The Increasingly Depressing Financial Crisis Thread

Carl Sagan

I pretty much steered clear of having to listen to any of this financial stuff for the last couple of years, but I just got my brother to fill me in. Ignorance is definitely bliss.

amacachi

sock puppet wrote: »

They will. But what you're not considering is that whatever the government debt stablises at won't be considered a large sum of money as time goes on. For example if we had growth rates of 3% then our GDP would double in 23 years.

How are we going to have 3% growth when we're cutting government jobs and actively trying to reduce wages?

randylonghorn wrote: »

That "on average" as a calculation is pretty meaningless though. Most schools these days are large enough that the principal has no allocated teaching hours; in a school of the size you describe I would assume there would be at least one deputy principal, if not more, with either no teaching hours or a very small number. Assistant principals (A-post holders under the old system) would also have reduced teaching hours in lieu of the fact that they have taken on certain administrative duties within the school.

I was only talking about the actual teachers, not the P and VP.

"Ordinary" teachers (i.e. without posts of responsiblilty) are expected to teach 22 hours per week. Assuming teaching periods of 40 minutes that works out at 33 such periods. Add in a couple of periods supervision ... probably 35 / 36 periods on average?

I'm working out the average in my old school at 15 hours, unless all of them were missing and they all had to do supervision to make up the hours. :pac:
What the rules are is just one thing, how it works out is completely different. I'm not trying to do a rant against teachers, just how unfair it seems to me that someone can get the same pay for far less hours and far less quality.

I'm not sure that taking that loan is the biggest problem ... at least it's likely to be at a more favourable rate than the money markets are likely to offer us from here on in, and it provides some stability. It means a loss of face certainly, but it may be the right course of action.

The bigger issue is the size of the loan, and that to a great extent is determined by the size of the debt which the Irish banks have entered into, and which the Irish government has apparently decided to not alone assume on their behalf but to honour to the last red cent. Surely there must be pressure coming from somewhere to take that course?

I have no issues with "losing sovereignty" and all that rubbish being spouted. It's the size of the loan as you mentioned that's the problem, there's just no way we can afford to pay it back.

The Irish banks have had to take a "haircut", through NAMA in particular, and rightly so .... they took incredibly stupid risks, and it blew up in their face. But the international bondholders / investors also took a risk in providing capital to them, and they did so with their eyes wide open. Why are they immune from the consequences of their bad decisions?

I agree, but one has to ask why they're all being paid back, it's almost certainly because it's private UK and German and a few other private pensions funds.

Merkel is right in saying that the bondholders need to share the pain. It might not have been the best-timed comment from our point of view; hard to know if it was deliberately manipulative though. She seems to have drawn back somewhat under internal pressure in Germany and on seeing that her remarks had caused a minor panic in the markets. But while I was surprised she was that blunt, I agree completely with her, and welcome the fact that the leader of a (the?) major European power has put it out there.

Perhaps I'm just being too cynical but I don't think she says too much that isn't well-scripted.

sock puppet

randylonghorn wrote: »

Nor am I advocating total default btw ... rather a 'haircut' of about one third. The Irish banks are essentially bankrupt, and in those circumstances, paying creditors €2 in every €3 is far from a bad deal for them. Instead of which, we're bankrupting the country as well to pay the full amount.

That kind of a 'haircut' wouldn't take us out of trouble by any means, but at least it would take us out of hell and into purgatory, with some hope for salvation before your grand-kids are in college!

Yeah there should be some sort of haircut. And what you've suggested that doesnt seem like a bad deal all things considered

amacachi wrote: »

How are we going to have 3% growth when we're cutting government jobs and actively trying to reduce wages?

And they'll continue to do so for another 40 years? No one's denying that this is a total mess but your claims that the banking crisis will cripple our country for several decades are based on nothing.

amacachi

sock puppet wrote: »

And they'll continue to do so for another 40 years? No one's denying that this is a total mess but your claims that the banking crisis will cripple our country for several decades are based on nothing.

Based on nothing? Have you paid any attention to any of my posts? We have to cut 8 billion over the next few years, that's going to reduce any growth massively. All just to cut the deficit, before even mentioning paying off the loan. Outside of state spending the minimum wage has already been confirmed to be cut with the aim of lowering wages. That's the opposite of growth. We've already seen how much resistance there's been to cuts amounting to about a fifth of what's needed and now they're going to try and make the rest.
Where is this growth going to come from? The increase in VAT? The increase in income tax? A few hundred thousand emigrating?

sock puppet

amacachi wrote: »

Based on nothing? Have you paid any attention to any of my posts? We have to cut 8 billion over the next few years, that's going to reduce any growth massively. All just to cut the deficit, before even mentioning paying off the loan. Outside of state spending the minimum wage has already been confirmed to be cut with the aim of lowering wages. That's the opposite of growth. We've already seen how much resistance there's been to cuts amounting to about a fifth of what's needed and now they're going to try and make the rest.

