Deteriorating outlook for Russia and CIS is reflected in this Euromoney Country Risk note, citing my views on Russian economy's risks:
Friday, August 9, 2013
9/8/2013: Irish ICT Services: Geniuses & Jobs Creators?..
The latest annual services inquiry for Ireland, published yesterday by the CSO and available here: http://www.cso.ie/en/releasesandpublications/er/asi/annualservicesinquiry2011/#.UgTpe2QmlF8 offers a fascinating read into the workings in the bizarrely-distorted world of MNCs-led exporting services in the country.
Here is one interesting set of facts, not shown by the CSO.
As chart above shows, in 2008-2011, Gross Value Added in ICT Services sector in Ireland (the sector heavily dominated by the likes of Google and other tax transfer-driven MNCs) has boomed, rising 30%. This growth, as the Government et al love reminding us, is allegedly translating into jobs, jobs and more jobs.
Alas, the facts speak for themselves:
Here is one interesting set of facts, not shown by the CSO.
As chart above shows, in 2008-2011, Gross Value Added in ICT Services sector in Ireland (the sector heavily dominated by the likes of Google and other tax transfer-driven MNCs) has boomed, rising 30%. This growth, as the Government et al love reminding us, is allegedly translating into jobs, jobs and more jobs.
Alas, the facts speak for themselves:
- Over 2008-2011 wages and salaries paid out in the sector rose just 8.2% or a tiny fraction of growth in value added.
- GVA per person engaged in the sector rose 29.9% an
- d GVA per full time employee rose 31.1% - both by far the fastest rates of growth of any sector in the economy.
- The numbers engaged in the sector dropped (not rose) in 2008-2011 by 5.0% while numbers of full-time employees in the sector dropped 5.9%.
Can someone explain these miracles to me, please? By anything other than ongoing substitution of activity away from actual production of services toward more tax optimisation?.. Anyone?..
While at it, here is another illustrative chart to consider:
The above shows that Irish ICT Services workers constitute a truly miraculous breed of employees - so vastly more productive than any other type of human being in Ireland. Next time, walking down the Barrow Street, do marvel at all the geniuses walking about.
9/8/2013: PM Abe: a fella who makes history, quickly...
Roger, we have a problem... or rather - we now have a historic-level problem. Swept by Abenomics - the latest Japanese policy craze that believes in simultaneous borrowing and printing of excessive amounts of cash as a form of economic development, the Japanese economy is drowning in the sea of Government debt. This week, the Government has announced that its official debt levels have surpassed Yen 1,008,600 billion or Yen 1,008.6 trillion or Yen 1.0 quadrillion.
Never fear, this for now amounts to just USD10.42 trillion - a mere 230% of GDP. Abenomics has some room to run, yet... stay tuned and buckled up.
Source: http://www.zerohedge.com/node/477408 via @zerohedge
Never fear, this for now amounts to just USD10.42 trillion - a mere 230% of GDP. Abenomics has some room to run, yet... stay tuned and buckled up.
Source: http://www.zerohedge.com/node/477408 via @zerohedge
Thursday, August 8, 2013
8/8/2013: Cars licensing numbers for July are just not that spectacular
Latest data on new vehicles licensing data for Ireland was out today with bombastic headlines (see release here: http://www.cso.ie/en/releasesandpublications/er/vlftm/vehicleslicensedforthefirsttimejuly2013/#.UgPQ0GQmlF8).
So what is really going on in the data? Let me just recap what you will see below in a neat summary:
- Increases in new licenses in July are real, but are most likely driven by timing underlying 131 vs 132 plates introduction.
- Increases in July licensing numbers are not a signal of any significant improvement in the motor trade fortunes in Ireland.
- Caution and patience (until we see full year numbers for 2013) are warranted on foot of total new licenses issued in January-July period of 2013 compared to past years numbers.
On a monthly basis, things are looking massively good, as the CSO release clearly indicates that 9,306 new private cars were licensed in July 2013, compared with 6,164 a year ago, an increase of 51.0% y/y - massive and strongly suggestive of some huge turnaround in demand. It should be noted that the 132 number plate was introduced from the 1st July 2013 (see note below).
