1/8/2013: Strategic defaults...

This is "I am not drowning puppies for fun" note concerning my view on the problem of 'strategic defaults':

1. I do not allege there are no 'strategic defaults' in Ireland.
2. I do state that at this moment, there is no evidence of these defaults being a systemic problem of specific dimension.
3. Absence of evidence is not, in my view, an evidence of absence. 
4. I am aware that some people prioritise payments of unsecured debt over secured debt.
5. However, (4) does not automatically imply that a person doing so is out to 'game the system' to their advantage. They might be prioritising payment of unsecured debt for a number of reasons, other than personal gain, e.g.: (a) their credit cards or small credit union loans fund their day-to-day living expenses and as such they need their credit flowing to survive, or (b) their unsecured creditors exerted more pressure on them and they simply caved in, etc.
6. I do not allege that doing (4) above (including for the reasons outlined in (5))  is a correct or a good or an acceptable course of action. In fact, in my opinion, it is not. However, presently, the Irish authorities have failed to secure a clear, accessible and definitive pathway for resolving the conflict between secured and unsecured debt obligations for distressed borrowers. As the result of such a failure, we cannot fault people opting for acting according to (5) above, regardless of what we might think.
7. I am aware of at least one instance where an organisation I am working came across a case of a wilful and strategic default. As the case was brought to us for an independent external assessment and was not represented by us on a client basis, we advised to pursue all legally available courses of action to stop the person from continuing to engage in such activity and we advised the borrower to immediately cease such activities.
8. I am aware of the study that used US research (not US data) to extrapolate to the Irish situation. I find such an approach a good starting point for a debate, but I do not accept it as a robust evidence to base any policy design or analysis on. It is not an evidence and thus (2) and (3) above continue to apply.
9. I am aware of the statements by media and analysts that the problem of 'strategic defaults' in Ireland is growing and is already significant. 
10. My view is that (9) represent unsubstantiated claims, not backed by any real evidence and as such these claims have to be treated as speculative conjectures. Anyone is free to make a conjecture. Some might even opt to be so kind as to seek evidence to back one up. None have a right to impose their conjecture onto actual solution or policy mechanism.

I hope this explains my position on the issue and ends the nonsensical accusations that I am denying the problem. 

My personal conjecture on the topic (backed by anecdotal evidence, so not different from any conjectures on the topic presented in the media to-date) is that there are, most likely, some borrowers attempting to game the system. We do not know how many there are. We do not know who they are. We do not have a means for rigorously identifying them. The correct way for dealing with them is to penalise them at the point of discovery, make such penalty known in advance of any actions to give them a  chance to alter their behaviour.

If the resolution of onerous arrears requires repossession of the property, repossession is justified. It is not my position to argue that all repossessions are unjustified. It is my view that repossessions of family homes should be minimised and, crucially, all repossessions should be preceded by the full, binding and voluntary agreement between the borrower and the lender on how the residual debts, remaining post-repossession action, are to be settled.

Before a point of discovery of their guilt, however, everyone is innocent. 

1/8/2013: Anatomy of the Personal Crises: QNHS Q3 2012

CSO has published Q3 2012 survey concerning the Effect on Households of the Economic Downturn: here.

Some core findings:

• 82% of households cut spending on at least one of the main categories of expenditure as a result of the economic downturn in the 12 months before July-September 2012. 
• Nearly a quarter of all households indicated that they had cut back on five or more categories of spending out of 9 categories listed.
• Over 1/3 of households who used a car had cut back on their expenditure on this means of transport.
• "Some 14% of owner occupied households with a mortgage were unable to make mortgage repayments on time at least once in the previous twelve months due to financial difficulties." This number is strangely well below the current rate of mortgages arrears by accounts. Does this suggest that households tend to overstate their financial health?
• "On the rental side 19% of all renting households failed to pay rent on time at least once."
• 43% of households "indicated that they had experienced difficulties in keeping up with their bills and debts."
• "Two fifths of individuals were concerned about their level of personal debt. Over half of these said that they were currently more concerned than they had been twelve months previously. Only 5% indicated that their level of concern had decreased."
• "households consisting of one adult aged 65 or over said they had the least difficulty" paying bills and funding debt (27%).
• "Of households where the reference person was at work 41% experienced difficulty [paying bills and funding debt] compared with 73% where the reference person was unemployed." Note that 41% is a frightening number, still.
• "Looking specifically at those households which had experienced difficulty in managing bills and debts, 47% of them said that it was due to loss of income, 73% said it was due to higher than expected or additional costs and 5% said the difficulty was due to other reasons."
• "Looking more deeply into the type of higher or additional costs mentioned by those households for whom it caused difficulty, 90% of those households mentioned higher or additional utility bills , 32% mentioned higher or additional school, college or university costs, 17% mentioned higher or additional medical or dental costs and 15% mentioned higher or additional loan or mortgage repayments" Now, run through these again. All of them are state-controlled and state-regulated services, ex mortgages and loans. That's the cost of Irish State policy of extracting rents out of already stretched households.

