Saturday, December 31, 2011
As the minutes tick toward midnight on Saturday and you are running out of conversation topics, why not bust out some trivia about the science of champagne to impress your friends.
The Discovery Channel says they may already know about French law, which decrees that grapes must be grown in the region of Champagne in order for sparkling wine to qualify as true champagne. But your companions might not know about Henry’s Law, explains a New Year’s themed video produced by the American Chemical Society.
This law of physics states that the pressure of a gas above a solution is proportional to the concentration of the gas within the solution. For champagne, carbon dioxide is the gas that forms those delightful bubbles. And, in an unopened bottle of champagne, there is equilibrium between the CO2 inside the liquid and the gas in the spaces of the cork.
Wednesday, November 30, 2011
Monday, November 21, 2011
Monday, November 14, 2011
Lot DescriptionANDREAS GURSKY (B. 1955)
Rhein II signed 'Andreas Gursky' (on a paper label affixed to the backing board)
chromogenic color print face-mounted to Plexiglas
image: 73 x 143 in. (185.4 x 363.5 cm.)
overall: 81 x 151a x 2 in. (207 x 385.5 x 6.2 cm.)
Executed in 1999. This work is number one from an edition of six.
Thursday, November 10, 2011
Wednesday, October 26, 2011
The nonpartisan agency said in a report that after-tax income on average grew by 62% during the 30-year period. But that growth wasn’t even.
The wealthiest 1% of Americans saw their incomes skyrocket by 275% during that stretch, while after-tax income for the one-fifth of households with the lowest income grew by just 18% from 1979 to 2007.
Monday, October 10, 2011
WorldIrish.com, a website for the Irish, or anyone who has an affinity with Ireland, "harnessing the power of existing social networks while deepening the relationship of users to the Irish experience, across culture, arts, sports, media, business and science," was launched at the weekend to coincide with the second Global Irish Economic Forum in Dublin Castle.
It is claimed it will harness the phenomenal advances in Information and Communications Technology allowing the ‘Irish Tribe’ to come together in a gathering with unlimited global potential. Through the WorldIrish initiative Ireland will be the first country to embrace social media to co-invent a platform between a country and its Diaspora - - maybe but it does not appear to be a potential news portal.
It is not exactly original in that there are already several online Irish theme services including US ancestry sites and the Irish Times one.
WorldIrish.com was unveiled by John McColgan (co-founder of Riverdance, and Tyrone Productions):
“Today, around the world, it is evident that the power and potential of the internet and social networking to communicate on an unprecedented scale is influencing change in ways which would have, until recently, been unimaginable. The timing of a project like this is opportune as Dublin is now the leading capital for social media with the presence of giants such as Facebook, Google, LinkedIn and most recently Twitter. You don’t have to be Irish to be WorldIrish - - anyone with an affinity with Ireland and Irishness from anywhere in the world can join,” said John McColgan, chairman of WorldIrish.
McColgan said he expects a profit of €20m per year in coming years, at the launch at Farmleigh House, in the Phoenix Park on Friday.
Worldirish.com will bring together Irish-centred social media content fromFacebook, Twitter and other websites to create a massive online Irish community. It is seen as a key tool for attracting investment toIreland, serving as a gateway to our culture, business, tourism and sporting sectors.
However, there is a limit to what the likes of Facebook will allow in terms of piggy-backing on its content. Twitter has already shutoff services that have depended on using its content.
A global advertising campaign would cost millions and given the economic crash in Ireland, it's only RTÉ, the State broadcaster, that can subsidise from the licence fee (despite what it claims) expensive online content.
Advertising is a not a sustainable model as there will be little from financial services, recruitment or property for many years.
Even with millions of users, e-commerce commissions from for example tourist bookings will also be thin gruel.
Meanwhile, the service will have to provide compelling content for users to regularly use the site.
The promoters said last weekend that in May of 2010 Gateway Ireland hosted a seminar in Dublin Castle. It was attended by 300 delegates and with a range of guest speakers and panels. Key members of the advisory board who have also invested to date include Denis O’Brien, Terry Clune and Dermot Desmond. The backers have believed in the project since the initial gathering at Dublin Castle. They are passionate about the opportunity for Ireland and believe the time is right for a site like this that allows people to express their affinity and pride in being Irish and let their creativity contribute to making a difference.
Following on from that seminar the process of building the site began in January of this year. Working with a core staff and the best young Irish technology and design companies the process began and Gateway Ireland morphed into WorldIrish.com. Initially targeting the wider Irish community across the globe, the comprehensive online and offline marketing campaign will be tailored to target the various geographical and demographical elements that make up that market in the Social media space.
“WorldIrish.com is creating an API (application programming interface) that is an open platform on which it will develop its various online applications. The site is currently in beta and a range of applications and features will be rolled out over the coming months, working hand in hand with the community as part of a co-invention process” said Michael Baraga, newly appointed CEO of WorldIrish
To date €3m has been raised, out of which almost €1m has been spent getting the project to where it is today. Additional investment is now being sought.
Research shows that of the 70m Irish Diaspora, 49m are online today -- this type of claim has echoes of the dot-com period..
Based in the centre of Dublin in Capel Street in the old Tram Terminus, "the project envisages operating as a thriving technology and media hub and is an opportunity to create a special place where WorldIrish will thrive."
Maybe and we wish these folks luck.
We have been around before Online.ie, an online portal was launched, as an Irish version of Yahoo and a gateway for the Diaspora.
Thursday, October 06, 2011
His predecessors were great with targets even adding expected indirect jobs and ignoring job attrition.
It brings Yoggi Berra, the famous Amercican baseball player's quip, "It's déjà vu all over again," to mind.
Irish enterprise policy is dominated with spin and vacous superlatives and nothing has changed with the new government.
Bruton told the Americans today that the Irish-US business relationship "is now very much a two-way street, with Irish companies in the US employing almost as many people as US companies in Ireland."
This week, Elan, said it plans to move its main stock exchange listing to the US, as 94% of its shareholders are located outside Ireland.
Its good for bragging that CRH is technically an Irish company and a big employer in the US but most of its 80,000 payroll are not based in Ireland and neither are its shareholders.
The problem with Bruton and Seán Sherlock, his junior minister, is that they have seamlessly taken over from O'Keeffe-Lenihan, as cheerleaders of university research as a potential jobs engine, when it is a failed strategy.
Another fundamental problem is that there is no credible data on firm survival and mortality to support grandiose aspirations.
A non-sugar coated assessment of the challenges would be a good start and a big surprise.
The Minister for Jobs, Enterprise and Innovation Richard Bruton TD today announced that he has begun preparation of a comprehensive Jobs Strategy, at the request of the Taoiseach and Cabinet Committee on Jobs with a target of 200,000 net new jobs.
The Minister has previously signalled his intention to prepare a jobs plan at a speech at MacGill in July. It is expected that the Strategy will be published in January.
The Minister made the announcement in his address to the US/Ireland Business Conference at Farmleigh, which he is co-hosting.
During his address, the Bruton said: “The relationship with the United States is of vital importance to Ireland and this government is determined to work hard to strengthen and deepen our links to the benefit of both countries. This relationship, which was once based entirely around the great success story of US investment in Ireland, is now very much a two-way street, with Irish companies in the US employing almost as many people as US companies in Ireland.
