The Sunday Times attempts economic assassination.

Flamed Diving

From The Sunday Times

March 29, 2009

Recession: the bad luck of the Irish

It was once hailed as the best place to live in the world. Now it’s in the grip of a terrifying economic storm. Could Ireland be the first euro country to go bust?

John Arlidge

In Ireland, the biggest funerals take place in the smallest churches. St Mochta’s, on Dublin’s western fringes, is little bigger than a front room. So many mourners turned up for the funeral of Patrick Rocca that they spilt out onto the pavement. Anyone who is anyone in modern Ireland was there, huddled together under a sky the colour of a day-old bruise.

Politicians, pop stars, billionaire developers, horsemen and the sporting elite. Even the paparazzi. Rocca would have liked that. The 42-year-old was the self-styled poster boy for the new, resurgent Ireland, with a glamorous wife, private planes and helicopters, and a property business worth, at its peak in 2007, €450m. But one morning in January, he snapped. The first sign that anything was wrong was when neighbours saw him walking round the garden of his €5m house in Holmeleigh, an exclusive residential enclave of Dublin, in pyjamas. When his wife, Annette, returned home just before 9am after taking the couple’s two sons to school, she found her husband dead in the hall. He had shot himself in the head with a shotgun. The morning papers revealed the value of his business had collapsed to as little as €14m, with debts of €18m.

Rocca’s funeral was not simply a wake for one man. To many, the bells that rang out as the hearse pulled away were a lament for a nation. The Celtic tiger that transformed a beer-soaked backwater into the envy of every small nation with a thirst for a makeover is dead, and its cubs are looking to emigrate because they see no future. The signs, big and small, are everywhere. One bank, Anglo Irish, the country’s third largest, has been nationalised, and the government is negotiating bail-outs for two more. Foreign firms, notably Dell computers, are shutting factories. The family china — Waterford Wedgwood — is being sold off. Guinness has put its plans to build a €1 billion “super-brewery” into cold storage. Crowds at the horse races are down 10% and on-course betting has dropped 18%. In the most remarkable reversal of economic fortune, Poland, whose workers flocked to Ireland in the go-go years, has started hosting job fairs to attract unemployed Irish workers to Warsaw. The ad slogan? “Come to the new Ireland.”

Paddies heading for Poland? Surely it can’t be that bad? Unfortunately, it can. If you think the British economy is a mess, spare a thought for the neighbours. Ireland had a bigger boom and is now suffering a bigger bust, with fewer resources to dig itself out of the hole. In his cramped, pamphlet-strewn office on the banks of the Liffey, Professor John FitzGerald, an economist at the Economic and Social Res-earch Institute and the son of the former taoiseach, Garret Fitz-Gerald, confirms that salaries are falling, house prices have slumped by a third, the stock market is at a 14-year low, and unemployment is set to hit 12% by the end of the year. Ireland recently became the first western European country to have its top-notch credit rating downgraded from stable to negative by the ratings agencies Moody’s and Standard & Poor’s. This year, the budget deficit will reach 10%, the highest in the EU, and the government concedes the economy will shrink by 6.5%, compared with 2-3% in the UK. “This is a dramatically bigger shock for Ireland than for the UK,” FitzGerald says.

Things are so bad that Nouriel Roubini, the New York banker nicknamed Dr Doom because he predicted the global crash, says Ireland could be the next country to go bust after Iceland. He points out that Ireland got richer faster than Iceland, in much the same way, and now has many of the same problems. “If a big institution in Ireland were in trouble,” he says, “the country does not have the resources to bail them out.” Government pledges to support the banking sector by honouring all the country’s bank deposits amount to 250% of annual economic output. Ministers acknowledge the risk. In the words of Brian Lenihan, finance minister, the eco-nomy has “fallen off a cliff”. Here, MPs are so worried about default that they are advising British savers to withdraw their money from Post Office accounts, whose savings scheme is run by the Bank of Ireland. This being Ire-land, there’s a joke about it all. “What’s the capital of Ireland?” they ask. “Oh, about 20 euros.”

... more at:

http://business.timesonline.co.uk/tol/business/economics/article5980940.ece

Pathetic. I'll never buy this rag again.

mike65

Very tabloid apart from too many words and too many long words.