That was the 'good' news. Was it really dramatic? Not if you look at the entire history of sales:
The only thing that was extraordinary about the July licensing figures was that in a historical context, these were not that extraordinary at all. Let's run through some numbers in more details:
- Year on year, all vehicles new licensing rose 43.9% in July 2013. These were also up 29.1% on July 2011 and 25.1% on July 2010.
- Alas, cumulative sales for 3 months May-July 2013 were down 13.9% on cumulative sales for 3 months of February-April 2013 although they were up 11.7% y/y. Good rise y/y but not as dramatic as 43.9%.
- July 2013 licenses came in at 10.2% below the monthly average for January 2000-present, putting some cold icy water between the headlines reported and actual levels achieved.
- New private cars licensing was up, as noted above 50.8% in July 2013 compared to July 2012, but 3mo cumulative licensing numbers for new private cars were down 30.6% for the period of May-July 2013 compared to February-April 2013, although these were up 0.32% y/y.
- Let's think in monthly volumes terms: July 2013 licensing numbers were highest in only 4 months for all vehicles and new vehicles, and in new private cars, and in only 2 months for goods vehicles. I don't see drama here, folks. Just none...
Aside: the number of new goods vehicles licensed in July 2013 was 953, down 6.2% from July 2012 and these signal activity (or lack thereof) in SMEs sector.
But back to core numbers. The omitted news is that monthly sales might tell us something, but they don't tell us as much as we would like them to. The reason for this is that possibly July 2013 was the month when buyers hunting for 132 plates came into the market, having delayed their purchases from prior months. To correct for this we need to look at y/y comparatives for cumulative licensing January-July. For the sake of taking a short-cut, let's just look at data from January 2000 through latest. Chart below plots this data:
As you can see from the above, things are not getting better in the market, at least not so far. In January-July 2013,
- Licensing of all vehicles declined 0.34% on 2012 and was down 11.8% on 2011. It was down 37.5% on average for the first seven months of the year for the period 2000-present and was down 5.45% on average for the crisis period from 2009 through present. Conclusion: January-July 2013 all vehicles licenses are down not up y/y and are running below the crisis period average.
- Licensing of new vehicles (private and goods vehicles) declined 9.6% on 2012 and was down 20.5% on 2011. It was down 48.5% on average for the first seven months of the year for the period 2000-present and was down 6.6% on average for the crisis period from 2009 through present. Conclusion: January-July 2013 all new vehicles licenses are down not up y/y and are running below the crisis period average.
- Licensing of new private vehicles declined 9.7% on 2012 and was down 22.8% on 2011. It was down 46.7% on average for the first seven months of the year for the period 2000-present and was down 6.7% on average for the crisis period from 2009 through present. Conclusion: January-July 2013 new private vehicles licenses are down not up y/y and are running below the crisis period average.
- Licensing of goods vehicles declined 9.6% on 2012 and was down 9.2% on 2011. It was down 62.3% on average for the first seven months of the year for the period 2000-present and was down 4.8% on average for the crisis period from 2009 through present. Conclusion: January-July 2013 goods vehicles licenses are down not up y/y and are running below the crisis period average.
I am not so sure we should be rushing out to congratulate our motors trade for delivering a magic turnaround on the above numbers, although we should stay cautious in terms of interpreting the overall sales until we have full year picture. Thus: caution, not celebration, is in order.
Note: Some are telling me that the industry is benefiting from 'spreading' the demand more evenly across the year under the new registration plates. In other words, allegedly, the industry was lobbying to introduce the 131 and 132 plates in order to reduce the rush of buyers in the first half of the year that took place under the original 13 plates (full-year plates) and transfer that 'surplus' demand to the second half of the year. This makes little sense to me. Suppose you transfer some sales from H1 into H2 (i.e. delay them by up to 6 months). What does this imply? By the time you do sell these 'spread-out' vehicles that you normally would have sold in H1, the money you do receive from the sales have been devalued by up to 6 months of inflation and you have incurred an opportunity cost of losing the interest on earnings that would have accrued were you to sell these 'spread-out' vehicles in H1. Is the motor trade sector that dumb? I don't think so.
Wednesday, August 7, 2013
7/8/2013: Sunday Times, July 28, 2013: Ireland's Polarised Paralysed Economy
This is an unedited version of my article in the Sunday Times from July 28, 2013.
