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What will the economy look like in 6 months time?

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    #332
    Geuze
    Registered Users Posts: 13,108 ✭✭✭✭Geuze


    Wanderer78 wrote: »
    agree and disagree, we currently have no options but to print money, its either that, or lots of people are gonna die from this virus and possibly from starvation

    Can I ask you exactly what do you mean by "print money"?

    Do you mean quantitative easing/asset purchases, or something else?


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    #333
    dresden8
    Registered Users Posts: 3,289 ✭✭✭dresden8


    As usual.

    The rich will be richer. the poorer will be poorer.

    #guillotine 2020


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    #334
    Geuze
    Registered Users Posts: 13,108 ✭✭✭✭Geuze


    Wanderer78 wrote: »
    Helicopter money goes directly into citizens bank accounts, bypassing the financial sector altogether, which I personally think just molestes money coming from central banks, eventually trickling down as our debts. I know the yanks are currently considering this, but I'm not aware if they've recently tried it, Hong Kong have, sounds like it's worked reasonably well

    Please note that the Hong Kong example is not "helicopter money".

    The HK case is a fiscal policy, where the Govt give people a social transfer payment, to be financed by Govt savings and/or a tax rise.

    As they don't have their own monetary policy, therefore they can't create extra money.

    Please note that "helicopter money" refers to the central bank creating money.


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    #335
    Pa ElGrande
    Registered Users Posts: 3,496 ✭✭✭Pa ElGrande


    snoopboggybog wrote: »
    For IT I think many companies will start pricing up the cost of having someone on site with physical hardware or start moving everything to the cloud with a centralized team, virtualized desktops etc where is can be easily managed.

    Cloud computing is going to kick off big time when this is over for a lot of companies.

    They have already been doing that, however there are limits and the pricing plans will change in future once they have all your business. There are also legal risks in compliance and liability to overcome so its not a straightforward consideration. Also the surge in demand has exposed infrastructure capacity constraints.


    European users reporting they're hitting Azure capacity constraints

    Microsoft Azure customers reporting hitting virtual machine limits in U.S. East regions

    Net Zero means we are paying for the destruction of our economy and society in pursuit of an unachievable and pointless policy.



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    #336
    Geuze
    Registered Users Posts: 13,108 ✭✭✭✭Geuze


    Wanderer78 wrote: »
    central bank money is now being offered at negative rates, its effectively free money, yes the principle will need to be repaid, but we d be mad not to accept this money now

    There seems to be a suggestion here that central banks lend to Govts?

    The ECB does not lend to Govts. That is illegal, and never happens.


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    #337
    ITman88
    Registered Users Posts: 876 ✭✭✭ITman88


    Balf wrote: »
    I don't see it quite as bleak as that, but I expect recovery will take years.

    I'm not sure there will be a medical boom. Many countries have already reached the limit of what they can spend on healthcare, driven by older populations. And now there will be even less money, so healthcare will have to constrain itself, too.

    I really believe there will be no boom in the pharma sector and some of the jobs would be at risk. Some of the salaries available in the pharma sector are grossly inflated in this country.

    The point about the old population is something that doesn’t often get mentioned but it’s becoming a huge issue for some countries in the continent.

    There is no solution for it, but it’s becoming an issue with heatlhcare costs, pensions etc.


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    #338
    nthclare
    Banned (with Prison Access) Posts: 3,316 ✭✭✭nthclare


    ITman88 wrote: »
    I really believe there will be no boom in the pharma sector and some of the jobs would be at risk. Some of the salaries available in the pharma sector are grossly inflated in this country.

    The point about the old population is something that doesn’t often get mentioned but it’s becoming a huge issue for some countries in the continent.

    There is no solution for it, but it’s becoming an issue with heatlhcare costs, pensions etc.

    Like a line out of Clockworkorange lol

    Reading between the lines its like a narcissistic diary or sociopathic mind process...

    Best post in ages lol


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    #339
    AllForIt
    Registered Users Posts: 8,299 ✭✭✭AllForIt


    If this is not brought to a head within the next 3 months, then not only will the cure be somewhat worse than the virus but it will be hundreds of times worse.


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    #340
    ITman88
    Registered Users Posts: 876 ✭✭✭ITman88


    nthclare wrote: »
    Like a line out of Clockworkorange lol

    Reading between the lines its like a narcissistic diary or sociopathic mind process...

    Best post in ages lol

    Immature derailing of a thread.

    No need for the moral high ground yet again.


