economic situation is dire

[CarewsEyebrowDesigner]

Cool another thread with people arguing and not changing their minds, I'll think i'll join in!

[CVByrne]

Always getting side tracked, so I'll just outline my opinion and it's basis and end it there.

Over the past decade the boom in Ireland was fueled by the property bubble. Year on year we were running budget surpluses due to windfall taxes from stamp duty on house sales and capital gains tax.

A large portion of these buget surpluses were secured by the unions for public sector pay increases. This continued year on year until 2009.

In 2009 all windfall tax revenues dried up and rising unemployment resulted in a budget crisis. The government raised taxes in the emergency budget in April and introduced the pension levy on public sector pensions. Then in the December budget a 5% cut in public sector wage bill was implemented.

Now these actions were necessary to deal with our huge budget defecit. Now, my problem was with the reaction by the Unions. They refused to accept the following.

If there was no property bubble we would not be in this crisis, but there also would not have been the budget surpluses over the past decade to pay for the pay increases they secured for their members in that time.

So since we did have the bubble and windfall taxes they must accept their part in the budget crisis, namely that of securing unsustainable pay increases in public pay. So I felt they should acknowledge this and accept the 5% pay cut on the chin especially given deflation of 7% this year.

Now despite their posturing and talk, common sense prevaled and there was no general strike, just a one day strike. Now we can get on with the work of rebuilding our economy.

[snowychap]

Now these actions were necessary to deal with our huge budget defecit

Perhaps they were, perhaps they weren't.

If there was no property bubble we would not be in this crisis

If there were no property bubble there would have been some other kind of bubble. The system demands it.

Now we can get on with the work of rebuilding our economy.

As with everyone else, on the same foundations (only more creaky than before) - waiting to collapse again.

[CVByrne]

As with everyone else, on the same foundations (only more creaky than before) - waiting to collapse again.

That may be Snowy, but you have your marxist beliefs I have my capitalist. It's differing opinion, neither of us will change our views. But yes there probably will be another crisis, and one after that, but like the ones before we'll survive it and life will go on. I am content with this. Because I'm content I can go about enjoying my life.

[JulieB]

Is it any wonder the country is in such a flipping mess when you read articles like this??!!!!

Makes me so angry when people can be paid £85,000 a year, at the tax payers expense for working one day a week. I make that £1,634.62 per day....How do THEY & the people who arranged these farcical contracts sleep at night?!!

It's totally immoral IMHO!!

From Money Marketing

Pada's Jones and Drake on quango rich list

Personal Accounts Delivery Authority chief executive Tim Jones and acting chair Jeannie Drake have been included on a list of civil servants and senior quango staff earning more than £150,000.

The Cabinet Office, which released the list this morning, says it is the first time this information has been published in one place, with some never having been made public before.

Jones is revealed to earn more than £235,000 while Drake, who will no longer be taking up her post of deputy chair of the National Employment Savings Trust, earns more than £85,000 for a time commitment of one day a week at Pada.

Pension Protection Fund chairman, and soon to be chairman of the National Employment Savings Trust, Lawrence Churchill also made the rich list as did chief executive Alan Rubenstein.

The pair earns £85,000 for two days a week and £200,000 respectively.

The Pension Regulator chairman David Norgrove earns £110,000 for three days a week and former chief executive Tony Hobman pocketed £175,000 for his full time role.

Seven civil servants in the Department for Work and Pensions are revealed to earn more than £150,000.

The list brings the total number of senior civil servants in central Government departments and senior staff in non-departmental public bodies who earn over £150,000 to 332.

Minister for the Cabinet Office Francis Maude says: “Yet again we have shown we are absolutely committed to acting quickly on pledges in our coalition agreement to release information that will allow everyone to hold their politicians and public bodies to account.

“Today’s release, along with previous publications listing high earning civil servants and salaries of special advisers, shows that transparency is fast becoming an integral part of everything we do.

“I believe this will not only increase accountability, but will lead to more efficient public service organisations.”

[snowychap]

I am content with this. Because I'm content I can go about enjoying my life.

Bully for you.

Though you didn't sound very content when you were criticizing everyone else's weak characters and their moaning and you didn't sound very content when you were criticizing the public sector.

