Realistic Economy News thread

andrew

Rightwing wrote: »

These derivatives are the worry:

UNITED States of America – It can now be reported that the Greek euro denominated debt has escalated to $360 billion. This now represents as much as $25 TRILLION of worthless cross-collateralized derivatives, which are outstanding with now the Bank of England and the Bank of New York Mellon as counter parties.
They have joined Bank of America, JPMorgan Chase, Citibank of New York, German Deutsche Bank, Société Générale of France and Barclays Bank of England as catching full scale contagion disease.
Without a Greek deal all of these aforementioned banks collapse leading to capital controls and the possibility of worldwide bank runs.
At this hour it is all about the repo rate, the lack of liquidity in the system leading to a derivative debacle

Firms have had 2 years to unwind any Greek derivative positions. That quote sounds like some shite Zero Hedge would post.

realitykeeper

Rightwing wrote: »

I've been surprised at how tough a stance the creditors have taken with Greece. Seems to me now that Ireland simply had no choice but to comply with their demands. Importantly, I think the Europeans are underestimating the effects a Grexit will have on the markets.

The creditors were not tough on Greece. Greece is insolvent and the only reason the creditors have continued giving them money and writing off small
parts of their debt is because they do not want to contend with the reality that Greece is insolvent and it cannot and will not pay its debts. Postponing the day of reckoning like this is foolish and it will only make matters worse.

Ireland very definitely did have a choice and it choose the soft option of a Troika bailout. Again this will only delay Ireland`s day of reckoning and it will worsen it by multiples when it comes. Ireland could have done an Iceland. It choose not to. Iceland did what Iceland did because it did not have the choice like Ireland.

As long as a Grexit can be postponed, it is unlikely to happen in my view, because of political cowardice. However, it will happen eventually and when it does, the consequences will be irrelevant. What must be must be.

Dohnjoe

Rightwing wrote: »

They have joined Bank of America, JPMorgan Chase, Citibank of New York, German Deutsche Bank, Société Générale of France and Barclays Bank of England as catching full scale contagion disease.
Without a Greek deal all of these aforementioned banks collapse leading to capital controls and the possibility of worldwide bank runs.
At this hour it is all about the repo rate, the lack of liquidity in the system leading to a derivative debacle

These banks are well prepared and will have had a contingency plans for a Grexit for years now. Not to say they won't be affected, but it will be minimal.

Rightwing

Rightwing wrote: »

This week will reveal all. Up until now, a deal has been priced in, so expect big volatility, particularly on the equity markets.

The FTSE EuroFirst 300, the Xetra Dax in Frankfurt and other Eurozone stocks are back where they were about a fortnight ago. All is quiet on the western front. Are you sure you don't want to revise this prediction?

It's clear that Grexit contagion is contained.

Godge

A Tyrant Named Miltiades! wrote: »

The FTSE EuroFirst 300, the Xetra Dax in Frankfurt and other Eurozone stocks are back where they were about a fortnight ago. All is quiet on the western front. Are you sure you don't want to revise this prediction?

It's clear that Grexit contagion is contained.

It won't be clear until Grexit happens.

Godge

Godge wrote: »

It won't be clear until Grexit happens.

No, it is perfectly clear today. It's the last Friday before the referendum, and there was tumbleweed blowing through Eurozone equities. Yesterday, German Bund benchmark yields, which move inversely to Eurozone political risk, actually rose slightly. Spain and Italian yields were deadpan. It is clear that European investors are not concerned.

Political contagion is a different, longer term issue that could generate market concerns in a few years, but moreso if Greece stay in the Euro and win concessions.

But clearly financial-market contagion through the Greek channel is no longer an issue.

Rightwing

andrew wrote: »

Firms have had 2 years to unwind any Greek derivative positions. That quote sounds like some shite Zero Hedge would post.

German banks have more exposure to Greece now than they had 2 years ago, French banks have much less. It's about perceived risk.

realitykeeper wrote: »

The creditors were not tough on Greece. Greece is insolvent and the only reason the creditors have continued giving them money and writing off small
parts of their debt is because they do not want to contend with the reality that Greece is insolvent and it cannot and will not pay its debts. Postponing the day of reckoning like this is foolish and it will only make matters worse.

