Recession predictions

Wanderer78 · 25-07-2020 5:28am

Geuze wrote:

Many of the workers affected are not house buyers.

Is this because they simply haven't been able to get access to the market for a long time, or ever? Housing and accommodation demand is more or less always there, as we haven't figured out how to stop the aging process, and obviously people are also living longer. Our accommodation needs have never been fulfilled in recent times, particularly since the last crash. it was noted that we needed to continue building, particularly in the Dublin region, but this didn't occur, and is only coming on stream now. We need to stop using metrics such as price as an indicator of demand.

This significant drop in demand for credit could have serious repercussions for the financial sector, as we learned from the previous crash, when demand for credit falls sharply, the whole financial sector becomes unstable. I'm aware conditions are different now compared to the previous crash, but I am expecting issues to arrive soon from the financial sector, here's looking at you Italy.

brisan · 27-07-2020 9:45am

Wanderer78 wrote: »

Is this because they simply haven't been able to get access to the market for a long time, or ever? Housing and accommodation demand is more or less always there, as we haven't figured out how to stop the aging process, and obviously people are also living longer. Our accommodation needs have never been fulfilled in recent times, particularly since the last crash. it was noted that we needed to continue building, particularly in the Dublin region, but this didn't occur, and is only coming on stream now. We need to stop using metrics such as price as an indicator of demand.

This significant drop in demand for credit could have serious repercussions for the financial sector, as we learned from the previous crash, when demand for credit falls sharply, the whole financial sector becomes unstable. I'm aware conditions are different now compared to the previous crash, but I am expecting issues to arrive soon from the financial sector, here's looking at you Italy.

The demand is there for credit but the CB rules and the banks reluctance (rightly so in my opinion ) to lend to those on PUP and TWSS will stifle the amount of credit made available

Wanderer78 · 27-07-2020 9:51am

brisan wrote: »

The demand is there for credit but the CB rules and the banks reluctance (rightly so in my opinion ) to lend to those on PUP and TWSS will stifle the amount of credit made available

yea i understand that alright, but as you said, the rules were put into place for a reason, its a very complicated mess, we re currently stuck and theres a strong possibility many will get stuck in the rental sector long term, some possibly indefinitely. we have to work on increasing our public housing stock

Geuze · 01-08-2020 1:05am

Flash estimates of Q2 2020 out now:

https://ec.europa.eu/eurostat/documents/2995521/11156775/2-31072020-BP-EN.pdf/cbe7522c-ebfa-ef08-be60-b1c9d1bd385b

Geuze · 01-08-2020 1:07am

Although earlier I may have said that this recession will be very sharp, but last maybe six months max, note that the level of output will be lower than the potential output for several years:

http://econbrowser.com/archives/2020/07/guest-contribution-lasting-damage-of-the-pandemic

Wanderer78 · 01-08-2020 9:05am

Geuze wrote:

Although earlier I may have said that this recession will be very sharp, but last maybe six months max, note that the level of output will be lower than the potential output for several years:

Thank you for your predictions, but I believe all predictions will turn out to be wrong, some very wrong, particularly if they are neoclassically based, equilibrium based models are notoriously inaccurate, as they lack that all important element, human behaviour, growth will return when the humans become confident once again

Roger the cabin boy · 01-08-2020 11:44am

It isn't traditional demand destruction that's going to be the big hit here, it's the societal and structural changes to what and how we do work which Covid has accelerated by perhaps a generation which is going to cause the most pain.

The traditional office commute work model is dead.

wassie · 01-08-2020 5:45pm

Another big effect is how the post covid will be supply chains and how the world trades with each other.

Supply chains, particularly for certain industries will no doubt be shortened to lower risks associated with similar global events that disrupt trade. This comes at a cost.

Also I think we are starting to see the world divide between US & China when comes to technology. Some commentators are calling this the start of a new information technology cold war with larger economies may be forced in time to choose sides. This could have big implications for capital flows.

saabsaab · 01-08-2020 6:16pm

wassie wrote: »

Another big effect is how the post covid will be supply chains and how the world trades with each other.

Supply chains, particularly for certain industries will no doubt be shortened to lower risks associated with similar global events that disrupt trade. This comes at a cost.