[CVByrne]

You think my life is confined to the sporadic few minutes I spend tapping away on my keyboard here on a football forum?

I get irritated by people blaming the world for everything that has happened when they should take some reponsibility for their own actions and their own part in what happened.

Be they a person who has over indebted themselves by taking out a huge mortgage at the height of a property bubble. Or a public sector worker happy to take pay increases off the back of a financial property bubble and then bitch and moan that they are not a factor in our economic woe and should not have to take any form of pay cut.

These things annoy me and I have a wee moan from time to time about them at lunch in work, or to friends. But when they're not around I can entertain myself on here, as you're more than happy to play ball on any issue.

I don't take it all that seriously, despite getting worked up at times. Nothing is really going to change so I have no need to fret about it.

[snowychap]

Funnily enough, I have absolutely shag all interest in what your life is like.

I was commenting on your posts on this forum.

[CVByrne]

All you seem to do is spend your life on here non stop blabbing about socialism, marxism, reevaluating the world, bringing down capitalism, blah blah. Pointless, save yourself the bother and go do something you enjoy. Capitalism will be here for our lifetime and the western world ain't gonna change too much. Prob best to accept that. I see the way the world works and instead of trying to change it I worked hard to get myself a nice life in it.

Though I do admit it is fun that every few months I can come on here and waste a few hours debating these things like with you, as it's already certain how you'll respond and what side you'll take in any given argument. You got some dedication.

[Meath_Villan]

Cv You hear city west has gone tits up .....Mu ha ha ha jim mansfield is broke

[snowychap]

All you seem to do is spend your life on here non stop blabbing ...

Really? How do you know?

You have just said that you spend a 'sporadic few minutes' on here - that apparently puts you in a position where you can judge how other people spend all of their life.

I see the way the world works.

No you don't, pal. You have an opinion on how the world works just like I have my opinion.

Only you seem to be absolutely certain that your view is the only applicable one and that everyone else is stupid (see thread from last year about anyone who doesn't do your job) or weak of character (see previous posts in this thread) and so on.

...a few hours...

A short while ago it was 'sporadic few minutes'.

It seems that's about as reliable as the statistics you throw in to a debate.

it's already certain ... what side you'll take in any given argument

That's a big load of bollocks. Again, your opinion is not fact.

[CVByrne]

Cv You hear city west has gone tits up .....Mu ha ha ha jim mansfield is broke

Hahaha, yeah they owe bank of scotland like €180mil. Though he still keeps some of his stuff like Weston Airport.

All the property barons tumbling one by one. Serves them right to be fair.

[Awol]

Looking like the USA is in big trouble...

Fed's volte face sends the dollar tumbling

The euro rocketed to a two-month high of $1.29 and sterling jumped two cents to almost $1.54 after the Fed confessed that the US economy may not recover for five or six years. Far from winding down emergency stimulus, the bank may need a fresh blast of bond purchases or quantitative easing.

Usually the dollar serves as a safe haven whenever the world takes fright, and there was plenty of sobering news from China and other quarters on Thursday. Not this time. The US itself has become the problem.

Warning signals of a double-dip recession flash across the world "The worm is turning," said David Bloom, currency chief at HSBC. "We're in a world of rotating sovereign crises. The market seems to become obsessed with one idea at a time, then violently swings towards another. People thought the euro would break-up. Now we're moving into a new phase because we're hearing alarm bells of a US double dip."

Mr Bloom said a deep change is under way in investor psychology as funds and central banks respond to the blizzard of shocking US data and again focus on the fragility of an economy where public debt is surging towards 100pc of GDP, not helped by the malaise enveloping the Obama White House. "The Europeans have aired their dirty debt in public and taken some measures to address it, whilst the US has not," he said.

The Fed minutes warned of "significant downside risks" and a possible slide into deflation, an admission that zero interest rates, $1.75 trillion of QE, and a fiscal deficit above 10pc of GDP have so far failed to lift the economy out of a structural slump.

"The Committee would need to consider whether further policy stimulus might become appropriate if the outlook were to worsen appreciably," it said. The economy might not regain its "longer-run path" until 2016.

