When will the property market bottom out?

ntlbell · 02-07-2009 1:15pm

20goto10 wrote: »

you're right, it's possible. I might win the lotto or get struck by lightening. Pigs might fly too.

if you're not going to bother to discuss the points made and instead make stupid remarks

why bother?

20goto10 · 02-07-2009 1:26pm

ntlbell wrote: »

if you're not going to bother to discuss the points made and instead make stupid remarks

why bother?

The argument is stupid so you're going to have to expect smart comments. Are you seriously suggesting that the rest of the world will recover, the Euro economy in particular, and Ireland will be left behind in its own little Uber-recession? It's nonsense. We've been hit harder than others thats for sure and we'll lag behind in a recovery. Thats all. But to suggest that we will still be fiddling around with our taxes while the ECB are hiking interest rates is utter nonsense.

El Stuntman · 02-07-2009 1:27pm

20goto10 wrote: »

The argument is stupid so you're going to have to expect smart comments. Are you seriously suggesting that the rest of the world will recover, the Euro economy in particular, and Ireland will be left behind in its own little Uber-recession? It's nonsense. We've been hit harder than others thats for sure and we'll lag behind in a recovery. Thats all. But to suggest that we will still be fiddling around with our taxes while the ECB are hiking interest rates is utter nonsense.

one word: Japan

ntlbell · 02-07-2009 1:35pm

20goto10 wrote: »

The argument is stupid so you're going to have to expect smart comments. Are you seriously suggesting that the rest of the world will recover, the Euro economy in particular, and Ireland will be left behind in its own little Uber-recession? It's nonsense. We've been hit harder than others thats for sure and we'll lag behind in a recovery. Thats all. But to suggest that we will still be fiddling around with our taxes while the ECB are hiking interest rates is utter nonsense.

The points are very clear and as usuall when you can't come up with an educated response you fire back with some moronic smart comments.

euro economic recovery != ireland's recovery

ECB interest hikes will not be based around ireland's recovery

is this really that hard to understand?

can you explain why euro recovery will = ireland's recovery?

considering international investment has practically disappeared and this dropped off long before the recession.

We don't seem to be anything in the way of job generation.

our whole economy was based on a property bubble borrowing from germany and selling houses to each other?

can you point to any inidcator's that the current goverment are doing to get into a situation to take advantage of any recovery?

all the above would be much apreciated rather than idiotic comments.

gurramok · 02-07-2009 1:41pm

20goto10 wrote: »

The argument is stupid so you're going to have to expect smart comments. Are you seriously suggesting that the rest of the world will recover, the Euro economy in particular, and Ireland will be left behind in its own little Uber-recession? It's nonsense. We've been hit harder than others thats for sure and we'll lag behind in a recovery. Thats all. But to suggest that we will still be fiddling around with our taxes while the ECB are hiking interest rates is utter nonsense.

Before the Eurozone, Ireland went through a recession while the world economy boomed, that was the 80s as a result of bad domestic policy.

Presently and into the future there will be a time lag between when ECB rates go up and when Ireland's economy actually starts growing again hence the grief of mortgage holders down the line.

Do you understand this simple statement?

20goto10 · 02-07-2009 1:53pm

ntlbell wrote: »

can you explain why euro recovery will = ireland's recovery?

Because we are Europe. When someone says the European economy is out of recession that means us too. Now when you want to break it down into individual countries there will be some who lag behind the majority. I agree, Ireland will be one of those. You're talking as if we are a separate economy who has its rates controlled by an outside force. That's the nonsense I'm talking about.

ntlbell wrote: »

We don't seem to be anything in the way of job generation.

Are we alone in that?

ntlbell wrote: »

our whole economy was based on a property bubble borrowing from germany and selling houses to each other?
.

Not true. We have 12% unemployment, the majority of which is connected to property in some way. It's hardly our whole economy. The problem is the lucky 88% have stopped spending money.