And a handy chart summarising demographics of debt crisis:

That's right: core crisis impact on debt side - 25-54 year olds, majority with kids and homes, just the crowd that the Government is targeting for cash extraction via higher prices and charges for services like health, health insurance, transport, energy, utilities, education... you name it.

And as you read data in Table 1.1.1. showing details of the households experiencing financial difficulty due to loss of income, classified by main reasons over 12 months prior to July-September 2012, keep in mind - almost all 'employment creation' in the labour market that the Government and 'green jerseys' keep talking about is taking place in the part-time jobs, which cannot cover the true cost of living in this country.

Finally, take a look at Table 1.2. This shows the extent of debt restructuring delivered by the 'reformed' banks. At 7% total - it is laughably low.

31/7/2013: Retail Sales Dynamics: June 2013

Retail sales stats are out for June and anticipation (based on the booming Consumer Confidence index from ESRI) was for a significant uplift in sales. Alas, things turned out to be not what some expected. All data seasonally-adjusted.

• Value of core (ex-motors) sales fell 0.73% m/m in June and was up 1.28% y/y. 
• 3mo average through June 2013 stood at 95.1 down on 3mo average through March 2013 at 96.0.
• 6mo average through June was at 95.5, down on 96.8 6mo average through December 2012.
• Value of core sales in June 2013 was 5.75% below the average for the entire crisis period
• Volume of core (ex-motors) sales fell 0.50% m/m in June and was up 1.21% y/y.
• 3mo average through June 2013 stood at 99.2 down on 3mo average through March 2013 at 99.5, although the difference was minute.
• 6mo average through June was at 99.4, down on 100.4 6mo average through December 2012.
• Volume of core sales in June 2013 was 3.74% below the average for the entire crisis period.

Meanwhile, Consumer Confidence shot up 15.4% in June m/m and is up 13.3% y/y. 3mo average from consumer confidence is at 63.6 which is above 3mo average through March 2013 at 61.2. 6mo average is practically identical to 6mo average through December 2012.

Charts above show clear disconnect between retail sales (volume and value) and the reported consumer confidence index. The disconnect is bizarre. Firstly, neither current, nor lagged average consumer confidence has much to do with either volume or value of what consumers opt to purchase. Worse, since June 2008 through June 2013, Irish retail sales indices correlations with Consumer Confidence are -0.66 for value index and -0.60 for volume index. In other words, rising Consumer Confidence in Ireland tends to be associated with falling retail sales. It is worth noting that prior to the crisis - in January 2005 - December 2007 period, the above correlations were +0.72 and +0.74 respectively.

My own Retail Sector Activity Index has had a better fortune tracking overall activity in the retail sector:

 The above clearly shows the sustained 'flat at the bottom' period of retail sales overall activity (by weighted contributions of volume, value and forward confidence). The recent rise in the activity, driven so far solely by two factors: year-on-year dynamics still impacted by the losses made in May-June 2012  and by the bizarre rise in consumer confidence. It remains to be seen if the index can hold near a 14 months period high attained in June.

30/7/2013: Flat demand for business credit in Q2 2013

Courtesy of the Central Bank of Ireland released last week:

Changes in Loan Demand from Enterprises

Key: 1= Decreased considerably, 2= Decreased somewhat, 3= remained basically unchanged, 4= increased somewhat, 5= increased considerably.

Top of the line analysis: the patient is still in  a comma: 

• Fixed investment (long-term investment in capital and technology) is flat two quarters running. One quarter (Q4 2012) pick up has barely brought us back 1/3 of the way for Q3 2012 contraction and on cumulated basis, we are - in Q2 2013 still below Q1 2012.
• Inventories and working capital demand is flat in Q2 2013, so no short-term build up in either on foot of any sort of positive expectations forward. Cumulated corrections up in Q3 2012 and Q1 2013 are not sufficient to compensate for declines in Q1-Q2 2012. Conclusion: we are still worse off on inventories and working capital demand than in Q1 2012.
• Debt restructuring demand is flat on Q1 2013 in Q2 2013. The only game in town when it comes to credit demand from the corporates in Ireland is for debt restructuring. 

