Recession predictions

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 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

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

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 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.

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

https://www.irishexaminer.com/business/economy/arid-40027091.html

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

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 wrote: »

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

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

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 wrote: »

Trump may not be there come Dec

January

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

What difference does it ever make.