Recession predictions

s1ippy

What if as an act of goodwill, everyone in Ireland agrees to take a zero from the end of the value of all properties.

Wanderer78

s1ippy wrote: »

What if as an act of goodwill, everyone in Ireland agrees to take a zero from the end of the value of all properties.

Unfortunately value/debt isn't as simple as that, I can understand the calls for a debt jubilee, but I suspect enacting such a thing, would be far more complex in reality, and potentially very dangerous

ceannbui

if QE is going to be around for a long time, shouldn't some of that, at least, be put into UBI instead? Otherwise it is just another zombie economic idea (trickle down). What use is the stock market to the kitchen table when a worldwide pandemic has forced governments to shut down their economies? In fact a UBI would enable governments to respond better to this pandemic (and possible future pandemics), while QE seems to be just delaying the inevitable crash but also increasing the debt in the meantime
(sorry, just jumped to the last page and havent read all 50 pages of discourse so maybe i'm repeating points of past discussion)

Wanderer78

ceannbui wrote: »

if QE is going to be around for a long time, shouldn't some of that, at least, be put into UBI instead? Otherwise it is just another zombie economic idea (trickle down). What use is the stock market to the kitchen table when a worldwide pandemic has forced governments to shut down their economies? In fact a UBI would enable governments to respond better to this pandemic (and possible future pandemics), while QE seems to be just delaying the inevitable crash but also increasing the debt in the meantime
(sorry, just jumped to the last page and havent read all 50 pages of discourse so maybe i'm repeating points of past discussion)

No harm done, tis probably us rambling on anyway, yup, forcing all this newly created money into the financial sector is failing, and very badly, but our most critical institutions aren't truly reacting to this failure, instead they're defaulting to the norm, this probably won't end well, for us all. It's either we blow out sovereign debt, or we continue building this bomb!

ceannbui

this default to the norm, for me, reveals some of the underlying issues in terms of trying to use conventional thinking to figure our way out of a unconventional problem . We are trying to use a 'conventional' approach (in the sense that QE is designed to protect an entrenched system of wealth distribution in the belief that some of that wealth will then flow into the economy) to an unconventional problem.

baked in climate disruption is going to cost untold amount as a direct result of 'conventional' thinking. not doing anything now will increase that cost massively, particularly ironic given how people are complaining about how much it will cost to avert further disruption. Whatever it costs today will be less than it costs tomorrow. so in a very real way, those who insist on not paying the price today are essentially ensuring it will cost us more later.

Wanderer78

ceannbui wrote: »

this default to the norm, for me, reveals some of the underlying issues in terms of trying to use conventional thinking to figure our way out of a unconventional problem . We are trying to use a 'conventional' approach (in the sense that QE is designed to protect an entrenched system of wealth distribution in the belief that some of that wealth will then flow into the economy) to an unconventional problem.

baked in climate disruption is going to cost untold amount as a direct result of 'conventional' thinking. not doing anything now will increase that cost massively, particularly ironic given how people are complaining about how much it will cost to avert further disruption. Whatever it costs today will be less than it costs tomorrow. so in a very real way, those who insist on not paying the price today are essentially ensuring it will cost us more later.

completely agree, neoclassical is done, we just largely havent accepted it yet, and you d have to wonder, how many crisis's do we have to experience, in order to. the reality is, we re all potentially on the titanic here, and it dont matter how much wealth you accumulate!

Geuze

Central Bank quarterly bulletin.

https://www.centralbank.ie/docs/default-source/publications/quarterly-bulletins/qb-archive/2020/quarterly-bulletin---q4-2020.pdf?sfvrsn=5

Geuze

The CBI are suggesting no recession in 2021, but slow recovery in domestic demand and consumption, and the hit to employment is very bad.

Total income up in 2021, yet employment down.


Big falls in the LFPR.

Wanderer78

Geuze wrote:

The CBI are suggesting no recession in 2021, but slow recovery in domestic demand and consumption, and the hit to employment is very bad.

