Recession predictions

Roger the cabin boy · 01-10-2020 3:01pm

Wanderer78 wrote: »

jaysis, where do you even begin to unpack this one!

the arguments of ubi have been around decades now, and its still not here, in any major way, yes it could be here soon, but since our most critical institutions are still largely controlled by more economically conservative bodies, including from the political left, we could be waiting a while.... i personally think it should be tried, but with controls, and i particularly like the idea of preloading all households esb accounts with credit, just for the winter months, is well worth trying, just to see. please define the term 'simple people'? i do understand the concerns for the advancement of tech, but its important to remember, all past advancements of tech, have in fact lead to an increase in jobs, but i also realise, past trends are not a guarantee for possible future outcomes. covid payments were/are critical to those that availed of it, without which, we probably would have had many families in serious trouble, and it would have had a further compression of the economy, it would have also accelerated the closure of businesses, permanently. as others have explained very well, certainly better than me, growing public debt isnt necessarily a problem in the long term, as the most dangerous debt, is largely rising private debt. we will actually increase societal collapse if we continue on our current approach of largely fiscal conservatism, america is a fine example of this, this is potentially where we re all heading, if we continue on this trajectory.

its very unfair to single out the younger generations, as you ll find our wastefulness is across all generations, and it has been us older generations that have actually caused this way of life, mainly by our chosen conservative political and economic ideologies, particularly over the last few decades, by both the traditional political left and right. the youth that believe in reducing working hours and working stresses are actually dead right, as us older generations have been fed a pack of lies concerning hard work and success, you ll actually find productivity levels across most sectors are currently at all time highs, yet the payoff isnt actually paying off for many, i.e. low wage inflation. this truly does remind me of Petersons nonsense of 'cultural Marxists' and zizek is spot on, 'where the hell are they'! i suspect the majority of people, including myself, have little or no knowledge of ideologies such as socialism, Marxism, communism, etc etc etc, and id completely agree with economist deirdre mccloskey, most would chose a capitalist society over a socialist one, again, including myself. so again, where are these socialists, and what governments are of a socialist persuasion? always love this 'personal responsibility' default, its commonly used along side other scapegoats such as the scary foreigners and the welfare class, tis kinna boring now.....

again, please define 'weak'? lazy! please define this? again, productivity levels are at an all time high, across most sectors??? i will agree with the self centered statement though, narcissistic behavior is currently growing and is being encouraged in society, its an element of why we now have trump in power, these kind of folks are seen as 'strong men', when in fact, theyre actually just conmen!

we have figured out how to create effectively endless amounts of money without experiencing the traditional outcomes of doing so, i.e. hyperinflation etc, but this is not coming problem free, but for the moment, we re keeping those problems at bay, just about, in fact, it looks like we could be entering a period of deflation, which brings its own set of problems.

of course reducing the working week is well worth trying, our current approaches to work, are actually inducing highly complex social and psychological issues into society, which is extremely counterproductive, and actually extremely expensive to try deal with after the fact. i suspect we ve surpassed some sort of productivity limit for humans to work, and its causing these complex behavioral and psychological issues. i dont understand these arguments for reducing our standard of living, i think theres now a huge opportunity for us to greatly improve our standards, for the reasons outlined. we cannot maintain our current form of capitalism, it ll more than likely lead to a catastrophic collapse of this planet to maintain most life, including our own, this is now becoming very obvious! capitalism has been about for centuries now, what makes people think its just about to wrap up and end! this is nuts! but we cannot continue with this form of it, for obvious reasons! we have a serious wealth distribution problem, which urgently needs to be addressed, but our most critical of institutions, including our political ones, are currently defaulting to the norm.

jesus, why would you want to maintain the misery of past generations, we ve overcome an enormous amount as a species, we have done some great things, and continue to, we just need to clean up our sh1t, and im completely with these younger folks on many of their visions, because us older ones, have certainly made their future, deeply uncertain.

Marxism! again, where????

A good post of which i agree with a lot.

brisan · 01-10-2020 3:50pm

KyussB wrote: »

It's unacceptable and inhumane to have any level of lasting long-term-unemployment - doubly so given we barely just got out of that from the previous decade.

A significant portion of upcoming generations are being completely screwed by this - and rewarded with astronomical costs of living to go with not having a job.

A policy of Permanent Full Employment needs to be enacted, with workers transitioning into a government 'employer of last resort' Job Guarantee program when the private sector can't provide for them. There is no end of useful work to be done, and for people to be trained up into doing - with housing being the most immediately obvious and often mentioned example (with plenty more besides that needs doing, still).

Involuntary unemployment must become a thing of the past. Even the Universal Declaration of Human Rights states that people have the right to protection against unemployment - so arguably it's a breach of human rights to allow involuntary unemployment (particularly long-term/very-long-term unemployment) to continue.