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    #341
    McGiver
    Registered Users Posts: 4,426 ✭✭✭McGiver


    Snow Garden wrote:
    Fair point. It was 8% in 2012 but is down to 6.2% in 2018.

    Recalculate to % GNI, otherwise it's useless.
    GDP also contains tax haven stuff, in fact 40% of Irish GDP contains that. GDP should not be used for any metrics otherwise it will give BS results due to the above and the EU, OECD and IMF font use it exactly for that reason either.

    Recalculated to GNI it is 10.50%.


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    #342
    lalababa
    Registered Users Posts: 1,726 ✭✭✭lalababa


    mariaalice wrote: »
    For a while, a lot of the froth will go businesses that depend on personal services or businesses that depend on trends or fashion, bubble tea, being one example trendy and expensive bars and restaurants or food experiences, traditional pubs will come back. Anything that depends on a wealthy urban lifestyle will be hit, up side of that is drugs like cocaine could take a massive hit.

    The issue is that such businesses support a lot of employment directly and a wider ecosystem of employment in businesses such as accountancy practices and legal practices.

    Construction will come back quickly, pharmaceuticals and health care will be booming.

    Some businesses will close down and owners retired soon that they have wanted to.

    The property market will take a temporary hit but nobody will be getting a red brick in Ballsbridge for peanuts.

    A lot depends on how long it goes on for and what happens in the rest of the world.

    I think this sounds about right. TBO I'd say almost everything will be back gung ho around October. There is plenty of money in Ireland. People will want to spend money. Apart from the total wipe out of this years tourist season ( that's 10 million visitors) this is just a temporary contraction of a bordering on overheating economy. Could probably do us some good before we were to lose the run of ourselfs.


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    #343
    Die Hard 2019
    Closed Accounts Posts: 362 ✭✭Die Hard 2019


    AllForIt wrote: »
    If this is not brought to a head within the next 3 months, then not only will the cure be somewhat worse than the virus but it will be hundreds of times worse.

    The decision has been made that the old and vunerable are more important than the economy. The reverse would be the deaths of 600,000,000 (six hundred million) people that could be attributed to the virus .


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    #344
    Xertz
    Closed Accounts Posts: 1,069 ✭✭✭Xertz


    I think this one is extremely hard to predict.

    Ireland’s not as exposed as some countries are due to the mix of industries we have here being very tilted towards pharma, IT and finance etc.

    The domestic economy will have taken a rather serious hammering though and what will matter there is speed of recovery.

    However, the layoffs haven’t happened because of lack of money, but because of the temporary shut down of businesses. It the remainder of the economy and any fiscal stimulus has sufficient power to kick start things again, we might be doing fairly ok relatively rapidly.

    The big incalculable is the global economy. I think the EU countries will probably pull through OK but it may be a bumpy year or two.

    You could see a huge issue in developing economies that don’t have the infrastructure or perhaps the stability to deal with this.

    When you think about it we are in an extremely lucky position both having the financial ability, the stability of the Euro and also the political stability across all parties to be able to pull this off.

    A lot of countries would buckle either economically or politically far sooner. Even the US is arguably politically unstable and could suffer serious consequences as a result not of a lack of finances or economic might, but because they are melting into a political turmoil that is damaging their ability to respond.

    The EU can be slow to act because of its complex structures but it is acting. Whether it will be enough and quickly enough is another question.


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    #345
    Yurt2
    Registered Users Posts: 9,381 ✭✭✭Yurt2


    Geuze wrote: »

    As they don't have their own monetary policy, therefore they can't create extra money.

    Hong Kong has its own independent central bank in the guise of the Hong Kong Monetary Authority. They of course have their own monetary policy and they act independently of Beijing (as per the Basic Law of Hong Kong).

    They operate a peg with the US dollar (within a certain band), but that's entirely at the monetary authority's option. Usually they set interest rates broadly in line with the Fed.


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    #346
    Yurt2
    Registered Users Posts: 9,381 ✭✭✭Yurt2


    Xertz wrote: »

    Ireland’s not as exposed as some countries are due to the mix of industries we have here being very tilted towards pharma, IT and finance etc.

    I'd argue the exact opposite actually, we're uniquely exposed to a global downturn and always have been. When the global economy does well, our economy starts hulking up, when things are bad, they get very bad indeed for us.

    We don't have a particularly large domestic economy and our monetary policy is outsourced to Frankfurt. Major changes in that tend to suit core economies and not the peripheral ones like Ireland.


