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Irish Stock Market Down 4.5%!

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There are some big fallers here making the 1.7% drop in the FTSE look like a walk in the park.

Anglo Irish Bank is down 6% today and has lost over 15% since March despite good results and outlook. This one is being picked on I feel.

Allied Irish Bank and Bank of Ireland also down well over 3% today.

:o

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Higher IR in the EU and soaring Euro is a big problem:

http://news.moneycentral.msn.com/provider/...0606&ID=5774829

On Monday, the euro hit its highest level against the dollar in more than a year, reaching $1.2979, the highest it has been since May 5, 2005. It fell back slightly Tuesday.
But analysts have warned that if such strength continues -- particularly if the euro breaches the $1.30 level -- politicians in the euro zone could call for an reduction in interest rates, fearful that the higher currency could hurt exporters.

EU has the same choice as the US:

A. Inflation.

B. Recession.

Select just one answer. Ben will go for B.

DAX and CAC are melting today:

DAX Index 5,499.89 16:07 -121.30 (-2.16%)

CAC 40 Index 4,805.81 16:22 -110.23 (-2.24%)

Ireland is looking serious:

ISEQ20 Index 1,157.59 16:24 -59.67 (-4.90%)

If this keeps up we may go into a recession. Hope everyone managed to dump stocks before all this began. Time to get out of anything that is IR sensitive.

Edited by Realistbear

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South American markets going into sell-off mode today:

http://cbs3.com/businesswire/LatinAmericaM...urces_news_html

Worries over rising U.S. rates trip Latin American stocks, currencies
Tuesday June 06, 2006
SAO PAULO, Brazil (AP) Stocks and currencies in Brazil and Mexico Latin America's top two economies extended their sell-off Tuesday for a second day as investors worried that higher U.S. interest rates could sap foreign investment from emerging markets.
Sao Paulo's benchmark Ibovespa index fell 1.9 percent in early trading, after closing down 3.2 percent Monday. Brazil's currency, the real, was also down nearly 1.4 percent against the U.S. dollar.
The Ibovespa was down 687 points late Tuesday morning to 36,053 after closing at 36,740 Monday.
Meanwhile, the downturn in Mexican stocks continued early Tuesday.

It seems that America has just caught a cold and sneezed. The "feel good" factor and binge spending may come to abrupt end in the UK and Gordon's miracle will collapse along with the HPI he has been fuelling with cheap money for the past 8 years.

Ireland just lost another .50% in the last few minutes:

ISEQ20 Index 1,153.01 16:37 -64.25 (-5.28%)

:o

For some reason Ireland is tanking the hardest in the world. HPI coming to a sad and sudden end perhaps? No more undergirding inflation with HPI?

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I thought people said that possible ir rises had been priced in to the markets for a while?

Yes, it has been priced in for a while. However, the markets are realising that they will have to go even higher. This is not so much about IR rises, but about the extent of the rise. As RB mentions central banks have to attend to inflation even if that doesn't necessarily coincide with growth. Anyway, we expect a good 20% to be wiped off commodities and real estate (that has been caused by cheap money) before we even start getting back to a neutral economy.

Also, I keep reading articles about uncertainty in UK interest rates and the fact that they may stay on hold until the end of the month. The money markets do not agree with this view. They believe that we are certain to have a rise of 25BP before the end of the year and continue next year. My feeling is that by Christmas we'll have our own inflation issues to deal with.

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Looks like today's hit in Ireland removed E 3,000,000,000 from the market.

http://www.businessworld.ie/livenews.htm?a...rollingnews.htm

ISEQ tumble led by Elan, CRH

Tuesday, June 06 17:54:25

(BizWorld)

There was a veritable bloodbath on the Dublin exchange with more than
E3bn wiped off the value of shares
.
At teh close, the ISEQ was down 4.89pc or 375.87 points to 7,303.15.
The ISEQ index nose-dived ahead of the ECB's expected interest rate hike this Thursday and as inflation fears in the EU and the US sent world bourses spiralling lower.