There are those who for a number of reasons are unemployable and another cohort who do not wish to be employed

Wanderer78 · 01-10-2020 3:52pm

brisan wrote: »

There are those who for a number of reasons are unemployable and another cohort who do not wish to be employed

long term unemployment is extremely complex, it cannot be simplified as such

brisan · 01-10-2020 4:22pm

wassie wrote: »

I don't mind people earning a bit on the side, but that is taking the p!ss to the rest of us taxpayers.

Wirecard & EY is just the latest installment. Richard Brooks book "Bean Counters" lays it all bare.

The 30- 40k on the side is not as uncommon as you think especially with tradesman in full or part time employment

Wanderer78 · 01-10-2020 4:23pm

brisan wrote: »

The 30- 40k on the side is not as uncommon as you think especially with tradesman in full or part time employment

do we have any absolute proof of these figures?

brisan · 01-10-2020 4:27pm

Roger the cabin boy wrote: »

We will be having universal income soon. it may start as a experiment, but it will quickly become permanent. Simple jobs for simple people are evaporating with the rise of AI and automation. Covid payments are a step towards this. I am aghast at how long these are planned to last and how much these are going to cost, but it is in truth because without them, and that crutch/bridge between employed and not, we will likely have societal collapse.

The new, younger generations have no mass on anything they own or use. Theirs is a disposable world, with little care for the past or the future. only the now is important. The youth have no wish for long hours and hard work. Work/reward is a disconnecting ideal.
This is why you see the rise of the eft, of the socialists, of the move away from personal responsibility and towards external blame and ire.

We are becoming utterly weak as a race, well, esp so in the developed world. We are too lazy and self centered for hard work, best leave that to the immigrants.

Problem is though, all that costs money rather than generates its. It's fine to be a society of take, rather than give but at some point, the piper needs to be paid.

Maybe, maybe working 50 hrs a week really is nuts. Maybe a 30 hr week and a reduced (material) standard of living is actually better but that will just feed into the deflationary environment. No new cars every three years, wear your clothes out, eat everything on the plate, buy house which is big enough, work to live, etc. but that's the death of capitalism if we do.

I am sure i heard Biden saying that life isn't nice at the moment. Life is never nice, it's a tough, miserable tortuous existence at the best of times. The modern generation can't handle that reality. They want to stay in bed hiding from the reality of it all. They want to cancel out the voices that tell them life is hard. They don't want rules and regulations which sacrifice personal freedoms for social responsibility.

Its a marxist wet dream.

As someone who started work in a factory in 1982 that employed nearly 1500 people (production and office staff combined ) producing 30k tonnes of product to the same factory producing 45k of product with a workforce of 350 I can vouch for that
All through automation and outsourcing
Most of those jobs were unskilled labour although well paid

brisan · 01-10-2020 4:30pm

Roger the cabin boy wrote: »

We will be having universal income soon. it may start as a experiment, but it will quickly become permanent. Simple jobs for simple people are evaporating with the rise of AI and automation. Covid payments are a step towards this. I am aghast at how long these are planned to last and how much these are going to cost, but it is in truth because without them, and that crutch/bridge between employed and not, we will likely have societal collapse.

The new, younger generations have no mass on anything they own or use. Theirs is a disposable world, with little care for the past or the future. only the now is important. The youth have no wish for long hours and hard work. Work/reward is a disconnecting ideal.
This is why you see the rise of the eft, of the socialists, of the move away from personal responsibility and towards external blame and ire.

We are becoming utterly weak as a race, well, esp so in the developed world. We are too lazy and self centered for hard work, best leave that to the immigrants.

Problem is though, all that costs money rather than generates its. It's fine to be a society of take, rather than give but at some point, the piper needs to be paid.

Maybe, maybe working 50 hrs a week really is nuts. Maybe a 30 hr week and a reduced (material) standard of living is actually better but that will just feed into the deflationary environment. No new cars every three years, wear your clothes out, eat everything on the plate, buy house which is big enough, work to live, etc. but that's the death of capitalism if we do.

I am sure i heard Biden saying that life isn't nice at the moment. Life is never nice, it's a tough, miserable tortuous existence at the best of times. The modern generation can't handle that reality. They want to stay in bed hiding from the reality of it all. They want to cancel out the voices that tell them life is hard. They don't want rules and regulations which sacrifice personal freedoms for social responsibility.

Its a marxist wet dream.

And social media fuels all this by misleading them into thinking everybody else has a perfect life

brisan · 01-10-2020 4:38pm

Wanderer78 wrote: »

long term unemployment is extremely complex, it cannot be simplified as such

I agree ,certain people due to medical and mental conditions are not suited to the workforce
Others are just bone lazy
Every society will have these to a varying degree

brisan · 01-10-2020 4:41pm

Wanderer78 wrote: »

do we have any absolute proof of these figures?