The latest news from the economy front both in Ireland and across the Euro area have been signaling some shallow improvements in growth outlook for the second and third quarters of 2013. However, the end game of a recovery currently building up will be a greater polarization of the real economy and little net new jobs creation. As supply of skills by indigenous workers remains mismatched to the demand for skills by exporting sectors, restart of exports-led growth of the future will not trickle down to the ordinary families. Meanwhile, long-term unemployment is hitting harder our older indigenous workers, and our entrepreneurship is in a structural decline. Responding to these problems will require a radical shift in the way we enable entrepreneurship, support professional labour mobility and increase investment in education and skills.
To see this, first consider the drivers for the latest improvements in the news flows. June Purchasing Managers’ Index (PMI) for Manufacturing in Ireland has finally reached just a notch above 50.0, signaling expansion for the first time since February 2013. Services PMI jumped to 54.9, marking 11th consecutive month of index readings above 50. Across the Euro area, Spanish Manufacturing PMI reached above 50 in June for the first time in 27 months. Italian PMI posted a rise for the third month in a row, although it remains below the expansion mark of 50.0. Germany's July composite PMI estimate for services and manufacturing hit a 17-month high at 52.8 and French estimate came in at 48.8 - an improvement on 47.4 in June.
Even though the end to the longest recession in euro area's history might be in sight, the recovery is unlikely to be strong. Euro area economies, Ireland included, genuinely lack sustainable drivers for growth. In addition, the processes of establishing new sources for future growth - new entrepreneurship and investment cycles – have been severely delayed both by the crises and by our policy responses to these crises.
In normal recessions, higher unemployment leads to higher involuntary entrepreneurship, as laid off workers deploy their skills and expertise into the market through self-employment and as sole-traders. In Ireland, in part due to tax hikes hitting the self-employed the hardest, this did not take place. According to the Enterprise Ireland report published earlier this month, the proportion of early stage entrepreneurs here has fallen from 8.1% average over 2003-2008 period to 6.1% in 2012. Ireland now ranks 18th out of 34 OECD countries in terms of entrepreneurship, just as the Government is expending millions on PR campaigns extolling the virtues of its pro-entrepreneurial policies and culture.
Beyond shrinking entrepreneurship, Irish labour markets are continuing to show signs of long-term, structural distress. The headline figures on Irish unemployment tell the story.
At the end of June 2013, there were 516,751 recipients of Live Register supports, including those in state and community training programmes. Some of the latter are involuntary in so far as they are linked to continued receipt of unemployment benefits. In June 2011, the same number was 517,187. The Government is boisterously claiming the economy is creating 2,000 new jobs per month. The same Government has spent hundreds of millions on enterprise supports and investment schemes, published series of programmes promising new jets in tens of thousands. Amidst this PR circus, the unemployment supports counts have declined by less than 500 over two years.
Based on the Quarterly National Household Survey data, we can take a more granular look into the jobs creation dynamics in the economy.
Between Q1 2011 and Q1 2013, the latest period for which data is available, total non-agricultural employment in the country fell by 9,200. In 12 months through March 2013, Irish economy added only 4,900 non-agricultural jobs. Some 19,000 shy of what our ministers in charge of jobs creation and enterprise policies allege. Controlling for health and education jobs, private sector saw destruction of 11,600 non-agricultural jobs since Q1 2011 when the Government came to power. Even in the booming Information and Communication services, overall employment fell by 1,100 in 12 months through Q1 2013, despite robust hiring in the exporting MNCs operating in the sector.
Underneath the surface, the trend is for displacement of Irish workers by age cohorts and by skills. This means that more and more foreign workers are taking up new positions created in sectors such as ICT and IFS to replace positions lost in domestic sectors. It also implies that older Irish workers are now being consigned to the risk of perpetual unemployment.
On the first point, while there is virtually no net new jobs additions in the economy, the positions that are being created to replace those being destroyed by the crisis, are getting progressively worse in terms of their quality. In the higher value-added private sectors, such as ICT services, professional, scientific, and technical activities, financial, insurance services and the likes, employment shrunk by 6,100 in Q1 2013 compared to Q1 2011 and by 900 compared to Q1 2012. Year on year there have been some 9,300 new jobs created in the top three professional occupations when ranked by earnings. However, more than half of these were part-time jobs. These are hardly the jobs that are attracting foreign talent into Ireland, suggesting that of the full time jobs in ICT and IFSC sectors created, the vast majority are taken up by non-Irish workers.