The above does not bode well for the story about pick up in business expectations and flies in the face of the PMIs-signalled 'improvements' in both current conditions and forward outlook. Any early-stage expansion will have to be consistent with increases in demand for Inventories and Working Capital finance, while Fixed Investment will have to pick up if the businesses are expecting significant uplifts out 12 months.

30/7/2013: It ain't recovery until prices start rising, folks...

You know the myth - the one spun by the realtors and the likes of the various business development bodies around the country - that goes something like: "Irish recovery is showing green shoots, as foreign investors are flocking to the Irish market, kicking tyres and snapping all commercial property they can get their hands on".

As usual, there's a basic logic flaw with much of the internal Irish commercial / business world. Normally, when someone is flocking with suitcases of cash to some destination to buy, demand goes up, and prices rise. In the short run, this logic might fail to hold if there is a supply rise of involuntary sales of properties in the market. In the long run, this demand-price relationship must hold, because both voluntary and involuntary supply of properties adjusts to move along with prices. In other words, even idiot bankers would begin to withhold property from the falling market when there are willing buyers kicking tyres in hope of gaining more on sale.

It has been years, that's right - years - since the reports of the alleged 'tyres-kicking' foreign investors first started to percolate. And yet... oh well... just look at prices:

Yes, per Central Bank chart (above), commercial property is still shrinking in terms of prices. The rate of shrinkage is moderating. But that is not the same as saying that prices are rising. They are falling, falling at a diminished rate, but still falling.

The 'recovery' is much more likely in the housing market, where cash-rich farmers (having made their dosh on pre-bust sales of land and still awash with CAP cash), cash-rich and property-secured senior professionals and retirees (having made their surplus money on pre-bust sales of homes in Donneybrook etc) and cash-rich Googlites and Namanoids (the sub-sects of the South Dublin younger professionals in cushioned jobs) are all chasing prime properties in the upper middle class segment of the market. Aside from that, things are not exactly hunky-dory, like...

Still, the housing market is telling a much better story of a 'recovery' (albeit it is still not a true recovery, yet), than the fabled foreign-investors-teaming commercial property markets... The old Widow Scallan's reincarnation as an ex-Spar 'prime retail' space is out for grabs... There's (allegedly) American investment funds-led bidding war going on across the country... so hurry up...

27/7/2013: WLASze Part 2: Weekend Links on Arts, Sciences and zero economics

This is the second post of my WLASze: Weekend Links on Arts, Sciences and zero economics.

The first post is linked here and is referenced below. Enjoy!


I covered superb Irish Pavilion at the Venice Biennale 2013 in my previous post. Now on to one of the best artists exhibiting this year in Venice: Catalan artist Antoni Tàpies, who, sadly passed away just last year, are in the Palazzo Fortuny. Tàpies's canvases of earth, dust, structurally rich and textured paint, and deep in colour and subdued light convey forms in their own space, free of time, interference of artist's positioning, referencing, blinding internal and external fields of view.

You can explore his work - outside Biennale - here. Tate has some excellent Tapies in collection here.
Here's one from Tate selection:

Don't forget and don't miss: ILLUSION show opened today in Trinity's Science Gallery:

I am just back from there… and kids and MrsG loved the show and the MakersFair in front of the Physics building...

By far the most impressive piece for Luca was:

Yet there are other fantastic works and projects there.


Amazing work of Portuguese artist, Henrique Oliveira in Paris. Dynamic, fluid, yet forceful. Integrated into space yet perfectly disruptive to that space…
Here is the artist website (warning - slow loading). Very good overview across three media - a rare combination for any artist.

Amazingly, http://www.theartnewspaper.ru/ let their domain lapse! Seriously poor judgement by the AN.


Cool stuff on 'superfluids': Behavior of Turbulent Flow of Superfluids Is Opposite That of Ordinary Fluids

Via http://www.sciencedaily.com/releases/2013/07/130725152143.htm example: liquid helium. "When cooled to extremely low temperatures, helium exhibits behavior that is otherwise impossible in ordinary fluids. For instance, the superfluid can squeeze through pores as small as a molecule, and climb up and over the walls of a glass. It can even remain in motion years after a centrifuge containing it has stopped spinning. Now physicists at MIT have come up with a method to mathematically describe the behavior of superfluids -- in particular, the turbulent flows within superfluids."

