The Recession

[Lone Shark]

The best way to get out of all this in the shortest time possible with the least collateral damage to people is if we start by looking at the situation truthfully and don't go looking for quick fixes or unfair market support for doomed businesses. On this thread there were a couple of references to guys like George Lee and David McWilliams and how they'll now be delighted, or how they were bound to get one right eventually, or how we've "talked" our way into this recession.

That kind of passing the blame is what will killl us - we did this to ourselves. as a nation we collectively borrowed a load of money to sell houses to each other, we ignored the fact that as a nation we weren't earning our way in the world economy, but instead we lived off borrowed money and tax loopholes. This turnaround was coming since 2002 - the fact that we didn't listen and inflated the bubble even further for another four or five years does not mean that Lee and McWilliams were wrong in 2002, it means that we didn't listen and ignored the problem until it got to apocalyptic levels.

Now we have the various cries for bailouts. Those who sell houses or make money from the selling of houses want more tax breaks for home buyers, forcing banks to offer 95% mortgages again and reductions in stamp duty. Well here's the thing - unless you are 100% guaranteed a huge increase in wages in the coming year, then a house that you need a 95% mortgage to buy is a house that YOU CAN'T AFFORD. If builders leveraged themselves to the nines building average houses for ten times average salaries and now can't sell them, then feck off. The best thing that could happen would be if everything they own was repossessed and they were left to live in one of the substandard shoeboxes that they told the rest of us were "ideal starter homes just 6an hour from Dublin" - i.e. Manorhamliton. The one thing Irish people have lost the ability to do is to look at something and realise that it's outside of their price range. I was at a wedding recently of a member of the girlfriend's family - the couple in question have just built what is now the standard rural one off house - i.e. 2 story, five large bedrooms with three en suite, huge living room, huge TV, every modern gadget, walk in fridge, walk in wardrobe.... Here's the thing - she works behind the till in Dunnes and he's a plasterer who even at the building peak was only drawing home a middling wage since his tendency to have no interest in overtime and his penchant for being "sick" on a Monday meant that he never held down a particular job for too long. That whole situation can only end in tears, but somewhere along the line people have decided that this is the type of house that everyone who has any kind of job is entitled to.

Yesterday on the radio I was listening to someone from one of the Civil service unions on the radio talking about how the government should borrow to pay inflation plus wage increases because "we cannot have living standards dropping." In Ireland, the general living standard of the past few years has been underpinned by borrowing - collectively and individually, people have spent more than they were earning, often cushioned by releasing equity from their houses. We could not afford how we lived, so the last thing we should do is go even further into hock to maintain it for another while.

We now need to work paying back the debt, and we need to work at real and productive enterprise. No more looking for areas where you can cream a bit off the top - and certainly no more subsidising these industries. Ireland Inc needs to take a long hard look at what the world will need in 2012 and beyond, to look at what on that list we'd be capable of providing, and then return to being an exporting economy where we pay our way in the world. Tom Parlon, Dan McLaughlin, gombeen councillors, estate agents, militant unions, vested interests, tradesmen expecting double the average industrial wage for 45 hours a week, land hoarders, property specuvestors, marketeers "selling a dream", civil servants who are neither civil nor serve, ye're time has come and gone, please feck off and stop asking the rest of us, who have just kept our head down and worked and will do the same again tomorrow, to finance the handy lifestyle you think you deserve.

If we muck in together this will blow over in no time.

[Bogball XV]

This recession that keeps being talked aboput only appears to be with the building sector, can the callops of the building sector really be called a recession and most of the rest of us work for Multi Nationals and and can see how unemployment in the building section will really effect us. I think this is being by alot of people into the doom and gloom its not, yes jobs will be lost in the building and service sector but calling it a recession is a bit much I think. Builders and Tradesmen were being overpaid for years so it was always gonna come crashing down when they finally just got to rediculous!

ffs tankie, if only it were that simple.  Tell us what you do and we'll let you know how it's going to affect you.

[Tankie]

This recession that keeps being talked aboput only appears to be with the building sector, can the callops of the building sector really be called a recession and most of the rest of us work for Multi Nationals and and can see how unemployment in the building section will really effect us. I think this is being by alot of people into the doom and gloom its not, yes jobs will be lost in the building and service sector but calling it a recession is a bit much I think. Builders and Tradesmen were being overpaid for years so it was always gonna come crashing down when they finally just got to rediculous!

ffs tankie, if only it were that simple.  Tell us what you do and we'll let you know how it's going to affect you.

I'm not denying that it wont effect everyone but there is no reason to beleive that this 'rescession' will effect the financial, pharmaceutical or IT industry as most of these are Multi Nationals with interest worldwide and can ride out such a storm.

[nifan]

I'm not denying that it wont effect everyone but there is no reason to beleive that this 'rescession' will effect the financial, pharmaceutical or IT industry as most of these are Multi Nationals with interest worldwide and can ride out such a storm.