Ireland very definitely did have a choice and it choose the soft option of a Troika bailout. Again this will only delay Ireland`s day of reckoning and it will worsen it by multiples when it comes. Ireland could have done an Iceland. It choose not to. Iceland did what Iceland did because it did not have the choice like Ireland.

As long as a Grexit can be postponed, it is unlikely to happen in my view, because of political cowardice. However, it will happen eventually and when it does, the consequences will be irrelevant. What must be must be.

It wasn't that small, somewhere in the region of a 50% writedown ?

A Tyrant Named Miltiades! wrote: »

The FTSE EuroFirst 300, the Xetra Dax in Frankfurt and other Eurozone stocks are back where they were about a fortnight ago. All is quiet on the western front. Are you sure you don't want to revise this prediction?

It's clear that Grexit contagion is contained.

I concede it looks that way, but the markets are remarkably complacent at the moment. At this stage, it will probably take an actual Grexit to test the hypothesis.

nice_guy80

http://www.irishtimes.com/news/social-affairs/350m-to-be-spent-subsidising-families-in-low-paid-work-1.2273055

That article basically points to the fact that most jobs created in the Irish economy over the past two years have been low paid jobs.

realitykeeper

nice_guy80 wrote: »

http://www.irishtimes.com/news/social-affairs/350m-to-be-spent-subsidising-families-in-low-paid-work-1.2273055

That article basically points to the fact that most jobs created in the Irish economy over the past two years have been low paid jobs.

I can believe it. Another very pertinent point can be made by comparing the main jobs pages in any recent newspaper publication with the main jobs page in the same newspaper back in 2000. Back then, there were a lot more jobs for engineers, technicians and other skilled people in industry. Now the only high paid jobs are in the public sector/civil service. Recruitment firms advertise for engineers, technicians, etc to fill jobs in Dubai no doubt, but it is rare to find companies advertising directly for such positions anymore.

It is never a good thing to see the state recruiting. At the end of the day, the taxpayer has to pay for everything.

andrew

Rightwing wrote: »

German banks have more exposure to Greece now than they had 2 years ago, French banks have much less. It's about perceived risk.

Proof/data?

nice_guy80 wrote: »

http://www.irishtimes.com/news/social-affairs/350m-to-be-spent-subsidising-families-in-low-paid-work-1.2273055

That article basically points to the fact that most jobs created in the Irish economy over the past two years have been low paid jobs.

The goalposts tend to move with the economy though, right? It used to be 'there aren't enough jobs' now it's 'there aren't enough high paying jobs.' Surely the latter is better than the former.

realitykeeper wrote: »

I can believe it. Another very pertinent point can be made by comparing the main jobs pages in any recent newspaper publication with the main jobs page in the same newspaper back in 2000.

Perhaps that's because a significant amount of jobs are advertised online now, which wasn't the case in 2000.

Godge

nice_guy80 wrote: »

http://www.irishtimes.com/news/social-affairs/350m-to-be-spent-subsidising-families-in-low-paid-work-1.2273055

That article basically points to the fact that most jobs created in the Irish economy over the past two years have been low paid jobs.

New jobs post-recession are always created at the lower-paid end first.

realitykeeper wrote: »

I can believe it. Another very pertinent point can be made by comparing the main jobs pages in any recent newspaper publication with the main jobs page in the same newspaper back in 2000. Back then, there were a lot more jobs for engineers, technicians and other skilled people in industry. Now the only high paid jobs are in the public sector/civil service. Recruitment firms advertise for engineers, technicians, etc to fill jobs in Dubai no doubt, but it is rare to find companies advertising directly for such positions anymore.

It is never a good thing to see the state recruiting. At the end of the day, the taxpayer has to pay for everything.

What a silly statement. Have you looked at irishjobs.ie and other online jobs portals? They have infinitely more jobs advertised now than in 2000.

Dave!

I'm interested in the issue of low paying jobs – don't those tend to be in retail, services, etc*? So it would be an indication that those sectors are recovering if so.

And is the research about new jobs that have been created over the last couple of years? Because many of the better paying jobs (e.g. IT) would not have been lost during the recession, so there isn't as much room to create those jobs as in other sectors.