Yes
Tradesmen working continental shifts 4 day on 4 days off ,or working 3 13hr weekend shifts and then working for themselves or small builders on 3 of their 4 days off
Younger lads in our place do it regularly ,all cash in hand .
200 euro a day for an 8 hr day is not a lot considering a contractor would probably charge 400 euro plus for the same time

Wanderer78 · 01-10-2020 4:42pm

brisan wrote: »

As someone who started work in a factory in 1982 that employed nearly 1500 people (production and office staff combined ) producing 30k tonnes of product to the same factory producing 45k of product with a workforce of 350 I can vouch for that
All through automation and outsourcing
Most of those jobs were unskilled labour although well paid

i think the term of 'simple people' is a bit ignorant to be honest, there was/is nothing simple about these folks, unskilled jobs were/are the norm, most of us have done that type of work at some stage, theres nothing wrong with it. but again, each evolution of tech, has lead to an increasing amount of jobs, but we ve decided the best thing to do is to suppress wage inflation and increase things such as asset price inflation, most notably, house price inflation, largely via financialisation of our economies

brisan wrote: »

And social media fuels all this by misleading them into thinking everybody else has a perfect life

social media definitely is weird, thank god, boards is all i do

brisan wrote: »

I agree ,certain people due to medical and mental conditions are not suited to the workforce
Others are just bone lazy
Every society will have these to a varying degree

id largely disagree here, i generally class this as 'lazy research' even with my own disorders, this belief is prevalent!

Wanderer78 · 01-10-2020 4:42pm

brisan wrote: »

Yes
Tradesmen working continental shifts 4 day on 4 days off ,or working 3 13hr weekend shifts and then working for themselves or small builders on 3 of their 4 days off
Younger lads in our place do it regularly ,all cash in hand .
200 euro a day for an 8 hr day is not a lot considering a contractor would probably charge 400 euro plus for the same time

all of them?

brisan · 01-10-2020 4:47pm

Wanderer78 wrote: »

i think the term of 'simple people' is a bit ignorant to be honest, there was/is nothing simple about these folks, unskilled jobs were/are the norm, most of us have done that type of work at some stage, theres nothing wrong with it. but again, each evolution of tech, has lead to an increasing amount of jobs, but we ve decided the best thing to do is to suppress wage inflation and increase things such as asset price inflation, most notably, house price inflation, largely via financialisation of our economies

social media definitely is weird, thank god, boards is all i do

id largely disagree here, i generally class this as 'lazy research' even with my own disorders, this belief is prevalent!

I never used the term simple ,another poster did
The majority of the people who worked and still do in my place left school before their leaving cert,had no futher education and went straight into a factory
Another section would be married women with kids at a sensible age and the women do it to supplement their household income
35-50k depending on shift is not bad pay for someone with no leaving cert in a job were you work 40mins out of every hour and you are not physically or mentally taxed

brisan · 01-10-2020 4:51pm

Wanderer78 wrote: »

all of them?

No not them all but some
Weekend nights was always the pits of a shift and it was were you started before moving to 4 night midweek and then 2 shift .
Now for childminding and nixer reasons those on weekend nights wont leave it .
85 k +pension + benefits and a few hundred cash in your pocket every week is not a bad life even if you lose your weekend

That is tradesmen
At one stage the taxi men's union picketed our factory because of the number of permanent workers who owned taxi plates and taxied at the weekend .

Wanderer78 · 01-10-2020 4:57pm

brisan wrote: »

I never used the term simple ,another poster did
The majority of the people who worked and still do in my place left school before their leaving cert,had no futher education and went straight into a factory
Another section would be married women with kids at a sensible age and the women do it to supplement their household income
35-50k depending on shift is not bad pay for someone with no leaving cert in a job were you work 40mins out of every hour and you are not physically or mentally taxed

i understand that, i wasnt pointing that comment towards you.

some of those folks may not have had many choices coming out of school, and if they didnt enjoy school, struggled with the leaving etc, working in a factory could have been the default, again, nothing wrong with it, ive done this type of work myself.

again, women should have the option to work and have kids, obviously humanity needs them to continue having kids, but many women actually work largely due to the issues mentioned above, i.e. low wage inflation, high asset price inflation etc

as ive mentioned, ive worked shifts in a factory, i was mentally challenged to the point of helping to induce mental health issues, ive worked with other lads that had breakdowns, and work was an element of this, ive also worked with people that were forced to take 'stress leave', not mentally challenging, im not so sure about that!

brisan wrote: »

No not them all but some
Weekend nights was always the pits of a shift and it was were you started before moving to 4 night midweek and then 2 shift .
Now for childminding and nixer reasons those on weekend nights wont leave it .
85 k +pension + benefits and a few hundred cash in your pocket every week is not a bad life even if you lose your weekend

again, is this lifestyle 'choice', really a choice for some? i will agree, some just love making more money, and best of luck to them

brisan · 01-10-2020 5:04pm

Wanderer78 wrote: »

i understand that, i wasnt pointing that comment towards you.

some of those folks may not have had many choices coming out of school, and if they didnt enjoy school, struggled with the leaving etc, working in a factory could have been the default, again, nothing wrong with it, ive done this type of work myself.

again, women should have the option to work and have kids, obviously humanity needs them to continue having kids, but many women actually work largely due to the issues mentioned above, i.e. low wage inflation, high asset price inflation etc

as ive mentioned, ive worked shifts in a factory, i was mentally challenged to the point of helping to induce mental health issues, ive worked with other lads that had breakdowns, and work was an element of this, ive also worked with people that were forced to take 'stress leave', not mentally challenging, im not so sure about that!

