Housing Bubble Bursting

AARRRGH

asdasd wrote: »

I am pretty sure Ireland has an export surplus.

Possibly, but this is because Microsoft and a few other tech companies 'export' their localised software via Ireland.

If these companies leave (which they will) we won't be left with anything.

Japan, on the other hand, don't rely on multi-nationals.

asdasd

If these companies leave (which they will) we won't be left with anything.

Why would they leave?

Japan, on the other hand, don't rely on multi-nationals.

Sure they do. the biggest Japanese companies are multi-nationals.

oceanclub

asdasd wrote: »

Sure they do. the biggest Japanese companies are multi-nationals.

Multi-nationals in Japan tend to be Japanese companies.

Mutlti-nationals in Ireland tend to be non-Irish companies.

P.

asdasd

Multi-nationals in Japan tend to be Japanese companies.

Mutlti-nationals in Ireland tend to be non-Irish companies.

this assumes that multi-nationals have any rootedness whatsoever. In the particular case of Japan, that may be the case. For most multi-nationals that is not the case.

I dont think that MS etc. will leave. Ireland is probably going to get cheaper. The fall in house prices will help keep wages down, at least in the private sector, but the public sector will fall too. That leaves us in a better position.

oceanclub

asdasd wrote: »

this assumes that multi-nationals have any rootedness whatsoever. In the particular case of Japan, that may be the case. For most multi-nationals that is not the case.

Um, this sounds like you're agreeing with me.

P.

asdasd

Um, this sounds like you're agreeing with me.

The claim that multi-nationals are going to leave Ireland is the one I dispute.

AARRRGH

asdasd wrote: »

the biggest Japanese companies are multi-nationals.

Yeah, but they're Japanese multi-nationals who have their HQs in Japan. You cannot compare Irish and Japanese industry. We have... the Kerry Group? They have Sony, Panasonic, Toyota, etc. Basically, hundreds of massive companies which were formed and are based in Japan.

asdasd wrote: »

Why would they leave?

Because multi-nationals always flock to cheaper wages. We are already seeing that happen. If you read the news you will see the multi-nationals which are manufacturing based are already leaving Ireland - it's only a matter of time before the high tech ones do too.

This is globalisation 101. It's only a matter of time.

population

gurramok wrote: »

Seasonal stuff. The summer will tell a truer picture with students looking for their first job as well as those that were working in the education sector will affect it.

Pretty sure they cant sign on till the 12 month calender school year is up though, so it'll be Sept before those numbers kick in

asdasd

This is globalisation 101. It's only a matter of time.

if globalisation really worked like that, all european and Western countries would be in trouble. All ireland has to do is be competitive in Europe.

They have Sony, Panasonic, Toyota, etc. Basically, hundreds of massive companies which were formed and are based in Japan.

thats a quaint view of where muinationals hire people, or where their loyalties lie. And on the one hand you think that all western companies will relocate to cheaper climes, but non-western countries won't.

There is no indication that google etc. are going to leave.

blast05

Because multi-nationals always flock to cheaper wages. We are already seeing that happen. If you read the news you will see the multi-nationals which are manufacturing based are already leaving Ireland - it's only a matter of time before the high tech ones do too.

This is globalisation 101. It's only a matter of time.

So why are the numbers working in silicon valley continuing to increase ? In multinationals in Ireland that engage in strategically important work and that are doing the job in a world class manner, then there is no risk of them moving. Cost is far from the most important consideration in a multinational company doing the job.

Seasonal stuff. The summer will tell a truer picture with students looking for their first job as well as those that were working in the education sector will affect it.

Pedalling of pessimism will be a self fulfilling profacy. Why do we Irish on balance always do things to extremes - drink hard, work hard, play hard, talk things up to extremes during good times and talk them down to equal extremes during bad times.
The reality is the seasonally adjusted trend in the first 4 months of this year has been downwards.
The reality is that April represented the lowest increase in pure numbers since last September.
The reality is that exports from this country have actually been rising as the year has progressed.
My agenda here has nothing to do with property - whatever happens happens - the market will take care of that ..... but for God sake, snap out of the negativity
Question - what are you do to help our country get out of recession ?