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Another tiger on it's way out, there was no bloody miracle in Ireland just the availability of cheap credit, huge EU handouts, unaffordable tax breaks, :ph34r:

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Another tiger on it's way out, there was no bloody miracle in Ireland just the availability of cheap credit, huge EU handouts, unaffordable tax breaks, :ph34r:

And a highly educated, english speaking and cheap workforce with huge international experience.

Almost total national coverage of digital telephone exchanges and a plentiful supply of water for the chemical industry...and proximity to the US and UK as well as being an EU member state.

Admittedly, very low corporation taxes helped......(ahem)

Ireland, incidentally, has a higher GDP per head than the UK and has recently become a net contributor to the EU.

Deutcheland, wir liebe dich ;) (apologies to any german speakers..)

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And a highly educated, english speaking and cheap workforce with huge international experience.

Almost total national coverage of digital telephone exchanges and a plentiful supply of water for the chemical industry...and proximity to the US and UK as well as being an EU member state.

Admittedly, very low corporation taxes helped......(ahem)

Ireland, incidentally, has a higher GDP per head than the UK and has recently become a net contributor to the EU.

Deutcheland, wir liebe dich ;) (apologies to any german speakers..)

Lets see how long it lasts then, the bubble there seems to be even bigger than here, it's not a case when bubbles burst, of we all simple go off in to the sunset and prices return to normal, it's far worse than that, a bubble of that magnitude has the tendency to throw a country into a very deep recession

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And a highly educated, english speaking and cheap workforce with huge international experience.

Almost total national coverage of digital telephone exchanges and a plentiful supply of water for the chemical industry...and proximity to the US and UK as well as being an EU member state.

What a load of "new paradigm" nonsense. You've made a few positive comments about Ireland, which is supposed to make a thriving new economy???? Spain is going through a similar boom and very little of what you describe applies there.

Could the common factor be ......

..... low interest rates?

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And a highly educated, english speaking and cheap workforce with huge international experience.

Almost total national coverage of digital telephone exchanges and a plentiful supply of water for the chemical industry...and proximity to the US and UK as well as being an EU member state.

Admittedly, very low corporation taxes helped......(ahem)

Ireland, incidentally, has a higher GDP per head than the UK and has recently become a net contributor to the EU.

Right, so precisely how much of that is applicable to a country almost totally isolated geographically from every other in Europe, a country that's proximity to the US is in reality sod all different than the rest of Europe, whose English skills are no better than the English, next to another country with lots of water, with lower personal taxation rates, a country next to the main trading platform in Europe and for a lot of the world...... and precisely just how long (if it's true) will it take Ireland to repay its net take from the EU..... as for cheap workforce, you have got to be joking.....

The only major difference has been interest rates and credit structure - Ireland is built on a housing boom even more than Blighty..... (IMO)

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the writings on the wall for the irish economy

-uncompetitive and inflation running at 4%

-highly reliant on construction/property

-exports stagnant and imports of consumer and luxury goods from abroad booming,"sure we'll make our selves rich buikding each other houses!" foreign multinationals account for 88%of exports!!

-huge competition coming from new EU countries and asia in terms of tax cost of labour etc

-spend a fraction of european average on R&D ,little innovation,people would rather invest in brincks and mortar than in developing world class companies

-has very little indigenous industry competing on world stage

-massive complacency "have gotten fat"

-ultra optimism which is misplaced and ill though out

Edited by ronnie

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Well I am glad that some people agree with me at least, I thought as much a few years ago when I started to hear all this tiger nonsense, I can smell ramping a mile off, I dug a little deeper and came to the conclusion that the whole economy was built on very soft foundations and would one day collapse, the same in many respects applies to Spain (and no little bit to this country no doubt)

You can not build a sustainable economy based on rampant house prices, the wealth is only imaginary, in fact it is not wealth at all it is huge debt, that could have been used for other things.

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So that'll be a thumbs down to a sustainable Irish economy.

I agree.

the writings on the wall for the irish economy

-uncompetitive and inflation running at 4%

-highly reliant on construction/property

-exports stagnant and imports of consumer and luxury goods from abroad booming,"sure we'll make our selves rich buikding each other houses!" foreign multinationals account for 88%of exports!!