Well the financial industry is in trouble the world over.
It would be crazy to believe that Ireland will somehow buck the trend in this regard.

[Tankie]

I'm not denying that it wont effect everyone but there is no reason to beleive that this 'rescession' will effect the financial, pharmaceutical or IT industry as most of these are Multi Nationals with interest worldwide and can ride out such a storm.

Well the financial industry is in trouble the world over.
It would be crazy to believe that Ireland will somehow buck the trend in this regard.

Yes it is but generally Multi Nationals can ride out these storms as they are in so many different markets. like are there may people on this board that are not in the building or service trade that feel that their job is under threat?

[heganboy]

Lone shark- great post

[nifan]

Yes it is but generally Multi Nationals can ride out these storms as they are in so many different markets. like are there may people on this board that are not in the building or service trade that feel that their job is under threat?

The multinational financials are dumping people world wide.
Bear Stearns (offices in Dublin) is completely screwed. Lehamn, Citigroup etc dumping people worldwide and projections look like this is to increase.

[Tankie]

Yes it is but generally Multi Nationals can ride out these storms as they are in so many different markets. like are there may people on this board that are not in the building or service trade that feel that their job is under threat?

The multinational financials are dumping people world wide.
Bear Stearns (offices in Dublin) is completely screwed. Lehamn, Citigroup etc dumping people worldwide and projections look like this is to increase.

These are the banks that cause this credit crunch so of course they will be letting people go but there are alot of jobs still free in this area, just look at jobs.ie or monster!

[Mickey Linden]

Surely these multinational banks have no loyalty to ireland. They are here due to the large tax breaks they receive and because of our educated english speaking workforce.

As this industry becomes less skilled due to advances in technology is it only a matter of time before these finance jobs are outsourced to somewhere cheaper?

[The Gs Man]

Lone shark- great post

Seconded.  Sums it up well.

[bingobus]

Lone shark- great post

Absolutely agreed.

Tankie, I think you are over optimistic re the Financial, IT, etc sectors. I know many people working in Financial services and they are all sitting tight and worried about job security. In the past these people where changing jobs on an annual basis at a whim.

Re the Country Manner that Lone shark described. I know one couple north of the border who have been only heating the house when they have visitors. Hit with a massive hike when they came out of a fixed rate mortgage in last six months and are struggling big time to keep up with loan repayments. Seems hard to believe thats the reality of how some tradesmen have been affected.

[nifan]

The multinational financials are dumping people world wide.
Bear Stearns (offices in Dublin) is completely screwed. Lehamn, Citigroup etc dumping people worldwide and projections look like this is to increase.

Most of the multinational banks have taken a hammering in the crunch, Goldman Sachs being the notable exception and even they where heavily trimming the staff since the turn of the year.

[Bogball XV]

This recession that keeps being talked aboput only appears to be with the building sector, can the callops of the building sector really be called a recession and most of the rest of us work for Multi Nationals and and can see how unemployment in the building section will really effect us. I think this is being by alot of people into the doom and gloom its not, yes jobs will be lost in the building and service sector but calling it a recession is a bit much I think. Builders and Tradesmen were being overpaid for years so it was always gonna come crashing down when they finally just got to rediculous!

ffs tankie, if only it were that simple.  Tell us what you do and we'll let you know how it's going to affect you.

I'm not denying that it wont effect everyone but there is no reason to beleive that this 'rescession' will effect the financial, pharmaceutical or IT industry as most of these are Multi Nationals with interest worldwide and can ride out such a storm.

Financial the lads have already mentioned.  IT, depends what sort exactly, if it's manufacturing then they're all in bother.  Pharmaceuticals are far from immune (no pun intended), they're largely dependent on govts buying their products, if govts have less money, then they'll have to accept less for their product, thus less revenue, less profit, so jobs are at risk.
On a strictly irish level, as I said earlier, each job that goes means an overall contraction in consumer spending, that means that other jobs in the economy will be lost, that could range from the guy behind the counter in the shop to the guy making sandwiches in some factory in Drumcondra, as they lose their jobs then they spend less, and the whole cycle repeats, govt revenues contract, and at the same time, demands on govt revenues increase, that means services have to be cut back, i could go on and on here, but you get the picture.
The other thing, and again, this has been touched on, multinationals have absolutely no allegiance to ireland, they will go where their costs are lowest, when we see 'irish' companies like hibernian transfer back office operations to India, what chance is there that multinationals with no traditional allegiance won't??

[thebandit]

I was just on the phone to a supplier in America, and he's mad to export because the American economy is in bits at the minute...... In order to work our way out of this we need to find a competitive advantage in terms of the world market. What was a relatively cheap, well educated workforce has become an over-expectant one, which turns its nose up at menial labour.

I think that attitude is about to change.

[AZOffaly]

The weak Sterling and Dollar is hurting Irish exporters as well. It's very hard to sell into the UK or the US at this stage, and if you do, your margins are under pressure.