Yeah but the difference is the Japanese economy is absolutely huge and they have an enormous amount of home grown industry. They actually produce stuff.

We, on the other hand, have very little.

Japans debt to GDP ratio is 170-190% .... depending on the source. Worst in the G7 by far and the 3rd worst in the world. Combine this with a greater than 10% fall in economic output in Q4 of 2008 and its clear that Japan, with its (many of which are loss making) multinationals or not and with an ageing population and with its private sector debt comaprable to Ireland, is in an even worse position than Ireland .....

gurramok

blast05 wrote: »

Pedalling of pessimism will be a self fulfilling profacy. Why do we Irish on balance always do things to extremes - drink hard, work hard, play hard, talk things up to extremes during good times and talk them down to equal extremes during bad times.
The reality is the seasonally adjusted trend in the first 4 months of this year has been downwards.
The reality is that April represented the lowest increase in pure numbers since last September.
The reality is that exports from this country have actually been rising as the year has progressed.
My agenda here has nothing to do with property - whatever happens happens - the market will take care of that ..... but for God sake, snap out of the negativity
Question - what are you do to help our country get out of recession ?

What do you suggest i do as a citizen to help our country get out of recession?. I've only so much power unless you want me as Taioseach

What are you on about with pessimism!

Its reality that there are circa 60,000 students who will be leaving school, another 50-60,000 who will be leaving college and when you strip out the ones who will go from school to college and those that leave both who will have a job ready for them and those that will emigrate, you are left with a fair portion of them who will be looking for their first job and there won't be any there for them.

Thats a good few thousand in a couple of months hence the seasonal factor which will push the total up again hence i do believe that the unemployment rate slowing down is only temporary.

AARRRGH

asdasd wrote: »

if globalisation really worked like that, all european and Western countries would be in trouble. All ireland has to do is be competitive in Europe.

No.

The difference between Ireland and the rest of Europe is Ireland does not have its own indigenous industries.

For example, France, UK, Germany, Italy, Spain etc. have large economies and many home grown industries.

Ireland has very little. If you remove the multi-nationals we are left with big problems.

asdasd wrote: »

There is no indication that google etc. are going to leave.

I don't see the point of being in denial.

The manufacturing multi-nationals are currently leaving. Why won't the high tech multi-nationals leave? Seriously, think about it logically. It is only a matter of time before they leave. (5 years? 10 years? 20 years? I don't know.)

blast05 wrote: »

So why are the numbers working in silicon valley continuing to increase ?

Because the companies were formed there. The original HQ always survives and grows.

You guys are seriously in denial.

asdasd

The difference between Ireland and the rest of Europe is Ireland does not have its own indigenous industries.

You seem to believe that multi-national companies who can be owned by shareholders around the world are loyal to their own countries, but they have no country. Google is not necessarily owned by Americans. The majority shareholders could be from anywhere.

Because the companies were formed there. The original HQ always survives and grows.

Where's the European HQ?

So Google etc. will pay silicon Valley wages but not Irish wages just out of some kind of patriotism? Why would multi-national groups be patriotic?

Google will stay in Silicon Valley , and in Ireland, for as long as it works for them to do so - and replacing long term Google employees who are not just cognisant of engineering and IT but how Google works in not as trivial as you might think. And in IT in particular, English native speaking - not just fluency - is a pre-requisite.

Dell was nuts and bolts. Google isn't. In any case multi-nationals are not the fly by night chancers portrayed in the media. Apple has been in Cork longer than the Apple Macintosh has been in existence. Cork produced the Apple II which was the first PC, ahead of the IBM PC by half a decade . It is still there.

Far from this recession making us weaker, it has the chance to make us stronger. When the dust settles, and housing is cheaper, we can be cheaper again and yet have more take home pay. Attracting people becomes easier too.

And most importantly, exports are increasing during a bust.

I liked this thread when it was pessimistic about house prices - that's realism. The utter unmitigated beal bocht pessimism would piss off a saint, and has no basis in reality.

oceanclub

asdasd wrote: »

You seem to believe that multi-national companies who can be owned by shareholders around the world are loyal to their own countries, but they have no country. Google is not necessarily owned by Americans. The majority shareholders could be from anywhere.