“Jobs are at the very top of this Government’s agenda, and if we are to achieve the turnaround in employment that we so badly need, we must implement radical reform across every aspect of the economy. I have spoken before about the need for an innovation revolution – a revolution that brings innovation out of the laboratories and into our businesses, our communities, our schools, our public bodies and every aspect of our economy.
“We must broaden our strengths over and above the reliance on the traditional foreign direct investment that has served us so well. Within the multinational sector, we must seek to attract international entrepreneurs to start businesses in Ireland, and must strive continually to encourage the world-leading companies already here to locate the pioneering parts of their businesses here. However we must also recognise that our indigenous companies have the potential to significantly increase their exports, and do what it takes to create a real indigenous engine of growth.
“We must learn from the world-leading companies we are so lucky to have in Ireland and find ways of ensuring that our indigenous companies can lead the world in the vital processes that add value and create employment: productivity, design, management and research and development.
“If we are to bring about these types of changes, we need a plan, and that is why I have committed to prepare a comprehensive Jobs Strategy. This Strategy will not attempt to compete with the large number of reports already prepared on this subject, but will draw from the volume of material already available, as well as the amazing level of expertise available both in Ireland and abroad. I have already started a rolling process of engagement on the issues and intend to create an action plan that Government can take to address our challenges.
“If we work hard and take tough decisions I don’t see why we should not aspire to:
- Create over 200,000 jobs to have 2 million people at work again
- Be the best country in which to run an enterprise
- Significantly increase the share of our indigenous business in export markets
- Return to and stay in the top five countries for cost competitiveness; and
- Ensure once again that all our children can have a future in Ireland.
Tuesday, September 27, 2011
The following is one of my contributions to the thread:
It’s foolish to argue that cuts in public spending against the backdrop of a faltering recovery in developed countries, would boost economic activity in the short-term.
However, what should a country that is dependent on foreigners for most of its borrowing do?
Irish professional economists appear to be as lost for credible answers as the general public, four years after the onset of the global credit crunch.
Is there any research being done in this area?
The ESRI will likely publish material on the issue in years to come but expect nothing in the short term.
The issue of austerity reminds me of Harry Truman’s answer to a question on the difference between a recession and depression.
"It's a recession when your neighbour loses his job; it's a depression when you lose yours."
- - Harry S Truman, in Observer, April 13, 1958; 33rd president of US (1884 - 1972)
Politicians, senior civil servants and academics face personal conflicts of interest on the issue and in this recession, for the first time, trade unions have effectively abandoned advocacy on behalf of individuals in the unprotected private sector who are experiencing most of the pain.
The issue of mortgage debt forgiveness did briefly provide a glimpse of the plight of people who are generally invisible. It was also interesting that BlackRock Solutions, an American fund manager, was seen as providing an ostensibly painless solution.
So what does austerity encompass?
Greece has apparently thousands more teachers than classrooms; the well-off who generally evade taxes pay more in private tuition than the combined primary and secondary school budgets?
Would it be austerity for Ireland, a bankrupt country, to clawback the big payouts for politicians and public sector staff?
Not alone is there an Irish state guarantee of employment in the public sector and surplus staff are today being paid for doing no work, almost four decades after equal pay for women became an issue, it’s planned to have new permanent staff in the civil service on worse conditions than existing staff doing the same work - - all because politicians are afraid of upsetting the existing applecart and there is silence from others who choose less risky topics du jour.
Anglo Bank plans to cut its payroll to 900 but who believes that the defunct bank has work for all of them?; the citizens of a failed entity that becomes a ward of the State have exalted status compared with compatriots who are dumped on the street every week.
So ESRI, time for you folks to get ahead of the curve and try a bit of radicalism.
Finally, when should failed systems be reformed? - - when an economy is showing signs of recovery or flat on its back?
My answer is the latter, if it can happen at all.
Japan, Italy, Greece, Ireland…
Tuesday, September 20, 2011
In a news release, ATRA director of communications Darren McKinney said he found the ad's "opportunistic, ambulance-chasing mentality" to be "truly sickening" and rhetorically asked: "So who can I sue?" He added that "ATRA intends to keep reminding consumers, taxpayers and voters in judicial hellholes that they ultimately bear the costs for the lawsuit abuse that the Craig Goldenfarbs of the world foment."
Tuesday, September 06, 2011
Catastrophe journalism uses the most modern technology to satisfy atavistic reflexes, because the patterns of thought that lie behind our voracity for doom and gloom news are religious.
How does it go in the Book of Revelations, that apogee of apocalyptic theories? 'You say, "I am rich; I have acquired wealth and do not need a thing." But you do not realize that you are wretched, pitiful, poor, blind and naked.' Then come the Riders of the Apocalypse live on CNN."
Thursday, September 01, 2011
The issue of mortgage indebtedness is complex and it is clear that there is no “magic bullet” or “one-size –fits-all” solution, Michael Noonan, Finance minister, said today.
Noonan told the Oireachtas Committee on Finance, Public Expenditure and Reform that while there have been many contributions to the debate including suggestions for the granting of extensive debt forgiveness, "this simply is not a realistic option." He said solutions must be found on a case-by-case basis through open and meaningful engagement between the distressed borrower and the lender. The planned reform of the bankruptcy and debt settlement arrangements are also key elements in any consideration of potential policy options.
On Monday, the Central Bank published the latest data on mortgage arrears and repossessions for the period ended June 2011. The figures show that 7.2% of private residential mortgage accounts are in arrears for more than 90 days. At the end of June 2011 there were 777,321 private residential mortgage accounts held in the Republic of Ireland to a value of €115bn. Of these, 55,763 accounts, or 7.2%, were in arrears for more than 90 days. This compares with 49,609 accounts (6.3% of total) that were in arrears for more than 90 days at the end of March 2011. 95,158 accounts were either in arrears greater than 90 days or have been restructured.
Besides the restructured mortgages, there must be large numbers of people who are just about managing to keep up with their bills but the rational reaction to the expectation of some sort of blanket forgiveness would be to not keep up with payments.
I noted last week that we have one of the highest level of owner occupied housing in Western Europe without a mortgage and obviously some housing units were purchased by parents in their children’s names — I would think it’s a substantial number.
There are many other issues; it’s understandable that a person who lost their business or job may not be able to pay a €500,000 or €1m mortgage, absent downsizing, unless most of the balance is cleared. So shouldn’t an agency have power to set reasonable options for a borrower in distress? In some cases a mortgage could be cleared in full by downsizing.
These type of big schemes are ripe for abuse and the application of the law of unintended consequences.
Forty per cent of third level students are in receipt of a public grant; from the time the scheme was introduced fort years ago, it was common to find wealthy farmers, already in receipt of public handouts, having their children on grants motoring to college while struggling middle income families above the income threshold having to fund fees and maintenance.
Finally, it’s interesting how the BlackRock extreme scenario provision, produced by the US firm in the March 2011 Irish bank stress tests, appears to give the illusion of a cost-free solution, as the monies have been already set-aside. Contrast that with a situation where one issue in the debate would be the amount of a special mortgage income tax levy that should be introduced in Budget 2012, to cover the cost.
Irish Economy blog thread
Sunday, August 07, 2011
This is a contribution to a thread on the Irish Economy Blog.