You still haven't said why you expect these cuts to affect us for another 40 years. It'd certainly be a first. Even the Long Depression didn't affect countries for that long.

Where is this growth going to come from? The increase in VAT? The increase in income tax? A few hundred thousand emigrating?

We're still a low tax country with a strong export sector. We may not recover soon at all but we will eventually.


edit: this discussion is a little moot anyway. Whether we recover in 5 years or 50 it'll make no difference to people leaving college in the next few years. But rest assured that the recovery will happen much quicker tan you think it will.

randylonghorn

randylonghorn wrote: »

What is allowed by a weakness in the system isn't by definition democratic ... what it rather points to is that the system is not fit-for-purpose.

Democracy is that which conforms to the democratic system. Whether that system has weakness or not doesn't change whether something is democratic. This is what annoys me.
Notice I didn't say fair or just, I said democratic.

Just as when someone commits a crime but gets away with it on a technicality in court, that doesn't make the original action moral.

No, it doesn't, but it does make it legal.

amacachi

sock puppet wrote: »

You still haven't said why you expect these cuts to affect us for another 40 years. It'd certainly be a first. Even the Long Depression didn't affect countries for that long.

We'll be paying the debt for anything from 20-40 years depending on how much we can afford. My point is that we're going to have to grow HUGELY to pay anything at all over the next few years, otherwise we default or we all will have to pay massive, massive taxes for no services.

We're still a low tax country with a strong export sector. We may not recover soon at all but we will eventually.

If we can somehow find an extra 16 billion per year then yes, we'll be "fine". The point is that that amount of money constantly having to be skimmed off an economy as small as ours will have a huge effect.

edit: this discussion is a little moot anyway. Whether we recover in 5 years or 50 it'll make no difference to people leaving college in the next few years. But rest assured that the recovery will happen much quicker tan you think it will.

It'll happen much quicker by defaulting. Although maybe the non-government economists who warned of a housing bubble who are now saying that we can't afford this loan are probably wrong, what would they know?

amacachi

Deleted User wrote: »

Democracy is that which conforms to the democratic system. Whether that system has weakness or not doesn't change whether something is democratic. This is what annoys me.
Notice I didn't say fair or just, I said democratic.

I didn't say that the government hadn't got the legal power to do what they've done, I said that I can't see how someone can claim that it's right that they do.

randylonghorn

amacachi wrote: »

I was only talking about the actual teachers, not the P and VP.

I'm working out the average in my old school at 15 hours, unless all of them were missing and they all had to do supervision to make up the hours. :pac:
What the rules are is just one thing, how it works out is completely different. I'm not trying to do a rant against teachers, just how unfair it seems to me that someone can get the same pay for far less hours and far less quality.

I don't know your old school, so I can't comment on it.

I doubt though that many schools at the moment have the luxury of allowing full-time permanent teachers to do less hours than they are required to do, and certainly by that kind of margin. There's really no point flogging a dead horse, especially one which isn't in the room, but you might want to ask yourself how sure you are or can be as to the status and contracts of the individuals you refer to? How many are post-holders with reduced teaching hours? How many are on EPT (Eligible Part-Time) contracts i.e. they are timetabled and paid for less hours than a full-time permanent teacher, but they have a fair degree of security from year to year, and some of the benefits of permanent teachers, albeit on a pro-rata basis. How many are actually part-time? How did / do you as a student / former student know what contracts people are on, unless they specifically tell you? ... and most teachers won't, considering quite rightly that it's none of the students' business.

Quality is a different issue ... most teachers I know work hard and do their best, but certainly some are naturally good teachers while to others it just doesn't come as easily. Others are burned out, especially in the more difficult schools, and yes, there's a small minority of lazy hoors who will get away with whatever they can, as there is in any job. In my own experience though, that latter group is a pretty small minority.

amacachi wrote: »

Perhaps I'm just being too cynical but I don't think she says too much that isn't well-scripted.

Like our fella? :pac:

Cynicism aside, you're probably right ... but scripted by whom? Her style is at times very reminiscent of Thatcher (as indeed are many of her views) and while that lady normally said exactly what she meant to, it didn't always match with the views of her colleagues or officials, nor did that concern her greatly. Merkel has been known to fly solo as well; one example which springs to mind is her comments in 2006 on German over-reliance on Russian energy.