again, is this lifestyle 'choice', really a choice for some? i will agree, some just love making more money, and best of luck to them

I can say without reservation that production people in our factory have no work related stress.
Work 40mins off for 20mins
Sit and watch machine ,or drive a forktruck etc
Fill a sheet in with a few weights and samples every couple of hours
Breakdown happens all head to canteen after a few mins cleaning
Clock in at 8 and out at 4 even if the place is falling down .
Its American owned now but there is 90yrs of British Quaker ownership embedded in the work practices and terms and conditions of employment

brisan · 01-10-2020 5:06pm

Wanderer78 wrote: »

i understand that, i wasnt pointing that comment towards you.

some of those folks may not have had many choices coming out of school, and if they didnt enjoy school, struggled with the leaving etc, working in a factory could have been the default, again, nothing wrong with it, ive done this type of work myself.

again, women should have the option to work and have kids, obviously humanity needs them to continue having kids, but many women actually work largely due to the issues mentioned above, i.e. low wage inflation, high asset price inflation etc

as ive mentioned, ive worked shifts in a factory, i was mentally challenged to the point of helping to induce mental health issues, ive worked with other lads that had breakdowns, and work was an element of this, ive also worked with people that were forced to take 'stress leave', not mentally challenging, im not so sure about that!

again, is this lifestyle 'choice', really a choice for some? i will agree, some just love making more money, and best of luck to them

if you are earning 85 k and your wife is a nurse or a teacher then yes its a lifestyle choice

Roger the cabin boy · 01-10-2020 5:08pm

Wanderer78 wrote: »

i understand that, i wasnt pointing that comment towards you.

some of those folks may not have had many choices coming out of school, and if they didnt enjoy school, struggled with the leaving etc, working in a factory could have been the default, again, nothing wrong with it, ive done this type of work myself.

again, women should have the option to work and have kids, obviously humanity needs them to continue having kids, but many women actually work largely due to the issues mentioned above, i.e. low wage inflation, high asset price inflation etc

as ive mentioned, ive worked shifts in a factory, i was mentally challenged to the point of helping to induce mental health issues, ive worked with other lads that had breakdowns, and work was an element of this, ive also worked with people that were forced to take 'stress leave', not mentally challenging, im not so sure about that!

again, is this lifestyle 'choice', really a choice for some? i will agree, some just love making more money, and best of luck to them

There is a spread of IQ and motivation traits throughout any population.

It may not be PC to state this but it's quite true. Not everyone has the nounce to fly aircraft or the drive to run a business.

Your reply is a good example of the eternal outrage becoming ever more prevalent in our society and ties in with my comments above.

You have taken the label of "simple" as what? Dumb, stupid, ignorant?

No, it just means a person who lives a simple life according to his situation.
The 50% of the population with low iq are getting ever more squeezed out of the workplace. The 50% of the population with low drive are being squeezed out of the workplace.

There are many highly motivated and high iq people working at McDonald's.

Some people really do just want to stamp washers for a day, get paid, go home.

Wanderer78 · 01-10-2020 5:10pm

brisan wrote: »

I can say without reservation that production people in our factory have no work related stress.
Work 40mins off for 20mins
Sit and watch machine ,or drive a forktruck etc
Fill a sheet in with a few weights and samples every couple of hours
Breakdown happens all head to canteen after a few mins cleaning
Clock in at 8 and out at 4 even if the place is falling down .
Its American owned now but there is 90yrs of British Quaker ownership embedded in the work practices and terms and conditions of employment

could boredom or unfulfillment be considered stressful? one of the main causes of my own issues in that work environment was in fact, i was deeply unfulfilled, i struggled in our educational system, so ended up in that particular job, even though it was a fantastic life experience, it still lead to deep unfulfillment, ive worked with many others that showed similar issues, but remained stuck, for many different reasons, including commitments such as financial and relationships etc

...and long may those work practices remain, i worked in one of those american corporations, an absolutely awful work environment for most, including management, where everyone is encouraged to threat everyone like sh1t

Wanderer78 · 01-10-2020 5:14pm

brisan wrote: »

if you are earning 85 k and your wife is a nurse or a teacher then yes its a lifestyle choice

or is it that everyone knows that, 'increasing worker insecurities' are exactly that, and it causes people to default towards, lets get as much money as we can, in order to try change this situation?

Roger the cabin boy wrote: »

There is a spread of IQ and motivation traits throughout any population.

It may not be PC to state this but it's quite true. Not everyone has the nounce to fly aircraft or the drive to run a business.

Your reply is a good example of the eternal outrage becoming ever more prevalent in our society and ties in with my comments above.

You have taken the label of "simple" as what? Dumb, stupid, ignorant?

No, it just means a person who lives a simple life according to his situation.
The 50% of the population with low iq are getting ever more squeezed out of the workplace. The 50% of the population with low drive are being squeezed out of the workplace.