Regarding the last point, in June 2013, compared to June 2010, by age, the only cohort of Irish workers that saw a decline in Live Register numbers are those under the age of 35. All other age cohorts saw increases in Live Register participation. Between June 2010 and June 2013, numbers of long-term unemployed and underemployed rose 20% for workers under 35 years of age, 54% for workers of 35-54 years of age, and 106% for workers older than 55. In effect, we are currently assigning older workers to spend the rest of their working-age life in unemployment.
All of the above is best summed by the quarterly data on unemployment. At the end of March 2013, 25% of Irish workforce was either unemployed, underemployed or marginally-attached to the workforce, up on 23.7% in Q1 2011. Adding to the above those in state training schemes pushes the true broad unemployment rate in Ireland to 29% in Q1 2013, up on 26% in Q1 2011.
As I asserted at the top of the article, evidence shows that there is basically no net jobs creation going on in Ireland since Q1 2011. It further shows that older and predominantly Irish workers are experiencing an ever-rising risk of perpetual unemployment. Amongst the younger cohorts of workers, the main beneficiaries of the ICT and IFSC exporting sectors boom are temporary residents from abroad. Of the jobs still being added in the economy, majority are of low quality and cannot be relied upon to sustain long-term financial viability of Irish households. Lastly, skills mismatches between indigenous workers and exporting sectors demand are offering little hope that exports-led growth of the future will trickle down to ordinary families in Ireland.
The response to the above problem will have to be a structural shift in the way we support and treat entrepreneurship, professional labour mobility and investment in education and skills.
Currently, government policies overwhelmingly disfavor self-employed, indigenous entrepreneurs, and risk-taking professionals. In return, our policies promote development of tax optimizing FDI-backed large enterprises. Thus, early stage entrepreneurs face higher direct and indirect taxes than mature corporations and PAYE employees. Risk-taking, mobile, highly skilled professionals face lower quality and higher cost safety nets than immobile, old-skills-reliant tenured employees. Both mobile employees and entrepreneurs are also facing higher risks of unemployment, greater prospects of disruptive shocks to their incomes and larger exposure to health and family shocks. Meanwhile, for would-be entrepreneurs and flexible markets employees currently in underemployment or unemployment, life-long learning systems are costly to access and, with few exceptions, are of dubious quality.
These obstacles to increasing functional mobility of workers and human capital investments in our workforce can only be dealt with via a drastic, costly and disruptive reforms of our welfare system. In part, the Government is currently attempting to undertake some of these reforms, albeit against the rising tide of internal discontent between the coalition partners.
But the current reforms proposals are not going far enough. Specifically, we will need to separate unemployment supports from general welfare and make these supports available to self-employed and flex-employment workers at no increase in cost of provision to these workers. The test for accessing all benefits – unemployment insurance and general welfare – should include skills levels and the entire past history of employment and entrepreneurship. Thus, higher unemployment supports should be given to those who have contributed more in the past in terms of taxes paid and entrepreneurship or human capital investment efforts undertaken. Conversely, they should have lower access to welfare benefits. To afford the strengthening of the safety net at the front end of unemployment, we will have to cut back the general social welfare benefits for able-bodied adults.
Parallel to these reforms we also need to change the way we do business in the areas such as childcare and life-long-learning. The goal of such reforms should be to increase access and supports for families at risk of unemployment in the 30-35 years of age and older cohorts. One possible long-term improvement would be to incentivize on-shoring of corporate training services into Ireland by the multinationals, coupled with requirement that such services take on a set percentage of Irish workers for training purposes and apprenticeships. Another reform can see greater and more strategic engagement of multinationals with indigenous entrepreneurs and SMEs.
A deep re-think of our current policies on dealing with unemployment requires breaking down traditional siloes in public policy and management that exist between various departments. The last two years – filled with good intentions and loud policies announcements show that the strategies deployed to-date are not working.