Radical solutions are needed to respond to a changing global economy but the radicalism should begin within our own direct spheres of influence.
The Sunday Independent quotes Ray Kinsella of UCD today, proposing leaving the euro — a hugely consequential move - - and Morgan Kelly referred to improving the education system.
However, in Ireland, four years this weekend after the onset of the credit crunch, the default mode remains to leave the tough issues and choices to the politicians.
The people who know best how to get an improved education system on limited resources are likely insiders who keep their heads down to avoid upsetting sacred cows.
The performance of the university presidents in particular, has simply been shameful.
It’s the same with the €2.5bn science budget, as referred to above.
Like motherhood and apple pie, education and innovation get universal plaudits.
The minister for education, an intelligent architect, should not be expected to produce miracles; In Enterprise, Bruton/Sherlock have replaced O’Keeffe/Lenihan and their soundbites on innovation are interchangeable.
‘Ecosystem’ and other jargon surely papers over a lot.
As for radicalism, while the 2008 state bank guarantee is now generally discredited, could someone enlighten me as to what is the current rationale for providing a state guarantee to workers who have the best pay and perks in the workforce?
The High Court had mandated deregulation in 2000 and recently the joint labour committee system was declared illegal.
Strange or not in a system of strong vested interests, where the political system failed, the courts have only been asked to rule or have chosen only to see the need for remedy at the bottom of the economic pyramid.
@ Brian Mercer
The primary system doesn't resemble Saudi Arabia and teaching a number of languages is not an impediment to a successful educational system.
In fact our aspiration to restore usage of the native language, while not being willing to put up with the hassle, speaks for itself.
Monday, July 18, 2011
Investments funds generally specify the minimum rated debt that they can buy.
The following are 2 of a number of contributions to an Irish Economy thread on the development.
Samuel Johnson said that “when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully.” The prospect of losing a job in today’s money economy, which for some would be permanent unemployment, can have a similar impact.
Hugely consequential proposals can be made by people who are protected from the storm but for example introducing capital controls would likely trigger speculation about leaving the euro. The battered private sector would again be in the eye of the storm while public sector job guarantees would remain in place.
By the end of this year, from the start of 2008, about 5,300 Irish companies will have collapsed; many of the surviving ones have incurred bad debts from the bust companies while dealing with big falls in business during the recession.
There are tens of thousands of jobs in the SME sector in peril; while exceptions would likely be made for foreign payments for supplies where capital controls were in place, who overseas would provide credit?
How many here know what it’s like to arrange cash-flow each month for the payroll, where bank credit is restricted and customers have to be hounded to pay?
IFSC companies also use the domestic banking system as do the other FDI companies.
@ Aidan R
Ireland has engaged in a fiscal adjustment equivalent to 14 percent of GDP. This is the LARGEST budgetary adjustment seen anywhere in the Western world.
It beggars belief that some still think more cuts in spending are required to fix Ireland’s economic woes (or that we did not cut more).
This argument has been made from 2008, usually by individuals from the public sector. In terms of income adjustments, most of the pain has been felt in the private sector. Self employed pension coverage was down to 36% in 2009 and is likely much lower now.
With about 75% of sovereign borrowings dependent on foreign lenders, what should we have done when a big global recession suggested that a recovery would take years?
There was no growth in jobs numbers in the internationally tradeable goods and services sectors in 1998-2008 as the workforce expanded by 25%; exports increased in nominal terms by 50% in 2000-2008 as the CPI rose 35%. However, additional output from the MNC sector is not permanent wealth.
In 2000-2008, GNP increased 74%; welfare spending +160%; health +186%; education +128%.
In 2010, current public spending was €61bn - - it was €52.5bn in 2007; In 2010, gross gov revenue was at €47bn - - it was €61bn in 2007.
The rise of unemployment and the legacy of the boom with possibly over 200,000 foreign nationals on welfare (78,000 adults are on the Live Register) are factors but the inconvenient truth is that there remain significant bubble gains in the system.
Just take one example: In Sweden, one of Europe’s best economies, MPs are paid 28% less than the standard pay of TDs and the Swedish expense system would certainly not enable an MP to have a second home paid by the taxpayer over the term of a mortgage. In Ireland today, independent TDs get an annual €41K tax free gift - - no audit, no need to say what it’s spent on - - called a ‘leader’s allowance’ in addition to normal lavish expenses. This payment amounts to 57% of a Swedish MP’s annual salary.
This litany could go on and on.
It’s interesting that the politicians and civil servants are the ones who have responsibility of rounding the circle. They also have been the big gainers from the bubble, despite some cuts, and will all be beneficiaries of an exclusive pension scheme.
Add in the ESRI, the Central Bank, the universities - - with the exception of Colm McCarthy who has had the experience of fighting for a living in the private sector - - and the trade unions who now mainly fight for public sector interests, is it any wonder that 4 years after the onset of the credit crunch, apart from short-term fire fighting, baby steps have only been taken in response to the bursting of the bubble?
Monday, July 04, 2011
Standard & Poor’s reported in 2009 that in 2007, the average age of cars registered in EU-15 countries was 8.2 years, up from 5.8 years a decade earlier. This increase was in part because of the improved overall quality of cars. In Ireland in 2007, a driver of an 8-year old ‘banger’ would have been viewed as a loser.
Cars were the biggest export sector for Germany at 16% in 2010; the majority of German cars were built outside Germany in 2010 — which was a boost for the German car parts industry.
Of the €10.9bn goods surplus in April, €1.5bn related to the Eurozone. In 2010, imports from the then other 15 EZ countries grew 4% faster than exports.
Germany became a net exporter of food and drink in 2008 for the first time since the Federal republic was founded; the arrival of Aldi and Lidl in Ireland has been a gain as Tesco now faces serious competition.
Common claims that exports have risen because of competitiveness should not be taken at face value in Germany or Ireland.
German companies were best placed to respond to demands from rapidly expanding emerging economies; the output of both big firms such as Siemens, Volkswagen and BASF and smaller family-run firms with a tradition of making quality machine tools, was in demand.
For several years, the Irish business economy total labour cost per hour has been a few percent below the German level and 30% below Denmark’s. Irish employer social security costs are low as there has been no obligation to provide pension cover.
The influx of migrants kept labour costs lower than they would otherwise have been during the boom and also enabled companies like Google to centralise localisation services in Ireland.
There is no evidence that overall competitiveness has impacted exports from the FDI sector. The closure of Dell’s Limerick plant was a special case as the PC manufacturing sector travelled the same road as the TV set industry.
Big electricity users have got low rates and while the indigenous food sector was hit by the fall in sterling, it is now benefiting from the resumption of a food commodity boom.
Excessive costs in the non-tradeable sector do of course impact the potential for economic development.
Now think about the competitiveness challenge Ireland has. Ireland must (and will) return to the Eurozone average at least, by accepting lower wages and deflating the economy. But will it ever really get close to Germany’s level of competitiveness?
In 1991, when Ireland’s interest on the national debt took 28% of tax revenues, German financed structural grants more than offset that burden and typical building site costs were 10% of the cost of a house. Site costs jumped to as much as 50% and the land rezoning system remains unreformed.
Public staff pension costs jumped 14% in the year to March and the litany could go on…legal costs have risen 12% since 2006 despite the crash and deflation.