There are many highly motivated and high iq people working at McDonald's.

Some people really do just want to stamp washers for a day, get paid, go home.

you may need to do some research into the most common causes of things such as long term unemployment, it truly is highly complex, and it shows multi system failure to address these individuals actually needs, and in fact, in many cases, exasperates their issues

brisan · 01-10-2020 5:26pm

Wanderer78 wrote: »

could boredom or unfulfillment be considered stressful? one of the main causes of my own issues in that work environment was in fact, i was deeply unfulfilled, i struggled in our educational system, so ended up in that particular job, even though it was a fantastic life experience, it still lead to deep unfulfillment, ive worked with many others that showed similar issues, but remained stuck, for many different reasons, including commitments such as financial and relationships etc

...and long may those work practices remain, i worked in one of those american corporations, an absolutely awful work environment for most, including management, where everyone is encouraged to threat everyone like sh1t

IF you are having a handy life getting 30-50 k ,able to get to work in 20 mins and
DO NOT MIND THE BOREDOM then its not an issue
As another poster said some people are happy to stamp washers get paid and go home
There is a saying in our job
Happiness comes in a brown envelope
Harks back to when we were paid in cash
Its not like Intel ,or one of those MNC or pharma companies .
its fairly low tech for them and easy work with no hassle
Junior software engineers in our company would start on less money than some production workers with little or no education
Last 2 years and move on
Looks well on their CV

Wanderer78 · 01-10-2020 5:31pm

brisan wrote: »

IF you are having a handy life getting 30-50 k ,able to get to work in 20 mins and
DO NOT MIND THE BOREDOM then its not an issue
As another poster said some people are happy to stamp washers get paid and go home
There is a saying in our job
Happiness comes in a brown envelope
Harks back to when we were paid in cash
Its not like Intel ,or one of those MNC or pharma companies .
its fairly low tech for them and easy work with no hassle
Junior software engineers in our company would start on less money than some production workers with little or no education
Last 2 years and move on
Looks well on their CV

its important to realise, many western economies are slowly moving towards service lead, ive never worked in this sector, but i suspect many of the positions created are deeply unfulfilling, particularly to those that have spent many years educating themselves for something more, something better, and god help those that are continually let down by our educational and training systems, many of these jobs are also of low pay. never underestimate the need for job satisfaction, i think graeber was spot on with 'bullsh!t jobs'!

KyussB · 01-10-2020 11:12pm

Geuze wrote: »

This suggestion deserves a separate thread.

I feel that pre-COVID, most of the LT unemployed in Ireland were not unemployed due to a lack of vacancies.

They were either:

unemployable
they choose LT JSA combined with nixers, i.e. they choose to claim JSA as a lifestyle choice
suffer from a skills mismatch

Bear in mind that thousands of immigrants arrive here and managed to get jobs, while there were thousands of LT unemployed.

The (admittedly few) people I know on LT JSA are not unemployed due to a lack of jobs.

One earns 10k JSA + 40k nixer, the other has mild personality issues/couldn't hold down a job.

A Job Guarantee resolves most of that - as it both trains up people into useful roles, and is capable of tailoring roles to accommodate for peoples personal circumstances - so e.g. people with anxiety difficulties say, or even more severe disabilities, can have roles created for them as part of the JG. I think the JG is one of the most beneficial things that can happen for disadvantaged people and communities, due to this.

JSA would still exist alongside the JG - and a JG in full swing would greatly reduce the number of people on JSA, and make it far easier to identify 'genuine' cases of fraud and such.

Another thing is: Bad private sector jobs, with both bad pay and bad working conditions, should not be considered genuine vacancies - as we want to eliminate jobs that do not provide good standards for workers.
A JG achieves this, by ensuring workers always have the JG as an alternative to bad jobs - meaning that the JG sets a floor both for wages, and for working conditions in the economy - boosting workers bargaining power in the process.

completedit · 01-10-2020 11:16pm

Dont
Sweat
The
Debt

Dust off the printing press and make it go brrrrrrr

There will be no Inflation. Zimbabwe Weimar Republic they all are misleading. We have so many goods that printing will do nothing. Look at post 2008. We live in a deflationary world outside of asset prices. Take morality out of economics. Make the economy work for people and society not the other way around.

Time to stop with textbook thinking and realise that it's all just an illusion. The debt means nothing. In the long run we are all dead.

Geuze · 01-10-2020 11:35pm

completedit wrote: »

Dust off the printing press and make it go brrrrrrr

QE started already, it started in 2014.

completedit · 01-10-2020 11:37pm

Make it faster

Geuze · 01-10-2020 11:57pm

Since 2014, the ECB has created money and used it to purchase 2,800 billion euro of financial assets:

app_cumulative_net_purchases-620px.png?tyui

That excludes the new PEPP, to help deal with COVID.

Geuze · 01-10-2020 11:58pm

https://www.ecb.europa.eu/mopo/implement/omt/html/index.en.html

2,940 bn of asset purchases since 2014/2015.

I wonder about the effectiveness of that policy.

