Recession predictions

saabsaab · 06-08-2020 9:53pm

Trump is on again about bringing pharma back to the USA. This would have a big impact on us if it comes to pass.

brisan · 06-08-2020 9:58pm

saabsaab wrote: »

Trump is on again about bringing pharma back to the USA. This would have a big impact on us if it comes to pass.

Trump may not be there come Dec

antimatterx · 06-08-2020 10:11pm

brisan wrote: »

Trump may not be there come Dec

January

ExMachina1000 · 06-08-2020 10:17pm

brisan wrote: »

Trump may not be there come Dec

https://joebiden.com/made-in-america/

Biden is also campaigning on an America first policy which includes standing up to China and bringing supply chains back to America.

Its doesn't specify which supply chains but possible that pharma is included.

Arthur Daley · 07-08-2020 4:58pm

Didn't Trump not stand at the Capitol in January 2017 and say 'America first, America first'

What difference does it ever make.

Wanderer78 · 07-08-2020 5:00pm

Arthur Daley wrote:

Didn't Trump not stand at the Capitol in January 2017 and say 'America first, America first'

You misinterpreted what he really meant, Donald first, Donald first!

07-08-2020 5:04pm

Wanderer78 wrote: »

housing is a completely disaster, im not sure if anyone really knows what to do about it, i think our politicians and their advisers are lost on it, which is kinna disturbing

As someone looking to rent privately on a not very high income I can tell you the housing market is completely ****ed in most ways. Can't speak for Dublin but rents in my town have shot up recently having already risen plenty in the last few years.

lsjmhar wrote: »

if they got rid of the players and put the staff on the pitch, tgey might improve. lol!!

Most of the players took a 12.5% pay cut and were told it would prevent redundancies elsewhere in the club. They are very understandably pissed off now. Kinda show you have to just look out for yourself at the end of the day.

saabsaab · 07-08-2020 6:55pm

antimatterx wrote: »

January

Then again maybe he knows something we don't.

wassie · 07-08-2020 9:53pm

ExMachina1000 wrote: »

https://joebiden.com/made-in-america/

Biden is also campaigning on an America first policy which includes standing up to China and bringing supply chains back to America.

Its doesn't specify which supply chains but possible that pharma is included.

I don't think Ireland has to much to be concerned with. These pharmas are big MNCs and Ireland provides access to EU markets as well as tax benefits. This is just bluster in an election year.

The reality is that the issue with pharma supply chains is that a lot of the requisite inputs for manufacturing come from from Asia, and more over China.

The bigger worry as I see it would be the threat of the US aggressively cutting its company tax rate to levels close to ours. That could see a huge amount of US capital flowing away from here back to the states.

Wanderer78 · 07-08-2020 9:55pm

wassie wrote:

The bigger worry as I see it would be the threat of the US aggressively cutting its company tax rate to levels close to ours. That could see a huge amount of US capital flowing away from here back to the states.

More money for massive job creation initiatives such as share buy backs!

screamer · 07-08-2020 10:07pm

wassie wrote: »

I don't think Ireland has to much to be concerned with. These pharmas are big MNCs and Ireland provides access to EU markets as well as tax benefits. This is just bluster in an election year.

The reality is that the issue with pharma supply chains is that a lot of the requisite inputs for manufacturing come from from Asia, and more over China.

The bigger worry as I see it would be the threat of the US aggressively cutting its company tax rate to levels close to ours. That could see a huge amount of US capital flowing away from here back to the states.

In the us is the wages and things like Medicare cost a fortune. US employee are paid way more for the same jobs that we do here, so a saving on the corporate tax wouldn’t necessarily mean a cut in cost base for relocating US companys, quite the opposite.

Geuze · 07-08-2020 11:01pm

wassie wrote: »

The bigger worry as I see it would be the threat of the US aggressively cutting its company tax rate to levels close to ours. That could see a huge amount of US capital flowing away from here back to the states.

This has happened already, under Trump, in 2017.

The US federal CT was cut from 35% to 21%.

FintanMcluskey · 07-08-2020 11:04pm

Does anyone know whats still driving the demand for house prices? Are people still confident for good reason? Are banks still happy to loan?

Snow Garden · 08-08-2020 12:08am

FintanMcluskey wrote: »

Does anyone know whats still driving the demand for house prices? Are people still confident for good reason? Are banks still happy to loan?

Give it time. There will be a lag between the economic impact and house prices. The government cannot sustain their current social welfare spending rate either. House prices started to decline in 2008 but did not bottom out until 2012/2013.

I believe we will see significant house price decreases in 2021 and 2022.

08-08-2020 12:52am

With rent prices people will do absolutely everything they can to "get on the ladder". How long that can keep things going probably isn't as long as people would like but if I had any wealthy family I'd be doing anything to get a deposit from one and pay a third as much per month compared to renting the same place.

Treppen · 08-08-2020 12:57am

FintanMcluskey wrote: »

Does anyone know whats still driving the demand for house prices? Are people still confident for good reason? Are banks still happy to loan?

Look at the daft monthly report.