Box-out:
The latest data from the Residential Property Price Index (RPPI) shows that Dublin property prices posted a year on year price increase of 4.15% in June and a 1.69% cumulative rise over the last six months. However encouraging this might sound, the data must be treated with caution for a number of reasons. Firstly, the main driver for the latest improvement in the RPPI was sales of Dublin apartments. These are highly volatile and are based on few transactions. Secondly, outside Dublin, the markets remain weak. Thirdly, latest mortgages data shows that while borrowing posted a cautious rise in the first half of 2013, mortgages affordability is falling. Lastly, current sales levels and valuations are not pricing in the upcoming wave of foreclosures (starting with Buy-to-Let markets around Q4 2013 and running though 2014) that will be required to deleverage banks balance sheets. The fact is: in June 2013 the All-Properties RPPI, was still down 1.5% on Q1 2012 average and is basically unchanged on December 2012-January 2013 levels. In other words, while pockets of strength might emerge in Dublin market, overall property market is currently bouncing at the bottom of the negative cycle, looking for a catalyst either up or down.
The latest news from the economy front both in Ireland and across the Euro area have been signaling some shallow improvements in growth outlook for the second and third quarters of 2013. However, the end game of a recovery currently building up will be a greater polarization of the real economy and little net new jobs creation. As supply of skills by indigenous workers remains mismatched to the demand for skills by exporting sectors, restart of exports-led growth of the future will not trickle down to the ordinary families. Meanwhile, long-term unemployment is hitting harder our older indigenous workers, and our entrepreneurship is in a structural decline. Responding to these problems will require a radical shift in the way we enable entrepreneurship, support professional labour mobility and increase investment in education and skills.
To see this, first consider the drivers for the latest improvements in the news flows. June Purchasing Managers’ Index (PMI) for Manufacturing in Ireland has finally reached just a notch above 50.0, signaling expansion for the first time since February 2013. Services PMI jumped to 54.9, marking 11th consecutive month of index readings above 50. Across the Euro area, Spanish Manufacturing PMI reached above 50 in June for the first time in 27 months. Italian PMI posted a rise for the third month in a row, although it remains below the expansion mark of 50.0. Germany's July composite PMI estimate for services and manufacturing hit a 17-month high at 52.8 and French estimate came in at 48.8 - an improvement on 47.4 in June.
Even though the end to the longest recession in euro area's history might be in sight, the recovery is unlikely to be strong. Euro area economies, Ireland included, genuinely lack sustainable drivers for growth. In addition, the processes of establishing new sources for future growth - new entrepreneurship and investment cycles – have been severely delayed both by the crises and by our policy responses to these crises.
In normal recessions, higher unemployment leads to higher involuntary entrepreneurship, as laid off workers deploy their skills and expertise into the market through self-employment and as sole-traders. In Ireland, in part due to tax hikes hitting the self-employed the hardest, this did not take place. According to the Enterprise Ireland report published earlier this month, the proportion of early stage entrepreneurs here has fallen from 8.1% average over 2003-2008 period to 6.1% in 2012. Ireland now ranks 18th out of 34 OECD countries in terms of entrepreneurship, just as the Government is expending millions on PR campaigns extolling the virtues of its pro-entrepreneurial policies and culture.
Beyond shrinking entrepreneurship, Irish labour markets are continuing to show signs of long-term, structural distress. The headline figures on Irish unemployment tell the story.
At the end of June 2013, there were 516,751 recipients of Live Register supports, including those in state and community training programmes. Some of the latter are involuntary in so far as they are linked to continued receipt of unemployment benefits. In June 2011, the same number was 517,187. The Government is boisterously claiming the economy is creating 2,000 new jobs per month. The same Government has spent hundreds of millions on enterprise supports and investment schemes, published series of programmes promising new jets in tens of thousands. Amidst this PR circus, the unemployment supports counts have declined by less than 500 over two years.
Based on the Quarterly National Household Survey data, we can take a more granular look into the jobs creation dynamics in the economy.
Between Q1 2011 and Q1 2013, the latest period for which data is available, total non-agricultural employment in the country fell by 9,200. In 12 months through March 2013, Irish economy added only 4,900 non-agricultural jobs. Some 19,000 shy of what our ministers in charge of jobs creation and enterprise policies allege. Controlling for health and education jobs, private sector saw destruction of 11,600 non-agricultural jobs since Q1 2011 when the Government came to power. Even in the booming Information and Communication services, overall employment fell by 1,100 in 12 months through Q1 2013, despite robust hiring in the exporting MNCs operating in the sector.