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    #347
    AllForIt
    Registered Users Posts: 8,299 ✭✭✭AllForIt


    Die Hard 2019 wrote: »
    The decision has been made that the old and vunerable are more important than the economy. The reverse would be the deaths of 600,000,000 (six hundred million) people that could be attributed to the virus .

    Only time will tell if this is actually correct.


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    #348
    Xertz
    Closed Accounts Posts: 1,069 ✭✭✭Xertz


    Yurt! wrote: »
    I'd argue the exact opposite actually, we're uniquely exposed to a global downturn and always have been. When the global economy does well, our economy starts hulking up, when things are bad, they get very bad indeed for us.

    We don't have a particularly large domestic economy and our monetary policy is outsourced to Frankfurt. Major changes in that tend to suit core economies and not the peripheral ones like Ireland.

    Even during the 2008 downturn it wasn’t the MNCs who were cutting employment in Ireland, it was the domestic economy driven by a construction collapse that hammered us.

    The mix of inward investment here, other than perhaps Apple, isn’t that consumer market focused. It’s healthcare and IT disruptive companies and infrastructure providers.

    The domestic economy tanking is precisely what caused the last recession. We were impacted because we had a flow of borrowing, running into the Irish banks, driving construction which was driving growth. When that dried up, we hit a brick wall.

    The economy isn’t as dependent on construction and mortgage lending now. It’s vulnerable to other shocks though but I still think we might be able to dodge the worst of this, if the fiscal injection from the European stimulus for the coronavirus is powerful enough.

    If we had IEP I think we would have struggled to maintain any peg and would have had very high inflation risks, with massive dependence on buying in goods and services denominated in Euro or USD. Not to mention external debt in hard currency.

    Energy costs being low at the moment may also be globally beneficial.

    I think the biggest risk actually could be US knee jerk protectionism attempting to pull pharma and biotech back out of Ireland. If that happens and FDI dries up, we’re in big trouble.

    I think though it’s mostly bluster and these companies are genuinely multinational, so US powers have limits.


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    #349
    Yurt2
    Registered Users Posts: 9,381 ✭✭✭Yurt2


    Certain pharma and med device MNCs may well be spared the worst as we'll likely see countries investing huge amounts in health during and after this.

    The other sectors I wouldn't be so optimistic about.

    Our MNCs were shedding jobs during the last recession, particularly in the early phases of it.

    They key difference between then and now is that the last time out, there was still centres of growth in the world economy, the crisis more or less bypassed East Asia (very limited effects on the major economies there).

    This time out the whole world is suffering at the same time.


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    #350
    Snow Garden
    Banned (with Prison Access) Posts: 3,126 ✭✭✭Snow Garden


    McGiver wrote: »
    Recalculate to % GNI, otherwise it's useless.
    GDP also contains tax haven stuff, in fact 40% of Irish GDP contains that. GDP should not be used for any metrics otherwise it will give BS results due to the above and the EU, OECD and IMF font use it exactly for that reason either.

    Recalculated to GNI it is 10.50%.

    Thanks, I did hear many times before that it was around 10%.


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    #351
    Snow Garden
    Banned (with Prison Access) Posts: 3,126 ✭✭✭Snow Garden


    Xertz wrote: »
    I think the biggest risk actually could be US knee jerk protectionism attempting to pull pharma and biotech back out of Ireland. If that happens and FDI dries up, we’re in big trouble.

    I think though it’s mostly bluster and these companies are genuinely multinational, so US powers have limits.

    Very good point. Trump made a reference to this in relation to ventilators.

    https://www.rte.ie/news/2020/0318/1123803-us-coronavirus/
    US President Donald Trump has said Ireland is "a very tremendous producer" when it comes to US pharmaceutical companies based in Ireland.

    Mr Trump was answering a question about access to medical devices at his daily coronavirus briefing.

    "Ireland does a lot of work for us in that world, in the pharma world. A very tremendous producer," he said.

    "We are looking to bring a lot more back home."


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    #352
    enricoh
    Registered Users Posts: 4,842 ✭✭✭enricoh


    Over 500k have joined the dole in the last 2 weeks, bringing the total to over 700,000. Jesus, that is grim.
    Good luck to whoever makes up the next government, it's going to be a thankless task. Fair play to whoever steps up, it'll be an awful lot easier to be a hurler on the ditch!


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    #353
    AlmightyCushion
    Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,056 Mod ✭✭✭✭AlmightyCushion


    enricoh wrote: »
    Over 500k have joined the dole in the last 2 weeks, bringing the total to over 700,000. Jesus, that is grim.
    Good luck to whoever makes up the next government, it's going to be a thankless task. Fair play to whoever steps up, it'll be an awful lot easier to be a hurler on the ditch!