I just did a bit of sleuthing on the author, a lot of fluffy lifestyle rubbish for "quality" papers.

Flamed Diving

Its seems McCreevy was bang on:

http://ec.europa.eu/ireland/press_office/news_of_the_day/mccreevy-carlow-speech_en.htm

mike65

http://ec.europa.eu/ireland/press_office/news_of_the_day/mccreevy-carlow-speech_en.htm

"Everyone knows that at some vulnerable moments in our history our immediate neighbours have tried to take us on". But the Commissioner warned: "They should remember this: They have never managed to take us out. And we must make sure that they never will".

I presume at this moment the assemble throng jump up and sing A Nation Once Again" or wave plastic hammers. :rolleyes:

Flamed Diving

mike65 wrote: »

http://ec.europa.eu/ireland/press_office/news_of_the_day/mccreevy-carlow-speech_en.htm



I presume at this moment the assemble throng jump up and sing A Nation Once Again" or wave plastic hammers. :rolleyes:

No. I suppose it would be better just to lie down and take the punishment from our betters.

Anyway, this is besides the point. This is a pathetic attempt, on behalf of the British government press.

Barname

Yes, I read it, very tabloid, alot of anecdotal rubbish, alot of inaccuracies.

I reckon the journalist is a failed property hack looking for a new outlet. His observations are very poor and third hand while at the same time way too opinionated.

I loved this gem....

Anyone who is anyone in modern Ireland was there

Really? perhaps the muppets from the Sindo were there, has the Sindo virus now spread to the Times?

10000maniacs

I suppose it makes them feel much better about themselves. It takes the focus off their crap ecomomic state.
God love them they are in a very unhealthy state themselves. They as taxpayers will be paying for their bank bailouts for the next 50 years.
They are sitting on Billions of Pounds worth of unsold stock in their factories. Unemployment is at its worst in 10 years and set to get much worse.
They can't even bury their dead.
http://www.time.com/time/world/article/0,8599,1851425,00.html
It was always the English way to kick someone weaker when they were being kicked themselves. From Henry VIII to Churchill and Maggie Thatcher.

Purple Gorilla

E-mailed them about it..not expecting a reply though

Latchy

Seems like only yesterday that brits were being urged to put their savings into Irish post office accounts .

Fratton Fred

I presume people have read the whole article, not just the bit in the OP, The OP only posted about 1/4 of it, the second page does get a lot better and the only thing I would say is..The truth sometimes hurts.

Flamed Diving

Fratton Fred wrote: »

I presume people have read the whole article, not just the bit in the OP, The OP only posted about 1/4 of it, the second page does get a lot better and the only thing I would say is..The truth sometimes hurts.

What are you implying?

The truth is that I tried to post the full story on another forum and I had to chop 75% out of it to meet maximum word limit. I assumed the same was here when I posted it.

That truth? Why would that hurt?

Strange...

Fratton Fred

Flamed Diving wrote: »

What are you implying?

The truth is that I tried to post the full story on another forum and I had to chop 75% out of it to meet maximum word limit. I assumed the same was here when I posted it.

That truth? Why would that hurt?

Strange...

only saying people should rerad the whole article, I understand why you didn't post the whole lot, it is huge.

A lot of what he says is true though, how can you say it is not.

OK, he hammed it up a bit and he comes over as a patronising bollox, but there are a lot of quotes in there that are spot on.

Flamed Diving

Fratton Fred wrote: »

only saying people should rerad the whole article, I understand why you didn't post the whole lot, it is huge.

A lot of what he says is true though, how can you say it is not.

OK, he hammed it up a bit and he comes over as a patronising bollox, but there are a lot of quotes in there that are spot on.

My problem aren't with the external quotes. It's the window dressing. He is making things seems so much worse than they are. We are not as bad as Iceland. Not in the slightest.

You need to question the motive of the paper here. This is a coordinated effort, imo.

Fratton Fred

Flamed Diving wrote: »

My problem aren't with the external quotes. It's the window dressing. He is making things seems so much worse than they are. We are not as bad as Iceland. Not in the slightest.

You need to question the motive of the paper here. This is a coordinated effort, imo.

what motives? The interest in the Irish economy is geographical, not economical.

The illuminati are using the Times to try and bankrupt Ireland...because....