Please name a single multi-national that has left its country of origin.

P.

asdasd

There are 100's of companies with corporate HQ's in tax benefical States not of the country of origin.

There are, of course, plenty of Chinese and Japanese companies with employees worldwide, something that just could not happen in the globalised worldview of companies always and everywhere looking for cheaper labour.

By the way rather than whining and pissing n moaning with the beal bocht claptrap join one of Ireland's startups or create an indigenous industry youself. One of the benefits of this bust - as G. Fitzgerald pointed out a few weeks ago in the IT - is that reserve capital will go into something other than property since property is such a bust. Hopefully Venture Capital. The government should help there by matching funds.

AARRRGH

asdasd wrote: »

rather than whining and pissing n moaning with the beal bocht claptrap join one of Ireland's startups or create an indigenous industry youself.

This sums up your way of thinking.

Ridiculous!

Living in denial must be nice.

oceanclub

asdasd wrote: »

One of the benefits of this bust - as G. Fitzgerald pointed out a few weeks ago in the IT - is that reserve capital will go into something other than property since property is such a bust.

What reserve capital? A startup I used to work for (yeah, I know, shocking, you're expect a "whiner" like me never to have worked for one, never mind too) just folded because no-one is loaning any money. Where do you think this investment money is going to come from - people selling shares, or people selling property?

P.

asdasd

Ridiculous!

Living in denial must be nice.

Living in beal boct ochon we're all f*cked pessimism must be horrendous, but it seems to suit you.

AARRRGH

I have also worked for a startup, and I'm also an entrepreneur.

I just happen to like to live in the real world, i.e. our economy is ****ed, and when the multi-nationals leave we'll we welcoming mass emigration with open arms.

I don't see the point in trying to delude yourself from the facts. Yes, living in denial might be a happier place, but it's not reality.

asdasd

A startup I used to work for (yeah, I know, shocking, you're expect a "whiner" like me never to have worked for one, never mind too) just folded because no-one is loaning any money. Where do you think this investment money is going to come from - people selling shares, or people selling property?

It wlll come from people with reserve money, or banks who need to lend, who used to invest in property now investing in business. It does need capital to start flowing again of course.

Or put it this way, most of the reserve capital - in banks, private investors, pension funds used to go to property. It can now go somewhere useful.

asdasd

and when the multi-nationals leave we'll we welcoming mass emigration with open arms.

Isn't the when in dispute? As far as I know the newsest kid on the block - FaceBook - has moved in.

Calina

asdasd wrote: »

It wlll come from people with reserve money, or banks who need to lend, who used to invest in property now investing in business. It does need capital to start flowing again of course.

Or put it this way, most of the reserve capital - in banks, private investors, pension funds used to go to property. It can now go somewhere useful.

This reserve money is not just lying around. Therein lies the problem. Banks don't need to lend. They don't have the funds to do so right now. A lot of the reserve capital that went into property is largely being written off because property has crashed.

Capital needs to start flowing. There just isn't very much of it around and so banks are being recapitalised right left and centre by governments because they have no money to lend. We know capital needs to start flowing but the capital isn't there right now.

oceanclub

asdasd wrote: »

Living in beal boct ochon we're all f*cked pessimism must be horrendous, but it seems to suit you.

One man's pessismism is another's realism.

Having been told I was a pessismist before for arguing against the bubble lasting for another 10 years, I'll take your insults with a pinch of salt.

P.

AARRRGH

asdasd wrote: »

Isn't the when in dispute? As far as I know the newsest kid on the block - FaceBook - has moved in.

I'm not at all trying to say Microsoft etc. will leave in the next 12 months.

I am saying we rely so heavily on foreign investment that when that investment leaves (and it definitely will leave at some stage) we won't be left with very much.

Btw I currently work for a multi-national, and have worked for a few others, e.g. Microsoft, Oracle, and AOL. I am not anti multi-national.

asdasd

Ok fair enough. We agree to disagree. I think that we are in a good position to come out of this precisely because real living costs are falling.