20goto10 · 02-07-2009 1:54pm

El Stuntman wrote: »

one word: Japan

Fair point. But you cannot say that about Ireland within the EU.

gurramok · 02-07-2009 1:58pm

20goto10 wrote: »

Because we are Europe. When someone says the European economy is out of recession that means us too. Now when you want to break it down into individual countries there will be some who lag behind the majority. I agree, Ireland will be one of those. You're talking as if we are a separate economy who has its rates controlled by an outside force. That's the nonsense I'm talking about.

You begin to understand with the first few lines of why there is trouble ahead and then contradict yourself about a non-existent outside force.

Outside force is ECB which will hike rates to suit the majority of the Eurozone, understand?

20goto10 · 02-07-2009 2:00pm

gurramok wrote: »

You begin to understand with the first few lines of why there is trouble ahead and then contradict yourself about a non-existent outside force.

Outside force is ECB which will hike rates to suit the majority of the Eurozone, understand?

Like I said, there's always a possiblity. But the reality is they cannot hike rates until everyone has their sh!t in order. We are not a separate entity, understand?

oceanclub · 02-07-2009 2:03pm

20goto10 wrote: »

Because we are Europe. When someone says the European economy is out of recession that means us too.

Umm, so you think its some kind of economic law that all parts of Europe have even growth and unemployment rates?

P.

D3PO · 02-07-2009 2:04pm

20goto10 wrote: »

Like I said, there's always a possiblity. But the reality is they cannot hike rates until everyone has their sh!t in order. We are not a separate entity, understand?

oh my ribs are hurting. Classic quote of the week.

Lets face it the ECB = The German central bank lets not kid ourselves to think otherwise.

German & French upturn in their economy with inflation returning to higher levels = interest rate hike no matter what kind of crap we are in in this country.

its called proportional representation. Largest countries regarding GDP indicate what happens in the Eurozone. The same way if we had hyperinflation in ireland rigth now would not cause rates in europe to rise

El Stuntman · 02-07-2009 2:06pm

20goto10 wrote: »

Like I said, there's always a possiblity. But the reality is they cannot hike rates until everyone has their sh!t in order. We are not a separate entity, understand?

heh, zey vill hike ze rates ven ze Fuhrer ze Bundesbank tells them to!

spockety · 02-07-2009 2:08pm

20goto10 wrote: »

Like I said, there's always a possiblity. But the reality is they cannot hike rates until everyone has their sh!t in order. We are not a separate entity, understand?

I think the reality is more like they can and will hike rates if continued low interest rates would be damaging to the behemoth economies of Europe who have recovered and are experiencing inflationary pressures.

They will not wait for Ireland. I'm not sure why you think they will?

D3PO · 02-07-2009 2:08pm

El Stuntman wrote: »

heh, zey vill hike ze rates ven ze Fuhrer ze Bundesbank tells them to!

I think your wrong here Stunt

flow is more like

Merkle --> Bundesbank --> ECB

El Stuntman · 02-07-2009 2:12pm

if 20goto10's argument held water, then it would stand to reason that rates should have about 10% in 2002-2007 in order to dampen overheated demand in Ireland

strangely enough, the opposite happened

hmmmm

bangersandmash · 02-07-2009 2:20pm

20goto10 wrote: »

But the reality is they cannot hike rates until everyone has their sh!t in order. We are not a separate entity, understand?

I would love to hear the reaction of the average German citizen when told that their own recovery will be impeded until the 1% of the EU population living on an island on the periphery of Europe have sorted out the mess they have created. I'm sure they will be more than happy to wait the many years it will take for us to do so.

Also don't underestimate the strong negative image that Ireland has recently cultivated in the EU. Our anti-Lisbon vote and the feckless mismanagement of our finances has had a significant negative impact. I think you will find little sympathy for the plight of Irish borrowers in France or Germany.

