Good economic news thread

Charles Babbage

BoJack Horseman wrote: »

Why sell a 100 year bond at 2.35% when shorter bonds attract much lower interest?

Doesnt seem like "good news"?

Because shorter term loans have to be rolled over. Say some bonds fall due in 2018 and there is some turmoil because of Brexit then you have a short term problem, rates might be much higher or you might have to go back to the IMF.

What were interest rates 100 years ago?

3.5%-5% in the First World War. Interest rates have never been lower than now.

FreudianSlippers

Godge wrote: »

Being able to sell a 100-year bond is the point.

Whoever is buying that bond won't be alive to see the money come back. The level of confidence required that a state will exist (or a successor state) in 100 years time to pay back that bond is a message to everyone else including the ratings agencies.

There's a yield to maturity issue there as well with longer bonds.

Godge

FreudianSlippers wrote: »

There's a yield to maturity issue there as well with longer bonds.

http://www.independent.ie/business/irish/ireland-sells-first-century-bond-at-rate-of-just-235pc-34585422.html

Here is a bit more information on it:

"Owen Callan, a bond analyst at Cantor Fitzgerald Ireland, said the issuance was unusual in a Eurozone context.
"Certainly the headline rate of 2.35pc sounds very cheap, for the NTMA it's a great deal to fund for 100 years at that sort of level, and maybe this will encourage them to look at longer-dated issuance on a broader level now going forward," he said.
"The typical type of investor that would buy something this long-term would be a life insurance company, somebody with very long-dated liabilities.
"That's typically the only type of person who'd look that far into the future.""

Sand

FreudianSlippers wrote: »

Ireland has sold €100m of 100 year bonds at 2.35%; by contrast Bloomberg points out (emphasis mine):


That's incredible really.

It is incredible really. Some investors apparently think a tiny open economy like Ireland is a safer investment than a huge global superpower like the United States. It reminds me of the sort of investment decisions made during the Celtic Tiger, and the root cause is the same: the banks/ECB flooding the market with cheap money and distorting decion making.

From an Irish perspective, the state should of course take advantage of foolish investors with far too much money on their hands.

barry181091

http://www.rte.ie/news/2016/0530/791878-amazon-jobs-dublin/

Another great jobs boost.

I, myself, am in this sector but I worry that this is the new construction type sector. We seem to be putting all of our eggs in one jobs basket. Bear in mind I do realise we are an extremely small and open economy. I.E. We have little choice, so we just take what we can get for now.

Rightwing

barry181091 wrote: »

http://www.rte.ie/news/2016/0530/791878-amazon-jobs-dublin/

Another great jobs boost.

I, myself, am in this sector but I worry that this is the new construction type sector. We seem to be putting all of our eggs in one jobs basket. Bear in mind I do realise we are an extremely small and open economy. I.E. We have little choice, so we just take what we can get for now.

No, it is completely different. These jobs are welcome anywhere and everywhere.

The housing bubble was a get rich quick scheme. Ahern & his cornies found it all too easy ( a few tax schemes swayed it) to trick mug punters into buying apartments in places like longford, probably built on flood plains.

K-9

Unemployment now at 7.8% about half what is was when it peaked.

Mongfinder General

K-9 wrote: »

Unemployment now at 7.8% about half what is was when it peaked.

Probably lower if you factor in those working in the black economy and still claiming welfare. A good chunk of that may be structural unemployment too.

Phoebas

K-9 wrote: »

Unemployment now at 7.8% about half what is was when it peaked.

I never understood why the government parties didn't make more of the rapidly falling unemployment figures (and the increasing employment figures) during the last election.

----
Latest competitiveness numbers show a big improvement.

Ireland has shot up a global ranking measuring competitiveness.

The country has surged from 16th place last year, to seventh now, according to the latest analysis from the Swiss-based IMD World Competitiveness Center.

Rightwing

Phoebas wrote: »

I never understood why the government parties didn't make more of the rapidly falling unemployment figures (and the increasing employment figures) during the last election.

----
Latest competitiveness numbers show a big improvement.

Similar problem to that in the US. Wage inflation is practically stagnant.

Phoebas

Rightwing wrote: »

Similar problem to that in the US. Wage inflation is practically stagnant.

Wages? It's much broader than that. Labour market costs are just one sub segment of a segment of what's measured.