Blackjack

Fratton Fred wrote: »

what motives? The interest in the Irish economy is geographical, not economical.

The illuminati are using the Times to try and bankrupt Ireland...because....

They're ignoring their own issues with their own economy?.

You may not want to hear it, but the UK's economy isn't exactly doing a stormer either.
Dunfermline Building society just had its bad loans taken by the Taxpayer and it's good loans bought by Nationwide building society. How many failed and Nationalised Banks has there been in the UK now?

Flamed Diving

Fratton Fred wrote: »

what motives? The interest in the Irish economy is geographical, not economical.

The illuminati are using the Times to try and bankrupt Ireland...because....

What?

Anyway, there are a few reasons. To deflect attention away from their own country. To encourage a flight of capital from Ireland to Britain. To damage the reputation of the Euro. I really don't know why the media in Britain has formed such a taste for Irish economic affairs. It's funny how it coincides those MP's calling for British savers to pull out their postbank savings.

Why Ireland?

Fratton Fred

Blackjack wrote: »

They're ignoring their own issues with their own economy?.

You may not want to hear it, but the UK's economy isn't exactly doing a stormer either.
Dunfermline Building society just had its bad loans taken by the Taxpayer and it's good loans bought by Nationwide building society. How many failed and Nationalised Banks has there been in the UK now?

Yep, the UK economy is well and truly ****ed at the moment. I think you will find most economies are. What's your point?

Flamed Diving wrote: »

What?

Anyway, there are a few reasons. To deflect attention away from their own country. To encourage a flight of capital from Ireland to Britain. To damage the reputation of the Euro. I really don't know why the media in Britain has formed such a taste for Irish economic affairs. It's funny how it coincides those MP's calling for British savers to pull out their postbank savings.

Why Ireland?

I must have missed the call to pull out of Postbank. The few old dears that keep their pensions in there will no doubt decimate the Irish economy.

There is no deflection of attention, it is reporting on a neighbouring country.

There are articles after article in Irish papers about everything that happens in the UK. Just read this forum and see how many threads mention the UK economy.

Some hack writes an article describing pretty much what everyone in Ireland is saying and there is ****ing outrage.

Stop being so bloody sensitive.

Flamed Diving

Fratton Fred wrote: »

I must have missed the call to pull out of Postbank. The few old dears that keep their pensions in there will no doubt decimate the Irish economy.

There is no deflection of attention, it is reporting on a neighbouring country.

There are articles after article in Irish papers about everything that happens in the UK. Just read this forum and see how many threads mention the UK economy.

Some hack writes an article describing pretty much what everyone in Ireland is saying and there is ****ing outrage.

Stop being so bloody sensitive.

Sorry. I'm with McCreevy on this.









Traitor.

Fratton Fred

Flamed Diving wrote: »

Sorry. I'm with McCreevy on this.

That says it all

thebman

Meh, despite all this doom and gloom, I don't know a single person that is actually in trouble yet financially except our government.

Fratton Fred

thebman wrote: »

Meh, despite all this doom and gloom, I don't know a single person that is actually in trouble yet financially except our government.

I do, both sides of the Irish Sea.

In the main, they are people who took out massive offset mortgages and used them to buy a house, do it up and buy a Freelander.

To be honest though, I kow a lot more people who have massive mortgages and are doing better now because of the drop in interest rates.

Blackjack

Fratton Fred wrote: »

Yep, the UK economy is well and truly ****ed at the moment. I think you will find most economies are. What's your point?

Don't think you read my post.

Here it is again:

"They're ignoring their own issues with their own economy?.

You may not want to hear it, but the UK's economy isn't exactly doing a stormer either.
Dunfermline Building society just had its bad loans taken by the Taxpayer and it's good loans bought by Nationwide building society. How many failed and Nationalised Banks has there been in the UK now?"

Fratton Fred

Blackjack wrote: »

Don't think you read my post.

Here it is again:

"They're ignoring their own issues with their own economy?.

You may not want to hear it, but the UK's economy isn't exactly doing a stormer either.
Dunfermline Building society just had its bad loans taken by the Taxpayer and it's good loans bought by Nationwide building society. How many failed and Nationalised Banks has there been in the UK now?"