Wild theory

* I'm speculating, I have no idea

realitykeeper

Godge wrote: »

What a silly statement. Have you looked at irishjobs.ie and other online jobs portals? They have infinitely more jobs advertised now than in 2000.

Fair enough but this only explains half the phenomenon in question i.e. why the state advertises jobs in the national newspapers while all the major private sector employers evidently find it more sensible to use irishjobs.ie

Indeed you may have highlighted a more sinister reality. Not only is the government intent on wasting taxpayers money and destroying the rain forests by advertising in print media but could they be doing it with the deliberate intention of influencing the newspapers to perpetuate the Good Economic News myth?

nice_guy80

realitykeeper wrote: »

Fair enough but this only explains half the phenomenon in question i.e. why the state advertises jobs in the national newspapers while all the major private sector employers evidently find it more sensible to use irishjobs.ie

Indeed you may have highlighted a more sinister reality. Not only is the government intent on wasting taxpayers money and destroying the rain forests by advertising in print media but could they be doing it with the deliberate intention of influencing the newspapers to perpetuate the Good Economic News myth?

I think there are rules to do with public sector recruitment which means they must be advertised publicly - ie in national papers, so that all citizens have opportunity to apply

it no longer applies to some sectors eg education
teaching jobs no longer have to be advertised in papers
schools can choose to do that if they want, in order to get a wider spectrum of applicants

andrew

realitykeeper wrote: »

Fair enough but this only explains half the phenomenon in question i.e. why the state advertises jobs in the national newspapers while all the major private sector employers evidently find it more sensible to use irishjobs.ie

Indeed you may have highlighted a more sinister reality. Not only is the government intent on wasting taxpayers money and destroying the rain forests by advertising in print media but could they be doing it with the deliberate intention of influencing the newspapers to perpetuate the Good Economic News myth?

The state uses http://publicjobs.ie/publicjobs/

Godge

nice_guy80 wrote: »

I think there are rules to do with public sector recruitment which means they must be advertised publicly - ie in national papers, so that all citizens have opportunity to apply

it no longer applies to some sectors eg education
teaching jobs no longer have to be advertised in papers
schools can choose to do that if they want, in order to get a wider spectrum of applicants

Correct, that is my understanding too. There are various rules and regulations about it.

realitykeeper wrote: »

Indeed you may have highlighted a more sinister reality. Not only is the government intent on wasting taxpayers money and destroying the rain forests by advertising in print media but could they be doing it with the deliberate intention of influencing the newspapers to perpetuate the Good Economic News myth?

You can find a conspiracy theory around every corner. Why didn't you just say it was a FG plot to keep up profits for Denis O'Brien's newspapers?

ardmacha

realitykeeper wrote: »

Indeed you may have highlighted a more sinister reality. Not only is the government intent on wasting taxpayers money and destroying the rain forests by advertising in print media but could they be doing it with the deliberate intention of influencing the newspapers to perpetuate the Good Economic News myth?

So let me get this clear. You are using the number of jobs advertised in newspapers as an indication that things are not as good as in the past, but you are also complaining about the State advertising in newspapers?

KingBrian2

People don't want to lose social benefits, that is why getting more than a part time job or volunteering is the key for a lot of jobseekers.

realitykeeper

ardmacha wrote: »

So let me get this clear. You are using the number of jobs advertised in newspapers as an indication that things are not as good as in the past, but you are also complaining about the State advertising in newspapers?

It is important to understand that when the state advertises jobs - that is not a good thing. It is bad news. When the states employs, it wastes money. Indeed, when the state does anything, it wastes money. Terms such as "spending targets" only exist in the twilight zone and the civil service.

Another contributor "justified" the state using print media to advertise on the grounds that it was a "requirement", he just forgot to mention the requirement was put there by the state - how convenient. Like I said, the government`s use of print media to advertise looks suspiciously like an attempt to bribe the newspapers so they will print the government`s propaganda. You don`t have to be a conspiracy theorist to know a sucker when you see one.

andrew

realitykeeper wrote: »

It is important to understand that when the state advertises jobs - that is not a good thing. It is bad news. When the states employs, it wastes money. Indeed, when the state does anything, it wastes money. Terms such as "spending targets" only exist in the twilight zone and the civil service.