"The Fed is throwing in the towel," said Gabriel Stein, of Lombard Street Research. "They are preparing to start QE again. This was predictable because the M3 broad money supply has been contracting for months."

The Fed minutes amount to a policy thunderbolt, evidence of how quickly the recovery has lost steam. Just weeks ago the Fed was mapping out withdrawal of stimulus.

Goldman Sachs said it expects the euro to rise to $1.35 by the end of the year. The yen will appreciate to ¥83, through the pain barrier for most of Japan's big exporters. The new twist is that SAFE, China's $2.4 trillion fund, has begun buying record amounts of Japanese bonds, a shift in reserve allocation away from the dollar.

The signs of a deep and sudden slowdown in the US are becoming ever clearer as the "sugar rush" from the Obama fiscal stimulus wears off and the inventory boost fades. California, Illinois and other states are cutting spending, tightening US fiscal policy by 0.8pc of GDP.

Thursday's plunge in the Philadelphia Fed's July index of new manufacturing orders to –4.3 suggests that the economy may have buckled abruptly, as it did in mid-2008. The Economic Cycle Research Institute's ECRI leading indicator has tumbled, reaching –8.3pc last week. This points to a sharp slowdown or recession within three months.

While US port data looked buoyant in June, the details were troubling. Outbound traffic from Long Beach fell from 139,000 containers in May to 116,000 in June. Shipments from Los Angeles fell from 161,000 to 155,000. This drop in exports is worsening the US trade deficit, eroding the dollar.

The US workforce has shrunk by a 1m over the past two months as discouraged jobless give up the hunt. Retail sales have fallen for the past two months. New homes sales crashed to 300,000 in May after tax credits ran out, the lowest since records began in 1963. Mortgage applications have fallen by 42pc to 13-year low since April. Paul Dales at Capital Economics said the "shadow inventory" of unsold properties has risen to 7.8m. "The double dip in housing has begun," he said.

Alcoa, CSX, Intel, and JP Morgan have reported good earnings, but they mostly did so in July 2008 just before their shares collapsed. Such earnings rarely catch turning points and can be a lagging indicator. Profits have been boosted in this cycle by cost-cutting, which is self-defeating for the economy as a whole.

The minutes confirm the Fed is split down the middle over QE. Fed watchers say the Board in Washington wants to be ready to launch another round of bond purchases if necessary, pushing the banks balance sheet from $2.4 trillion towards $5 trillion, but hawks at the regional banks are highly sceptical.

A study by the San Francisco Fed said the interest rates need to be –4.5pc to stabilise the economy under the Fed's "rule of thumb". Since this is impossible, massive QE needs to make up the difference.

Tim Congdon from International Monetary Research said the US authorities have botched policy response. "They are forcing banks to contract lending by raising their capital asset ratios. They have let M3 shrink by 1pc a month, as in the early 1930s. The solution is simple. The Fed must raise the level of deposits by purchasing bonds from the non-banking system as the Bank of England has done. They refuse to do it," he said.

Nasty as it is, the action being taken to get a grip on our deficit - and the similar measures being taken across Europe - seem to be having the desired effect on the markets. The question is what happens if (or when by the looks of it) America falls over? Will it take the world down with it into full blown depression? Chinese manufacturing is falling like a stone too, so taken together with the the problems across the pond, it's hard to see how a perfect storm scenario can now be avoided.

Any thoughts from the economically literate?

[TrentVilla]

Well my view would be that no matter what we are doing to sort out our deficit we are so caught up in the global economy and the US and China are so central in the gloabl economy that if they go into melt down we are going to slide back into recession ourselves, a recession the like of which none of us will have ever known.

Put in simple terms if the wave hits in America and China what our current government is doing would be akin to rearranging the chairs on the Titanic.

[ender4]

i partly disagree.

we've already come through a USA melt-down & survived (just), if they meltdown again, we will survive again.

Now China might be another matter...

[legov]

I'm no economist but here's something interesting I found. (Use your own discretion when reading)

Allaying fears over slowing down of Chinese economy in the second quarter, Prime Minister Wen Jiabao said on Friday that the sluggishness was because of his government's 'active regulation and control' to keep the inflation in check and to prevent economy from overheating.