Geuze · 02-10-2020 12:01am

https://www.ecb.europa.eu/mopo/implement/pepp/html/index.en.html

The PEPP is now planned to be 1,350 billion, on top of the 2,940 billion in APP so far.

500bn of the PEPP has been created/spent by end of August.

Timing belt · 02-10-2020 12:14am

Geuze wrote: »

https://www.ecb.europa.eu/mopo/implement/omt/html/index.en.html

2,940 bn of asset purchases since 2014/2015.

I wonder about the effectiveness of that policy.

The QE is keeping the longer term rates low to encourage investment and at the same time injecting cash into the financial institutions that are pledging/selling the debt to the ecb.

Logic is that the banks will then be able to provide more loans but if the banks are not issuing more loans as they can’t find customers within there risk appetite or they don’t have sufficient capital to lend...it fails and the banks just park the extra cash in the central bank and get a negative rate impacting on the banks profitability. It could be argued it encourages banks to take more risk.

The only institutions that are benefiting are funds as they can use the cash to purchase more assets and in turn inflate asset prices. This stops a collapse in the markets but does little for boosting the economy (except the funds industry)

Geuze · 02-10-2020 12:14am

completedit wrote: »

Make it faster

3,440 billion of QE done already, is that fast enough??

Wanderer78 · 02-10-2020 5:39am

Geuze wrote:

3,440 billion of QE done already, is that fast enough??

But as explained very well above, if it's not moving (velocity), what's the point?

Geuze · 02-10-2020 9:32am

Timing belt wrote: »

The QE is keeping the longer term rates low to encourage investment and at the same time injecting cash into the financial institutions that are pledging/selling the debt to the ecb.

OK, yes, long-term bond yields have fallen, yes.

This helps corporate bond issuers and Govt bonds, yes, ok.

But here in Ireland, the effectiveness is less, as the fall in wholesale costs isn't fully passed onto retail mortgage rates.

greenfield21 · 02-10-2020 10:30am

More Great numbers out of the EU today. It seems so long ago I listened to one of my favourite talking heads saying central banks can't keep printing money for ever but for way longer than we think.

Wanderer78 · 02-10-2020 10:31am

greenfield21 wrote: »

More Great numbers out of the EU today. It seems so long ago I listened to one of my favourite talking heads saying central banks can't keep printing money for ever but for way longer than we think.

thank god they can never run out of the stuff, or we d be screwed

Timing belt · 02-10-2020 11:45am

Geuze wrote: »

OK, yes, long-term bond yields have fallen, yes.

This helps corporate bond issuers and Govt bonds, yes, ok.

But here in Ireland, the effectiveness is less, as the fall in wholesale costs isn't fully passed onto retail mortgage rates.

The retail mortgage rates are so high because of the volume of mortgages in default and the extra capital the bank has to hold. The only way to get lower rates is to get rid of default mortgages either through repossession or selling the assets to a fund.

https://www.google.co.uk/amp/s/amp.independent.ie/business/personal-finance/no-single-fix-for-distressed-loans-warns-central-banks-ed-sibley-39571088.html

Wanderer78 · 02-10-2020 11:51am

Timing belt wrote: »

The retail mortgage rates are so high because of the volume of mortgages in default and the extra capital the bank has to hold. The only way to get lower rates is to get rid of default mortgages either through repossession or selling the assets to a fund.

https://www.google.co.uk/amp/s/amp.independent.ie/business/personal-finance/no-single-fix-for-distressed-loans-warns-central-banks-ed-sibley-39571088.html

...but this still doesnt resolve our overall housing and accommodation issues

Timing belt · 02-10-2020 11:55am

Wanderer78 wrote: »

...but this still doesnt resolve our overall housing and accommodation issues

No it doesn’t as it is a supply issue and more houses need to be built.

It’s not profitable to build as there is a risk of selling at a loss if supply is delivered and there is a drop (even small) in house prices.

Wanderer78 · 02-10-2020 11:58am

Timing belt wrote: »

No it doesn’t as it is a supply issue and more houses need to be built.

It’s not profitable to build as there is a risk of selling at a loss if supply is delivered and there is a drop (even small) in house prices.

yup, its a really messy situation, and its disturbing to see, theres been literally no solution for over 10 years now, we ve no choice but to allow the state to try solve this one, even if the state only plays a financing role

Timing belt · 02-10-2020 12:07pm

Wanderer78 wrote: »

yup, its a really messy situation, and its disturbing to see, theres been literally no solution for over 10 years now, we ve no choice but to allow the state to try solve this one, even if the state only plays a financing role

Yes it needs something to break the deadlock. As long as building costs are so high it’s not going to change.

you could argue that intervention caused the issue with Nama stepping in keeping land values high if they didn’t the market would have found its own level and building would have started again as there would be money to be made. I am not saying Nama was the wrong thing to do just pointing out that everytime there is human intervention there are always unforeseen consequences.

