Showing posts with label recession. Show all posts
Showing posts with label recession. Show all posts

Friday, August 14, 2009

Sinn Fein mystery tour to Lisbon departs

eu flag WHY IS it that it that foreign political entities so passionately seek to protect our Irish nation state from the thrall of Europe and the consequences of The Lisbon Treaty? Perhaps because they anticipate that there is a slight chance that the electorate will abandon their own singular sense of long term self-interest and climb aboard a rickety mystery train where the landmarks are ‘good or bad’, ‘black or white’, ‘pretty or ugly’; where prosperity is a UFO and chronic poverty and deprivation are the tribal badges of a what binds them in their eternal, infinite misery.

Last year we endured the histrionics of the Libertas enterprise that was going to wash over us with the cleansing characteristics of a surging Atlantic foam.  Libertas, naturally, sought legitimacy after the No argument prevailed in the first referendum. Their subsequent ambitions were  far-reaching.  They were not just going to conquer Ireland, but all of Europe from a fortress in Tuam, with a new political disposition in the European Parliament. But the Irish electorate as not as green as they are cabbage-looking and by the time local and European Parliament elections took place on 5 June, the time had come for Libertas to grab their Louis Vuitton luggage, board the Titanic, pay their enormous outstanding bills and disappear over the horizon.

Today, Sinn Féin launched its No campaign to save us from what they consider to be the toxic potential of the second Lisbon Treaty referendum on 2 October. They argue that it is ‘an out of date document that is bad for the Irish and European economy’. Don’t you always admire one-dimensional thinking and the old world of ‘black and white’, ‘good and bad’, win or lose’, ‘ma and pa’, ‘Fred and Wilma’, Barney and Beanie’. Imagine – the out of date document is ‘bad’.

How could a recession be used as scare tactic?  Perhaps through some, yet to be identified, by-product of voodoo concocted by a bearded bogyman.  Have you ever associated the leadership of that party with modernity? I reckon the ambition of the Irish electorate in on the prospects of recovery not the type of fossilising isolation endured by citizens of Albania, Myanmar and Zimbabwe

They are concerned by what they see as the ‘singular focus’ of the European Commission on competitiveness. Competitiveness, as a foundation to prosperity is ‘bad’. So what is ‘good’? Apparently a capacity to strategically intervene in the economy is ‘good’, but there is no elaboration of what intervention they have in mind? I guess this is another blind date; an instance of beauty really being in the eye of the beholder and the beholder being afflicted with advanced, untreated glaucoma.

What economic angel dust has Sinn Féin ever sprinkled to even tease the electorate that it is economically literate, that they understand the ambition of electorate or that they are remotely progressive or have the naked coherence to deliver anything of value to the electorate? Their advocacy of wealth creation is rather circumscribed so don’t expect any diversions down highways, byways or back lanes that could result in new jobs, new patents from research, increased international trade, a more vibrant tourist sector, a more sophisticated society, a €15 billion healthcare system that is not dysfunctional, enhanced confidence or a viable vision that is achievable. Perhaps they have become too suffocated with the economic doctrine of Robert Mugabe and his weakness for state intervention.

Their native Northern Ireland has an economy has a chronic dependence on state handouts and state employment but I have never detected a craving that this approach would be admired and desired in our own nation state.  The 30% decline in support for Sinn Féin in Dublin last June would imply that the electorate wishes to idolise some other lateral thinking political demigods for whom insular tribal clamminess is not a prerequisite rather than live in a cave waiting for the rain to stop.  It is simply not adequate to build a campaign on vacuous slogans. An electorate will examine what a political party is capable of achieving and what its accomplishment are.  The posturing of a ‘party of protest’ achieves nothing.  Society needs ‘do-ers’, not wafflers!

The UK Independence Party are also compassionately concerned about our wellbeing and the threat of a totalitarian super-state evolving “by deception, propaganda and outright lies”.  Indeed!  The search for virtue is endless!

Tuesday, June 16, 2009

Ireland’s wilting personal wealth

euro The nest-egg of the average Irish household has declined by 42% from €95,022 in 2006 to €55,113 at the end of 2008.

This downturn is reflected in the financial assets owned by the households of Ireland. Net financial assets fell by €36.1 billion to €81.2 billion in 2008.

The Central Statistics Office has just issued a balance sheet of net financial assets for 2008 and this reveals the following downward trend:

 

€ Billion

2005

2006

2007

2008

Financial Assets, Jan 1

234.3

269.0

307.8

308.3

Net acquisitions

18.2

13.1

10.6

8.9

Valuation changes

16.4

25.8

-10.1

-34.7

Financial assets, Dec 31

269.0

307.8

308.3

282.5

Liabilities, 1 Jan

110.3

140.1

167.9

191

New borrowing

29.9

27.8

23.2

10.5

Valuation changes

0

0

-0.2

-0.1

Liabilities, 31 Dec

140.1

167.9

191.4

201.4

Net financial assets, 1 Jan

124.1

128.8

139.9

117.1

+ financial transactions

-11.7

-14.8

-12.6

-1.7

+valuations changes

16.4

25.8

-10.0

-34.4

Net financial assets,
31 Dec

128.8

139.9

117.3

81.2

Financial assets include deposits, shares and securities other than shares, life insurance and pensions, accounts receivable and liabilities comprise mainly loans, both short and long-term.

The decline in new borrowing from €23.2 billion in 2007 to €10.5 billion last year is both a reflection of the credit crunch and a decline in the demand for mortgages.  The main cause in the decline in personal wealth is the collapse in the valuation of financial assets in 2007 and 2008.

The 2006 Census of Irish Population indicated that there were 1,473,345 occupied houses in Ireland, an average of 2.81 persons per household. There were a further 296,000 vacant houses and apartments, including 50,000 holiday homes.

Residential construction was one of the major sources of taxation during the boom. The residential sector alone yielded over €1 billion in 2006 and 2007 but the total anticipated yield from stamp duties in 2009 is only €980 million.

The Irish economy is suffering the catastrophic consequences of a property bubble funded by Irish banks who raised the wherewithal on wholesale markets in Ireland and elsewhere.  The economy has been in damage-limitation mode since last Autumn.  The first initiative was the State guarantee of customer deposits, (or bank liabilities).  Ireland, I believe was the first of many countries to make this move last September.  The second step has been the recapitalisation of the banks using the resources of the National Pension Reserve Fund for this purpose.  The third initiative has been the establishment of a ‘bad bank’, the National Asset Management Agency.  A review of the banking sector is outstanding both in terms of its fitness for purpose, regulation and scope of activities.  Some consolidation is anticipated together with the removal of reckless and  incompetent bankers.  The sector has all the characteristics of a dysfunctional family for the time being with grandparents taking over parenting duties.  Old geysers, who have been retired for years are turning up in board rooms, some of whom never worked in the sector and who know as much about banking as I do about high-end prostitution!