More scientifically, from the authors' mouth: "Superfluid turbulence is a fascinating phenomenon for which a satisfactory theoretical framework is lacking. Holographic duality provides a systematic approach to studying such quantum turbulence by mapping the dynamics of a strongly interacting quantum liquid into the dynamics of classical gravity. We use this gravitational description to numerically construct turbulent flows in a holographic superfluid in two spatial dimensions. We find that the superfluid kinetic energy spectrum obeys the Kolmogorov Formula scaling law, with energy injected at long wavelengths undergoing a direct cascade to short wavelengths where dissipation by vortex annihilation and vortex drag becomes efficient. This dissipation has a simple gravitational interpretation as energy flux across a black hole event horizon." [Few of you who took my derivatives theory few years back would recall, undoubtedly, Kolmogorov scaling in non-normality space...]

And in uber-geeeky terms via MIT: "Holographic description of a superfluid with vortices. The vertical axis is the radial direction z of AdS4. The planes at z=0 and z=1 are the boundary of AdS4 and the black hole horizon respectively.  The green surface is a surface of constant bulk charge density, with the region between the two slices defining a ``slab'' of condensate where most bulk charges reside.  The slab screens excitations from falling into the horizon. This can be seen from the vector field in the plot which indicates the direction and magnitude of the local energy flux;  note that this flux vanishes quickly below the slab. The vortices, with energy flux circulating around them, punch holes through this screening slab, providing avenues for excitations to fall into the black hole.  The surface z = 0 also shows the condensate on the boundary (with blue color representing zero condensate), superposed with flow lines of the superfluid velocity. The flux tubes show a surface of constant  |\Phi|^2/z^4, which coincides with the boundary condensate at z=0. The z = 1 surface also shows the flux of energy through the horizon.  Note that the energy flux is only significant (red and green) in the wake of the moving vortices."

Yeah, I know… WHAAAAT...WHAS...DAT?! Still, cool...


While on the impossible science set, reading through some links, I stumbled upon the ages-old Godel's Ontological proof of the existence of God. Here's the brilliant exposition. And more links on this fascinating effort:

• Prof. Dr. Elke Brendel gives exhaustive background and compendium of actual proof here
• Good backgrounder here
• And more philosophical outline here.

This is why I absolutely love Godel's work. He was, beyond any doubt, one of the greatest thinkers of the 20th century. Godel's greatest contribution was in the form of two Incompleteness Theorems. Am paraphrasing these here:

• Theorem 1: In any logical system it is possible to construct statements that are simultaneously neither true nor false.
• Theorem 2: By Theorem 1, no consistent system can be used to prove its own consistency. 

Theorem 1 is equivalent to the Liar’s Paradox: "Everything I say is a lie" or "This sentence is false". See: http://www.iep.utm.edu/par-liar/. Theorem 2 is equivalent to saying that "No proof can be proof of itself".  Godel's Theorem 2 is, in my view, a more defined logical version of Karl Popper's idea that any theoretical (mathematical) system based on axiomatic (or hypothesis-anchored) structure is falsifiable, but unprovable. Godel actually pre-dates Popper's thesis. Incidentally, this is why, in my view, axiomatic (theoretical) structures of inquiry are more powerful (have greater degrees of freedom) than 'natural' sciences. And hence, arts are more powerful than physical (experimental) sciences.

Time to stop…


And time to see the awesome power of nature. Courtesy of My Modern Met blogs:
http://www.mymodernmet.com/profiles/blogs/veselin-malinov-porto-portugal-hurricane-storm

The extreme and the extremely beautiful power of nature merged with the power of art. Veselin Malinov's work is fantastic. See it here. His other works are also superb, even if less dynamic. By the way - both, the exceptionally movement-saturated photographs of the storm and 'static' images of architectural spaces reveal Malinov's real strength: intuitive composition.

 Compare this with the banality of architectural photography of Peter Marlow, I covered in the first post (linked above).

Enjoy!

27/7/2013: WLASze Part 1: Weekend Links on Arts, Sciences and zero economics

This is the first part of my regular WLASze: Weekly Links on Arts, Sciences and zero economics posts for this weekend. Enjoy...


