Recession predictions

Roger the cabin boy

Wanderer78 wrote: »

any ideas yourself?

About what?

Geuze

It initially looked like the recession would be three months long, maybe six months, Q2 and Q3.

During Q1, Ireland had growth in both GDP and GNP (just about).

We were one of four EU countries to record GDP growth during Q1.

https://ec.europa.eu/eurostat/documents/2995521/10294996/2-09062020-AP-EN.pdf/8a68ea5e-5189-5b09-24de-ea057adeee15

https://www.cso.ie/en/releasesandpublications/er/na/quarterlynationalaccountsquarter12020final/

However, note that MDD fell by 5.2% in Q1.



I am reading some talk of a "double-dip" in the USA.

http://econbrowser.com/archives/2020/08/the-double-dip-cometh

Varadkar mentioned talk of the recovery being slower than expected.


Although technically the recession (falling GDP/GNP/GNI*) may last just six months, it looks like years of slow recovery.

Wanderer78

Geuze wrote: »

It initially looked like the recession would be three months long, maybe six months, Q2 and Q3.

During Q1, Ireland had growth in both GDP and GNP (just about).

We were one of four EU countries to record GDP growth during Q1.

https://ec.europa.eu/eurostat/documents/2995521/10294996/2-09062020-AP-EN.pdf/8a68ea5e-5189-5b09-24de-ea057adeee15

https://www.cso.ie/en/releasesandpublications/er/na/quarterlynationalaccountsquarter12020final/

However, note that MDD fell by 5.2% in Q1.



I am reading some talk of a "double-dip" in the USA.

http://econbrowser.com/archives/2020/08/the-double-dip-cometh

Varadkar mentioned talk of the recovery being slower than expected.


Although technically the recession (falling GDP/GNP/GNI*) may last just six months, it looks like years of slow recovery.

the best slogan ive come across is not a u recovery, but a nike swoosh recovery, i think you could be right

wassie

And depends what a 'recovery' means/looks like as well.....

Just because things may have been better than where we were, doesn't make things great.

Mongfinder General

KyussB wrote: »

The pandemic unemployment payment is the same as employing (half) a million workers to dig holes - just minus the unneccessary hole-digging part.

People want useful things done - like housebuilding (can be done on a self-financing basis even) and infrastructure etc.. The 'hole in the ground' stuff is a common rhetorical tactic of begging the question, in silently assuming governments are not capable of employing people into useful work - despite centuries of evidence otherwise.

It's hard to gauge how many people have been out of work since March. However, one absurd but worrying factor is that the income tax take for May and June rose. This tells me that those out of work are paying **** all tax. Half a million plus people. The income tax burden is being dumped on the €35k + earners. This is not fair. However I'm sure that somebody will be along shortly to tell me that corporation tax should be raised to 90% and millionaires should be skinned and buggered alive

Wanderer78

wassie wrote:

Just because things may have been better than where we were, doesn't make things great.

Absolutely, there was truly little or no recovery from the last crash for many, and that's those that are working, those that have been homeless throughout all of this, well they simply never had a chance, we should be absolutely ashamed of ourselves

Wanderer78

Mongfinder General wrote:

It's hard to gauge how many people have been out of work since March. However, one absurd but worrying factor is that the income tax take for May and June rose. This tells me that those out of work are paying **** all tax. Half a million plus people. The income tax burden is being dumped on the €35k + earners. This is not fair. However I'm sure that somebody will be along shortly to tell me that corporation tax should be raised to 90% and millionaires should be skinned and buggered alive

There's something fundamentally wrong with our overall tax systems, we cannot keep dumping this responsibility onto the work force, and particularly onto mainly the same portion of the work force. Yes in theory, corporation taxes should be raised considerable, but in reality, not right now, but we could change the way we accept it

kala85

How or why did the income tax figures rise?

Mongfinder General

kala85 wrote: »

How or why did the income tax figures rise?

Hard to pin down. Some areas of the economy like logistics would have seen a big increase in demand so there may have been overtime paid in that sector. Ergo, more income tax paid.

Wanderer78

kala85 wrote: »

How or why did the income tax figures rise?

this is a common outcome from a more neoliberial/neoclassical design of an economy, most western nations have gone down this road, over the last few decades, now we re all getting stuck in it, and we havent accepted its failing, its why we re now starting to see radical election/voting outcomes across the world.

Thierry12

kala85 wrote: »

How or why did the income tax figures rise?