Basically supply is down prices don't go down

Wanderer78 · 08-08-2020 6:15am

Snow Garden wrote:

Give it time. There will be a lag between the economic impact and house prices. The government cannot sustain their current social welfare spending rate either. House prices started to decline in 2008 but did not bottom out until 2012/2013.

If our government doesn't maintain current welfare payments, it will force more businesses to close, permanently, it's a critical life line now for the private sector, it's counter intuitive, but it does work, it's commonly called 'helicopter money'. The private sector currently has extremely limited capacity to expand the money supply via debt expansion, so at the moment we re left with the only other option, public sector debt expansion, baring in mind, rising private debt has caused far greater damage than rising public debt, historically, so there's nothing truly to worry about there.

Geuze · 08-08-2020 11:16pm

Wanderer78 wrote: »

If our government doesn't maintain current welfare payments, it will force more businesses to close, permanently, it's a critical life line now for the private sector, it's counter intuitive, but it does work, it's commonly called 'helicopter money'.

"Helicopter money" is actions by the central bank, not the Govt.

Helicopter money is an unconventional monetary policy.

The welfare payments are fiscal policy.

FintanMcluskey · 08-08-2020 11:19pm

Snow Garden wrote: »

Give it time. There will be a lag between the economic impact and house prices. The government cannot sustain their current social welfare spending rate either. House prices started to decline in 2008 but did not bottom out until 2012/2013.

I believe we will see significant house price decreases in 2021 and 2022.

Ok so would you advise someone to buy a house in the current climate?

Demand is still high and money seems readily available from lender's?

Apologies for the thinly veiled advice question

Geuze · 08-08-2020 11:21pm

Wanderer78 wrote: »

The private sector currently has extremely limited capacity to expand the money supply via debt expansion, so at the moment we re left with the only other option, public sector debt expansion, baring in mind, rising private debt has caused far greater damage than rising public debt, historically, so there's nothing truly to worry about there.

This is what's happening with the money supply in the eurozone:

Money and credit
Broad money growth increased further in May. The broad monetary aggregate
(M3) experienced another large inflow, signalling an ongoing strong build-up of
liquidity amid uncertainty related to the pandemic crisis.

The annual growth rate of M3 increased to 8.9% in May 2020, after 8.2% in April (see Chart 11). While the slowdown in economic growth dampened M3 growth, substantial support came from the extraordinary liquidity demand of firms and households.

The increase in M3 was mainly driven by the narrow aggregate M1, which includes the most liquid components of M3.

The annual growth rate of M1 increased from 11.9% in April to 12.5% in May
2020, which was mainly attributable to a further increase in the annual growth rates of overnight deposits. While for firms precautionary motives seem to remain an important driver of increases in their deposit holdings, in the case of households constraints still limiting spending possibilities might also have played a role. Other short-term deposits and marketable instruments made a small, positive contribution to annual M3 growth in May.

See section 5:

https://www.ecb.europa.eu/pub/pdf/ecbu/eb202005.en.pdf

Geuze · 08-08-2020 11:23pm

The money supply is rising:

ecb.md2006.en_img0.png?d4cd703d68efe1868b095b66db8cf488

Wanderer78 · 08-08-2020 11:25pm

Geuze wrote:

"Helicopter money" is actions by the central bank, not the Govt.

True, but I would call covid a type of helicopter money, since our restrictions of money creation via our own central bank, it was a good move, and very unusual from a more traditional economically conservative government, it would give you hope that our major parties are willing to change, very interesting to watch

Wanderer78 · 08-08-2020 11:28pm

Geuze wrote:

The money supply is rising:

Of course it is, it has to, or we re toast, but I'd imagine the money supply from the private sector, I.e. credit, is reducing, since demand for it is probably falling?

Thierry12 · 08-08-2020 11:30pm

FintanMcluskey wrote: »

Ok so would you advise someone to buy a house in the current climate?

Demand is still high and money seems readily available from lender's?

Apologies for the thinly veiled advice question

Depends

Will you have a job in 21/22?

If you will wait

Cash buyers id imagine are waiting it out

Snow Garden · 09-08-2020 12:16pm

FintanMcluskey wrote: »

Ok so would you advise someone to buy a house in the current climate?

Demand is still high and money seems readily available from lender's?

Apologies for the thinly veiled advice question

Absolutely not. It's way way way too early to see the real impact. The housing market is completely flawed at the moment with the government paying wages and banks giving mortgage holidays. Write this year off. Too much flux and a fair dollop of denial. The real pressure will come next year and 2022 as the financial impact hits home (I also see massive unemployment next year). We cannot keep running massive budget deficits month-on-month like we are doing now, eventually reality has to kick in.

Wanderer78 · 09-08-2020 12:18pm

Snow Garden wrote: »

Absolutely not. It's way way way too early to see the real impact. The housing market is completely flawed at the moment with the government paying wages and banks giving mortgage holidays. Write this year off. Too much flux and a fair dollop of denial. The real pressure will come next year and 2022 as the financial impact hits home (I also see massive unemployment next year). We cannot keep running massive budget deficits month-on-month like we are doing now, eventually reality has to kick in.

currently being debunked, in fact, id class it as dangerous, particularly right now

Snow Garden · 09-08-2020 12:35pm

Wanderer78 wrote: »

currently being debunked, in fact, id class it as dangerous, particularly right now

Jaysus you are a broken record.