I suggest you read a copy of the times, it is full of doom and gloom. There was an article in there last week, after the failed gilts sale, that mentioned IMF loans and all sorts.

They ran an article that gave an overview of the Irish economy, for the UK economy (the condition of which is no surprise to people in the UK) they go into detail of each firm that is failing, or each director that gets a bonus.

No one is trying to deflect attention away from the state of the UK economy by pointing the finger at other people.

The same cannot be said for Mr McCreevy.

Blackjack

Fratton Fred wrote: »

I suggest you read a copy of the times, it is full of doom and gloom. There was an article in there last week, after the failed gilts sale, that mentioned IMF loans and all sorts.

They ran an article that gave an overview of the Irish economy, for the UK economy (the condition of which is no surprise to people in the UK) they go into detail of each firm that is failing, or each director that gets a bonus.

No one is trying to deflect attention away from the state of the UK economy by pointing the finger at other people.

The same cannot be said for Mr McCreevy.

Shame that most of the article is a complete pile of balls, with mostly half truths and conjecture - examples of single scenarions providing the basis for how the entire country is performing.

And I never mentioned anything about McCreevy.

Fratton Fred

Blackjack wrote: »

Shame that most of the article is a complete pile of balls, with mostly half truths and conjecture - examples of single scenarions providing the basis for how the entire country is performing.

And I never mentioned anything about McCreevy.

it is not a very good article, which surprises me, the times is my paper of choice because it is usually very objective. What half truths are in there though?

Several people have mentioned Charlie McCreevy. I guess the Fianna Fail policy is to suggest everyone in Ireland who talks doom and gloom should hang themselves and everyone from outside Ireland obviously has it in for the country.

Denial is the correct term I believe.

Blackjack

Fratton Fred wrote: »

it is not a very good article, which surprises me, the times is my paper of choice because it is usually very objective. What half truths are in there though?

Several people have mentioned Charlie McCreevy. I guess the Fianna Fail policy is to suggest everyone in Ireland who talks doom and gloom should hang themselves and everyone from outside Ireland obviously has it in for the country.

Denial is the correct term I believe.

lets start with the "anyone whos' anyone at Rocca's funeral".

Shops in Limerick (what an example) selling single cigarettes and Tea bags

1 chap who's lost his house and car being the example of the average Irish person.

Denial my arse - it's balls.

Again, I've not mentioned McCreevy, so I don't see why you're raising that to me.

thebman

Yes his listed some facts about our economic situation but makes out that it is hitting the people a lot harder than it is for most.

MoominPapa

Its a terrible article, we are still in the **** - don't read the Sunday Times Magazine for economic analysis. Reckon this is more suited to N&M

Flamed Diving

Fratton Fred wrote: »

Several people have mentioned Charlie McCreevy. I guess the Fianna Fail policy is to suggest everyone in Ireland who talks doom and gloom should hang themselves and everyone from outside Ireland obviously has it in for the country.

Denial is the correct term I believe.

You must go to great lengths to avoid what people have actually been saying in this thread, and just fabricate whatever you want.

I'm impressed.

Unfortunately, what people are actually saying is that the British media are blowing up the magnitude of Irelands problems, and making us look like we are the same as Iceland.

Only a fool would think that we are the same as Iceland.

Dob74

I will be buying the Sunday Times because it has actual news.
We can do the irish thing and bury our heads in the sand.
Our face the facts. We have been on a borrowing splurge and it has come to an abrupt end.

That article looked completly factual, unlike most of the other sunday newspapers.

Flamed Diving

Dob74 wrote: »

I will be buying the Sunday Times because it has actual news.
We can do the irish thing and bury our heads in the sand.
Our face the facts. We have been on a borrowing splurge and it has come to an abrupt end.

That article looked completely factual, unlike most of the other sunday newspapers.

Yeah.

Except that it wasn't.

Fratton Fred

Flamed Diving wrote: »

You must go to great lengths to avoid what people have actually been saying in this thread, and just fabricate whatever you want.

I'm impressed.

Unfortunately, what people are actually saying is that the British media are blowing up the magnitude of Irelands problems, and making us look like we are the same as Iceland.

Only a fool would think that we are the same as Iceland.

I thought I had responded to the points raised. If I haven't, then i'm not going to now.

The whole thing (On all sides) is an over reaction.