Having been told I was a pessismist before for arguing against the bubble lasting for another 10 years,

Interestingly enough I was a total pessimist for the last 5 years. My siblings and ( most) friends thought me mad. I stayed out of the housing market. I now feel that the cost of this recession, in Ireland and elsewhere, is being over-exaggerated by the very people who, in real life if not on these forums, were the most optimistic during the boom.

I get strange looks now when I suggest that the Irish economy is not going back to the 1930's.

ntlbell

AARRRGH wrote: »

I'm not at all trying to say Microsoft etc. will leave in the next 12 months.

I am saying we rely so heavily on foreign investment that when that investment leaves (and it definitely will leave at some stage) we won't be left with very much.

Btw I currently work for a multi-national, and have worked for a few others, e.g. Microsoft, Oracle, and AOL. I am not anti multi-national.

There was a spokesman for Microsoft on George Hook there about 6 months ago and he stated they wouldn't think twice about leaving in Ireland and could do it within a very short space of time (he was irish) and will do it at the drop of a hat if circumstances call for it.

he didn't really go into what those circumstances were

gurramok

asdasd wrote:

Interestingly enough I was a total pessimist for the last 5 years. My siblings and ( most) friends thought me mad. I stayed out of the housing market. I now feel that the cost of this recession, in Ireland and elsewhere, is being over-exaggerated by the very people who, in real life if not on these forums, were the most optomistic during the boom.

I get strange looks now when I suggest that the Irish economy is not going back to the 1930's.

So how do you expect the public finances to be fixed?

And where will all those lost jobs in construction related activities(construction, banking, retail) including the 300,000 due to be lost by the end of 2010(esri prediction) to come from? (Calina answered this)

Where will the investment come from considering we are hugely overpriced?

"'Historic low' for mortgages in March"
http://www.rte.ie/business/2009/0430/credit.html

Where was all this magic activity that was reported here by a couple of posters.?

Where they on magic mushrooms?

asdasd

gurramok.

The engine in Irish growth recently was housing. Prior to that it was export led growth in real jobs which is the way we have to fix this. does that mean lower wages, yes it does.

Not a big deal if the country is in deflation.

The public finances are not the hole people think. Capital projects run at 31Bn a year. There is no need to cut all of that since there is no need to run a surplus during a recesssion.

blast05

Because the companies were formed there. The original HQ always survives and grows.

You guys are seriously in denial.

Thats bullsh*t.
The multinational i work for (which has been based in Ireland for over 40 years) has over the last 18 months set up a base in Silicon Valley and now employs over 1800 people there. Why did they do that - cos its strategically important to have a base there.
Strategic importance is also the key phrase for all multinationals in Ireland. The one i work for has received 2 additional mandates of responsibility over the last 6 months (and we are R&D so no beneift gained from 12.5% corporation tax) which has opened up much greater degrees of opportunity and given us much much greater degrees of responsibility. Cost is not the only factor - if you continue to do the job in world class manner and your costs are not off the rictor scale (and you are seen to do everything in your power to control costs) then the work is going no where.

ambro25

ntlbell wrote: »

There was a spokesman for Microsoft on George Hook there about 6 months ago and he stated they wouldn't think twice about leaving in Ireland and could do it within a very short space of time (he was irish) and will do it at the drop of a hat if circumstances call for it.

he didn't really go into what those circumstances were

Any upward changes in the corporate tax rate and/or suppression of the IP-friendly tax incentives (which other EU countries have repeatedly nagged the EU Commission about), for instance introduced as part of measures to top up the public coffers.

These were the main drivers behind the localisation of foreign groups based on IP exploitation (software, biotech), and, to an extent still are ...for now.

The second Luxembourg (in particular) drops their corporate tax rate to more-or-less match Ireland's, and M$, Google etc. will all vanish at that "drop of the hat" you mentioned.

The country

• already includes the European HQ of most such 'multinational organisations' (refer earlier posts querying where in Europe are they? that's where) for generally more beneficial fiscal reasons,
• already has the infrastructure which Ireland has been so slow to grow and still painfully does, and
• has a comparable abundance of highly skilled, multilingual and low-paid (relative to Ireland) service sector employables (picked from the local populace, and neighbouring France, Belgium and Germany).

I'd be in Cowen's shoes, I'd be keep very close tabs on Juncker's next moves