Let's start with some music: http://www.youtube.com/watch?v=EEB6bX35aHk
H/T to t.j greene @greentak : Gipsy Kings - Duende

And while on music front, memory brings me back to one of my most favourite composers of all times: Arvo Part's his Fratres was recently heard by myself and MrsG in Dublin's NCH. Different performance, but equally sublime: http://www.youtube.com/watch?v=KddCQz_Ru_w


Of Fratres in us all… and science-linked, too: Nothing - emotively or nostalgically - comes close to seeing the Earth from outer space… and this photograph from July 19, 2013, the wide-angle camera on NASA's Cassini spacecraft, showing Saturn's rings and our planet Earth and its moon in the same frame does the job superbly:
http://www.nasa.gov/mission_pages/cassini/multimedia/pia17171.html#.Ue7tE2SglF_

Art merged with (sort of) science, or may be with just raw (accident-driven) curiosity?
http://www.wired.com/rawfile/2013/07/who-knew-golf-balls-could-be-so-arty/?viewall=true
Images are stunning. My favourite?
http://www.wired.com/rawfile/2013/07/who-knew-golf-balls-could-be-so-arty/#slideid-27451
and

Reminds me of Kenneth Noland and Josef Albers. Kandinsky described circular form as one of the most natural and challenging simultaneously. Geometrically-speaking, circle is also conceptually one of the unique basic 'natural' shapes (Platonism)… go figure it is all inside a golf ball…


"The robots are even more baffled by Bernanke than the humans" - yes, I know - this is 'zero economics' post… but this is very, very good...
http://qz.com/108089/the-robots-are-even-more-baffled-by-bernanke-than-the-humans/
Need I to say that at a higher level - more 'Earth from Saturn' of a vantage point - Bernanke is baffling to humans too. But that has more to do with my Impossible Monetary Dilemma (you can search my blog for that to read my musings, or one of the summaries is here).


Prix Pictet photographer, Simon Norfolk, captures harsh reality of life in Afghanistan

Simon Norfolk, "The Disaster Season", 2013. Photo: Simon Norfolk for Prix Pictet

"After winning the coveted Prix Pictet commission, the British photographer Simon Norfolk travelled to Bamyan Province in Afghanistan's Central Highlands in February to shoot the landscape as it changed through the seasons. There the climate can wreak havoc on the local farming communities—May is known as the “disaster season”, when the sun melts the deep winter snow, sending it crashing down the valleys and often ripping through villages in its path. "Every year the beautiful, pristine blanket of white holds within it the possibilities of destruction and death," Norfolk writes in the Financial Times newspaper. Norfolk's series, also called “The Disaster Season”, depicts scenes photographed from the same vantage point roughly six weeks apart. The body of work is due to go on show at Somerset House in London from 10 to 27 October."

You can see more of his work here: http://www.simonnorfolk.com/burkenorfolk/photos.html

His other work - equally stunning:

Oak trees at Blenheim Palace, copyright Simon Norfolk. Read more: http://www.bjp-online.com/british-journal-of-photography/project/1650104/simon-norfolk-trees-blenheim-palace#ixzz2a5qMQuuV


Science and art: take a fixed spot in the sky. Take a shot every 10 seconds. Form a day-long movie of these shots. One movie per day over 360 days. Combine. Get: http://apod.nasa.gov/apod/ap130724.html Creative, imaginative, structured, replicable, not confirmable. Science and art. I loved this.


And then, take the most sacred in science (speed of light) and freeze it:
http://www.newscientist.com/article/dn23925-light-completely-stopped-for-a-recordbreaking-minute#.UfITIWSglF9
"While light normally travels at just under 300 million metres per second in a vacuum, physicists managed to slow it down to just 17 metres per second in 1999 and then halt it completely two years later, though only for a fraction of a second. Earlier this year, researchers kept it still for 16 seconds using cold atoms."


But just taking fixed-point photographs does not guarantee attainment of value.
"A new exhibition by Magnum photographer Peter Marlow - opening today at London's The Wapping Project Bankside" - July 24th is an exemplification of the above statement.

Frankly, I'd run away from this parade of banality. As an architectural cataloguing project, this might fly. And the architecture is rather impressive, beyond any doubt. But as art this photography is static, boring, compositionally unchallenging and exploratively flat. Textures, tonalities, light remain unexplored, space is drained of its meanings.

