I have posted previously on the decline in GDP per capita during the current crises across the euro area states, the US and UK. Here is another look:
Let’s take GDP per capita at the peak before the crisis.
For some countries this would be year 2007, for others 2008. Keep in mind, many comparatives in the media and by analysts treat the peak as 2008. This is simply not true. Only 89countries of the sample of 20 countries comprising EA18, plus US and UK have peaked their GDP per capita in real terms in 2008, the rest peaked in 2007. Hence, for the former countries, the GDP per capita decline started in 2009 and the for the latter in 2008. Now, take GDP per capita declines cumulated over the years when the GDP per capita was running, in real terms, below the peak. Again, the sample of the countries is not homogeneous here: for some countries, GDP per capita regained pre-crisis peak by 2011 (Germany, Malta and Slovak Republic), by 2013 (Austria and U.S.) and by 2014 (Latvia). For all the rest of the countries, the GDP per capita peak was not regained through 2014.
Now, let’s plot the overall cumulated losses over the years of the crisis (over the years from the crisis start through either the year prior to regaining pre-crisis GDP per capita levels for the countries where this was attained, or through 2014 for the countries that did not yet recover pre-crisis levels.
full article at source: http://trueeconomics.blogspot.ie/
by Dr. Constantin Gurdgiev
- European authorities and nation states have pushed for banks to ‘play a greater role’ in ‘supporting recovery’ – euphemism for forcing or incentivising (or both) banks to buy more Government debt to fund fiscal deficits (gross effect: increase holdings of Government by the banks, making banks even more too-big/important-to-fail);
- European authorities and nation states have pushed for separating the banks-sovereign contagion links, primarily by loading more contingent liabilities in the case of insolvency on investors, lenders and depositors (gross effect: attempting to decrease potential call on sovereigns from the defaulting banks);
- European authorities and nation states have continued to treat Government bonds as zero risk-weighted ‘safe’ assets, while pushing for banks to hold more capital (the twin effect is the direct incentive for banks to increase, not decrease, their direct links to the states via bond holdings).
The net result: the contagion risk conduit is now bigger than ever, while the customer/investor security in the banking system is now weaker than ever. If someone wanted to purposefully design a system to destroy the European banking, they couldn’t have dreamt up a better one than that…
byDr. Constantin Gurdgiev
Off the start – there is nothing wrong with debt collection as business when it is properly delivered and regulated / supervised. And there is nothing wrong with debt collection agency growing its workforce.
But, then again, there is nothing particularly laudable about this either.
Unless, that is, you are an Irish Government Minister who cares none but for a headline grabbing opportunity.Capita – some background on the company is given here: http://www.rte.ie/news/2013/0516/450722-capita-jobs/ and http://namawinelake.wordpress.com/2010/08/15/capita-aka-crapita-%E2%80%93-service-provider-for-one-of-nama%E2%80%99s-most-lucrative-contracts/ – is to double its workforce in Ireland by bringing in 800 new jobs……
full article at source::http://trueeconomics.blogspot.ie/
byDr. Constantin Gurdgiev
NCB Purchasing Manager Indices for Manufacturing for Ireland are out this morning with a deserved upbeat soundings on foot of the core data showing continued growth in the sector. Here are some details, both worth a positive overall note and some warning signs of potential tightness ahead.
Business conditions continued to improve in the Irish manufacturing sector during November, marking the ninth consecutive month of such increases, though there were slower rises in output and new orders.
Overall PMI was running at 52.4 in November, slightly up on October 52.1. November reading was the highest since July 2012. Strictly-speaking, both October and November indices were statistically indistinguishable from 50.0, however, with the last index reading that was statistically significantly above 50.0 was July 2012 and the last time this happened before then was April 2011.
Not to rain too much on the parade, 12mo MA through November 2012 is at 51.1 and 6mo MA is at 52.4,
full article at source : http://trueeconomics.blogspot.de/
We are all aware for the huge problem homeowners are facing
with negative equity issues
Dr. Constantin Gurdgiev has outlined here in this article a costing and a possible road map of what a possible bailout of the ordinary Irish home owner could look like.I find it an excellent well thought out process and the Government of the day should give it serious
consideration .It is not possible to continue to bailout the gangsters in the
banks and at the same time demand homeowners continue to pay back the full
The amount on properties that are now only worth less than half of what the banks
lent out to the hapless mortgage holders. It takes two to tangle and the banks
were negligent to say the least when offering these mortgages in the first
place .(due diligence and all that) I believe the banks have to step up to the
plate and the take on their part of the responsibility .The total lack of
regulation also implicates the Government and there is an obligation on the government
to take its share of the blame so in this case would advocate that up to two
thirds of the total debts be written off.But what chance of that ever happening?? None!Kenny and the boys are there to look after the banks and themselves
by Dr. Constantin Gurdgiev
This week, we finally learned the official figure for what
it would cost to address one of the biggest problems facing this
country.According to the Keane Report – or the Inter-Departmental
Mortgage Arrears Working Group Report – writing off negative equity for all
Irish mortgages will cost “in the region of €14 billion”. Doing the same just
for mortgages taken out between 2006 and 2008 would require some €10
billion. These numbers are truly staggering, not because of they are
so high, but the opposite: because they contrast the State’s unwillingness to
help ordinary Irish families caught in the gravest economic crisis we have ever
faced with the relatively low cost it would take to do so.