seriously, what fcuking recession? Haven't noticed anything different tbh (Then again i've nothing to do with construction and i've never taken out a loan in my life)

-Edit- Actually, the price of fuel is p1ssing me off but don't know if it has anything to do with the recession. 1000litres of green diesel cost me 890euro last week - this time last year it cost me 550euro :eek:

A_M101

I'm delighted that I haven't recently bought a house.

On the other hand, I'm graduating next year and don't praticularly want to accept some shoddy job because it's all I can get!

In general, I'm not bothered, I'm well set-up enough.

Caoimhín

I deal with a number of gubberment departments and the cuts are being made daily. It will take some time, but these cuts WILL begin to affect public services, eventually.

500 million to be cut this year, 1 billion next year, there isnt a person in the country who wont be affected by this slaughter either directly or indirectly.

They just dont want to do it too soon or too hard because they want us to vote on Lisbon again.

RandolphEsq

Ikky Poo2 wrote: »

Yes of course! Let's all spend the money we don't have on things we don't want to impress tahe neighbours we can't stand! Now if only I could get more credit.... dammit.....

I need a hovercraft!
http://www.iwantoneofthose.com/hovpod-acx-52/index.html

yeah, baby! No more recession for me!

How does UK£15000 = €22000? Their currency conversion is completely retarded. Its more like UK£15000 = €19000

Quazzie

A_M101 wrote: »

I'm delighted that I haven't recently bought a house.

On the other hand, I'm graduating next year and don't praticularly want to accept some shoddy job because it's all I can get!

In general, I'm not bothered, I'm well set-up enough.

Daddy's money??

constitutionus

Quazzie2002 wrote: »

Is it the fear of the recession that is actually causing the recession. Everyone seems to be tightening their purse strings now when it comes to shopping nowadays, but that not increase the effect of the recession? Is it the threat of it that caused it?

no whats causing the recession is a combination of the pyrmid scheme that was the housing sector imploding and the "credit crunch", which is a polite way of saying banks have been lying their arses off so much about the worth of what they had that even THEY dont trust each other.

up to 2000 our economy was actually based on flogging stuff. from then it was based on flogging houses to each other which is unsustainable, hence the bust and the subsequent recession.

all this "talking ourselves into a recession" is bollocks. if it was true you could talk yourself into a boom and as you can see in zimbabwe that aint happening yes its making it a bit worse as people aint spending but the basic fundementals are bollocksed anyway so it wouldnt make that much difference.

look at it this way, even the rich are being hit as helicopter reposessions are at an all time high !

SimpleSam06

JohnCleary wrote: »

But seriously, what fcuking recession? Haven't noticed anything different tbh

You will in a year or two. These things take time to happen. Its going to be a rough few years imho... The worst hit will be students and the poor. Get rid of your debts people, cash is king!

Princess Consuela Bananahammock

JohnCleary wrote: »

But seriously, what fcuking recession? Haven't noticed anything different tbh (Then again i've nothing to do with construction and i've never taken out a loan in my life):

Exactly, me neither. Becvause I knew I'd have to pay soem day.

redzer007

eh, just exactly what recession is it that we are talking about. A recesssion has a particular definition and we have not met those criteria, therefore we are not in a recession.

seamus

Very few people will actually notice any major difference.

Most of us will not get an increase in our salary to the same extent which we have for the last few years. Most of us will have to hold onto our cars for an extra 18-36 months more than we'd planned.

A tiny number of people will lose their jobs and will be unable to find more work.

A even tinier number of people will lose their homes.

Most of us will continue on as we have done, it's only that small minority of people who blew everything on €100k+ cars and helicopters that will have to adjust their lifestyle/attitude.

CountingCrows

redzer007 wrote: »

eh, just exactly what recession is it that we are talking about. A recesssion has a particular definition and we have not met those criteria, therefore we are not in a recession.

A recession is a decline in GDP for two or more consecutive quarters. Anyone know if we've reached this promised land yet?

Quazzie

So is it a bad time to be buying/building a house? Is it a bad time to be getting a mortgage? Are AIB/TSB/BOI etc gonna all fold and leave us in the depths of despair with some unknown bank coming taking over and repossessing our house?