A speech by the ECB’s Jürgen Stark on Mar 17, 2008 has a table of unit labour costs total economy - - (not to be confused with labour costs per hour in the business economy) for EZ economies 1999-2007.
It shows a rise of 33.3% for Ireland compared with 2.9% for Germany.
German labour reforms, including flexibility during downturns in collective agreements, proved their worth in the recession.
Prof. Hans-Werner Sinn had a book published in 2003:Ist Deutschland noch zu retten? (Can Germany Be Saved?) - - Its blurb read:“Taxes keep rising, the pension and health insurance systems are ailing. More and more companies are going bankrupt or are leaving the country. Unemployment has reached alarming levels. Germany is outperformed by its neighbours. Its growth rates are in the cellar, and it can’t keep up with Austria, the Netherlands, Britain or France. Germany has become the sick man of Europe.“
Sunday, June 19, 2011
It’s odd that two academics could produce such a fact-less op-ed article.
The banks in Spain, Portugal and Italy are not ‘chock full of their government’s debt’ as clliamed - - the figures for 2010 were €200bn, €13.7bn and €145bn respectively.
The earnings of most of Europe’s big banks are at risk from restructuring rather than capitalsiations.
Italy’s UniCredit had a sovereign exposure of 2.8% of 2010 total book value while Spain’s Banco Santander was at 11.8%. Spain’s second biggest bank BBVA was at 3.7% - - 43% of BS profit in Q1 was from Latin America.
How realistic is it to include Italy when the private sector has the highest savings rate in Europe and half the sovereign debt is financed locally?
The main risk from Greek debt is the exposure of its banking system and a related collapse of its economy; the direct exposure of German and French banks is relatively low at €34bn and €55bn (2 Greek banks are majority owned by French banks) respectively. There are other distributed exposures to insurance companies etc and the ECB.
A Greek default would unlikely bring down a big European finance firm.
An editorial in Friday’s FT titled ‘The evaporating reform of Greece,’ says “The international financial rescue of Greece in May 2010 was, first and foremost, an emergency operation to avert a sovereign debt default, save Europe’s banks and prevent the collapse of the euro. But the crisis also represented a once-in-a-generation opportunity for Greek politicians, business leaders, trade unionists and the general public to join together in cleaning the putrid Augean stables of the modern Greek state…Thirteen months on..myopic politicians, in government and opposition, trade accusations over trivialities and pay lip service to the cause of reform. The public, suffering its third successive year of economic recession, is by turns angry, desperate and drained of hope.”
Greece had a debt to GDP ratio of 25% in 1981 when it joined the then EEC. Turkey’s was 42% in 2010.
I made similar arguments to the FT’s in respect of Ireland in the article in the Dublin Review of Books - - only to have them dismissed by UCD economist Karl Whelan as ‘nonsense.’
I also argued that the socialisation of bank debt had been pioneered by Ireland when as Commissioner Almunia confirmed this week, there was no EU policy on protecting senior bondholders. It’s a pertinent issue as Anglo was nationalised just 15 weeks after the issue of the bank guarantee.
On reform of Europe’s governance system, it’s reported that it’s the directly elected European Parliament, that is pushing for a system with credible sanctions against the resistance of member governments.
Dr. Stephen Roach of Yale and Morgan Stanley, wrote this week of zombie consumers and the gridlock on fiscal reform in Washington DC.
The chattering class may not view reform as important but in the real world of jobs and business at a time of uncertainty, agreement on long-term reforms must surely have some positive current impact on consumers and business investment.
Dublin Review of Books: Article on Irish economic crisis
Sunday, May 29, 2011
After winning the Ice Hockey World Championships, many players of the Finnish ice hockey team returned home drunk this month.
The Finns and Irish share a love of the bottle and Lahti’s Etelä-Suomen Sanomat newspaper reported that tens of thousands of cheering fans were in Helsinki to greet the heroes who had just returned from humiliating archrivals Sweden 6-1, in the finals in Slovakia.
The state of stupor of the team was evident when team captain Mikko Koivu, his gold medal hanging on his chest, held up the trophy.
The trophy had been damaged by a drunken assistant coach who did a faceplant as he descended the steps of the airplane. Apart from him, almost all the team on the platform were “staggering around in a drunken stupor.”
The newspaper said that in Finland “people have nothing against getting a little tipsy.” But that level of drunkenness was just embarrassing - - particularly for young men who are supposed to be “heroes and role models.” Those responsible for the team should have “made sure that nobody was drunk on the plane ride home.” As it is, the hockey association “has an apology to make” to the Finnish people.
World alcohol country rankings
Monday, May 23, 2011
How? Did he have a gun? Did he have a knife? He's a short fat old man," and "Can anyone tell me any economists who have been convicted of violent sex crimes?"
Bloomberg article, May 24, 2011: Strauss-Kahn Case May Curb Libertine Ways
Tuesday, May 10, 2011
Concentrating on the situation of males in some key age groups, unemployment rose dramatically in all fours age groups, but younger men were most severely affected.
Irish Economy thread
I wrote: This is an impressive presentation and there are interesting parallels with the US.
Economists at the Hamilton Project of the Brookings Institution, say that up until the early 1970s, virtually all prime-aged men were gainfully employed - - regardless of whether they had a high school diploma or a college degree. Over the last 40 years, however, the United States has witnessed a dramatic change in the employment situation for men, particularly for less-educated workers who have faced greater challenges finding jobs and have increasingly dropped out of the labour force.
Separately, Prof. Michael Spence and a colleague have produced research which shows that in the period 1990-2008, almost all the additional increase in US employment was in the non-tradeable sector led by government and health care.
Almost all US jobs added in 1990-2008 were in non-tradeable sector led by government and health care
In the last decade of the Irish boom, almost all the new jobs were in the non-tradeable sector.
To me one of the enduring problems at policy level in the jobs area is that spin invariably trumps an unvarished assessment of the challenges.
In the FDI area, because we already host most of the top firms in high-tech, health/pharmaceuticals and financial services, it's evident in recent years that new projects tend to be small and while only 10,000 jobs were added in the tradeable sector in the period 1998/2007, recent job losses have reduced employment in the tradeable goods and services sectors (FDI + local) to about 268,000 - - back to 1997 when the workforce was 25% smaller.
The number of Irish firms involved in exporting is much lower than comparable firms in other small economies. Irish SMEs do not grow to a size that is considered essential for developing overseas markets.
There is very little useful data on firms. Stephen Kinsella has done some work on firm mortality but there is no useful data on startups, survival rates and no longitudinal studies tracking growing firms.
According to Forfás, science related public spending across 39 government departments and agencies rose from €1.2bn in 1999 to €2.5b in 2009. €500m could likely be chopped off this sector without impacting outcomes.
The so-called smart economy has got the lion's share of Irish enterprise public funding in recent years with research and development spending in higher education almost trebling from €322m in 2002.
While research can have several benefits, direct commercialisation is an insignificant one. For example, in the US the income from intellectual property is 4% of university research spending and in England in 2009, only £73m was earned.
The officially policy is a muddle but the goal to create a jobs engine from research is a delusion.
A UCD study shows that in 2009, firms supported by venture capital companies, employed 9,700 people; according to Enterprise Ireland, 100 spinouts from research created 1,000 in 10 years.
Given the growing world population, there should be focus on food and commercial research should prioritise this area.