-huge competition coming from new EU countries and asia in terms of tax cost of labour etc

-spend a fraction of european average on R&D ,little innovation,people would rather invest in brincks and mortar than in developing world class companies

-has very little indigenous industry competing on world stage

-massive complacency "have gotten fat"

-ultra optimism which is misplaced and ill though out

Again, mostly true.

Well I am glad that some people agree with me at least, I thought as much a few years ago when I started to hear all this tiger nonsense, I can smell ramping a mile off, I dug a little deeper and came to the conclusion that the whole economy was built on very soft foundations and would one day collapse, the same in many respects applies to Spain (and no little bit to this country no doubt)

You can not build a sustainable economy based on rampant house prices, the wealth is only imaginary, in fact it is not wealth at all it is huge debt, that could have been used for other things.

Yep.

My point was that Irelands "success" of recent years was not solely down to EU handouts.

There were many other factors (education, telephone infrastructure, and water) that influenced the growth.

Also, Ireland was at the opposite end of the economic cycle to most countries in EU, so when rates should have been raised, they were in fact lowered.

The corporation tax is lower btw, I dont think personal taxation is.

However Irelands "geographic isolation" is not necessarily a truism.

It is close to Europe and it is also the closest EU state to the US.

Crucially it is the only English speaking country actually in the EU.

But is it all built on bulls41t - yes, yes and yes again.

PS I'm nearly sure Ireland is a net contributor, I'll try to source some links - it happened in 2004/2005 if memory serves.

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http://www.businessworld.ie/livenews.htm?a...rollingnews.htm

ISEQ tumble led by Elan, CRH

Tuesday, June 06 17:54:25

(BizWorld)

Banks were among the worst hit. Many of the banks' investors are based abroad and, according to Davy Stockbrokers, are less in touch with the depth and scope of Ireland's economic boom.

Oh for pity's sake! I'm sick of hearing this outsiders-don't-understand-our-economy cr8p. :angry:

When I find out who said that I'm going to wait for him at lunch time, give him a wedgie and nick his chicken panini. ;)

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It is close to Europe and it is also the closest EU state to the US.

Crucially it is the only English speaking country actually in the EU.

I think you meant the Euro, but in reality just about any professional Dutchman would put us both to shame !

Seriously, a couple of hundred miles over 3,000 is neither here nor there. Plus add in the appalling internal transpost infrastructure in Ireland - outside of Dublin, you try getting to most places in a hurry (yes, I have lots of Irish family and have tried it).

It's also got the bigger problem of no direct link to Europe, at least the UK has the Channel Tunnel to get goods in, Ireland needs boats and that makes imports and exports that much more expensive - traditionally Ireland has been an exporter or labour, EU grants and huge government subsidy has brought in professional and creative jobs, but go on, what is actually made in Ireland (apart from Guinness !) that's exported massively and contributes to the GDP AND is a bona fide Irish business (Smurfit ain't, for a start), most of Ryanair's shareholders are not Irish.....) - there ain't much - I just don't see the solid foundations for the boom - and as yet, no-one has been able to give me a satisfactory reassurance that it's sustainable.....

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I agree.

Again, mostly true.

Yep.

My point was that Irelands "success" of recent years was not solely down to EU handouts.

There were many other factors (education, telephone infrastructure, and water) that influenced the growth.

Also, Ireland was at the opposite end of the economic cycle to most countries in EU, so when rates should have been raised, they were in fact lowered.

The corporation tax is lower btw, I dont think personal taxation is.

However Irelands "geographic isolation" is not necessarily a truism.

It is close to Europe and it is also the closest EU state to the US.

Crucially it is the only English speaking country actually in the EU.

But is it all built on bulls41t - yes, yes and yes again.

PS I'm nearly sure Ireland is a net contributor, I'll try to source some links - it happened in 2004/2005 if memory serves.

Ireland does have a cultural advantage when it comes to the US. It has attracted lots of US investment and many Irish owned business have succeeded in selling direct to the US where their UK competitors have failed.

However, there is very little to have come out the celtic tiger that is truely homegrown and that is what Ireland will need to see it through the rough times when they come.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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