Davy on the Irish Economy: Economy to grow by 4% in 2011

Flamed Diving

Anonymous1987 wrote: »

Fair point about construction but I'd be inclined to think that financial services can be a driver of the economy for example much of the work in financial services in the IFSC is administration of international funds not domestic. Of course the primary reason for setting up here is the low corporation tax but that's another story.

Yeah, but do investment banks actually create real capital, or do they make money from money? Do you get what I'm saying?

Anonymous1987

Flamed Diving wrote: »

Yeah, but do investment banks actually create real capital, or do they make money from money? Do you get what I'm saying?

I'm not exactly sure what you mean but I take it you are saying that an investment bank operating in Ireland doesn't necessarily create capital like commercial banks do by making loans and driving growth, rather investment banks operate here simply to outsource their administrative work?

Does that really matter though? they still pay taxes, employ people, perform services and at the end of the day is that not the same as the IT and pharmaceuticals industry? Just like those industries financial services in Ireland is effectively exporting services.

Flamed Diving

Anonymous1987 wrote: »

I'm not exactly sure what you mean but I take it you are saying that an investment bank operating in Ireland doesn't necessarily create capital like commercial banks do by making loans and driving growth, rather investment banks operate here simply to outsource their administrative work?

Well, a commercial bank doesn't directly generate growth by lending money. They simply provide the funds (acquired from net lenders) required for a company to spend on what they deem necessary for their future growth. It is the company that goes ahead and spends the money, creating jobs and the products to sell. Banks merely serve as an intermediary allowing companies to borrow from future potential, and take a slice of the winnings. I don't really class this as generating real capital. Banks are just institutions that warp space/time and take a fee for the trouble.

Anonymous1987 wrote: »

Does that really matter though? they still pay taxes, employ people, perform services and at the end of the day is that not the same as the IT and pharmaceuticals industry? Just like those industries financial services in Ireland is effectively exporting services.

By this broad definition, yes, all economic units are the same. It doesn't explain very much, however.

MrMatisse

Marketing rubbish. Trying to encourage share buying.

Euroland

Here you go. Even such over-pessimists as the Goodbody Stockbrokers now revise upwards their gloomy forecasts:



http://www.finfacts.ie/biz10/Recovery_in_sight.pdf

http://www.finfacts.ie/irishfinancenews/article_1018226.shtml

daithicarr

the banking sector needs to be healthy for economic growth to resume, company's need a line of credit etc. lots of viable businesses are struggling because of lack of capital.

gurramok

Euroland wrote: »

Here you go. Even such over-pessimists as the Goodbody Stockbrokers now revise upwards their gloomy forecasts:


http://www.finfacts.ie/irishfinancenews/article_1018226.shtml

Why trust their forecasts when they have been wrong consistently?

"predicts a contraction in the economy of 1.1% (GDP) for 2010, rising to a growth figure of 2.4% in 2011. (This contrasts with the broker’s previous most recent prediction of a 3.7% contraction in 2010, followed by a 1.2% growth figure in 2011.) "


Your 2nd link is frightening.

"Private sector debt levels will increase to 225% of GDP in 2009 - - among highest of developed world"