Quote: "These days, Anglican cathedrals attract more tourists than churchgoers - though in some respects, both are arguably worshipping something greater than themselves. And while we wait with bated breath for the next 'starchitect' masterwork to be erected, it is worthwhile to remember that these religious shrines have withstood a test of fortitude (think two World Wars) far greater than any modern pinnacle might face - for centuries in fact."  Yes. But none of this has anything to do with Peter Marlow's effort, which, in the end, is itself a quintessentially a replica of the shallow tourist view… sans John Baldessari's capacity for sarcasm:

In contrast - a superb, absolutely superb work at the Irish pavilion at Venice Biennale 2013 offers an excellent viewing:

Panoramic landscapes from the range of geographies - rich, luscious, dynamic, juxtaposing war and peace, calm and tension, colour and depth - by Irish artist Richard Mosse's. Mosse uses infrared film to re-narrate space:

Ireland put one of the top 5 pavilions in Venice Biennale 2013, if not the best. Well done!


Stay tuned for WLASze Part 2 later… Enjoy… and think… and marvel… and question… 

26/7/2013: Forfas Report 2012: A Handy Guide to 'Egg-Face' Collision

Ireland has been described as a 'Knowledge Economy", a science and R&D intensive economy, and island of Scholars (yes, while ago we also allegedly had saints). We have enough science development policy 'platforms' to fill TCD's Long Room. And we do spend some dish on funding science.

One of the organisations, responsible for shaping policy and assessing effectiveness of all of these and other 'platforms' is Forfas - a state body in charge of economic policy supports. You can read all the glorious descriptions of what Forfas does here: http://static.rasset.ie/documents/news/forfas-annual-report-2012.pdf

And this week, RTE reported the following nice stats about this beacon of knowledge and research (full article here: http://www.rte.ie/news/2013/0724/464489-forfas-pension/?goback=%2Egde_2825341_member_260797418)

• "The pension scheme at State enterprise body Forfas has a net deficit of almost €1.2 billion" (to be more precise: €1,187,674,000 - up 22% from €972,389,000 in 2011). Note: "Forfas administers the pensions of a number of agencies including Forfas, Enterprise Ireland, IDA Ireland, Science Foundation Ireland and the predecessors of those agencies."
• "The report also states that 78% of last year's €51.4m Oireachtas grant to Forfas went to pay pensions - with just 22% spent on policy activities, corporate and shared services."
• "The cost of payments to pensioners rose from by over 23% from €35.3m in 2011 to just under €43.5m last year."
• But wait, there's more: "'non-effective expenditure' of €1.4m relating to rents for unoccupied office space.

On top of the figures highlighted in the RTE article, here are the actual breakdowns from the annual report:

• EUR79.052mln was total income received by Forfas from all sources in 2012, down on EUR79.229mln in 2011.
• Pensions spending was EUR61.372mln in 2012 or 77.63% of total income. In 2011 the same was EUR60.424 or 76.27%.

So: EUR43.5m on pensions, EUR1.4m on wasted rent, our of EUR51.4m grant means that Forfas has managed to spend ca EUR44.9m from EUR51.4m on… err… being a well-housed pension administrator. Less than 12.65% of the organisation grant went to fund its activities.

Seriously, folks, this does not give one much confidence in getting 'value for money'…

Updated: A comment from a senior science body head in Ireland: "I was gobsmacked to see this figure. I wonder how much of the country's so-called €500m 'science' budget goes on pensions? This is not to begrudge retired public servants their entitlements, but we should be transparent about what we spend on science & what we spend on other things."

26/7/2013: Eurocoin signals 22nd consecutive month of recession

CEPR and Banca d'Italia leading growth indicator for the euro area, Eurocoin, is out for July, showing that growth in the euro area economy remained under water for 22nd month in a row.

Per charts above,

• Eurocoin indicator stood at -0.09 in July, an improvement in the rate of contraction on -0.18 in June 2013 and on -0.24% in July 2012.
• Both, 3mo MA and 6mo MA of Eurocoin through July 2013 are at -0.14.
• Q2 2013 forecast for growth is now at -0.15 and Q3 2013 forecast (based on July and trend) is slightly more benign -0.1-0.11, though that is a very high risk forecast.  

Looking at the 'Impossible Monetary Policy Dilemma':

ECB rates are at zero bound and are not stirring growth, with HICP being in the 'safely benign' territory. We are looking at a scenario where the only reason not to drop rates to zero is that doing so will not make any serious difference to growth.