Merkel can be a difficult one to fit in a box. She's conservative, right-wing and pro-market certainly. She's generally pro-American as well, though she was probably a lot more comfortable with Bush than Obama. She's also the daughter of a Lutheran minister though, and grew up in East Germany before the fall of the iron curtain, an upbringing which has imbued her with a respect for the values of thrift and hard work, and the belief that rewards follow on from these. One suspects that these values make her less than sympathetic for the current Irish situation and its root causes; on the other hand, however, it also seems to leave her less than sympathetic for big investors, private or institutional, who invest and head for the golf course, and expect to have their returns guaranteed and protected. Certainly she has never been a strong proponent of government guarantees for banks, either in Germany or in the rest of Europe, and she was quite critical of the original Irish bank guarantee scheme.

I don't usually read political autobiographies, but I will be quite interested to read Merkel's if she writes one when she retires. She often strikes me as someone with strong personal beliefs, who generally chooses to keep them in reserve for political reasons.

sock puppet wrote: »

You still haven't said why you expect these cuts to affect us for another 40 years. It'd certainly be a first. Even the Long Depression didn't affect countries for that long.

And I don't expect this recession / depression to affect economies worldwide for that long; indeed, there are signs already that it is easing. Ireland, however, is in modern terms a tiny backwater economy when viewed on a global scale, and while a global upturn will benefit Ireland, it will not do so to an extent that will significantly cancel out other and more negative factors of local origin.

I'm not prepared to get into an argument about 20, 30 or 40 years, but given the scope of the mess which we have gotten ourselves into, and the scale of the resulting debt, and the extent to which that debt ties our hands, I have to agree with amacachi that we are looking at a very long cold winter ahead.

Just to take one example, almost all the measures outlined in the great Plan for Economic Recovery are deflationary. They have to be, while the priority is shoving money in the bankers' black hole, borrowing heavily to do so and servicing the resultant debt. In the ~3/4 years since the pooh hit the fan, there has not been one significant government measure to stimulate the economy or encourage employment; they simply don't have the resources to do it, nor will they have in the foreseeable future.

Deleted User wrote: »

Democracy is that which conforms to the democratic system. Whether that system has weakness or not doesn't change whether something is democratic. This is what annoys me.

And this is where we disagree at a very fundamental level.

To my mind, a democratic system is that which conforms to the principles of democracy. Systems are, and always should be, subordinate to the principles upon which they are supposedly based.

Deleted User wrote: »

No, it doesn't, but it does make it legal.

No, they have gotten away with it on a legal technicality, which is quite a different thing.

If someone murders someone, and manages to escape justice on a technicality, that doesn't make the original murder legal any more than it makes it moral.

amacachi

randylonghorn wrote: »

I don't know your old school, so I can't comment on it.

I doubt though that many schools at the moment have the luxury of allowing full-time permanent teachers to do less hours than they are required to do, and certainly by that kind of margin. There's really no point flogging a dead horse, especially one which isn't in the room, but you might want to ask yourself how sure you are or can be as to the status and contracts of the individuals you refer to? How many are post-holders with reduced teaching hours? How many are on EPT (Eligible Part-Time) contracts i.e. they are timetabled and paid for less hours than a full-time permanent teacher, but they have a fair degree of security from year to year, and some of the benefits of permanent teachers, albeit on a pro-rata basis. How many are actually part-time? How did / do you as a student / former student know what contracts people are on, unless they specifically tell you? ... and most teachers won't, considering quite rightly that it's none of the students' business.

Fair enough. I'm basing this on 2004 when I saw a list of the teachers in order of seniority and it only 2 had been there less than 3 years. Anyway, let's just leave it.

Quality is a different issue ... most teachers I know work hard and do their best, but certainly some are naturally good teachers while to others it just doesn't come as easily. Others are burned out, especially in the more difficult schools, and yes, there's a small minority of lazy hoors who will get away with whatever they can, as there is in any job. In my own experience though, that latter group is a pretty small minority.

I got on great with most teachers in my school so I'm not just doing a whole bitching for no reason thing, but the variation of quality was huge, graphed it would be a wide, short bell-curve. :pac:

Cynicism aside, you're probably right ... but scripted by whom? Her style is at times very reminiscent of Thatcher (as indeed are many of her views) and while that lady normally said exactly what she meant to, it didn't always match with the views of her colleagues or officials, nor did that concern her greatly. Merkel has been known to fly solo as well; one example which springs to mind is her comments in 2006 on German over-reliance on Russian energy.

Someone in her government. I've always been massively in favour of the EU but this bailout has left me pretty annoyed at them.


Also I hope I'm wrong about how screwed we are, I really do, but I'm not going to bury my head in the sand and stop using logic and basic maths and economics and say everything will be fine.

soccymonster

Now that the imf are in, are we like.... screwed?

I'm watching brian cowen now and he said cuts are gonna be really severe to what they had thought...