Wanderer78 · 02-10-2020 12:11pm

Timing belt wrote: »

Yes it needs something to break the deadlock. As long as building costs are so high it’s not going to change.

you could argue that intervention caused the issue with Nama stepping in keeping land values high if they didn’t the market would have found its own level and building would have started again as there would be money to be made. I am not saying Nama was the wrong thing to do just pointing out that everytime there is human intervention there are always unforeseen consequences.

again, we truly need to walk away from this idea of the market finding its own equilibrium, this is not our reality at all, it never has been, its a fantasy idea we ve convinced ourselves of, and it has never happened anywhere in the world, ever. providing the finance publicly, may just unlock this deadlock, and might just stimulate the private sector, particularly the construction industry.

Timing belt · 02-10-2020 12:28pm

Wanderer78 wrote: »

again, we truly need to walk away from this idea of the market finding its own equilibrium, this is not our reality at all, it never has been, its a fantasy idea we ve convinced ourselves of, and it has never happened anywhere in the world, ever. providing the finance publicly, may just unlock this deadlock, and might just stimulate the private sector, particularly the construction industry.

Unfortunately it would probably make the matter worse as it would increase supply and reduce house prices inflation leading to less building. That’s not saying it is the right thing to do just that this will be a consequence of gov intervention. The only way it will be permanently unlocked is cheaper labour, input costs or some sort of efficiency,

Obviously you don’t want construction workers taking a cut as if that happens it feeds back into the problem as they won’t be able to buy property. If the government were able to lower land values via taxation this might solve the issue but don’t see that happening anytime soon.

Regardless of this houses need to be built ASAP.

Wanderer78 · 02-10-2020 12:34pm

Timing belt wrote: »

Unfortunately it would probably make the matter worse as it would increase supply and reduce house prices inflation leading to less building. That’s not saying it is the right thing to do just that this will be a consequence of gov intervention. The only way it will be permanently unlocked is cheaper labour, input costs or some sort of efficiency,

Obviously you don’t want construction workers taking a cut as if that happens it feeds back into the problem as they won’t be able to buy property. If the government were able to lower land values via taxation this might solve the issue but don’t see that happening anytime soon.

Regardless of this houses need to be built ASAP.

unfortunately, our current economic approaches default towards the highlighted, we cant keep playing this game, particularly cheaper labour, and productivity levels are at an all time high, theres only so many layers on an onion here!

i completely agree with a lvt, even though i dont fully understand it, but most commentators i follow, advocate for it, so i think you re right there.

yup, building needed to start over 10 years ago, but here we are....

brisan · 02-10-2020 2:35pm

Only option is to free up Gov land and let builders build at a set cost and margin
If you buy and sell within 10 years Government gets a percentage of the profits depending on length of time between purchase and sale

Timing belt · 02-10-2020 2:49pm

brisan wrote: »

Only option is to free up Gov land and let builders build at a set cost and margin
If you buy and sell within 10 years Government gets a percentage of the profits depending on length of time between purchase and sale

That would work but government would loose out on the 1.9bn Nama cash flow each year. It makes interesting reading to see what land they are still sitting on.

https://www.nama.ie/our-work/search-property

Geuze · 02-10-2020 3:13pm

Timing belt wrote: »

The retail mortgage rates are so high because of the volume of mortgages in default and the extra capital the bank has to hold. The only way to get lower rates is to get rid of default mortgages either through repossession or selling the assets to a fund.

https://www.google.co.uk/amp/s/amp.independent.ie/business/personal-finance/no-single-fix-for-distressed-loans-warns-central-banks-ed-sibley-39571088.html

Who is in charge of setting the RWA, and when are they reviewed?

https://assets.gov.ie/6836/664f5174ebd34f7e938aea654bed6757.pdf

Timing belt · 02-10-2020 3:22pm

Geuze wrote: »

Who is in charge of setting the RWA, and when are they reviewed?

https://assets.gov.ie/6836/664f5174ebd34f7e938aea654bed6757.pdf

RWA’s are suggested by the bank for international settlement (BIS) based in Basel. Hence why you hear of Basel3 etc in relation to rwa’s and then adopted by Europe under the capital requirements directive(CRD) The last One was CRDiv which introduced more capital requirements (RWA’s) after the last crash

Timing belt · 04-10-2020 1:32pm

In an effort to prop up the world economies the central banks have undertaken a massive amount of QE which has resulted in low rates and cheap money in circulation. A lot of this cash has found its way into the stock market which has resulted in the stock markets being valued higher than they were before the Covid Crisis. Are these share valuations based on company profitability or are they overvalued due to the cheap money supply like we have seen before during the dot.com bubble when the fed cut rates. Are the central banks creating a bubble in the stock market as indirect consequence of there efforts to prop up the world economies.

Logic would tell me that a company should be valued more if it has become more efficient or if it is growing its income by increasing sales etc. But I don't think this is the case for most companies at present as can be seen by the numbers that are cancelling dividend payments to shareholders. I don't see how companies can be worth more now that they were before the pandemic started.

I question how their share price is growing? What is the logical basis for the increased valuation in the company? Is it just a case of Greed and people are chasing returns on the stock market like some sort of pyramid scheme when the first in the door make the money and because of this funds need to join in otherwise their return to investors is bellow the market benchmark and they would see there investors pulling out of the funds.