20goto10 · 02-07-2009 2:21pm

They'll hike rates when inflation gets too high. Will there be high inflation in Europe while Ireland is still in recession? It's nonsense. I'm not saying we're something special and the ECB will hang around until we give the nod to hike rates. I'm saying the chances of everyone else imporving while we go in the opposite direction is not going to happen. As was pointed out, there is a possibilty, but nothing worth debating.

D3PO · 02-07-2009 2:28pm

20goto10 wrote: »

They'll hike rates when inflation gets too high. .

you clearly know more than others. You should work as an advisor to the banks who have already priced in interest rate hikes expected in 2 quarters time. they clearly are wrong along with the multiple economists that also believe rate hikes will kick in q1 of next year.

spockety · 02-07-2009 2:28pm

20goto10 wrote: »

They'll hike rates when inflation gets too high. Will there be high inflation in Europe while Ireland is still in recession? It's nonsense. I'm not saying we're something special and the ECB will hang around until we give the nod to hike rates. I'm saying the chances of everyone else imporving while we go in the opposite direction is not going to happen. As was pointed out, there is a possibilty, but nothing worth debating.

Can you explain what action is going to be taken in Ireland in the next few years to decouple us from our previous over-reliance on the entire property/construction industry (at one point, accounting for 25% of our economy and tax take), and how this will be achieved to such a degree as to minimize the impact of our continuing payment for those mistakes (NAMA, bailout, etc.) , so that we can enjoy an economic recovery that is adequately in line with the rest of Europe so as to mean that ECB interest rate increases will not have any major impact on the monthly outgoings of your average Irish mortgage holding citizen?

oceanclub · 02-07-2009 2:29pm

20goto10 wrote: »

I'm saying the chances of everyone else imporving while we go in the opposite direction is not going to happen..

How old are you - 18? Do you have even the barest knowledge of the economic history of this country before you come out with this twaddle?

P.

The_Conductor · 02-07-2009 2:33pm

20goto10 wrote: »

Like I said, there's always a possiblity. But the reality is they cannot hike rates until everyone has their sh!t in order. We are not a separate entity, understand?

We are not a seperate entity, no. We are however less than 1% of the Eurozone- and whether we like it or not- economic and financial policy, as set by the ECB, is based on the majority principle. This is why Ireland, Portugal, Spain, Italy and Greece are in such trouble- the low interest rate regime was not suitable to the economic stages our economies were in- in the early years of this decade. It is also why the money markets have already priced a .5% increase in ECB rates into the rates quoted for Q2 2010. Yes- its guess work on the part of the financial markets- but its educated guess work by the people who are moving money around the place- not crystal gazing by Jack and Jill in Lucan Co. Dublin......

It is not the case that the Eurozone will wait until everyone 'has their sh!t in order'- they will wait until the time is appropriate for the major economies of the Eurozone- and even then it will be France and Germany who dictate policy- not Spain, Italy or any other economic wannabees. Everyone else is along for a bumpy ride.

The_Conductor · 02-07-2009 2:47pm

20goto10 wrote: »

They'll hike rates when inflation gets too high.

At the moment- the Eurozone is actually in a deflationary situation. By your rationale- rates should in fact be further lowered. What is actually happening is a process known as quantitative easy- where the ECB is injecting an additional 440 billion into the financial system via the purchase of senior secured sovereign debt. If inflation rates became too high- they simply have to restrict the supply of money- interest rate policy is one manner of doing this- but similar to their current exercise- they can simply sell debt onto the market- removing liquidity. They will not necessarily do this- but it is a weapon in their arsenal.

Further- it is simply not the case that the ECB will 'hike rates' when inflation gets too high. They have a set target for inflation- 1.85-2% and their policies are supposed to reflect an indefinite inflation rate in this target zone. Once it goes over 2% (which is not high by Irish standards)- the impetus is on to increase rates.

20goto10 wrote: »

Will there be high inflation in Europe while Ireland is still in recession? It's nonsense.