Slow Show

Kinda immune to all this doom and gloom now tbh. I wasn't home for Brian Cowen's big announcement, and I'm really not bothering trawling through depressing news articles.
Soccy, we're screwed either way. But sure, c'est la vie.

amacachi

amacachi wrote: »

I didn't say that the government hadn't got the legal power to do what they've done, I said that I can't see how someone can claim that it's right that they do.

And I didn't say it was right, I said it was democratic. :pac:

amacachi

Deleted User wrote: »

And I didn't say it was right, I said it was democratic. :pac:

I know, that was the point I was making. Under our constitution it's allowed, but I don't think it's right that a state should be allowed do such a thing.

Pygmalion

Deleted User wrote: »

And I didn't say it was right, I said it was democratic. :pac:

You said it was allowed under our current system, then did some hand-waving and said that makes it democratic.
I don't really follow, are you saying that since we have elections every minute detail of the system we have is a perfect example of democracy in action?

jumpguy

soccymonster wrote: »

Now that the imf are in, are we like.... screwed?

I'm watching brian cowen now and he said cuts are gonna be really severe to what they had thought...

Yup, I hope you like the bog, cause that's where we'll be when they stop funding for second level schools.

Pygmalion

Pygmalion wrote: »

You said it was allowed under our current system, then did some hand-waving and said that makes it democratic.
I don't really follow, are you saying that since we have elections every minute detail of the system we have is a perfect example of democracy in action?

No, I'm saying that there is no accepted definition of democracy, so it seems sensible to me to consider democracy to be that form of government in so-called democratic societies.

There are many definitions of democracy in the dictionary, and the only one which fits all countries that are said to have a democracy is some form of rule derived from the people.

As you can see, Ireland certainly does have some form of rule by people, with the caveat that we only vote periodically and so a Government can remain in power for a full term so long as the budget is not defeated or should they wish to pull out.

If you define democracy as "everybody having a fair and equal say, at all times, in the running of the country", then it would be alright to say that it's undemocratic for the Government to remain in power.

However, I think if this is what you mean to say, then you ought to to express it as "it's unjust that the Government should remain in power" or something equivalent.

Lastly, here there are a sample of some definitions of democracy, some of which would make Ireland democratic and some which wouldn't.

Duffy the Vampire Slayer

Budget day tomorrow... Trouble a'brewin.

Ginja Ninja

I'm praying [which I never do] that the fees don't go up or at least not by much.If they do it's quite possibly the biggest mistake they could make in the economy at a time like this.

We need more educated workers,not less.We've more unedcuated labour than you can shake a stick at and will have for the next decade.It's college graduates bringing in companies and improving domestic ones that'll drag us out of this recessions,not a politicians 6 digit salary :rolleyes:

Grindylow

Ginja Ninja wrote: »

I'm praying [which I never do] that the fees don't go up or at least not by much.If they do it's quite possibly the biggest mistake they could make in the economy at a time like this.

We need more educated workers,not less.We've more unedcuated labour than you can shake a stick at and will have for the next decade.It's college graduates bringing in companies and improving domestic ones that'll drag us out of this recessions,not a politicians 6 digit salary :rolleyes:

That was already announced wasn't it? There going up by €500!

It was said that "He also said families where there were two or more children at third level would not have to pay the full €2,000 registration fees for all three, but would have to do so for the first child only."

Pigwidgeon

Ladies and Gentlemen, welcome to doomsday.

Grindylow

kateos2 wrote: »

Ladies and Gentlemen, welcome to doomsday.

I CANT WAIT!!1111

Insect Overlord

I'll be studying in the library during the Budget, so you wonderful people will have to fill me in on the details later tonight!

Ginja Ninja

Ginja Ninja wrote: »

I'm praying [which I never do] that the fees don't go up or at least not by much.If they do it's quite possibly the biggest mistake they could make in the economy at a time like this.

We need more educated workers,not less.We've more unedcuated labour than you can shake a stick at and will have for the next decade.It's college graduates bringing in companies and improving domestic ones that'll drag us out of this recessions,not a politicians 6 digit salary :rolleyes:

We've plenty of graduates unemployed too. They haven't brought in foreign companies so far. It's because our banks are ****ed and won't lend them capital, so unfortunately, the fee hike is probably a necessary evil.

Duffy the Vampire Slayer

I wonder whats wrong with Irish voters when a budget can be passed on the whims of Michael Lowry and Jackie Healy-Rae.

Bloody hell... Hijacking the Order of Business to have a little rant at Fianna Fáil.
Uggh, Politicians... the sleaze is visible.

amacachi

Such a stupid budget.

Wolfe Tone

Its ok, beer is untouched

I don't think it's awful.

amacachi

Smokes as well.:)