All of this is what I have seen predicted btw.

constitutionus

SimpleSam06 wrote: »

You will in a year or two. These things take time to happen. Its going to be a rough few years imho... The worst hit will be students and the poor. Get rid of your debts people, cash is king!

too damn right. makes me glad i never bought into this paying for your shopping with your credit card mullarkey. honestly its insane to see someone use a visa to buy a bar of chocolate

the banks are so deperate for cash now that halifax are offering 5.6% on amounts over 2k. i havent seen a rate like that outside of the internet banks. the crunch is killing em

i dont want to seem smug but having bought a gaff before things went nuts and pretty much opting out of the celtic tiger by choice im in a pretty good position to ride things through. it helps that i got my job in a recession too so odds are ill make it through this one as well.

in a weird way this recession is brilliant for alot of people as were getting back to the stage when an average person can actually afford a home again. hard parts making sure your in a sector that wont go bust.

Caoimhín

seamus wrote: »

A tiny number of people will lose their jobs and will be unable to find more work.

Jaysus Seamus, 20 - 30,000 predicted job losses in construction alone is hardly a tiny number.

http://www.irishtimes.com/newspaper/breaking/2008/0718/breaking34.htm

SimpleSam06

redzer007 wrote: »

eh, just exactly what recession is it that we are talking about.

The one that Davy Stockbrokers are talking about...

Davy says that cash flow has slowed to a trickle as sales (of new homes, cars and durable goods) have dropped. That slowdown has been reinforced by reduced access to credit. Increased risk aversion has also seen funds moved to deposits with a longer maturity. In a real economy context, that mindset is manifested in lower business investment and a rising household savings ratio.

Davy projects a marginal fall of 0.3% (previously 1% growth) in the volume of GNP this year. It says that at this stage, the outlook for 2009 is more important. Next year, it forecasts that real GNP will slip by another 0.7%. Prices may rise marginally across the economy next year but not by enough to avoid another fall in nominal GNP.

• We have cut our Irish macro forecasts: the economy is set to shrink in 2008 and 2009
• We now expect real GNP to decline 0.3% in 2008 versus our previous forecast of 1% growth.
• For 2009, we see a further volume contraction of 0.7%. In both years, nominal GNP may also shrink.
• Consumer spending is set to remain almost unchanged in volume in 2007-2009: a 0.6% gain this year may be followed by a 0.5% decline in 2009.
• We now project that investment will fall by 19.2% (was -13.4%) in 2008 and 16% (was -9.2%) in 2009.
• Exports are set to be weaker, hurt mainly by goods exports to the UK and by financial services. They may rise 4.1% in 2008 and 3.6% in 2009 compared with our previous expectation of 6% growth for both years.
• Rise in unemployment limited by slowing immigration
• Unemployment will reach 7.5% of the labour force by end-2009, contained by slowing immigration.
• Meanwhile, household balance sheets are not as healthy as previously reported by official data.

SimpleSam06

constitutionus wrote: »

the banks are so deperate for cash now that halifax are offering 5.6% on amounts over 2k. i havent seen a rate like that outside of the internet banks.

Bank of Ireland are offering 8% on an 18 month account for amounts of €3000 or better.

seamus

caoibhin wrote: »

Jaysus Seamus, 20 - 30,000 predicted job losses in construction alone is hardly a tiny number.

http://www.irishtimes.com/newspaper/breaking/2008/0718/breaking34.htm

30,000 is around 1.3% of the workforce.

What proportion of that will be unable to find more work?

A tiny number overall.

constitutionus

SimpleSam06 wrote: »

Bank of Ireland are offering 8% on an 18 month account for amounts of €3000 or better.

which is what, 1% away from the rate theyre chargine on on their internet credit card offer?

its mad, i NEVER thought i'd see that level of interest on savings again !

long LONG way away from the 0.15% on you bog standard saving account that was the norm last year. anyone with savings should be shifting em around like mad !

SimpleSam06

seamus wrote: »

30,000 is around 1.3% of the workforce.

What proportion of that will be unable to find more work?

A tiny number overall.

Well combine that with the current 4.3% rate and you get 5.6%, which is less than the 7.5% predicted by Davy, which is conservative, I would say. Put another 50,000 on there and you have an approximately correct number, which is carnage in anyone's books.

ressem

SimpleSam06 wrote: »

Bank of Ireland are offering 8% on an 18 month account for amounts of €3000 or better.

That's 8% over 18 months, so 5.26% EAR.
A little difficult to judge against Halifax as it looks like Halifax's rate also declines at the end of the year.

SimpleSam06

ressem wrote: »

That's 8% over 18 months, so 5.26% EAR.

True, I was only looking at the TV adverts... They are doing 7% EAR up to €5000 though...

muppetkiller

recession smession...I got a nice raise last month and am still seeing the same people wasting a hundred euro a night getting hammered in pubs and clubs....The country is fine...Although there's still too many wasters on the dole in this country...If you haven't found work in 3 months you should be made clean the streets or manual labor to earn your dole.

entropi

Recession? didnt know there was one tbqh...all i can see are rip off prices and a government screwing us over.