Over 300,000 public sector workers were still on full salaries?

Alot probably on massive over time too and they represent over 20% of total workforce

wassie

And Covid-PUP payment is taxable also so people are still effectively in jobs paying tax.

Arthur Daley

Jim Power on with Dunphy was suggesting that the Income tax has held up because more or less the only people who have lost their jobs were paying little or no tax.

But from a business perspective certain businesses looking to cut costs won't be 'top heavy' for long with high earners, and if jobs or parts of jobs can be done from home, there may be a suggestion that the job (or part of it) can be done anywhere.

Mongfinder General

Arthur Daley wrote: »

Jim Power on with Dunphy was suggesting that the Income tax has held up because more or less the only people who have lost their jobs were paying little or no tax.

But from a business perspective certain businesses looking to cut costs won't be 'top heavy' for long with high earners, and if jobs or parts of jobs can be done from home, there may be a suggestion that the job (or part of it) can be done anywhere.

It's the anywhere part that is most interesting. Employing somebody in a developing European state will have a saving in labour costs and most probably a lower threshold of employment rights domestically - although most of employment law is boxed off at EU level these days. We might find that it's also easier to dismiss staff if you've never actually physically met them.

Geuze

Four months of mild deflation so far:

https://www.cso.ie/en/releasesandpublications/er/cpi/consumerpriceindexjuly2020/

Both CPI and HICP.



Consumer prices are now 3.1% higher than Dec 2011.

Very little inflation over 9 years.




Regarding industrial production, it's interesting to note that we are the only EU country higher than a year ago:

https://ec.europa.eu/eurostat/documents/2995521/10545423/4-12082020-AP-EN.pdf/7c638d68-3e54-d560-73f4-a6aeb6ced59c

Wanderer78

Geuze wrote: »

Four months of mild deflation so far:

https://www.cso.ie/en/releasesandpublications/er/cpi/consumerpriceindexjuly2020/

Both CPI and HICP.



Consumer prices are now 3.1% higher than Dec 2011.

Very little inflation over 9 years.

Regarding industrial production, it's interesting to note that we are the only EU country higher than a year ago:

https://ec.europa.eu/eurostat/documents/2995521/10545423/4-12082020-AP-EN.pdf/7c638d68-3e54-d560-73f4-a6aeb6ced59c

you can understand why some are fearing deflation, the only inflation i can see is in assets, but i can see what economist pippa malmgren calls shrinkflation, i think she has a point

celtic_oz

apparently we are 2 months away from the start in the States (the dollar rising will be the key indicator), will last decades

https://www.youtube.com/watch?v=QS7b-BsAchE

Buffett finally turns to gold

https://www.youtube.com/watch?v=G1vkSEJ3CJ4

antimatterx

celtic_oz wrote: »

apparently we are 2 months away from the start in the States (the dollar rising will be the key indicator), will last decades

https://www.youtube.com/watch?v=QS7b-BsAchE

Buffett finally turns to gold

https://www.youtube.com/watch?v=G1vkSEJ3CJ4

Just in time for the election :eek:

Wanderer78

celtic_oz wrote: »

apparently we are 2 months away from the start in the States (the dollar rising will be the key indicator), will last decades

Buffett finally turns to gold

its impossible to say, nobody knows for sure, but the dollar isnt looking healthy, it could very well lose its reserve currency in all of this, goldbugs such as jim rickards have been talking about this years now, who knows, they could be right, i guess theres a reason why countries such as china, russia and germany have been increasing their gold supplies significantly over the last few years

Roger the cabin boy

If the answer to the problem of really low interest rates is even lower interest rates then we are in an alternative universe.

Darc19

wassie wrote: »

And Covid-PUP payment is taxable also so people are still effectively in jobs paying tax.

This old chestnut. Again mis information from gutter journalism.

Technically it is correct as all income except a few very specific social welfare payments are taxable.

Jobseekers allowance is taxable - always has been.

The only way the PUP is taxable is if your earnings are above your tax free allowance AND the tax free allowance built up during the PUP meant that the after tax salary after you come off PUP has used the built up tax free allowance from your time on PUP


If you are on pup through to the end of the year, there will be zero tax liability.

If you earn €35,000 your normal annual tax (assuming single person) would be approx €3,500

If that €35k is made of €10k PUP and €25k from the company, you STILL will pay €3,500 tax. No difference whatsoever.

If your €35k becomes €30k over the year, your net tax would be about €2400 in total. Less tax.

