If the Fed start cutting, which seems increasingly likely given concerns that the US is entering a slowdown, the ECB may follow. So Austin may indeed get his rate cut but he needs to pray for a US recession.
He was on East Coast FM (local radio) this morning talking about his article and the jist of his point was that we are not having a collapse but prices may continue to fall for the next few months but he expects the Fed to cut their interest rate next week and then pointed out that for 30 years the euro rates have followed soon after. So as you say he may be correct about the rates, His last point was that he expected house prices to record moderate growth in 2008. It would be interesting to know if he really believes all this or is he just saying something whether correct or not because thats his job.
What Hughes is predicting is a US recession (a recession caused in the main by the bursting of a speculative property bubble). The cost of debt in Ireland in such circumstances is pretty much irrelevant.
I’m quite new to the pin, and as such have only following the “economist” statements recently. (But have been looking back through earlier posts)
I have to say though, if I were to make statements in the news every month or so, a la Austin Hughes, with my employers name tied to my statements, and almost always get them wrong, I don’t think it’d be long before I was either told to stop getting it wrong, to shut the hell up, or pack up and leave. (And I’d say I’d find it pretty hard to get a job after that as well, cause all my prospective employers would know that I’d a history of being wrong, really wrong!)
Are they really convinced that they’re dead right, or just closing their eyes, sticking their fingers in their ears, and shouting “EVERYTHING IS JUST FINE, I SHOULD KNOW, I’M AN ECONOMIST”
(I’m not saying he’s wrong this time, I don’t know enough about economics)
Maybe it’s just that in my line of work your reputation is everything.
For that same reason I would say they actually hired him. He’s not so much an economist as a spinner…In order to keep his job he’d better convince people to take out loans again and soon…His economical analysis that I have read consist of all the basic facts and leave out the bigger picture…His ‘builders have reacted by cutting supply, which should bring houseprices back up again’ routine is a great example that completely misses out on the oversupply that will exist when foreign construction workers start leaving the country and demand for housing will drop further…
There’s only the convenient truth for Austin, to say it Al Gorish.
Good point. Not to mention an ongoing slump in the irish and other stockmarkets which would create a feel bad factor in terms of wealth effects and would result in an ongoing stream of poorer pensioners - all in all, our exports and consumer spending would head seriously south with the consequent effects for jobs, confidence etc. It’ll take more than a reversal in interest rates to save the day for the property market in these circumstances.
Also Trichet commented on not bailing investors out that made the wrong decisions…The thing is that if the Fed opts to lower interest rates, it will be for short term gain of those investors but at the cost of long term stability…Gauging Trichet he’s of the same opinion…but it’s hard to tell, cause in Americ they have been known to take an entirely other point…However, even if they rise, i’d still say that ECB will make up its own mind…
Anyone see the Irish Daily Mail today? Comical was savaged by one of their columnists , the front page was taken up with Comical’s plea to government to save the market from a crash/hard landing by increasing tax relief etc etc. Funny stuff, More Desperate than Comical in this case!
This gets mentioned a lot as an excuse for the likes of Comical Austin and Desperate Dan, but it just makes my brain curl up in the corner and whimper.
What sort of person takes a job where they have to casually lie through their teeth to the public, day in, day out? What exactly is wrong with such people? Should they not be in a nice comfy room somewhere having their sociopathy treated?
Such people clearly have very serious mental issues and probably shouldn’t be allowed out on the streets on their own. But in modern society instead we treat them like celebrities and pay them €200K+ a year! WTF?!
I’ve said it before and I’ll say it again - modern Ireland has its priorities all arseways, in almost every sphere of life. It’s increasingly like living in some bizarre parallel universe.