The potential loss of jobs, is looking terrifying

Poor_old_gill

Geuze wrote: »

The CBI are suggesting no recession in 2021, but slow recovery in domestic demand and consumption, and the hit to employment is very bad.

Total income up in 2021, yet employment down.


Big falls in the LFPR.

I presume those figures are heavily caveated?

Are they based upon the expectation that we will have a vaccine by Spring time?

Apologies for the questions - I haven't had the chance to go through it yet & might not until tonight

Wanderer78

Poor_old_gill wrote:

I presume those figures are heavily caveated?

I think all predictions carry gigantic caveats, particularly from equilibrium models

Poor_old_gill

Wanderer78 wrote: »

I think all predictions carry gigantic caveats, particularly from equilibrium models

I know, I know but I guess I meant heavily caveated with regard to a vaccine!

The existence of multiple caveats in a modelled solution has got me out of many a hole over the years so I welcome their continued existence

Wanderer78

Poor_old_gill wrote:

The existence of multiple caveats in a modelled solution has got me out of many a hole over the years so I welcome their continued existence

As Kate Raworth says, 'all models are wrong, but some are useful', I'm always extremely wary of equilibrium based models, they're notoriously inaccurate, but good point about the vaccine

Poor_old_gill

Wanderer78 wrote: »

As Kate Raworth says, 'all models are wrong, but some are useful', I'm always extremely wary of equilibrium based models, they're notoriously inaccurate, but good point about the vaccine

It is welcome to see a positive utterance coming from somewhere though!
Lets hope it comes to fruition!

KyussB

Most official economic forecasting tends to be unwarrantedly optimistic about GDP. I've always considered it more as a political messaging "recovery is just around the corner!" (for the next half a decade or more...) - which, in among repeatedly wrong forecasts, usually completely fails at the one role it could actually be useful for: Predicting economic crises.

Of course, central banks predicting crises that are usually the result of their inadequate regulations/enforcement, would go against their interests and other political interests - they might have to actually regulate properly, then...

completedit

Yeah signaling is hugely important.

Roger the cabin boy

Geuze wrote: »

The CBI are suggesting no recession in 2021, but slow recovery in domestic demand and consumption, and the hit to employment is very bad.

Total income up in 2021, yet employment down.


Big falls in the LFPR.

Not quite?

No net change from the year before (2020) no?
Which considering the fall 2020 has from 2019, is quite concerning!
Only 0.8 net gain in 2022 with a positive model bias.

Or have i got that wrong ?

The valley in the charts looks awful.

Mach 3

Geuze wrote: »

The CBI are suggesting no recession in 2021, but slow recovery in domestic demand and consumption, and the hit to employment is very bad.

Total income up in 2021, yet employment down.


Big falls in the LFPR.

I think people are missing out on the fact that this is now a consumer market. Most people that weathered the 2008 GFC were/are cautious since. Thus means there is alot of money parked up ready to go on the right deals(human nature). Look at car sales - when dealers reduced prices mid year. At the end of the day it will come down to increased volume/reduced prices.

Wanderer78

Mach 3 wrote: »

I think people are missing out on the fact that this is now a consumer market. Most people that weathered the 2008 GFC were/are cautious since. Thus means there is alot of money parked up ready to go on the right deals(human nature). Look at car sales - when dealers reduced prices mid year. At the end of the day it will come down to increased volume/reduced prices.

...and those writing these reports are not truly accepting why people save more in downturns!

Geuze

https://www.cso.ie/en/releasesandpublications/er/cpi/consumerpriceindexseptember2020/

CPI and HICP now at -1.2%

"The most notable changes in the year were decreases in Communications (-8.1%), Clothing & Footwear (-5.8%), Furnishings, Household Equipment & Routine Household Maintenance (-3.8%) and Transport (-3.5%). There were increases in Education (+4.1%), Health (+3.4%), Restaurants & Hotels (+1.1%) and Recreation & Culture (+1.0%)."

Geuze

Given this consumer price deflation, the final PS pay restoration under the PSSA, 2% due this month, means a substantial rise in real wages for PS.