25/7/2013: BlackRock Institute latest survey results for global economic outlook: June 2013

The latest summary of the global growth conditions from the BlackRock Investment Institute. Click on the chart to open larger version. I have highlighted Ireland on the chart.

Blue bars reflect consensus on current phase of economic development (for example, in Ireland's case, current phase is seen as being recessionary by roughly 25% of respondents to the survey). Red dot corresponds to 6mo forward expectation (in Ireland's case, 50% of respondents expect recession in Ireland to either continue or to present itself again in 6 months time).

Note: this is the view of surveyed economists and not the view of the BlackRock II. The chart is based on the "trailing 3 survey reports for the other regions we poll. In our first month of this initiative, we collected the views of over 430 economists from more than 200 institutions, spanning over 50 countries"

25/7/2013: Entrepreneurship in Ireland, 2012

Here's a recently published report on entrepreneurship in Ireland (data through 2012):  http://www.enterprise-ireland.com/EI_Corporate/en/Publications/Reports-Published-Strategies/GEM-Report-2012.pdf

Some points of note, quotes direct from the text, italics emphasis is mine:

"Less positive trends…….

• The general perception of opportunities for new businesses by people in Ireland continues at historically low levels and is far below that pertaining across the OECD and EU.
• The aspiration to become an entrepreneur remains low, and is far below that generally observed across the OECD and EU, at a time when the perceived need for entrepreneurs is greater than ever.
• Fewer people are currently planning and starting new businesses in Ireland. This is particularly the case among men.
• In respect of early stage entrepreneurs, Ireland’s position relative to other European countries has significantly declined.
• The prevalence of early stage entrepreneurs in Ireland is at historically low levels and is half of what it is in the United States.
• The level of early stage entrepreneurs that are motivated by necessity continues at a high rate.
• A marked lowering of growth ambition may be observed among men starting new businesses.

More positive trends…..

• Successful entrepreneurs continue to be well considered in Irish society, and success at entrepreneurship is considered to confer considerable status.
• There is a growing general perception of supportive coverage by the media of entrepreneurs and their activities.
• The educational attainment level among early stage entrepreneurs in Ireland is one of the highest internationally.
• More than half of all early stage entrepreneurs are focused on overseas markets and many expect a significant number of customers to be from overseas markets.
• The growth expectations among women entrepreneurs have considerably increased and there is no longer a significant gender gap in this area.
• The prevalence of owner managers of established businesses in Ireland is higher than it is across the OECD and EU.
• The level of growth expectation among early stage entrepreneurs remains at a high level."

Another point of interest: "Early stage entrepreneurship is higher among immigrant groups (7.2%) than it is among the non-immigrant population (5.8%) (Table L). This is the case in the other EU-15 countries, with the exception of the Netherlands. Immigrant early stage entrepreneurs are typically motivated by opportunity (73%), which is also the case for non-immigrant entrepreneurs (70%). More specifically, a higher percentage of first generation (3.0%) and second generation immigrants (2.9%) have recently started a business in Ireland, compared to the non-immigrant population (2.2%)."

Role of the recession: "Almost a third of those consulted identified the recession and continuing high rates of unemployment as fostering entrepreneurial activity. The view is that the high unemployment rate has reduced the fear of failure as a deterrent, as people have little to lose. The high unemployment level is forcing people to consider starting up. This point ties in with the continuing high levels of necessity entrepreneurship identified in the 2012 GEM research"

It is worth noting that involuntary entrepreneurship (due to lack of employment) is usually associated with poorer business outcomes.

On funding side: "Informal investors play a vital role in the development of new businesses. In Ireland in 2012, 3.7% of adults reported having provided funds in the past three years (June 2009 to June 2012) to a new business started by someone else. This rate was broadly similar to that reported in 2011 (3.2%). Informal investment is more pervasive in the US (5.4%), across the OECD (4.6%) and the EU-27 (4.5%). The rate in Ireland is more on a par with the EU-15 average (3.4%). The great majority (81%) of the 36,000 individuals, who provided funds as informal investors in Ireland in 2012, provided them to family, friends or work colleagues. Instances of providing investment to entrepreneurs unknown to the investor were much less common (19%)."

Some summary stats:

25/7/2013: More on Sovereign-Banks Contagion risks in Spain and Italy

Two interesting charts detailing continued rise in risk links between the sovereigns and Italian and Spanish banks:

 Both via Ioan Smith @moved_average.