Flamed Diving

Fratton Fred wrote: »

I thought I had responded to the points raised. If I haven't, then i'm not going to now.

The whole thing (On all sides) is an over reaction.

Good man.

P. Breathnach

There was a great saying to remind us how ephemeral newpaper stories are: tomorrow they'll be wrapping chips in it.

Barname

P. Breathnach wrote: »

There was a great saying to remind us how ephemeral newpaper stories are: tomorrow they'll be wrapping chips in it.

No. The FSA as directed by the HSE will not allow it.

Dob74

Flamed Diving wrote: »

Yeah.

Except that it wasn't.

What dont you find factual in the story?
We have grown fast and we are falling fast.
I know the number of 12% unemployed by the end of the year will more likely be 16-20%.
But they are all just guesses by John Fitz of the ERSI

Flamed Diving

Dob74 wrote: »

What dont you find factual in the story?
We have grown fast and we are falling fast.
I know the number of 12% unemployed by the end of the year will more likely be 16-20%.
But they are all just guesses by John Fitz of the ERSI

Ireland =/= Iceland

For example, S&P downgraded our credit rating to AA+, but even they said that our debt to GDP ratio would peak at 70% of GDP around 2013. We had 120% at the beginning of the 90's, when the IMF were really talking about coming in but we didn't default then either. Considering that the UK's ratio is predicted to reach 60% over the next few years, this means that:

a) The UK are going to default too?

or

b) That Ireland will not default, nor will the UK.

Which do you think?

Dob74

Flamed Diving wrote: »

Ireland =/= Iceland

For example, S&P downgraded our credit rating to AA+, but even they said that our debt to GDP ratio would peak at 70% of GDP around 2013. We had 120% at the beginning of the 90's, when the IMF were really talking about coming in but we didn't default then either. Considering that the UK's ratio is predicted to reach 60% over the next few years, this means that:

a) The UK are going to default too?

or

b) That Ireland will not default, nor will the UK.

Which do you think?

We both have a good chance of defaulting.:(

We are more exposed because we are a smaller economy.
The main problem I see is that things have turned south so quick.
No one is sure what will happen next.
The banks could be what drags us over the cliff.

If we the same amount of oil as Norway does of the west coast that may save us longterm.
Our short term economic outlook is fairly bleak

Flamed Diving

Dob74 wrote: »

We both have a good chance of defaulting.:(

We are more exposed because we are a smaller economy.
The main problem I see is that things have turned south so quick.
No one is sure what will happen next.
The banks could be what drags us over the cliff.

If we the same amount of oil as Norway does of the west coast that may save us longterm.
Our short term economic outlook is fairly bleak

Did you even consider a word I said? We almost defaulted in the late 80's/early 90's. Our debt-to-GDP ratio was 120% then. S&P (remember now, the people who downgraded our credit rating) estimates that our debt-to-GDP ratio will peak at 70% by 2013.

120% > 70%

Geddit?

silverharp

Flamed Diving wrote: »

Did you even consider a word I said? We almost defaulted in the late 80's/early 90's. Our debt-to-GDP ratio was 120% then. S&P (remember now, the people who downgraded our credit rating) estimates that our debt-to-GDP ratio will peak at 70% by 2013.

120% > 70%

Geddit?

one point though , private debt was much smaller in the 80's , we effectively had a prudent private sector and an out of control public sector.

to my thinking you would need to look at public and private debt together , and start projecting the effect of rising interest rates in the coming years

Flamed Diving

silverharp wrote: »

one point though , private debt was much smaller in the 80's , we effectively had a prudent private sector and an out of control public sector.

to my thinking you would need to look at public and private debt together , and start projecting the effect of rising interest rates in the coming years

True, I suppose. That bank guarantee is a bastard. I still think we are far from defaulting though, which is reflected in S&P's assessment.

Barname

Dob74 wrote: »

If we the same amount of oil as Norway does of the west coast that may save us longterm.

Oil - What is it used as?

A source of energy.

We have energy sources off the west coast and they do not involve deep sea drilling.

It would be preferable to see the €7 Billion bank bail out being invested in new energy sector than the bottomless pit that is the AIB/BOI failures.