Shiny

muppetkiller wrote: »

..If you haven't found work in 3 months you should be made clean the streets or manual labor to earn your dole.

...and what about the long term unemployed that have been on the
dole for more than a year? Clean your toilet for you ?

Its not as easy get a job as you think and selling your soul for
tech support work doesn't count as a job.

amacachi

muppetkiller wrote: »

recession smession...I got a nice raise last month and am still seeing the same people wasting a hundred euro a night getting hammered in pubs and clubs....The country is fine...Although there's still too many wasters on the dole in this country...If you haven't found work in 3 months you should be made clean the streets or manual labor to earn your dole.

If the work existed would they get paid minimum wage? If so two days work a week wouldn't be so bad.

R0ot

R0ot wrote: »

There goes every student that didn't sit the leaving cert in favour of that highly paid construction related job. :pac: My heart bleeds

Engineers, Architects, Lawyers, admin staff...

seamus

Shiny wrote: »

...and what about the long term unemployed that have been on the
dole for more than a year? Clean your toilet for you ?

Its not as easy get a job as you think and selling your soul for
tech support work doesn't count as a job.

There's work out there for people who want to work.

Of course, aim to go get a job you like, but beggars can't be choosers. If you get paid for it, it's work.

brianthebard

seamus wrote: »

There's work out there for people who want to work. Of course, aim to go get a job you like, but beggars can't be choosers. If you get paid for it, it's work.

i'd much rather be cleaning streets instead of signing on,but theres no jobs going.

4Xcut

Exactly, if you can, then choose your job, if not, tough.

Although, the dole chould be supstituted largely by free heating/food/electricity/rent/etc.

If you want to be a lazy bum and not work, then you can exist off the state, not live.

If you want to go to the pub for a few pints, go on holidays, buy a newspaper, you can get job.

As regards, the recession, good, it will serve people who borrowed loads of money on cheap credit and didn't give a thought to how they would pay it back.

redzer007

SimpleSam06 wrote: »

The one that Davy Stockbrokers are talking about...

I am now quoting from that link

"*a shrinkage on annual basis. Contrary to conventional wisdom, the US National Bureau of Economic Research does not define a recession in terms of two consecutive quarters of decline in real GDP. "

Davys are not using the conventional use of the term in this piece.

so yes, a decline in growth,

It was inevitable that Irish Economy would not maintain its meteoric growth that we have seen in the past 10-15 years, but in no way are we seeing a catastophic crash.

As we are now tied to ECB interest rates, our economy will be more closely pegged with that in the major European economies. (Germany, France etc.)

It is probable that we will not see any more rate rises by the ECB this year and possible that there will be a 0.25% - 0.5% reduction in interest rates in the spring. This of course will be dependent on inflation and growth in the Eurozone.

As for unemployment in the housing sector, it is an unfortunate but neccessary correction. We could not keep building houses and keep borrowing money from each other to pay for it.

SimpleSam06

redzer007 wrote: »

but in no way are we seeing a catastophic crash.

Not at the moment, no, we are not in the middle of a complete collapse. But give it another four years and come back to me then.

redzer007 wrote: »

It is probable that we will not see any more rate rises by the ECB this year and possible that there will be a 0.25% - 0.5% reduction in interest rates in the spring. This of course will be dependent on inflation and growth in the Eurozone.

Of course the Euro is now losing against the dollar, as growth in the Eurozone slows and inflation rises. And if theres one thing that terrifies the Germans, its inflation. Also, if I had a penny for every time I heard someone say that the ECB was going to reduce interest rates, I'd have a lot of pennies.

You aren't looking at the bigger picture here. The global economy is in the throes of a slowdown (read crash), the subprimes mess in the USA was just the tip of the iceberg. Now the Alt-As and the Primes are coming up, and over the next three years they are going to hammer the US economy seven ways from Sunday. What makes you think an economy like Ireland, so dependent on US multinationals, is going to swan through that blissfully?

redzer007 wrote: »

As for unemployment in the housing sector, it is an unfortunate but neccessary correction. We could not keep building houses and keep borrowing money from each other to pay for it.

Again, handwaving doesn't cover the fact that some 20% of the economy was construction or related sectors. Now we have enough housing stock to last us for years without any building at all, that will shrink dramatically.

One of the main places the record tax receipts went over the last eight years was the public sector, and they need to continue being paid even when the money isn't there, so you are looking at a net gain becoming a serious loss for the economy, ongoing, since you can't fire them.