"China's economy in general is in line with the government macro-economic regulation and control," Wen told reporters after talks with visiting German Chancellor Angela Merkel.

China's economy expanded by 11.1 per cent in the first six months from a year earlier after recording growth of 10.3 per cent for the second quarter, compared with the 11.9 per cent rise in the first quarter.

Wen said the theme for the regulation and control in the second half of this year is to 'maintain the continuity and stability of policy'.

"Major efforts will be made to handle the relations among maintaining steady and fast growth, restructuring the economy and managing well the inflation expectations," he said.

"China will continue to adopt a pro-active fiscal policy and a moderately loose monetary policy," he said.

According to Thursday's official figures, consumer prices inflation fell in June to 2.9 per cent from 3.1 per cent in May, even though markets had expected a further rise to 3.3 per cent.

The Chinese central bank targets 3 per cent inflation and the unexpected drop means that it is now less likely to follow other Asian central banks in raising interest rates, analysts here said.

China set an annual economic growth target for 2010 at around eight per cent, with an increased focus on the quality of growth but most of the international monetary institutions.

[dundeevilla]

So since we did have the bubble and windfall taxes they must accept their part in the budget crisis, namely that of securing unsustainable pay increases in public pay. So I felt they should acknowledge this and accept the 5% pay cut on the chin especially given deflation of 7% this year.

How can you blame the unions for securing pay increase for their members? That's what unions are for.

If the pay increases were "unsustainable" then that is the fault of the public sector organisations who agreed to the increases, not the unions.

[TrentVilla]

i partly disagree.

we've already come through a USA melt-down & survived (just), if they meltdown again, we will survive again.

Now China might be another matter...

Yes but we couldn't aford to take the same action we took last time, hell we couldn't aford it last time.

[drat01]

Nasty as it is, the action being taken to get a grip on our deficit - and the similar measures being taken across Europe - seem to be having the desired effect on the markets. The question is what happens if (or when by the looks of it) America falls over? Will it take the world down with it into full blown depression? Chinese manufacturing is falling like a stone too, so taken together with the the problems across the pond, it's hard to see how a perfect storm scenario can now be avoided.

I would have expected no less from you Jon than to try and spin a negative into a positive. To say that our measures are having a positive effect on the markets is simply wrong. Forecasts from bodies like the IMF paint a totally different picture and the spectre of double dip recession is there for all of us to be concerned about in the very near future.

As Trent rightly puts it the world economy is the key thing - our (wrong) attempts currently being inflicted on the UK populous are more to help their own supporters than anything else. The world economy is volatile - as it always has been. Very few (if any) countries can be isolationist to think they can be outside of the world events

[Gringo]

World Economy Saved by Jeeermans

German economy sees 'record' growth of 2.2%

The German economy grew by 2.2% in the three months to the end of June, its fastest quarterly growth in more than 20 years, official figures show.

"Such quarter-on-quarter growth has never been recorded before in reunified Germany," the national statistics office, Destatis, said.

The main reason for the higher-than-expected growth was strong exports, helped by a weaker euro.

Separate figures showed that the French economy grew by 0.6% in the quarter.

This compares with growth of 0.2% in the first three months of the year, INSEE said.

Not since the Berlin Wall divided the country has Germany seen growth of 2.2% in a single three-month period.

The German statistics agency says the numbers can partly be explained by a sustained period of export growth, as Germany's immense manufacturing sector begins to recover the markets it lost in 2009.

But the most surprising element of the numbers is an apparent contribution from the German consumer. They have traditionally been very cautious in their spending habits, but appear in 2010 to have finally opened their wallets with gusto.

France's figure of 0.6% growth in the period from April to June is also significantly better than economists had expected, raising hopes that Europe may be emerging from the gloom of the last three months, a period when many contemplated the end of the euro currency as rioters took to the streets of Athens.

Meanwhile, the Spanish economy grew by 0.2% in the second quarter, compared with growth of 0.1% in the previous three months, its National Statistics Institute said.

Growth figures for the rest of the eurozone will be published later.