Licensing and sale of energy products generated could be as profitable as oil for the benefit of the nation....... Wave Technology..... Tidal.... Wind ...

johnnyskeleton

Flamed Diving wrote: »

My problem aren't with the external quotes. It's the window dressing. He is making things seems so much worse than they are. We are not as bad as Iceland. Not in the slightest.

You need to question the motive of the paper here. This is a coordinated effort, imo.

While I agree that there are a number of factual inaccuracies, these are more to do with out of date information. For example, he suggests that we will see 12% unemployment by the end of the year and a budget deficit of 10%. I think even the most optimistic of commentators would say that this is on the light side. We have already seen unemployment jump to 11%, and the government have effectively said that the 9.5% deficit target is out the window.

IMO the article makes us look better than we actually are, and if I take issue with anything is that the factual data is somewhat out of date.

Flamed Diving

johnnyskeleton wrote: »

While I agree that there are a number of factual inaccuracies, these are more to do with out of date information. For example, he suggests that we will see 12% unemployment by the end of the year and a budget deficit of 10%. I think even the most optimistic of commentators would say that this is on the light side. We have already seen unemployment jump to 11%, and the government have effectively said that the 9.5% deficit target is out the window.

IMO the article makes us look better than we actually are, and if I take issue with anything is that the factual data is somewhat out of date.

I feel like a scratched record, at this stage. But my problem with this article is two points:

1) The level of hysteria it is attempting to create. Yes, even more than other articles that have been published lately.

2) The insinuation that Ireland is on the brink of default. This is a lie.

This is the very last time I am going to say this. I will simple ignore anyone who chooses to throw the same old false premises about my problems with the article.

johnnyskeleton

Flamed Diving wrote: »

I feel like a scratched record, at this stage. But my problem with this article is two points:

1) The level of hysteria it is attempting to create. Yes, even more than other articles that have been published lately.

Not really. It is an article about the downturn in Ireland. Virtually all the facts mentioned have been mentioned in the Irish press before, and I couldn't see anything that struck me as leaping to a conclusion. If you wish to point to specific examples of them attempting to create hysteria then by all means post them and we can scrutinise them to see whether they are trying to cause hysteria or merely to report what they have observed. If anything, I think the facts they point to are the worries of last December, early Jan, and the economy has deteriorated rapidly since then.

Flamed Diving wrote: »

2) The insinuation that Ireland is on the brink of default. This is a lie.

I don't see any posts in this thread where you show that it is a lie, backed up with empirical data or other evidence. Instead, you rely on an off hand remark from Charlie "I spend it when I have it" McCready.

I personally won't express an opinion on whether we are on the brink of default or not. I simply don't know. If accurate data was published I might have a better idea, but everything is hidden from the public domain and so we have no clue as to the true state of the country's finances. Because of this uncertainty, there is a real risk of default. Put another way, if I were a bank and someone came in off the street and said "i'm not going to give you any financial information, but trust me I'm good for it if you give me a loan", I wouldn't give them a loan. So without full disclosure, can we really expect to raise money on the international markets indefinately?

Flamed Diving

johnnyskeleton wrote: »

Because of this uncertainty, there is a real risk of default. Put another way, if I were a bank and someone came in off the street and said "i'm not going to give you any financial information, but trust me I'm good for it if you give me a loan", I wouldn't give them a loan. So without full disclosure, can we really expect to raise money on the international markets indefinately?

Except we did go to the 'bank' for a loan last week. And we got it. Remember?

http://www.independent.ie/business/irish/government-gets-confidence-boost-with-successful-83641bn-bond-auction-1684857.html

I await your goalpost shifting.

johnnyskeleton

Flamed Diving wrote: »

Except we did go to the 'bank' for a loan last week. And we got it. Remember?

http://www.independent.ie/business/irish/government-gets-confidence-boost-with-successful-83641bn-bond-auction-1684857.html

I await your goalpost shifting.

If you re-read my post, I said that we can't expect to continue to raise money on international money markets indefinately. And if we come to a point where we can't refinance old debt, we may have to default or accept EU/IMF intervention.

Here's a good article about the international bond market:

http://www.economist.com/finance/displaystory.cfm?story_id=13240654

At the moment, we can raise money because we pay higher returns. In 6 months time or a years time, when the picture is not as rosy, we might struggle to raise the money at any cost, especially if we nationalise another bank or two.