You have the most deeply ironic username on this entire site.

nice_guy80

realitykeeper wrote: »

It is important to understand that when the state advertises jobs - that is not a good thing. It is bad news. When the states employs, it wastes money. Indeed, when the state does anything, it wastes money. Terms such as "spending targets" only exist in the twilight zone and the civil service.

Another contributor "justified" the state using print media to advertise on the grounds that it was a "requirement", he just forgot to mention the requirement was put there by the state - how convenient. Like I said, the government`s use of print media to advertise looks suspiciously like an attempt to bribe the newspapers so they will print the government`s propaganda. You don`t have to be a conspiracy theorist to know a sucker when you see one.

to maintain services to the public, the public sector have spending targets that allows for programmes to be budgeted for
eg school building, garda overtime, road building, support funds for businesses, funding for start ups

how would potential public sector employees find out about jobs in the public sector if the jobs weren't advertised nationally in the print media?
eg nurses, doctors, school principals, engineers in local councils, state law offices...

nice_guy80

realitykeeper wrote: »

According to nice _guy80 (above) the civil service do have spending targets. See? Just like I told you, exactly like the twilight zone.

why wouldn't they have spending targets
I mean, a government department set out their plans for the year and then do up a budget and they try and spend the money allocated to them
what is the issue?

realitykeeper

nice_guy80 wrote: »

why wouldn't they have spending targets
I mean, a government department set out their plans for the year and then do up a budget and they try and spend the money allocated to them
what is the issue?

That is insane! Imagine that kind of mentality, trying to spend to a target. No wonder the country is in the state it is in.

ezra_pound

realitykeeper wrote: »

That is insane! Imagine that kind of mentality, trying to spend to a target. No wonder the country is in the state it is in.

It's called budgeting.

nice_guy80

realitykeeper wrote: »

That is insane! Imagine that kind of mentality, trying to spend to a target. No wonder the country is in the state it is in.

if the department of education didn't spend all the money they had earmarked for new schools and maintenance of current buildings, then children would be left without schools or in prefabs

if the department of health didn't spend their target on new hospital buildings and maintenance and refurbishment, the health sector would crumble within a few years

realitykeeper

nice_guy80 wrote: »

if the department of education didn't spend all the money they had earmarked for new schools and maintenance of current buildings, then children would be left without schools or in prefabs

if the department of health didn't spend their target on new hospital buildings and maintenance and refurbishment, the health sector would crumble within a few years

It is a well known and established fact that private enterprise makes economic sense and state monopolies do not. Despite this, stupidity prevails and the state stubbornly refuses to get out of the way and allow the full privatization of the health and education sectors. Does it really matter if someone makes a profit so long as the job gets done and everyone receives a superior education and the benefits of a fantastic health service?

The chaos in A&E are what you get from a state monopoly. What do you think would happen if the state controlled the retail sector? People would queue for hours to get a few rotting tomatoes and a block of moldy cheese.

Why would you deprive the elderly of a quick and pleasant trip to a state of the art health facility with all the mod cons, stress free staff and the five star treatment and instead subject them to a lonely and miserable death on a trolley in a run down and chaotic A&E ward? Are you really so jealous of some perfect stranger making a profit that you would do that to your own mother or father?

If the state must run a monopoly, then why not take sole control over the sale of everything that is bad for people: alcohol, tobacco products, legal highs, gambling etc. In fact, the state should legalize the illegal drugs and have a monopoly on all the the above. In Scandinavia, people wishing to avail of these things simply sign a form and pay the government.

K-9

Stay on topic please which isn't public sector bashing, Government conspiracy theories and extreme right wing ideology.

Rightwing

Rightwing wrote: »

German banks have more exposure to Greece now than they had 2 years ago, French banks have much less. It's about perceived risk.

andrew wrote: »

Proof/data?

I normally don't oblige when such requests are made as my data is internal and you can appreciate there are confidentiality factors involved. Then it can be time consuming going online.