I am not saying right now or even this year! We all get your point.

But ok let's run 30bn budget deficits forever and see how we go...

Wanderer78 · 09-08-2020 12:38pm

Snow Garden wrote: »

Jaysus you are a brokeh record.

I am not saying right now or even this year!

i am indeed, and i ll keep going until its widely accepted. we need to step away from the idea of constantly feeling the need to reduce public debt, private debt has in fact, historically caused far more damage, as we ve recently discovered. create the bonds, keep creating the bonds, until confidence returns, particularly in the private sector, then redirect towards servicing public debt

Wanderer78 · 09-08-2020 12:39pm

Snow Garden wrote: »

Jaysus you are a broken record.

I am not saying right now or even this year! We all get your point.

But ok let's run 30bn budget deficits forever and see how we go...

hopefully theres no need to, long term bonds are common, and possibly gonna become more common after this one

Deub · 09-08-2020 2:19pm

Talking about private debt. It looks like over 1/3rd of Irish households wouldn’t have enough money for an unexpected expense.

https://twitter.com/C_Barraud/status/1292376280411918336

KyussB · 09-08-2020 4:20pm

Snow Garden wrote: »

Jaysus you are a broken record.

I am not saying right now or even this year! We all get your point.

But ok let's run 30bn budget deficits forever and see how we go...

The main thing people advocate is running deficits until we reach Full Employment - and to efficiently allocate those deficits directly into providing jobs doing useful/necessary work - which would be a very wise thing to do. Nobody advocates 'deficits forever'.

Wanderer78 · 09-08-2020 7:28pm

Deub wrote: »

Talking about private debt. It looks like over 1/3rd of Irish households wouldn’t have enough money for an unexpected expense

yea, im becoming deeply concerned about the financial sector again, its already showing signs of stress, lets hope it doesnt buckle, we need to just keep giving people money, to try prevent what happened the last time

Tea drinker · 10-08-2020 2:13pm

Deub wrote: »

Talking about private debt. It looks like over 1/3rd of Irish households wouldn’t have enough money for an unexpected expense.

https://twitter.com/C_Barraud/status/1292376280411918336

Graphic states data is as of 2018. The likes of Croatia have been massively affected due to heavy reliance on now collapsed tourism sector so would expect their position to be relatively more worsened.
I think Montenegrin tourism has collpased 90% or some such, in a poor country, this is devastating

2lazytogetup · 10-08-2020 2:30pm

anyone with economics knowledge have any thoughts on whether this pandemic will lead to an improved economy.

So if people are working from home, and thus need for less resources such as office buildings, and if people are getting deliveries of clothes, thus using less resources to go to shops, buying less cars as not needed, shouldnt this lead to a more efficent economy and thus increase GDP.

As a collary, if the government was to announced that they would be employing a million workers to build a hole in the ground, there are increased employment, but it wouldn't improve our economy.

Wanderer78 · 10-08-2020 2:37pm

2lazytogetup wrote: »

anyone with economics knowledge have any thoughts on whether this pandemic will lead to an improved economy.

So if people are working from home, and thus need for less resources such as office buildings, and if people are getting deliveries of clothes, thus using less resources to go to shops, buying less cars as not needed, shouldnt this lead to a more efficent economy and thus increase GDP.

As a collary, if the government was to announced that they would be employing a million workers to build a hole in the ground, there are increased employment, but it wouldn't improve our economy.

how longs a piece of string? it ll more than likely bring some good, and some bad, as any shock does, but urgent change has been needed for a long time, particularly since the last crash, which didnt happen, this pandemic is now forcing some of these much needed changes, it ll probably lead to some good and some bad, we simply dont know for sure. (un)fortunately, our current government is traditionally quite resistant to serious change, so it ll be interesting to see how they react, when the only options will be ultimately, serious change, tis fascinating to watch

KyussB · 10-08-2020 2:41pm

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.

Roger the cabin boy · 10-08-2020 4:00pm

https://www.youtube.com/watch?v=7iaKR5-bxEw

Wanderer78 · 10-08-2020 5:32pm

Roger the cabin boy wrote: »

https://www.youtube.com/watch?v=7iaKR5-bxEw

any ideas yourself?

Roger the cabin boy · 10-08-2020 7:24pm

Wanderer78 wrote: »

any ideas yourself?

About what?

Geuze · 11-08-2020 3:10pm

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 · 11-08-2020 3:14pm

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 · 11-08-2020 4:38pm

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 · 11-08-2020 11:35pm

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 · 11-08-2020 11:35pm

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 · 11-08-2020 11:57pm

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 â‚¬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 · 12-08-2020 8:54am

How or why did the income tax figures rise?

Mongfinder General · 12-08-2020 9:27am

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 · 12-08-2020 12:17pm

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 · 12-08-2020 12:22pm

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 · 12-08-2020 12:30pm

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

Recession predictions

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