As per the above- there doesn't have to be high inflation in Europe for the ECB to hike rates. Stated policy is normalisation of rates to 4-4.5% in a 3-4 year period. This is the historical 'normal' interest rate in the Eurozone- and is actually something the governing council have as a target- not a stick they intend to beat people with- a stated target.

20goto10 wrote: »

I'm not saying we're something special and the ECB will hang around until we give the nod to hike rates.

You can be bloody certain our little voice amounts for very little. If we couldn't persuade them that we needed higher rates- when the Netherlands, Spain, Italy and Greece were all clamouring for them- you can be certain our pleas for mercy will go unheard at the table.

20goto10 wrote: »

I'm saying the chances of everyone else imporving while we go in the opposite direction is not going to happen.

Over 95% of economists would disagree with you- our situation- in particular of structural deficits and simultaneous private sector debt, are globally unique. Even in Japan private sector debt, such as it was, was almost totally residing in conglomerates with bizarre cross holdings- not personal debt- like it is in Ireland. It could well take 15 or 20 years for the majority of Irish people to clear debts incurred in the last 10 years.

20goto10 wrote: »

As was pointed out, there is a possibilty, but nothing worth debating.

Why do you think its not worth debating? Intelligent debate- even from those who hold diametrically opposing viewpoints to us, help educate everyone.

gurramok · 02-07-2009 3:38pm

20goto10 wrote: »

Like I said, there's always a possiblity. But the reality is they cannot hike rates until everyone has their sh!t in order. We are not a separate entity, understand?

No, you do not understand. They base it on the majority.

It does not matter if Ireland or Spain or Latvia or Malta are still in recession, they will make a judgement on the overall inflation rate and coupled with the economic health of the overall eurozone area to make a decision.

It seems to me you think that Ireland has this veto power on the ECB:rolleyes:

quozl · 02-07-2009 3:44pm

20goto10 wrote: »

I'm saying the chances of everyone else imporving while we go in the opposite direction is not going to happen.

We have, per capita, the most expensive banking bailout in the world plus the greatest drop in GDP of a developed nation since the great depression.

Someone has to be last out of recession in the EU, and we're a much better contender for that than Germany or France.

The idea that every country in the EU will come out of this recession simultaneously seems very implausible to me.

blast05 · 02-07-2009 4:02pm

There seems to be a perception that the recession we are going through is far worse than anywhere else. Take the Germans - German central bank predicting a 6.2% GDP drop - in Ireland best predictions for GDP is about 8.5%. Japan year on yea in quarter 1 was over 12%

And yet we still have people saying "the greatest drop in GDP of a developed nation since the great depression"

http://news.xinhuanet.com/english/2009-06/06/content_11496160.htm

D3PO · 02-07-2009 4:06pm

blast05 wrote: »

- in Ireland best predictions for GDP is about 8.5%.

predictions in ireland are for double digit GDP reduction

gurramok · 02-07-2009 4:44pm

And i don't think the Germans or Japanese have a huge public finances problem either!

ZYX · 02-07-2009 4:50pm

Why do people think the rest of Europe is going to recover so rapidly that the ECB is going to have to raise interest rates to over 4% to curb inflation? Serious question. I would have thought the best Europe can hope for is a couple of years of pretty slow growth.

El Stuntman · 02-07-2009 4:52pm

ZYX wrote: »

Why do people think the rest of Europe is going to recover so rapidly that the ECB is going to have to raise interest rates to over 4% to curb inflation? Serious question. I would have thought the best Europe can hope for is a couple of years of pretty slow growth.

even if that is the case, 4% interest rates would seem about right

1% is abnormally low by any standards

ZYX · 02-07-2009 4:57pm

El Stuntman wrote: »

even if that is the case, 4% interest rates would seem about right

1% is abnormally low by any standards

But why 4%+? Over last 10 years when there was a Europe wide boom, interest rates averaged less than 4%. Why would they suddenly return to 4%+.

Maybe people should say when they see rates going tgo this level. Are we talking 5-10 years or are we talking 1-2 years?

When will the property market bottom out?

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