    What unemployment rate are we at now. Must be near 25%. That is horrendous.


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    #354
    Eric Cartman
    Registered Users Posts: 26,282 ✭✭✭✭Eric Cartman


    Over 700k of the 2.2 million labour force now on the payment, that doesnt even take into account various government supports to businesses paying their staff that way, the government is effectively supporting over 1/3rd of the labour force and at a rate of almost double the dole during recession. If this goes on much longer we’ll be in a serious financial hole.

    The ‘emergency’ tax they bring in to fix this is going to be an absolute kick in the face and balls to those who return to work.


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    #355
    leavingirl
    Registered Users Posts: 548 ✭✭✭leavingirl


    Debenhams gone into administration in the UK. It's only beginning.


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    #356
    leavingirl
    Registered Users Posts: 548 ✭✭✭leavingirl


    Eric Cartman wrote: »
    Over 700k of the 2.2 million labour force now on the payment, that doesnt even take into account various government supports to businesses paying their staff that way, the government is effectively supporting over 1/3rd of the labour force and at a rate of almost double the dole during recession. If this goes on much longer we’ll be in a serious financial hole.

    The ‘emergency’ tax they bring in to fix this is going to be an absolute kick in the face and balls to those who return to work.

    The emergency tax will be the least of your worries.


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    #357
    Pa ElGrande
    Registered Users Posts: 3,496 ✭✭✭Pa ElGrande


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


    Leveraged commercial property. Rossman makes a fair point that the value of the rent is based on what it brings in. With no customers passing the value of the space falls especially as the cash flow for the businesses has dried up, no rent can be paid and teh leveraged landlords are in trouble. There is payment failure up along the chain that probably works its way into pension funds eventually.

    Also bear in mind availability of goods via the internet via courier has been slowly chipping away at high street and shopping center stores over the past few years. This may well be the final death knell for some of the marginal hangers on, expect downwards trajectory for much commercial property as regards yields.

    Net Zero means we are paying for the destruction of our economy and society in pursuit of an unachievable and pointless policy.



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    #358
    LuasSimon
    Closed Accounts Posts: 1,208 ✭✭✭LuasSimon


    Eric Cartman wrote: »
    Over 700k of the 2.2 million labour force now on the payment, that doesnt even take into account various government supports to businesses paying their staff that way, the government is effectively supporting over 1/3rd of the labour force and at a rate of almost double the dole during recession. If this goes on much longer we’ll be in a serious financial hole.

    The ‘emergency’ tax they bring in to fix this is going to be an absolute kick in the face and balls to those who return to work.

    will it just be an increase in the USC , the top rate 8% to 12% ??

    Its only over 70K this rate kicks in , id imagine its anyone earning over 70K that will feel the most pain


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    #359
    FVP3
    Closed Accounts Posts: 1,187 ✭✭✭FVP3


    With regards to IT, we have lucked out in that a lot of our big name IT companies are online behemoths and very few will be affected by any slowdown, perhaps the opposite when people are locked in. Google, Facebook and Amazon have no reason to lose customers, meanwhile they have employees earning money but not spending, leading to a potential pent up demand which could help kickstart the economy.
    will it just be an increase in the USC , the top rate 8% to 12% ??

    Its only over 70K this rate kicks in , id imagine its anyone earning over 70K that will feel the most pain

    My bet is most of the borrowing will be monetised.


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    #360
    Kivaro
    Closed Accounts Posts: 4,105 ✭✭✭Kivaro


    AlmightyCushion wrote: »
    What unemployment rate are we at now. Must be near 25%. That is horrendous.
    We are above it and 2 months ahead already of the estimated rate i.e. they were not expecting this rise for another 2 months.


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    #361
    Yurt2
    Registered Users Posts: 9,381 ✭✭✭Yurt2


    FVP3 wrote: »
    With regards to IT, we have lucked out in that a lot of our big name IT companies are online behemoths and very few will be affected by any slowdown, perhaps the opposite when people are locked in. Google, Facebook and Amazon have no reason to lose customers, meanwhile they have employees earning money but not spending, leading to a potential pent up demand which could help kickstart the economy.



    My bet is most of the borrowing will be monetised.

    98% of Facebook's revenue comes from advertising, Google's is 83%.

    In the mother of all bear economies, these guys are in trouble too.


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