In this instance, posters may be interested in seeing the different exposures countries banks have and the insights behind it.

http://www.bruegel.org/nc/blog/detail/article/1557-whos-still-exposed-to-greece/
As can be seen from the graphs, US/UK/German banks have all increased their Greek exposure from Dec 12, whereas France has greatly reduced theirs, when at 1 stage they were by far the most exposed when the sovereign debt crisis erupted. Most would assume this was foolish from the UK/US/German banks, but the economic environment in Greece was again approaching normalisation, hence the increase.

realitykeeper wrote: »

It is important to understand that when the state advertises jobs - that is not a good thing. It is bad news. When the states employs, it wastes money. Indeed, when the state does anything, it wastes money. Terms such as "spending targets" only exist in the twilight zone and the civil service.
.

In many instances I would agree, particularly in the run up to elections, when there are crazy announcements like 666 jobs :rolleyes::

http://www.irishexaminer.com/ireland/review-of-sna-scheme-as-666-extra-posts-approved-341273.html

skafish

realitykeeper wrote: »

It is important to understand that when the state advertises jobs - that is not a good thing. It is bad news. When the states employs, it wastes money. Indeed, when the state does anything, it wastes money. Terms such as "spending targets" only exist in the twilight zone and the civil service.

Another contributor "justified" the state using print media to advertise on the grounds that it was a "requirement", he just forgot to mention the requirement was put there by the state - how convenient. Like I said, the government`s use of print media to advertise looks suspiciously like an attempt to bribe the newspapers so they will print the government`s propaganda. You don`t have to be a conspiracy theorist to know a sucker when you see one.

Conspiracy theories much there Reality keeper?

robp

nice_guy80 wrote: »

if the department of health didn't spend their target on new hospital buildings and maintenance and refurbishment, the health sector would crumble within a few years

Not necessarily. It just depends on what is driving spending, is it about using up budgets or improving performance on some metric.

nice_guy80

Minimum Wage increases for a lot of workers in the next budget!
Great!

How many small businesses will shed staff or change their rostering based on this?


I know of businesses that are actively letting staff go and rehiring new staff on different contracts so they can claim the Jobplus financial initiative from the Department of Social Welfare for hiring people off the long term dole - 12 months +

Godge

nice_guy80 wrote: »

Minimum Wage increases for a lot of workers in the next budget!
Great!

How many small businesses will shed staff or change their rostering based on this?


I know of businesses that are actively letting staff go and rehiring new staff on different contracts so they can claim the Jobplus financial initiative from the Department of Social Welfare for hiring people off the long term dole - 12 months +

Businesses who do that fall into two categories:

(1) Those who exploit their workers which is a long-term guarantee of failure

(2) Those who are not financially viable and are only postponing the inevitable.

realitykeeper

Even without the election promises, Fine Gael has proven itself to be just as deluded as Fianna Fail in matters pertaining to the economy. This is a government that has borrowed with careless abandon. It was elected on the promise that the taxpayer would not pay for bailing out the banks and not only did they break that promise but they heaped tens of billions in additional debt on the shoulders of the Irish taxpayer.

K-9

FG are also proposing taking 100's of 000's of people out of the USC net, ending up paying no Income Tax or PRSI. So much for a sustainable tax take. This is exactly what FF did post 2002, seems we've learned nothing.

BoJack Horseman

K-9 wrote: »

FG are also proposing taking 100's of 000's of people out of the USC net, ending up paying no Income Tax or PRSI. So much for a sustainable tax take. This is exactly what FF did post 2002, seems we've learned nothing.

Politicians know what makes paddy purr.

Rightwing

Godge wrote: »

Businesses who do that fall into two categories:

(1) Those who exploit their workers which is a long-term guarantee of failure

(2) Those who are not financially viable and are only postponing the inevitable.

This is a ridiculous post.

Employers don't exploit workers, they provide opportunities for them. Those that do exploit the workers aren't in the tax system e.g au pairs. illegal immigrants.

Increasing the minimum wage will cause unemployment. This is 1 of the few things economists can agree on. The more you raise the minimum wage, the more businesses will fall into your 'not financially viable' category.

K-9 wrote: »

FG are also proposing taking 100's of 000's of people out of the USC net, ending up paying no Income Tax or PRSI. So much for a sustainable tax take. This is exactly what FF did post 2002, seems we've learned nothing.

I don't have a problem with this. Welfare (and particularly the extras associated with it) is too high in this country, so you have to make it somewhat more attractive for low paid workers to work.