I realise that the PSSA 2018-2020 is restoring previous pay cuts, and that even after the 4 PSSA rises, most PS have similar wages to 2008 (ignoring increments and progression/promotion).

So the PSSA can be defended.

On the other hand, in the midst of huge unemployment, a massive fiscal deficit, and now mild deflation, giving 2% extra to PS is easy to attack.

I suggest there be a PS pay pause during 2021 and 2022.

Wanderer78

Geuze wrote: »

Given this consumer price deflation, the final PS pay restoration under the PSSA, 2% due this month, means a substantial rise in real wages for PS.

I realise that the PSSA 2018-2020 is restoring previous pay cuts, and that even after the 4 PSSA rises, most PS have similar wages to 2008 (ignoring increments and progression/promotion).

So the PSSA can be defended.

On the other hand, in the midst of huge unemployment, a massive fiscal deficit, and now mild deflation, giving 2% extra to PS is easy to attack.

I suggest there be a PS pay pause during 2021 and 2022.

your logic is understandable and makes a lot of sense, but we cant keep suppressing wages, in both the public and private sectors

Geuze

Thankfully, PS wages aren't "supressed" in Ireland.

Teachers make 70k at the top of their scale, ok it's a long scale.

Lecturers in IoTs, with 70 days annual leave, make 85k at top of scale.

I think these wages are good, are not low, and are reasonably high by international standards.



I'm not as familiar with nursing or Garda payscales, but again, they are not bad.

Our nurses are paid well ahead of UK rates.

Wanderer78

Geuze wrote: »

Thankfully, PS wages aren't "supressed" in Ireland.

Teachers make 70k at the top of their scale, ok it's a long scale.

Lecturers in IoTs, with 70 days annual leave, make 85k at top of scale.

I think these wages are good, are not low, and are reasonably high by international standards.



I'm not as familiar with nursing or Garda payscales, but again, they are not bad.

Our nurses are paid well ahead of UK rates.

as they say, 'lifes relative'!

how are newer ps recruits fairing out in all of this???

again, the whole western world is experiencing low wage inflation in comparison to critical elements such as asset price inflation, most notably in property! and you d be wondering why we re experiencing such issues!

Timing belt

https://www.prnewswire.com/news-releases/mit-sloan-study-finds-significant-disconnect-between-credit-agency-ratings-and-clo-risk-301148832.html

Healy_Rayban

Just want to give my input. Things are not bad out there at all.

I can't give details on it but I can assure you some of the major employers have lots of potential for cuts in the next year if this continues.

Timing belt

Healy_Rayban wrote: »

Just want to give my input. Things are not bad out there at all.

I can't give details on it but I can assure you some of the major employers have lots of potential for cuts in the next year if this continues.

Yes there are cuts coming but will be different by sector. The agri/food sector will have big cuts if Brexit no deal happens. The banks will need to cut costs so will have redundancies. The finance sector will tighten there belt but multinational’s don’t seem to be impacted. Most of these cuts are probably already in track and are being negotiated with unions at the moment.

Wanderer78

Timing belt wrote:

Yes there are cuts coming but will be different by sector. The agri/food sector will have big cuts if Brexit no deal happens. The banks will need to cut costs so will have redundancies. The finance sector will tighten there belt but multinational’s don’t seem to be impacted. Most of these cuts are probably already in track and are being negotiated with unions at the moment.

What do you mean by the financial sector tightening it's belt?

It's critical that the national debt is expanded, as the contraction of the private sector is looking bad

Timing belt

Wanderer78 wrote: »

What do you mean by the financial sector tightening it's belt?

It's critical that the national debt is expanded, as the contraction of the private sector is looking bad

I am taking about the private sector as in the finance industry will experience job cuts.

Wanderer78

Timing belt wrote:

I am taking about the private sector as in the finance industry will experience job cuts.

Yea I'd agree, it probably will, along side many other industries, unfortunately, we need to protect as many jobs as possible, particularly in the private sector.

It truly is critical that we continue to expand the money supply via the public sector now, or this could all go horribly wrong, very quickly