In the EU in 2006, manufacturing as a percentage of total employment was 18.2%, 13.3% in Ireland and 22% in Germany.
Despite the recession, the costs of doing business in Ireland are still excessive.
Irish Economy 2011: The Jobs Initiative and a promised ambitious long-term strategy
Sunday, May 01, 2011
developed a new language—a kind of Nix-speak. Government officials were entitled to make flat statements one day, and the next day reverse field with the simple phrase, "I misspoke myself." White House Press Secretary Ronald Ziegler enlarged the vocabulary in that month, declaring that all of Nixon's previous statements on Watergate were "inoperative." Not incorrect, not misinformed, not untrue —simply inoperative, like batteries gone dead.
Time said euphemisms notwithstanding, the Nixon Administration's verbal record on Watergate was enough to turn ardent believers into skeptics.
In Ireland's small insider elite, flip-flops may take longer than a week but a brass neck can work wonders because other insiders are afraid to challenge hypocrisy directly. Who knows when one may need a back scratch some time? After all, it's a country where resigning on principle is viewed as bizarre; the concept of conflict of interest hardly exists; local councillors with commercial property interests can vote on land rezoning decisions and the State broadcaster, RTÉ, has publicly declared that there was no problem with its highest paid staff getting free luxury cars from private companies.
Tammany Hall here we come in the land where for some, the buck stops nowhere!
In the recent Irish general election campaign, Alan Shatter, now Minister for Justice, challenged rival candidate Senator Shane Ross over the claims in the latter's election literature that he had ‘‘a 15-year record of challenging bankers.’’
Ross has been both a politician and business editor of the Sunday Independent and has delivered a book, 'The Bankers,' to the angry mob looking for a tooth for a tooth.
The floatation of the Irish State-owned telco, Eircom, was the first big manifestation of tulip mania in the Celtic Tiger period and in September 2000, the then Sunday Business Business Post journalist Emily O'Reilly lambasted the then Senator Shane Ross for what she termed the former stockbroker's pitching of the shares in the public floatation and later heading a public crusade against the company.
O'Reilly wrote: "Ross has made a virtual third career out of board bashing. As business editor of the Sunday Independent and part-time commentator on Today FM's Last Word programme, he and presenter Eamon Dunphy have developed a neat double-act. Outrage is the theme as the two handsomely paid media buddies rail against the handsomely paid business buddies on various company boards."
Alan Shatter challenged Ross about his praise of the two most notorious
bankers of the bubble: Seán FitzPatrick of Anglo Irish Bank and Michael
Fingleton of the Irish Nationwide Building Society.
Ross took the prudent course and ignored Shatter's bait as this non-response as usual worked wonders in conservative Ireland. The anti-banker Ross headed the poll. All his previous statements had become "inoperative."
As a newly elected TD for South Dublin, Ross is a scourge of nefarious
bankers and is advocating Irish default.
Vying for populist appeal where inconvenient truths do not have to be told, is celebrity economist David McWilliams.
McWilliams has claimed to be an architect of the September 2008 calamitous blanket bank guarantee that ranks as one of the most inept but consequential decisions made in the history of the Irish State. He too has reinvented himself as a spokesperson for the economically illiterate and now distances himself from the guarantee that he once termed a 'masterstroke.'
Dr. Conor McCabe, a historian, has published a devastating critique of the populist chameleon.
McCabe challenges apparently made up 'facts' in the book 'Follow the Money' and he adds: "The footnotes, though, pale into insignificance when compared with the attitude, analysis and conclusions which are presented to the reader. ‘Out in our new suburbs, a new generation - the Juggling Generation - is sinking under the weight of huge debts, negative equity and the trauma of failure’ writes McWilliams.
This is a mere four years since McWilliams opened up The Pope’s Children with the line: ‘Ireland has arrived.’
In that book he talked of little else but the new generations and the profound changes Ireland had undergone in the previous 25 years. Now, 48 months later we have a new generation. Not even The Borg could regenerate that quickly."
Bankers are not the only ones who are running away from their past.
Conor McCabe: David McWilliams: Merchant of Guesses
Sunday Business Post: Shatter critical of Ross election claims
Irish Times: Shane Ross, Alan Shatter, Dublin South and the banks
The issue of ECB President Jean-Claude Trichet and the Irish State bank guarantee of Sept 2008,is reminiscent of arguments about London-Dublin cable traffic during the Treaty negotiations in 1921. The main story of course was why the head of the revolutionary government had decided to stay in Dublin not communication problems.
There was no official ECB policy in Sept 2008 on issuing blanket guarantees and neither had EU finance ministers promoted it.
Ireland was the ONLY Eurozone country to issue a blanket guarantee and a week later Denmark made a similar move.
According to the IMF, the median across 12 advanced countries of government-guaranteed debt issued by banks during the crisis or in the case of Denmark/Ireland including existing debt, was about 6% of GDP.
In ascending order, US (2.5% of GDP), Germany (3%), Portugal, Spain, France, Austria, Sweden, Netherlands, UK, Australia, Denmark and Ireland.
Denmark’s exposure was 20% of GDP and Ireland was the outlier with an exposure of 55% of GDP — all the others had an exposure below 10%.
The news on the Irish guarantee was presented as a fait accompli to the ECB, Ecofin and Eurogroup heads on the morning of Sept 30, 2008, coinciding with the issue of the news to the markets.
Once the announcement was made, it would have been very difficult to reverse it.
As regards the Lenihan-Trichet phone conversation a week before the guarantee was issued, I doubt if Trichet gave the go-ahead on a blanket bailout. Unlike his gaffe-prone predecessor, he is always measured when speaking on policy issues.
This story is akin to a unit of a multinational making a major decision without any consultation with headquarters but assuming that everything would be grand because of a conversation a week before with the CEO.!
Decisions made in a panic situation seldom turn out right.
The banks had access to the ECB’s emergency liquidity program which was in place since Aug 2007.
The unlimited deposit guarantee could have been issued and the issue of guaranteeing debt could have been discussed with the ECB in a calmer atmosphere.
If the blanket guarantee was issued to save Anglo, it was an absolutely reckless move to make in the absence of detailed information on the state of the bank.
Remember the context - - yes the crisis had intensified in the previous 2 weeks after the collapse of Lehman - - but it had been 13 months since the onset of the credit crunch; the world’s biggest insurer had to be rescued by the US government and the prospects of an Irish soft landing had evaporated and what did the Department of Finance have?
A Sept 18th PowerPoint presentaion prepared by Anglo and the financial regulator both chimed with the mantra on ‘resilient’ banks.
Wednesday, April 20, 2011
Wednesday, April 13, 2011
The insiders can be multimillionaire lawyers and public staff with premium pay, pensions and job security, while the outsiders, without the support of powerful vested interests, are on their own.
In Ireland today, the vested interests are part of the machine politics system; from traditional trade unions on the Left to their counterparts on the Right representing wealthy medical consultants and lawyers, they make common conservative cause in opposing reform and change.
The main culprits of the cataclysmic dénouement have got gilt-edged meal-tickets for life and David Begg, the general secretary of the Irish Congress of Trade Unions, who was a director of the Central Bank from 1995 to 2010, like the bankers, rejects any personal responsibility for the banking crash.