K-9

Maybe, I suspect it might be ok now but come a recession, the same people will use the figures, or lack of, to increase them again.

Rightwing

K-9 wrote: »

Maybe, I suspect it might be ok now but come a recession, the same people will use the figures, or lack of, to increase them again.

I don't think one it too far away. A global recession that is. Government ought to be concentrating on reducing costs and spending. 'No one saw it coming' type analysis is what I'd expecting to hear.

nice_guy80

Rightwing wrote: »

I don't think one it too far away. A global recession that is. Government ought to be concentrating on reducing costs and spending. 'No one saw it coming' type analysis is what I'd expecting to hear.

I agree with this

China is in real trouble at the moment and if they stop investing money abroad a lot of countries are going to feel the pinch

Chips Lovell

Central bank warns against more tax cuts. Says additional tax revenues should be instead be used to pay down debt:

In a new quarterly forecast with upgraded projections for economic growth this year and next, the bank warned against using unanticipated tax revenues in the budget and said the money would be better spent paying down the national debt.

The forecast comes as the Government prepares an expansionary package between €1.2 billion and €1.5 billion in the October budget, its last before the election.

Will they be heeded? With an election coming up, I seriously doubt it.

Rightwing

Jep Gambardella wrote: »

Central bank warns against more tax cuts. Says additional tax revenues should be instead be used to pay down debt:



Will they be heeded? With an election coming up, I seriously doubt it.

Very hard to central banks seriously these days.

Why not cut government expenditure instead and axe a few civil serveants as an alternative?

I see - speaking realistically - that Government debt as a percentage of GDP has now fallen from 124% in 2013 to 105% now.

Ah Jaysus, I remember the economic illiterati telling us (many of them posting in this very forum) how we should ditch the EU, the Troika and the euro and "repudiate the debt".

Just as well they weren't the ones making the big decisions, eh?

Rightwing

I don't like the debt : gdp ratio, particularly when it is used as a sole reference. It is not a misleading ratio when used as a snapshot of a moment in time. However, when/if a recession comes, it quickly becomes evident how only a fool would truly rely on it.

As an example, many Greeks may have thought things were fine in '08 because their debt:gdp was 105%.

nice_guy80

Rightwing wrote: »

Very hard to central banks seriously these days.

Why not cut government expenditure instead and axe a few civil serveants as an alternative?

put some tax on corporations
handy money there

nice_guy80

Rightwing wrote: »

I don't like the debt : gdp ratio, particularly when it is used as a sole reference. It is not a misleading ratio when used as a snapshot of a moment in time. However, when/if a recession comes, it quickly becomes evident how only a fool would truly rely on it.

As an example, many Greeks may have thought things were fine in '08 because their debt:gdp was 105%.

we're going be a long time paying for the german and french banks and hedge funds selling cheap money into the Irish economy, and then getting all their money back

Saipanne

nice_guy80 wrote: »

put some tax on corporations
handy money there

What if they leave and/or FDI decreases?

K-9

Rightwing wrote: »

I don't like the debt : gdp ratio, particularly when it is used as a sole reference. It is not a misleading ratio when used as a snapshot of a moment in time. However, when/if a recession comes, it quickly becomes evident how only a fool would truly rely on it.

As an example, many Greeks may have thought things were fine in '08 because their debt:gdp was 105%.

Sure we thought ours was fine at 35% or whatever!

Seriously we have a different attitude to Government debt since the 80's, through hard earned experience.

Rightwing

K-9 wrote: »

Sure we thought ours was fine at 35% or whatever!

Seriously we have a different attitude to Government debt since the 80's, through hard earned experience.

True.

We were also lucky that our debt was relatively low when the crisis began. So for this reason alone I do agree with those that call for restraint particularly in government expenditure & also tax cuts. Create a bit of leeway so to speak.

K-9

Some would argue it was a pity it was so low as through necessity things like bondholders and NAMA would have been economic and political non runners.

Still though, it has become an accepted norm to reduce the debt percentage as much as possible.

Rightwing

Rightwing wrote: »

However, when/if a recession comes, it quickly becomes evident how only a fool would truly rely on it.

That was certainly true when all the panic merchants were screaming in terror arguing that Ireland shouldn't pay its debts.