Also I think we are starting to see the world divide between US & China when comes to technology. Some commentators are calling this the start of a new information technology cold war with larger economies may be forced in time to choose sides. This could have big implications for capital flows.

A great post. You are onto something.

theguzman · 01-08-2020 11:32pm

Made in India and Made in Nigeria will be where our tat comes from by mid-decade, alot of corporation will never again centralise manufacturing in China, and will rather establish multiple manufacturing sites globally so that if something happened in India the factory in Lagos can take up the slack.

Roger the cabin boy · 05-08-2020 11:40am

Redundancies now ticking up in the UK.....

Wanderer78 · 05-08-2020 11:41am

Roger the cabin boy wrote: »

Redundancies now ticking up in the UK.....

yea this is a fcuking disaster

combat14 · 05-08-2020 11:53am

Bank of Ireland said on Wednesday it will cut 1,400 jobs in the coming years to rein in costs as the lender posted a loss for the first half of the year after taking a €937 million charge to cover an expected spike in bad debts resulting from the coronavirus crisis

Group warns full-year loan-loss charge is expected to fall between €1.1bn and €1.3bn

https://www.irishtimes.com/business/financial-services/bank-of-ireland-to-cut-1-400-jobs-as-covid-19-drives-937m-loans-charge-1.4322469?mode=amp

looks like the banks are starting to look a bit wobbly already and we are only barely 6 months into this

Wanderer78 · 05-08-2020 12:15pm

combat14 wrote: »

Bank of Ireland said on Wednesday it will cut 1,400 jobs in the coming years to rein in costs as the lender posted a loss for the first half of the year after taking a €937 million charge to cover an expected spike in bad debts resulting from the coronavirus crisis

Group warns full-year loan-loss charge is expected to fall between €1.1bn and €1.3bn

https://www.irishtimes.com/business/financial-services/bank-of-ireland-to-cut-1-400-jobs-as-covid-19-drives-937m-loans-charge-1.4322469?mode=amp

looks like the banks are starting to look a bit wobbly already and we are only barely 6 months into this

unfortunately it nearly always comes back around to the banks, its an incredibly fragile sector

lsjmhar · 06-08-2020 4:00pm

Felipe Ashy Signboard wrote:

If Arsenal are looking for 55 redundancies after winning a cup + qualifying for Europe it doesn't look good for all those underneath.

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

antimatterx · 06-08-2020 4:51pm

My company is threading very carefully. They're keeping recently hired staff, or staff they would have let have been let go otherwise on 2 month fixed term contracts. Not ideal, but if nothing else it's some more work until the uncertainty is figured out.

brisan · 06-08-2020 4:58pm

antimatterx wrote: »

My company is threading very carefully. They're keeping recently hired staff, or staff they would have let have been let go otherwise on 2 month fixed term contracts. Not ideal, but if nothing else it's some more work until the uncertainty is figured out.

I think a lot of companies are treading warily
Certain sectors are doing well but a lot are facing an uncertain future.
I had to drive to Fairview at 9 am today.
I was shocked at how light the traffic was
City centre was very quiet
There again the Yacht pub in Clontarf was very busy at lunchtime
Who knows what way it will pan out,
Even if the economy recovers there will be a lot of economic scarring

i_surge · 06-08-2020 5:59pm

Wanderer78 wrote: »

Thank you for your predictions, but I believe all predictions will turn out to be wrong, some very wrong, particularly if they are neoclassically based, equilibrium based models are notoriously inaccurate, as they lack that all important element, human behaviour, growth will return when the humans become confident once again

Reflexivity is where it is at. Self sustaining processes driving cyclicality.

Wanderer78 · 06-08-2020 6:00pm

i_surge wrote: »

Reflexivity is where it is at. Self sustaining processes driving cyclicality.

'in the words of the virgin mary, come again'?

i_surge · 06-08-2020 6:11pm

Wanderer78 wrote: »

'in the words of the virgin mary, come again'?

It is a philosophy about the driving forces for recursive processes such as credit contraction or expansion.

All summed up in the most pretentious way possible in a book called the Alchemy of Finance.

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!

Recession predictions

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