But the IMD study takes into consideration a broad range of factors that include not only the tax environment, but also the health of the economy, regulation, petrol prices and electricity costs. It lists, as improvements on last year, the improvement in GDP and the government finances, finance and banking regulation and credit.

Rightwing

Phoebas wrote: »

Wages? It's much broader than that. Labour market costs are just one sub segment of a segment of what's measured.

But the important segment.

Now, there's no disputing that the Govt got the wrong message out, but in rural areas, any jobs that were created were low paid ones, and they lost the in election in rural constituencies.

Clinton is facing a similar problem in the US. And Trump knows it. Whilst the NFP headline figure has been consistently good, once an analyst scratches beneath the surface many problems are exposed.

Phoebas

Rightwing wrote: »

But the important segment.

Where do you get that idea from?

IMD wrote:

Each sub-factor, independently of the number of criteria it contains, has the same weight in the overall consolidation of results, which is 5% (20x5 =100).

The labour market is one sub-factor (that's 5% of the total score). Labour costs are one of 3 criteria within that sub-factor. Labour relations and skills are the other two criteria.

Dinny Byrne has Angina

Sand wrote: »

It is incredible really. Some investors apparently think a tiny open economy like Ireland is a safer investment than a huge global superpower like the United States. It reminds me of the sort of investment decisions made during the Celtic Tiger, and the root cause is the same: the banks/ECB flooding the market with cheap money and distorting decion making.

From an Irish perspective, the state should of course take advantage of foolish investors with far too much money on their hands.

There are no margins in buying national debt anymore. It's typically more expensive to borrow money than it is to buy almost any EU-15 debt, and although that's an expense some FIs are willing to make, it is not the norm.

Cheap ECB money floods into the private sector, i.e. equities. Not national coffers.

Nobody of any significance is borrowing money to buy Irish debt.

Charles Babbage

Let the good times roll
http://www.independent.ie/business/irish/tax-take-is-15bn-ahead-of-last-year-exchequer-reveals-34767884.html

BoJack Horseman

Charles Babbage wrote: »

Let the good times roll
http://www.independent.ie/business/irish/tax-take-is-15bn-ahead-of-last-year-exchequer-reveals-34767884.html

Just as well.
The new FF programme for government will be expensive.

Zubeneschamali

BoJack Horseman wrote: »

The new FF programme for government will be expensive.

If you have it, spend it!

serfboard

Bond yields down again:

RTE wrote:

The yield on Ireland's 10-year bond yield fell to 0.613%, its lowest level ever.

How does this compare to 10 year money for other countries? From Bloomberg just now:

Bloomberg wrote:

United States 1.46%
Canada 1.08%
Germany -0.13%
United Kingdom 0.95%
France 0.21%
Italy 1.36%
Spain 1.29%
Netherlands 0.10%
Portugal 3.07%
Greece 8.18%
Switzerland -0.60%
Japan -0.24%
Australia 1.99%
New Zealand 2.33%
Hong Kong 0.91%
Singapore 1.88%
South Korea 1.45%

Zubeneschamali

Greece at 8.18, Iceland at 6.2, if only we were more like them!

KingBrian2

Those countries have their own problems besides you can't change your economic situation over night like what these Nations tried to do. Iceland caused massive damage to their banking sector by the actions of their gvt. Their small enough to escape the horrible consequences and return to a fish based society. Do that to a larger population and you see the wealth destruction it causes.

Villa05

KingBrian2 wrote:

Those countries have their own problems besides you can't change your economic situation over night like what these Nations tried to do. Iceland caused massive damage to their banking sector by the actions of their gvt. Their small enough to escape the horrible consequences and return to a fish based society. Do that to a larger population and you see the wealth destruction it causes.

Was it not Iceland's banks that did all the damage and the Icelandic people refused to place bank debt on the shoulders of their unborn children unlike other people

KingBrian2

Villa05 wrote: »

Was it not Iceland's banks that did all the damage and the Icelandic people refused to place bank debt on the shoulders of their unborn children unlike other people

The typical anti bank message that gets spouted about. Iceland had a massive banking sector for such a small Island. It's economy had moved away from the fisheries to the service sector. You want everyone in Iceland to become fish mongers don't think so. Their problem was an economy that mismatched with the living conditions of the Island, our problem was lack of diversification.

FreudianSlippers

Villa05 wrote: »

Was it not Iceland's banks that did all the damage and the Icelandic people refused to place bank debt on the shoulders of their unborn children unlike other people

Not this nonsesne again.