An awful lot of factors are coming together all at the same time, government mismanagement, global conditions, pressure from lower cost nations, unfavourable exchange rates, among other things, and you can say that it won't have any major effect on Ireland, but I'll say you are wrong.

redzer007

SimpleSam06 wrote: »

you can say that it won't have any major effect on Ireland, but I'll say you are wrong.

No you may be right, but I am not as pessimistic as most, if ECB reduces interest rates in the spring I'll come back and reactivate the thread.

In fact figures from the Eurozone this morning show decline in major economies and with inflation looking like its under control I think a rate drop is even more likely now. Put it this way I wont be fixing my mortgage interest rate any time soon.

However I do agree that things globally are far from good, but the real point of my first post was that we (esp. media) are throwing around the the word recession in such a way that it is being treated as fact. The actual fact is that we are not in a recession. I do concede that this may not be the case in 12 months time.

arybvtcw0eolkf

Well the recession is biting my arse nicely now.

For the first time in years I serviced both my car's & felt good about saving a few hundred €uro.

Its also the first time in along time that my car will go more than three years old without being changed for a new model.

This is also the first summer in about ten years that I didn't go on a package holiday.

gurramok

redzer007 wrote: »

No you may be right, but I am not as pessimistic as most, if ECB reduces interest rates in the spring I'll come back and reactivate the thread.

In fact figures from the Eurozone this morning show decline in major economies and with inflation looking like its under control I think a rate drop is even more likely now. Put it this way I wont be fixing my mortgage interest rate any time soon.

Your forgetting one thing.

As the euro slides, its gives the ECB more space to put up rates if and a big if, inflation continues to be double of what it should be.
They could not put up rates properly till now because of the euro's strength.(as well as credit crunch)

jackal

If the ECB lowers its rates soon, do you really see the banks passing that on to anyone other than the tracker mortgage holders? Higher ECB rates are not the root of the problem, neither is stamp duty, neither is the credit crunch...

There is no "problem", the cyclical market which overshot itself booming on the way up is being corrected, the bust on the way down may well be as dramatic as the boom we just experienced.

Property prices lost all touch with reality to the point where the first time buyers who support the market were becoming unable to afford these first time buyer properties, leading to a complete standstill in the market, as trader uppers hand no-one to sell to. The credit crunch just pushed us over the line, reducing the amount people could borrow, but that day was coming one way or another.

Now we have people sitting, waiting for things to get back to "normal", people who have only ever experienced the good times. They are the ones you hear loudly decrying David McWilliams and George Lee etc. for "talking us into a recession".

A recession is not the end of the world... People lose a lot of wealth, but things slowly get better. However, if the recession is ignored and it turns into a depression after a sudden devastating crash.. thats a different story. Unless the banks in Ireland start taking some pain, and stop telling us all their loans are grand, when their stock is down 60-70% in less than a year... something catastrophic is going to happen which could lead to a proper depression which will set this country back a decade.

seamus

Come back to me at Christmas tbh. There's been some madness in the markets since February with oil most notably all over the shop, but also exchange rates too. The rate of change has made it very difficult to predict anything past next week.

There's even talk of a drop in inflation in Germany now which could lead to a drop in ECB rates.

No-one seems to have a f*cking clue tbh.

SimpleSam06

seamus wrote: »

No-one seems to have a f*cking clue tbh.

Looks to me like a lot of people in this thread have a pretty good f*cking clue.

Flamed Diving

Essentially, recessions are caused by negative expectations of future growth/inflation on the part of producers/consumers/banks. So if you think about it in very simple terms, we do think ourselves into recessions.

gixerfixer

I've been out of work for the last 11 months now and am sick of sending my C.V. off to employers.Used to at least get interviews now i dont even get that.
Thank god the wife is working in the public sector and brings in a good wage.Is the recession real ?.....It is for me

Kipperhell

People or missing the point here. Recessions can be caused by lack of confidence in a good or bad economic environment. Talk of a recession may actually be the cause of the current likely recession.

If somebody can't get a job doesn't mean there is a recession either does falling house prices.

Considering headlines over recent times it is likely that consumer confidence was effected by them thus causing a recession. There were lots of reports going on about slowing and less growth stated in a similar way to an actual recession.

If you were moving a 50 mph and slowed to 40mph you are still moving at 40mph.

It can be reported different ways

1) Man loses 1/5th of speed
2) Speed plummets by 10mph
3) Man continues progress towards goal
4) Man slows speed for steady progress

Depending on the description given and asked to bet people will bet more on the positive description

So negative talk can have cause and effect.