As for the employers' body IBEC, we said last February that it may seem strange that given the ostensibly pious aspirations for reform of both the "the country and the economy," that IBEC director general, Danny McCoy, would avoid the issues of reform of the protected private sector which imposes more cost burdens on business than for example commercial rates.
What is striking is that some people are outraged by perceived unfairness when it's seen from afar but not so when it's close by.
In the Financial Times today, Lorenzo Bini Smaghi, executive board member of the European Central Bank argues that Ireland should share the pain of the banking crash.
This has prompted a thread on the Irish Economy blog, which I have responded to.
I would agree that Bini Smaghi's general tone is akin to a red rag to a bull but I return to an old refrain on we seeing what suits us.
The Irish Examiner in an editorial today hits out at the Allied Irish Banks' signal that it would be “reasonably generous” on severance packages. The newspaper says figures based on up to eight weeks pay per year’s service, plus statutory redundancy, were bandied about yesterday:
“One of the most provocative things about our economic collapse is the inequity of it all. Some people seem unaffected yet others struggle to survive.
Figures like those suggested at AIB are unheard of in most of the economy. They are even more bizarre when you consider that the bank depends on taxpayer bailouts for funding. Payments on this level would add to the sense of injustice simmering right across this society as they are the exception rather that the rule. A similar argument can be made about semi-state staff expecting windfalls if those companies are privatised.
AIB staff from the boardroom to the cash counter may not like to hear it but sooner or later the Government is going to have to take a stand on creating a more equitable society and this is as good an issue as any. It is not about punishing bank employees but about redressing some of the terrible wrongs in this country.”
In contrast with the United States, the largely invisible unemployed in conservative Ireland and the issue of the development of a credible jobs strategy, evoke tepid reaction compared with the heat generated on burning bondholders.
Sunday, April 03, 2011
“In my (no doubt ignorant) opinion, we should be threatening to kick the table over and leave the eurozone while remaining in the EU, joining Britain in an Atlantic alliance that will still have the clout to maintain access to the single market.
There’s no hope of that happening — we’re too inherently Anglophobic for that. It is 38 years since I listened to government officials in Brussels telling me that our future lay with the deutschmark, and that our curse was the link with sterling.
It is surely strange that, after all these years, the perfidious Brits are still our biggest trading partners.”
Interesting argument expect for the strange fact: exports to the Eurozone in 2010 at 38% of total exports (goods + services) are double the level to the UK.
In the Irish Independent in Sept 2010, celebrity economist David McWilliams, used false export data to also argue against the euro.
"The most damning statistic of our entire euro venture is that from 1990-2000 when we had our own currency and we devalued in 1993 to get competitive, Irish exports grew by 360%. Between 2000 and 2009 with our overvalued new euro currency, Irish exports grew by 0.3%. That says it all really and yes, that figure is 0.3%, not 30%!"
We at Finfacts take facts seriously and it's very important when commenting on economic trends and policy.
There is the simple support for an argument by citing relevant facts. There is alternatively the selective use of facts to support a position and there was a classic example of both in the Irish Independent.
In 2000, tradeable goods and services exports were €102bn; in 2009 they were valued at €144bn - yes, an increase of 41%! McWilliams said 0.3%!
There was a 10% devaluation in 1993. So that is a fact but it is not credible to claim that an export boom depended on a small scale currency revaluation while ignoring a key fact that with 1% of Europe's population, we were attracting 25% of US greenfield investment. Besides, a paper published by the Central Bank in 2005 shows that the trend of exports from Irish-owned firms in the period 1990-2002, hardly changed. Have a look at a chart here which shows the true facts.
Intel, Dell, Hewlett-Packard, Microsoft and a raft of world-class pharmaceutical companies triggered the export boom not the Minister for Finance Bertie Ahern who was left with no choice but to agree to a market-forced devaluation in 1993.
We need leaders who will ignore the eurobabble and just say no
Ireland and leaving the Euro: 10 questions for pub-stool economists
Wednesday, March 23, 2011
Kevin O'Rourke, professor of economics at TCD in Central Dublin, calls critics of the lack of public service reform and change in the protected private sector 'economically illiterate commentators.'
A colleague of O'Rourke used to make money producing reports for developers cheerleading the boom; now he is advocating unilateral default.
In 2007, Taoiseach (Prime Minister) Bertie Ahern wondered why critics didn't commit suicide.
The conservative vested interests eager to protect existing benefits will fight tooth and nail despite the economy being bankrupt.
Among several contributions, I say: "Why do you think that the traditional trade union movement, headed by an individual who was a central bank director for 15 years - - all through the boom and beyond - - has had nothing to say on change and reform of the system controlled by their wealthy counterparts along the spectrum, representing protected professions also dependent on tax funds?
Is it that there is a tacit understanding by the conservative groups along the spectrum where all fear change and thus the Mexican stand-off?
Why do you refer to those on benefits?
What is needed is a jobs strategy to provide people with worthwhile jobs not public sector trade unions wanting the status quo for insiders with unique protections (maybe everyone in the economy should have their job guaranteed?) while supporting more welfare payments for the private sector unemployed."
Master statistician Hans Rosling makes the case for the washing machine.
With newly designed graphics from Gapminder, Rosling shows us the magic that pops up when economic growth and electricity turn a boring wash day into an intellectual day of reading.
Monday, March 14, 2011
Milton Friedman was an American economist who became an icon of the conservative movement and he was interviewed in 1979 on a chat show presented by Phil Donohue.
Friedman's research focused on monetary impact in the economy and he was generally regarded as a crackpot until the emergence of Ronald Reagan and Margaret Thatcher.
He was more of a libertarian than a conservative.
I admired both the liberal John Kenneth Galbraith and Milton Friedman, two of America's best known economists of their time.
Does that sound strange?
They both died in 2006.
Nobel Prize Winner and renowned American economist Milton Friedman dies at 94 -
- Influenced economic policies of President Ronald Reagan and Prime Minister Margaret Thatcher
Renowned iconoclastic economist John Kenneth Galbraith dies at 97
Thursday, March 10, 2011
UPDATE Sept 09, 2014: The idiot/ eejit's guide to distorted Irish national economic data
UPDATE: May 26, 2013: In recent years, Accenture, the US management consultancy firm, has been among several big international groups that have moved their headquarters to Ireland.
They may engage in little or no economic activity beyond an office in Dublin but their results are included in Ireland's national accounts and the GNP metric in particular has been distorted.
Reported profit in one year can eventually be moved out of the system via dividends but the impact on data continues as these firms are big compared with the Irish economy and there are a flow of new entries and exits.
Steven Rattner wrote this week in The New York Times:
WHILE a Senate report detailing Apple’s aggressive tax sheltering of billions of dollars of overseas income grabbed headlines this week, little notice was paid to a surreptitious thrust at tax minimization that was announced at nearly the same moment.
In a news release, the American drug maker Actavis announced that it would spend $5 billion to acquire Warner Chilcott, an Irish pharmaceuticals company less than half its size.
Buried in the fifth paragraph of the release was the curious tidbit that the new company would be incorporated in Ireland, even though the far larger acquirer was based in Parsippany, N.J.
The reason? By escaping American shores, Actavis expects to reduce its effective tax rate from about 28% to 17%, a potential savings of tens of millions of dollars per year for the company and a still larger hit to the United States Treasury.