Iceland nuked the banks and initiated strict capital controls to stop whatever money was left from leaving the country, then they inflated the hell out of the króna which appeared to show the recession ended in terms of a quick rise in nominal GDP. However, the inflation wiped out whatever savings were left in the country (eg ISK1.00 was EUR0.005, less than half a cent, and jumped to €0.007 - so if you had €5,000 or ISK 1m in the bank you lost 33% of the buying power that had)

Take a look at the real GDP figures and tell me who came out on top:

Suryavarman

FreudianSlippers wrote: »

Not this nonsesne again.

Iceland nuked the banks and initiated strict capital controls to stop whatever money was left from leaving the country, then they inflated the hell out of the króna which appeared to show the recession ended in terms of a quick rise in nominal GDP. However, the inflation wiped out whatever savings were left in the country (eg ISK1.00 was EUR0.005, less than half a cent, and jumped to €0.007 - so if you had €5,000 or ISK 1m in the bank you lost 33% of the buying power that had)

Take a look at the real GDP figures and tell me who came out on top:

Yeah, but, but, but the bankers! The bondholders! Righteous indignation!


Ireland's response to the banking collapse wasn't exactly optimal but trying to make it out as if the economy is crippled forever more as a result of the bank bailout is a bit disingenuous.

Godge

FreudianSlippers wrote: »

Not this nonsesne again.

Iceland nuked the banks and initiated strict capital controls to stop whatever money was left from leaving the country, then they inflated the hell out of the króna which appeared to show the recession ended in terms of a quick rise in nominal GDP. However, the inflation wiped out whatever savings were left in the country (eg ISK1.00 was EUR0.005, less than half a cent, and jumped to €0.007 - so if you had €5,000 or ISK 1m in the bank you lost 33% of the buying power that had)

Take a look at the real GDP figures and tell me who came out on top:

Given the growth rates in Ireland since Q2 2013, the gap must be huge by now.

Avatar MIA

Godge wrote: »

Given the growth rates in Ireland since Q2 2013, the gap must be huge by now.

The Icelandic trend is more impressive than Irelands though - in that graphic. Playing the Devil's advocate like.

Godge

Avatar MIA wrote: »

The Icelandic trend is more impressive than Irelands though - in that graphic. Playing the Devil's advocate like.

Huh?

Iceland and Ireland jump off a cliff.

Iceland lands on the rocks far below, battered, bleeding and bruised, it starts to climb back up. Hours later, it is still struggling, out of breath and very sore.

Ireland lands on a grassy ledge, not far from the top. Breath knocked out of it, it takes its time and starts the gentle climb back upwards. Hours later, it is feeling much stronger and believes it can reach the top again.

That is what the graph shows. Sure Iceland has climbed further, but it still has further to go and still is suffering more.

Suryavarman

Avatar MIA wrote: »

The Icelandic trend is more impressive than Irelands though - in that graphic. Playing the Devil's advocate like.

Iceland bottoms out about 33% lower than Ireland. Iceland grows faster after bottoming out but that is to be expected. It's commonly observed that the worse a recession is the faster the subsequent recovery. If Iceland didn't grow faster than Ireland there would be something seriously wrong.

There's nothing impressive about Iceland relative to Ireland. Especially when you consider that Ireland doesn't control its monetary policy. If anything Ireland's growth path is more impressive.

FreudianSlippers

Suryavarman wrote: »

Yeah, but, but, but the bankers! The bondholders! Righteous indignation!


Ireland's response to the banking collapse wasn't exactly optimal but trying to make it out as if the economy is crippled forever more as a result of the bank bailout is a bit disingenuous.

I agree and have done so since the guarantee occurred. A blanket bailout arose based on the information available at the time - Minister Lenihan (RIP) was opposed to a blanket guarantee for all banks and proposed guaranteeing only pillar banks, allowing for those other banks that were in a position to liquefy or sell their assets to larger banks or else go bust.

Problem was, some banks who were in an awful position cooked the books to make it look like they deserved saving. The rest is history...

Charles Babbage

More jobs http://www.independent.ie/business/jobs/number-of-people-in-ireland-at-work-breaks-two-million-mark-for-first-time-since-2008-34988335.html

and because of this, good news for some, perhaps not for others, net immigration resumes.