Ah it’s difficult to know where to start with such rubbish.
2007 has been very like 2006 all told - most of the imbalances and excesses still exist and continue to paper over the cracks.
The property slowdown hasn’t really gotten started yet (a relatively small number of people are stuck on with houses they’d rather sell, and a few builders have started to drop prices to clear stock - which has worked so far), we’re still spending as if from a bottomless pot of gold (yoy debt growth rose during 2007 after a drop early in the year), and there’s been a relatively limited impact from the rising cost base among the multinationals.
It’ll be well into 2008 when the crunch hits - builders forced into deeper or multiple rounds of cuts, serious employment drop in construction, serious spending cutbacks as reality hits sentiment (all self inflicted) and probably one or two sizeable multinationals cutting back on irish operations.
It’s such a load of crap, it took 2 people to write it.
I agree with most of what you say, it’s the multinationals bit that I can’t get my head around. AFAIK, most of the multinationals are serving EMEA markets. ME & A are doing well (on the back of the commodity boom). E is looking doubtful, but there are still growth possibilities in CEE, Russia and the Balkans/Turkey.
Is it not possible that they will dodge the bullet? By the time the demand for commodities slackens (due to US slowdown - leading to China and European slowdown), leading to lower demand in ME & A, E will have bottomed out and be back on the upswing? Or is that hopelessly optimistic?
a rehash of the same old “ireland is different” tripe…
i wonder just how many people are employed in the application of spin to the irish economy…?
and i wonder just how much political pressure is being applied behind the scenes to prevent our loyal MNCs from racing to the door…
Aw, give’m abreak…at least they never blamed stamp duty.
There are two kinds of multinational in ireland - real productive operations, and “tax avoiding” operations. The first are suffering from the high irish cost base, and they’ll be looking to relocate somewhere cheaper if they can - it just makes sense since most physical manufacturing operations in ireland, bar intel, could move easily to eastern europe.
The second group are more likely to hang around, although they’re not immune to the cost base either.
The problem is not that they’ll all leave tomorrow - it’s just that we’re entirely reliant on them, it’s almost impossible to attract new companies here (expansions of existing operations are pretty hard sells too), and there’s a natural churn rate which means most of the current operations will be either re-invented or gone inside a decade.
Yeah, it’ll be a long slow death of a thousand cuts really. Every couple of months another MNC will pull out. Drip, drip, drip.
The real problem isn’t that MNCs will leave, the real problem is that we don’t have any wealth-creating exporting industry of our own - and worse, we have no plans or will to actually create any, nor do we have the governmental, educational or physical infrastructure to support it.
Under FF/PD mismanagement, we’ve become an unbalanced two-legged stool over the last decade - construction/property and MNCs, all on one of the most expensive cost bases on the planet and kept afloat by an ocean of debt.
Even with a visionary proactive hardworking government in charge, it would still take 6 or 7 years of very hard work (and a willingness on the part of the sheeple to face up to and accept the mistakes made during the greed frenzy) to rebalance the economy and work through the pain to come out the other side in fairly decent shape.
With Ahern and his woeful freakshow of drooling morons in office, and an electorate of greedy children refusing to accept any responsibility for the mess, there’s really no way out of this one. A long, very long, Japanese style slump is on the way. And there’ll be no way out of that slump until the entire parasite class of grubby little spiv gombeen fixers that make up the current Dáil are forcibly ejected by the electorate.
And that includes FG & Labour - same greasy cute-hoor small-town mindset as the FFers in most cases. The only real difference is that FFers are slightly more ruthless in the pursuit of mercs and perks. None of them have a fecking clue what they want to do with power (apart from using it to make their mates richer).
i lived in finland for a while and they are very proud of how they turned the corner once things went pear-shaped after the collapse of the USSR.
there was frustration but not a lot of panic… they saw what needed to be done, assessed what it would take to get to that point and got on with it.
now they’re sitting pretty (at least in comparison to us) but the society manages not to kid themselves about their “wealth” etc.
i cant see ireland modelling the finns collective action… its far from a perfect society but in general the right things are done for the good of the economy/society… i can’t help thinking how many times im going to get fucked over as a tax payer and how many VIs will benefit from **trying **to get us out of this mess…!!!
forgive the rant…
I personally believe that Ireland will be in a full blown recession by 2011, if not sooner. Next year will see the real crunch and collapse of the property bubble.
Can’t see the FF led govt. doing anything about the tailspin we’ll be in either - after all they just governed the country on “autopilot” during the boom years. The true test of governance is real leadership and hard decisions which need to be taken in tough times. FF have shown absolutely none of this.
Meanwhile back at the ranch…
Dáil agrees to six-week Christmas break
Wednesday, 19 December 2007 15:40
The Dáil has agreed to take a six-week Christmas break.
The break begins at the close of business this afternoon.
The next full Dáil sitting will not take place until Wednesday 30 January.
it speaks for itself really…
This is a surprising piece from Dara Doyle. He normally doesn’t swallow bullish bravado, I guess he has been guided, or felt that if he purports it he exposes it; if you were completely ignorant of the Irish economy you wouldn’t be running to invest after reading it. Irish economic writers and journalists are rather weak compared to their international equals. No British paper would publish the badly strung prose of Mark Coleman or the Business and Finance people, even if they agreed with their mostly undergraduate rantings.
to be fair, even CrashandBurn wasn’t this bullish!
People tend to forget that the ‘tiger’ economy was real and based off hard work and productivity. It ended/stabilised in about 2000/2001 with the dot bomb, and that’s when the bubble economy took over.
It’s a mistake to describe the building bubble as the celtic tiger in my opinion. One was fuelled by actually producing things and the other was fuelled by transferring future earnings of the young to the old via cheap European credit.
I do believe we can get back to the 1990’s at the end of this, but it will take a hell of a lot of deflation/stagflation and pain for a lot of people before then.