Actavis is hardly alone in fleeing to lower-tax countries. For example, Eaton Corporation, a diversified power management company based for nearly a century in Cleveland, also became an “Irish company” when it acquired Cooper Industries last year.
John FitzGerald, an economist at the ESRI, an Irish economics think-tank, recently produced a paper on the impact.
Both GDP and GNP are now unreliable measures of Irish economic activity.
The original post below dates from March 2011
Ireland's national statistics office, the CSO, says Gross Domestic Product (GDP) and Gross National Product (GNP) are closely related measures. GDP measures the total output of the economy in a period i.e. the value of work done by employees, companies and self-employed persons.
This work generates incomes but not all of the incomes earned in the economy remain the property of residents (and residents may earn some income abroad). The total income remaining with Irish residents is the GNP and it differs from GDP by the net amount of incomes sent to or received from abroad.
In Ireland's case, for many years past, the amount belonging to persons abroad has exceeded the amount received from abroad, due mainly to the profits of foreign-owned companies, and our GNP is, therefore, less than our GDP.
State agency Forfás said last year that GNP is a better measure than GDP of the value added accruing to residents of the country. In Ireland, GNP is now considerably lower than GDP because of income flows to non-residents, especially profits and dividends of foreign direct investment enterprises. In 1970, the reverse was the case with GNP higher, because of income flows to Irish residents from abroad.
As a result of this turnaround, GNP growth has been somewhat slower than GDP growth. Since 1970, real GNP has increased about four times. In the year 2008, GNP decreased by 2.8% while in the five years (2003-2008) it increased by an average annual rate of 3.8%.
The growth in exports has been especially noticeable. Since 1970, the value of exports has increased over twenty times in real terms. The other demand components making up GDP have increased to a lesser extent over the same period, e.g. personal consumption over four times, public expenditure about four times and investment about five times.
Some of the growth during the bubble resulted from increasing numbers at work. While GNP at constant prices increased by 19% between 2003 and 2008, the increase per person in employment was much less at 1.3%.
GNP was until recent times about 82% of the value of GDP. however, the National Recovery Plan 2010-2014 forecasts a level of 73%.
During the boom, the per capita GDP data did not chime with reality.
Even allowing for inequality, it just wasn't credible that we were among Europe's wealthiest and when Bank of Ireland had us as runners up to Japan as the wealthiest on earth it seemed more bizarre - - Japan had at the time about 35% of its workforce as temps, earning less than the Irish minimum wage.
In recent times, we have seen pharmaceutical exports jump without any impact on jobs and we know that the MNCs have profits of sales from Ireland inflated to maximise the benefit of the low corporate tax rate.
We have about 500 employed in the leasing sector and we manage over 3,000 aircraft from Ireland; in 2004, the 2 biggest companies by revenue were owned by Microsoft and were operating from the offices of a Dublin law firm. They still operate to channel patent and other income from other overseas Microsoft units to Ireland. They now have unlimited status and their results are not publicly available.
A leasing company with 20 people can have huge revenues but it does not reflect economic activity in Ireland.
The other side of the coin are Irish companies earning income abroad.
CRH for example, is only Irish because its headquarters are in Ireland and because of its background -- up to 90% of its shareholdings are held by non-Irish and only about 2,000 of its 80,000 staff are based in Ireland.
On paper the outward stock of foreign direct investment is greater than the total for inward investment.
Danny McCoy, the director general of the business lobby group IBEC, told his conference last November: "However, what we see is the extent to which Irish-owned assets are working for us overseas and creating that €50bn in wealth that flows back into Ireland.
Ireland's stock of direct investment overseas (ODI) in other words, Irish owned assets abroad was just shy of €190bn. The stock of FDI assets here in Ireland was just below €170bn.
Ireland therefore has a net Direct Investment asset position of €20bn.
This number shows the growing impact of large Irish multinationals many of them represented here today operating in the international sphere: companies like CRH, Smurfit Kappa Group, Glen Dimplex, Kerry Group, Glanbia, Paddy Power, Creganna-Tactx and Greencore indigenous companies growing their international reach and acquiring new businesses overseas."
This is of course another example where the bragging/bullshit does not chime with reality.
Foreign firms are responsible for more than 90% of our tradeable exports.
The American management consultants, Accenture, moved their hq to Ireland from Bermuda and I would think that some of the €50bn referred to by McCoy includes profit from activities in for example the US that shouldn't affect Irish national accounts data.
GDP and GNP for most countries are at similar levels. However, Ireland is exceptional for its dependence on FDI (foreign direct investment).
The difference between the 2 measures has widened during the recession.
I would think that the GNP level is more a reflection of reality today.
Employment in the FDI sector is back to 1997 levels when the workforce was 25% smaller.
This issue of GDP v GNP was raised by economist Michael Taft in a blog comment response to a Finfacts article on Wednesday.
Richest EU countries have the highest taxes; Irish tax burden will be as high as Denmark's by 2014
Tuesday, March 08, 2011
Irish National Debt: Public spending was 57.3% of GNP in 2009; Deficits in 2008-2013 will amount to €95bn
Seamus Coffey said this week that the National Debt will be €192.8bn by the end of 2013. This is 113.5% of the IMF’s nominal GDP forecast for 2013. Here is a breakdown of the debt and the proportion attributed to each category.
- Pre-crisis (2007) National Debt - €37.6bn, 19.5%
- 2008-2013 deficit-related Debt - €94.9bn, 49.2%
- Banking-related Debt - €60.5bn, 31.4%
Below is one of my contribution's to a thread on the Irish economy blog.
Fianna Fáil with various hangers-on was elected in Irish General Elections in 1997, 2002 and 2007 - - they had democratic mandates all through the bubble period.
The party on its own in the period 1977-1981 trebled the national debt and in 1978 a budget deficit of almost 18% was recorded - - the largest according to the IMF in the period 1970-2008.
The results of reckless mismanagement was misery for tens of thousands of people in the 1980s and large scale emigration.
You refer to ‘immorality’ but surely that should largely be levelled at the people who left a legacy of 200,000 job losses and a generational calamity?
It was an Irish government in 2008 that guaranteed existing bank debt without consultation/negotiations with the EU institutions, before firm positions were taken on saving banks.
We joined a currency union which has positives and negatives. The ECB supported the banks and it’s easy to view the seductive alternative of just walking away from debt and believe that a banking system in a bankrupt country could be funded from thin air.
The annual budget deficits in the period 2008-2013 will result in €95bn in debt according to Seamus Coffey.
Any outrage for that?
Monday, February 28, 2011
Iceland’s total export value is split about 40% each between marine products and the aluminum industry, linked to its geothermal resources.
The biggest annual changes in exports in recent years have been in 2008.
The banking system collapsed early in Q4 2008.
In 2008, marine product exports jumped 33% in value on a volume rise of 13%. This was against a backdrop of global food prices rising to record levels.
Aluminum exports jumped 127% in 2008 and volume increased 71%. US giant, Alcoa, opened a new smelter in East Iceland in mid 2007.
Fish export volume fell 4% in 2009 but the export value jumped 22%; aluminum export volume rose 6% in 2009 but the value of exports fell 6%.
Fish export volume fell 5% in 2010 and the export value rose 5%; aluminum export volume rose 1% in 2010 and the value of exports jumped 30% - - the average aluminum price on the London Metal Exchange in 2010 rose 24%.