If your total income for the year is under the about €18k tax free allowance, there is ZERO tax due no matter whether is comes from Jobseekers, PUP or earnings or any mixture of that.

wassie

You are technically correct. Let me rephrase...

And Covid-PUP payment is taxable, allowing a lot of people to return to their jobs and pay tax.

Better?

Thierry12

Roger the cabin boy wrote: »

If the answer to the problem of really low interest rates is even lower interest rates then we are in an alternative universe.

Avant are rumoured to be bringing in 1.5-1.8% 5 year fixed mortgages next month here

Rest will have to follow?

Won't be far off tracker rates in 12 - 18 months if that's true

Will that drive house prices up or down?

thomas 123

Thierry12 wrote: »

Avant are rumoured to be bringing in 1.5-1.8% 5 year fixed mortgages next month here

Rest will have to follow?

Won't be far off tracker rates in 12 - 18 months if that's true

Will that drive house prices up or down?

My guess would be up, but I think the banks internal quotas for mortgage approvals and the help to buy scheme rule changes would have a much bigger impact.

Wanderer78

Roger the cabin boy wrote:

If the answer to the problem of really low interest rates is even lower interest rates then we are in an alternative universe.

We re already there to some degree, I wonder will we enter the world of dual rates?

silver2020

Thierry12 wrote: »

Avant are rumoured to be bringing in 1.5-1.8% 5 year fixed mortgages next month here

Rest will have to follow?

Won't be far off tracker rates in 12 - 18 months if that's true

Will that drive house prices up or down?

That's the rate they charge in Spain (owned by BankInter since last year). It will not be the rate they charge here. There will be at least a 0.5% premium due to the near impossibility of repossession in a reasonable timeframe and the legal costs involved.

But what they will bring is long term fixed rates. Definitely 10 year and 15 year options which will be their headline generator, possibly up to 25 years but not initially. Some brokers have been given an indication of what they will be offering, but nothing is set yet. Launching with a 20 year fixed rate of 3% would see massive interest from people.

I expect to see a 15 year fixed rate of 2.99%. That would see a 30 year mortgage of 400k fixed at €1686 per month. This may also bring the central bank to ease multiples for long term fixed rates and allow for 4.5 times borrowing.

On the general theme of recession, I can see a slowdown but no prolonged recession as there is not the personal credit bubble of previous recessions. Spending will move to other areas and job creation will increase in many sectors and these will be filled from the sectors that will see a downturn.

But share prices in many companies are in bubble territory and I'm moving out of my higher risk pension funds even though there's a 4% charge for doing so.

Wanderer78

silver2020 wrote:

On the general theme of recession, I can see a slowdown but no prolonged recession as there is not the personal credit bubble of previous recessions. Spending will move to other areas and job creation will increase in many sectors and these will be filled from the sectors that will see a downturn.

But there is bubbles in asset markets, as you said, which if they burst simultaneously, we could have serious problems, so, who knows. Spending requires confidence, which is effectively none existing at the moment, this takes time to recover, and nobody can predict when that will occur, accurately, and what happens those that lose their jobs? This has the potential to go horribly wrong, very quickly, but who knows.....

Roger the cabin boy

https://news.sky.com/story/coronavirus-debenhams-owners-draw-up-plan-for-department-store-chains-liquidation-12049794

House prices rising you say?

RGARDINR

Roger the cabin boy wrote: »

https://news.sky.com/story/coronavirus-debenhams-owners-draw-up-plan-for-department-store-chains-liquidation-12049794

House prices rising you say?

Just wondering on the Debenhams situation, how much longer in the tank do they have? Realistically if you read it until end of next month if no buyer is found, would that be right. Staff who were in Irish stores might be thinking there is no point in still picketing their stores now if looks like there going in the UK. Wonder would the store even make it to Xmas time in the UK. I still buy from online Debenhams. Could be a lot more bigger sales on their website soon.

Roger the cabin boy

RGARDINR wrote: »

Just wondering on the Debenhams situation, how much longer in the tank do they have? Realistically if you read it until end of next month if no buyer is found, would that be right. Staff who were in Irish stores might be thinking there is no point in still picketing their stores now if looks like there going in the UK. Wonder would the store even make it to Xmas time in the UK. I still buy from online Debenhams. Could be a lot more bigger sales on their website soon.

Well, sales are going to tank with the threat of closure hanging around.
Who would want to spend any money when you might not be able to claim any warranty or returns.