Flamed Diving

johnnyskeleton wrote: »

If you re-read my post, I said that we can't expect to continue to raise money on international money markets indefinately. And if we come to a point where we can't refinance old debt, we may have to default.

Here's a good article about the international bond market:

http://www.economist.com/finance/displaystory.cfm?story_id=13240654

Thanks. I will read that. But you appear to be entering the world of idle speculation, while you were attacking me for lacking empirical evidence.

Another example would be Ireland's S&P rating of AA+/A-1+. The last I heard Iceland was BBB/A-3. So not only is our rating far above Icelands, but our outlook is miles above it too. S&P also said that if the Irish government (bless) seem to show signs of pulling the exchequer accounts into order they would change our outlook to stable, next time around.

So, at this moment in time, we appear to be attractive-ish (pending) to investors and to the credit agencies. A far cry from that hysterical article.

johnnyskeleton

Flamed Diving wrote: »

Thanks. I will read that. But you appear to be entering the world of idle speculation, while you were attacking me for lacking empirical evidence.

My point is that we are not given full disclosure (see, for example, the debacle surrounding the nationalisation of Anglo, the comments from opposition parties in recent weeks re: government non disclosure, the various rumours circulated by the government re: the budget, the implasibility of Cowen's 5 year plan, the fact that last year's budget and estimates bore no relation to reality and were shown wildly optimistic a few weeks after release) and in the times we are living in there is a risk (by no means a certainty or even probability) that we will default. All I'm saying is that we cannot say for sure that Ireland won't default, and at this stage there are a number of situations that could arise which would lead to our default (e.g. break up of euro, full nationalisation of banks, failure to bring spending under reign, worsening conditions vis a vis employment, better investment opportunities elsewhere).

Flamed Diving wrote: »

Another example would be Ireland's S&P rating of AA+/A-1+. The last I heard Iceland was BBB/A-3. So not only is our rating far above Icelands, but our outlook is miles above it too. S&P also said that if the Irish government (bless) seem to show signs of pulling the exchequer accounts into order they would change our outlook to stable, next time around.

The ratings agencies seem to be behind the curve in the last few years. I wonder where we would be if we were not part of the eurozone. I am not suggesting that we are as bad as Iceland, but you don't have to be that bad to default. What could also be worse is that if there is a global upturn, but Ireland is not part of it (and I think this is a likely scenario, but a matter for another thread) we will be at higher risk of default.

Flamed Diving wrote: »

So, at this moment in time, we appear to be attractive-ish (pending) to investors and to the credit agencies. A far cry from that hysterical article.

I don't agree. That article simply laid out how bad Ireland was and, more importantly, how what was once touted as the golden boy of europe turns out to be nothing more than gold plated lead. It points to problems in our economy which are out of date but nevertheless worse than the UK e.g. government finances, unemployment, GDP. Of greater concern is that we have no real recovery plan and we denied that there was anything wrong for so long. In my view, because our government adopted the head in the sand attitude and even now is unwilling to fully grasp the bull by the horns, we are in for a long rocky road, and if the article is incorrect in having out of date information, I think the tone is fairly accurate for the situation we are in. The fact that there are other people talking about the bottom, recovery, that the banking crisis is over and that house prices are going to return to "normal" is much more hysterical in that it is a desparate bid to talk up the economy. The Times article has an element of shaudenfreud, but I don't think it is inaccurate or that it is deliberately trying to talk down the Irish economy.

Flamed Diving

johnnyskeleton wrote: »

My point is that we are not given full disclosure (see, for example, the debacle surrounding the nationalisation of Anglo, the comments from opposition parties in recent weeks re: government non disclosure, the various rumours circulated by the government re: the budget, the implasibility of Cowen's 5 year plan, the fact that last year's budget and estimates bore no relation to reality and were shown wildly optimistic a few weeks after release) and in the times we are living in there is a risk (by no means a certainty or even probability) that we will default. All I'm saying is that we cannot say for sure that Ireland won't default, and at this stage there are a number of situations that could arise which would lead to our default (e.g. break up of euro, full nationalisation of banks, failure to bring spending under reign, worsening conditions vis a vis employment, better investment opportunities elsewhere).