As for marine products in 2010, the movement of large shoals of mackerel north to cooler waters off Iceland and the Faroe Islands prompted both countries to unilaterally hike their catch quotas.
Iceland raised its 2010 quota from 2,000 tonnes to 130,000 tonnes and to 147,000 tonnes in 2011.
Without the mackerel windfall, the volume of its fish exports would have fallen more than 5% in 2010.
So the big export volume and value changes happened before the currency collapsed; the price of aluminum fell 40% in Q4 2008.
Paul Krugman identified six ’supertrading’ economies as existing in 1990 - - Belgium, Hong Kong, Ireland, Malaysia, the Netherlands and Singapore and the OECD added six more in 2000.
These economies are dependent on the “slicing up of the value added chain” on an international basis.
US multinationals based in Ireland mainly export to their units in other European countries, Exports to Asia are insignificant and short-term exchange rate movements would not impact supply decisions.
Iceland has an unemployment rate of 7% — almost half the Irish level - - and about 9,000 are employed directly in the fishing and aluminum industries.
This is only 5% of the total workforce.
The equivalent Irish ratio for the internationally tradeable goods and services sectors is almost 13%.
Friday, February 25, 2011
It's striking that despite a thread of many words, no advocate of unilateral default has detailed a worst case scenario - - which should be an essential aspect of consequential decision making - - be it for the aspiring entrepreneur or political leader.
It’s easy to be on the sidelines making proposals without having any responsibility.
The Irish banks are dependent on funding from the European Central Bank.
The ATMs would be shut down if the ECB also pulled the plug on its lifeline.
“Ah shur, that would never happen” would be the typical excuse to avoid having to address what should be done if the “what if” materialised.
On Sept 29, 2008, the night when a blanket State guarantee was provided to Ireland's banks, it’s very likely that Taoiseach Brian Cowen did not consider the consequences of the builders' bank Anglo Irish Bank collapsing because in his mind, such an eventuality would have been so GUBU that it would have been crazy to even worry about it - - now the price to pay for negligence and incompetence is very steeep.
Irish Economy Blog: Martin Wolf: Ireland Needs Help With Its Debt
Finfacts article: The Irish debt burden and the market for simple solutions
Sunday, February 20, 2011
Thursday, February 17, 2011
The European Union's Economic and Monetary Affairs commissioner, Olli Rehn, said on Tuesday that EU finance ministers have 'simply no appetite' for Irish bank senior bondholder 'haircuts' - - forced cuts in the amount of the debt owing.
The commissioner said the restructuring of Ireland's banking sector should be done in line with undertakings already agreed with the EU and the IMF.
"We only expect that this will be done according to the memorandum of understanding which sets the frame for restructuring and reform of the Irish banking sector so that it can become again healthy and resilient," Rehn told reporters after a meeting of the Ecofin council of European Union finance ministers in Brussels.
He added: "There is simply no appetite for considering senior bondholders in this context because we want to avoid any kind of potential contagion effect and therefore this issue is not at the table and that was made very clear yesterday in the meeting of the Eurogroup."
The Fine Gael party's election manifesto, which was published on Tuesday, says imposing losses on senior bondholders in Irish banks would only be extended as part of a European-wide framework and would focus on Anglo Irish Bank and Irish Nationwide Building Society, which are being wound up.
Would we be burning ourselves:
UCC economist says more than half Irish bank bonds owned by investors in Republic of Ireland
Irish Economy Blog Threads:
Gormley On the Guarantee: The McWilliams Option
Monday, February 14, 2011
We hadn't even struck oil; we were host to large American companies and a lot of us were deluded into believing that the fairytale of riches from selling each other houses, would keep going.
A year later, the nternational house price comparison index for 2007 ranked Dublin, Ireland and Beverly Hills, California in top ranks for world's most expensive comparable management level family homes.
Finfacts 2008: International house price comparison index for 2007 ranks Dublin, Ireland and Beverly Hills, California for world's most expensive comparable management level family homes
Finfacts 2006: Global Survey: Cost of typical management level house in Dublin, Ireland, could buy 9 similar houses in Houston, Texas, 3 in Amsterdam, 2 in Sydney and almost two in Tokyo (old format page)
Saturday, February 12, 2011
Thursday, February 10, 2011
Basically, before reforms are implemented, as with Greece, the argument that we cannot sustain debt of say 130% of GDP, will not wash.
If the EU-IMF reform programme is implemented, the then view of the IMF on growth prospects and the debt burden, would hopefully have some weight in Brussels and Frankfurt.
The following are reports and presentations from the current week:
Presentation by Lorenzo Bini Smaghi, member of the Executive Board of the ECB, London Business School, 9 February 2011: Slides from the presentation (pdf)
IMF staff report on Ireland: Lingering domestic perception of inequitable burden sharing persists
European Commission’s staff report on Ireland is available here
Goodbody Stockbrokers arguing for debt sharing: Debt Dynamics - With a little help from our friends (scribd)
Thursday, February 03, 2011
This is my comment:
This is an excellent article as it forensically debunks the excuses put forward for the collapse of the 'Democracy Now' soufflé.
It also comes from a commentator who is not an insider in the cosy media club.
I term it a soufflé because there was not much of substance to it; it is easy to be against villainous bankers but if there is an avoidance of inconvenient truths for voters, then it's a repackaging of Bertie Ahern's politics, albeit with some transparency.
Late last year, Fintan O'Toole addressed a public protest organised by the trade union congress, ICTU, and standing beside him was the general secretary who was a board member of the Central Bank from 1995 to 2010.
This is conservative Ireland after all, where the buck stops nowhere system!
The Dublin Chamber of Commerce calls today for “root and branch” reform of the public sector but it has zero to say on a system where lawyers as public contractors can get paid more per day than the claimed bribes they are investigating, while becoming multimillionaires in the process.
Yes to public reform but also for reform in the protected private sector where the Sate is the biggest supporter.
There is no evidence that these 'Democracy Now' folk were going to be iconoclasts and according to Colm Keena's report in the IT on Tuesday, when 5 putative candidates dropped out, the project collapsed.
Credit where it's due to Shane Ross, but the other big names found that it's easier to be a hurler on the ditch.
There was a confusing newspaper headline this week: 'David McWilliams plans Obama-style campaign' - - showing the conflict between the pull of the public limelight and hard choices, including fear of failure - - and Colm Keena also reported that Elaine Byrne, IT columnist and political scientist, got the impression after 3 meetings that McWilliams was planning to stand in the election but he apparently is giving a contrary impression.
Prof. Kenneth Rogoff of Harvard University and co-author of the celebrated book, 'This Time is Different,' in 2002 when he was chief economist of the IMF, wrote an open letter to Prof. Joseph Stiglitz, highlighting how easier it is to be a commentator than a policymaker.
"Joe, as an academic, you are a towering genius. Like your fellow Nobel Prize winner, John Nash, you have a 'beautiful mind.' As a policymaker, however, you were just a bit less impressive."
Finally, I could be fairly termed a hurler on the ditch myself. However, I have stood in a national election and I have the experience of leaving the security of a multinational and starting a business myself - - it takes more stamina than a 4-week campaign!
The Finfacts General Election Page 2011