Is there something that I am missing as it would appear that stock markets are overvalued and that QE will need to continue for a long time. Once QE is reduced or stopped you will see a jump in yield and the cost of debt for companies increase leading to a decrease in profitability. when this happens investors will move away from equities and into the debt market as it will offer a better return. Or will it lead to big movements in the FX market as the underlying value of the equities has not increased and what has created the inflation of the asset is an inflow of funds into a currency as investors chase yield.

Wanderer78 · 04-10-2020 2:55pm

Timing belt wrote: »

In an effort to prop up the world economies the central banks have undertaken a massive amount of QE which has resulted in low rates and cheap money in circulation. A lot of this cash has found its way into the stock market which has resulted in the stock markets being valued higher than they were before the Covid Crisis. Are these share valuations based on company profitability or are they overvalued due to the cheap money supply like we have seen before during the dot.com bubble when the fed cut rates. Are the central banks creating a bubble in the stock market as indirect consequence of there efforts to prop up the world economies.

Logic would tell me that a company should be valued more if it has become more efficient or if it is growing its income by increasing sales etc. But I don't think this is the case for most companies at present as can be seen by the numbers that are cancelling dividend payments to shareholders. I don't see how companies can be worth more now that they were before the pandemic started.

I question how their share price is growing? What is the logical basis for the increased valuation in the company? Is it just a case of Greed and people are chasing returns on the stock market like some sort of pyramid scheme when the first in the door make the money and because of this funds need to join in otherwise their return to investors is bellow the market benchmark and they would see there investors pulling out of the funds.

Is there something that I am missing as it would appear that stock markets are overvalued and that QE will need to continue for a long time. Once QE is reduced or stopped you will see a jump in yield and the cost of debt for companies increase leading to a decrease in profitability. when this happens investors will move away from equities and into the debt market as it will offer a better return. Or will it lead to big movements in the FX market as the underlying value of the equities has not increased and what has created the inflation of the asset is an inflow of funds into a currency as investors chase yield.

again, i think terming all of this behavior as 'greed' is too simplistic, even though there is an element of it intertwined, i truly do believe its more complex human behavior than anything. we have created these complex systems and processes, based on the simply principles of, more is good, we have set out the goals of, increasing share holder value is good, no matter what, and the wealth trickles down etc etc, and since money moves to the place of least resistance, this is now what we re experiencing. i also believe the majority of humans working within these processes and systems arent actually truly greedy, but simply are just behaving on the principles above. you have to step outside of the world of logic, and enter the irrational world of human behavior, this is where neoclassical economics collapses.

Timing belt · 04-10-2020 3:50pm

In an effort to prop up the world economies the central banks have undertaken a massive amount of QE which has resulted in low rates and cheap money in circulation.
The EU & UK Stock markets are down year to date but the US Markets are up:

Movement from 31/12/2019 – 30/09/2020
USA
Dow Jones down 2%
S&P 500 up 4%
Nasdaq up 24%

UK
FTSE 100 down 22%
FTSE 250 down 21%

Europe
DAX down 4%
CAC down 20%
ISEQ down 10%
EURONEXT 100 down 16%

The US stock market growth has mainly been in the tech companies whilst other sectors have seen a fall in share price. Yes, tech stocks should be up with the WFH policies being adopted across the world but not to the extent that we are seeing on the stock market. If you look at Apple the share price has risen by 58% between the 31/12/2019 and 30/09/2020. Even allowing for an increase in sales I struggle to see how such a share price can be backed up by the company valuation. But that is a topic that deserves its own thread.

I started looking at this as I wanted to see what correlation there was between QE and the share prices during the pandemic and to see if share valuations were based on company profitability or are they overvalued due to the cheap money supply like we have seen before during the dot.com bubble when the fed cut rates.

Yes share prices have rallied on the back of stimulus by all the world central banks as this has helped boosted investors’ confidence and has also ensured that cash has stayed in the stock market rather than moving to the debt markets chasing yield. The QE has kept yields low in the debt markets but how long can this continue and what happens when QE slows down or stops.

Will we see a big shift in investors selling equities and buying debt due to the increasing yields on new issuances as QE stops or slows down. What happens to the existing debt in issuance will there be massive write downs in valuations as a holder of the bond will have to sell at a discounted rate to compete with the new issuances leading to Market to Market losses on banks balance sheets. Or will it cause liquidity to dry up for these older bonds and if it this is the case can the banks still classify this debt as a liquid asset in their Liquidity coverage ratio calculations.

Lots of questions but the one thing it does point towards is that QE is going to be around for a long time and will need to be unwound very slowly without causing havoc on the markets.

KyussB · 05-10-2020 2:33am

Stock buybacks: Instead of companies putting money from cash and debt into production and R&D, they put it into buying back their own stock and overinflating its value, for purely financial reasons.

It used to be banned - now it's so routine that its dangers are barely ever discussed.

Recession predictions

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