I'm not saying default is impossible. But I'm dispelling this notion that it is an absolute certainty that we will. I believe this to be complete hysteria/lunacy, fed by the media.

johnnyskeleton wrote: »

The ratings agencies seem to be behind the curve in the last few years. I wonder where we would be if we were not part of the eurozone. I am not suggesting that we are as bad as Iceland, but you don't have to be that bad to default. What could also be worse is that if there is a global upturn, but Ireland is not part of it (and I think this is a likely scenario, but a matter for another thread) we will be at higher risk of default.

It's not even worth considering, because we are part of the Eurozone. Anything else is simply counter-factual speculation. You are also discounting the possibility of the EU helping us out, which is a possibility as a last resort.

johnnyskeleton wrote: »

The Times article has an element of shaudenfreud, but I don't think it is inaccurate or that it is deliberately trying to talk down the Irish economy.

It is attempting to paint an image of Ireland = Iceland. I have already showed why this is bull****. This article is a shameful attack on Ireland. Perhaps much of it is warranted, but it went too far.

What annoys me more is how Irish people seem to be glad that this is happening. As if the economy failing would somehow rub it in the faces of Fianna Fail, developers, etc. They seem to forget about the general populace.

I can understand why the ST would want to have a go, but these people make me sick.

johnnyskeleton

Flamed Diving wrote: »

I'm not saying default is impossible. But I'm dispelling this notion that it is an absolute certainty that we will. I believe this to be complete hysteria/lunacy, fed by the media.

I don't think that that article is saying that it is an absolute certainty. Rather it is along the lines of "Ireland is in trouble - where do they go from here?" It would be a mistake to discount the possibility of default at this stage and without reliable information and a government that knows what it is doing, the risk of default is significant IMO. I certainly wouldn't dismiss it as hysteria/lunacy.

Flamed Diving wrote: »

It's not even worth considering, because we are part of the Eurozone. Anything else is simply counter-factual speculation.

I don't mean to speculate about the what ifs, but if we were not in the Euro, I doubt we would be much better off than Iceland. Being part of the euro has saved the panics in Ireland from turning into runs on the country. Also, if you look at Iceland, there wasn't a whole lot of international news about them, whereas Bloomberg were running stories with headlines along the lines of "Ireland - Another day, another scandal". I think Ireland's problems have been understated because of the Euro.

Flamed Diving wrote: »

You are also discounting the possibility of the EU helping us out, which is a possibility as a last resort.

Re-read my posts. If you look at the post #47 back from this one, you will see that I specifically referred to EU assistance.

Flamed Diving wrote: »

It is attempting to paint an image of Ireland = Iceland. I have already showed why this is bull****. This article is a shameful attack on Ireland. Perhaps much of it is warranted, but it went too far.

I don't think it is. I think it is trying to show that Ireland is in serious trouble and it is. It is not trying to sink the ship, merely say to the UK populace that the ship is overladen with rubbish. If you think it is a shameful attack on Ireland, please point to specific phrases which make you think so. I'm inclined to the view that they simply took a no holes barred approach to the Irish economy, something which the Irish media rarely do.

Flamed Diving wrote: »

What annoys me more is how Irish people seem to be glad that this is happening. As if the economy failing would somehow rub it in the faces of Fianna Fail, developers, etc. They seem to forget about the general populace.

There are a few points to this. First it is in our nature to exaggerate - as we lived it up in the bubble years, so too will we crib and moan through the recession/depression. Second, if by destroying the economy we could end the corrupt & wasteful ways we do things in this country, then I say bring it on. If we saw the end of FF that would be even better, but that's too much to ask. Third, while there are a lot of people who I have great sympathy for, there are others who can go to the dogs for all I care. The ones who bought several apartments and spent recklessly on easy credit scoffed at me for being frugal; I am not going to scoff at them now that they are in trouble, but my heart doesn't exactly bleed for them. Finally, the more pain we take on now, the sooner we can clear the decks and try to recover. In that regard, calling on the bad news with gusto is the smart move long term.

Flamed Diving wrote: »

I can understand why the ST would want to have a go, but these people make me sick.

To be honest, I'm not a big fan of discounting an article that is closer to the truth than most Irish articles for the reasons you have outlined. Point out the specific factual inaccuracies and we can debate it further, but as to the general thrust of the article, I think they have us bang to rights.