Underneath the surface, the trend is for displacement of Irish workers by age cohorts and by skills. This means that more and more foreign workers are taking up new positions created in sectors such as ICT and IFS to replace positions lost in domestic sectors. It also implies that older Irish workers are now being consigned to the risk of perpetual unemployment.
On the first point, while there is virtually no net new jobs additions in the economy, the positions that are being created to replace those being destroyed by the crisis, are getting progressively worse in terms of their quality. In the higher value-added private sectors, such as ICT services, professional, scientific, and technical activities, financial, insurance services and the likes, employment shrunk by 6,100 in Q1 2013 compared to Q1 2011 and by 900 compared to Q1 2012. Year on year there have been some 9,300 new jobs created in the top three professional occupations when ranked by earnings. However, more than half of these were part-time jobs. These are hardly the jobs that are attracting foreign talent into Ireland, suggesting that of the full time jobs in ICT and IFSC sectors created, the vast majority are taken up by non-Irish workers.
Regarding the last point, in June 2013, compared to June 2010, by age, the only cohort of Irish workers that saw a decline in Live Register numbers are those under the age of 35. All other age cohorts saw increases in Live Register participation. Between June 2010 and June 2013, numbers of long-term unemployed and underemployed rose 20% for workers under 35 years of age, 54% for workers of 35-54 years of age, and 106% for workers older than 55. In effect, we are currently assigning older workers to spend the rest of their working-age life in unemployment.
All of the above is best summed by the quarterly data on unemployment. At the end of March 2013, 25% of Irish workforce was either unemployed, underemployed or marginally-attached to the workforce, up on 23.7% in Q1 2011. Adding to the above those in state training schemes pushes the true broad unemployment rate in Ireland to 29% in Q1 2013, up on 26% in Q1 2011.
As I asserted at the top of the article, evidence shows that there is basically no net jobs creation going on in Ireland since Q1 2011. It further shows that older and predominantly Irish workers are experiencing an ever-rising risk of perpetual unemployment. Amongst the younger cohorts of workers, the main beneficiaries of the ICT and IFSC exporting sectors boom are temporary residents from abroad. Of the jobs still being added in the economy, majority are of low quality and cannot be relied upon to sustain long-term financial viability of Irish households. Lastly, skills mismatches between indigenous workers and exporting sectors demand are offering little hope that exports-led growth of the future will trickle down to ordinary families in Ireland.
The response to the above problem will have to be a structural shift in the way we support and treat entrepreneurship, professional labour mobility and investment in education and skills.
Currently, government policies overwhelmingly disfavor self-employed, indigenous entrepreneurs, and risk-taking professionals. In return, our policies promote development of tax optimizing FDI-backed large enterprises. Thus, early stage entrepreneurs face higher direct and indirect taxes than mature corporations and PAYE employees. Risk-taking, mobile, highly skilled professionals face lower quality and higher cost safety nets than immobile, old-skills-reliant tenured employees. Both mobile employees and entrepreneurs are also facing higher risks of unemployment, greater prospects of disruptive shocks to their incomes and larger exposure to health and family shocks. Meanwhile, for would-be entrepreneurs and flexible markets employees currently in underemployment or unemployment, life-long learning systems are costly to access and, with few exceptions, are of dubious quality.
These obstacles to increasing functional mobility of workers and human capital investments in our workforce can only be dealt with via a drastic, costly and disruptive reforms of our welfare system. In part, the Government is currently attempting to undertake some of these reforms, albeit against the rising tide of internal discontent between the coalition partners.
But the current reforms proposals are not going far enough. Specifically, we will need to separate unemployment supports from general welfare and make these supports available to self-employed and flex-employment workers at no increase in cost of provision to these workers. The test for accessing all benefits – unemployment insurance and general welfare – should include skills levels and the entire past history of employment and entrepreneurship. Thus, higher unemployment supports should be given to those who have contributed more in the past in terms of taxes paid and entrepreneurship or human capital investment efforts undertaken. Conversely, they should have lower access to welfare benefits. To afford the strengthening of the safety net at the front end of unemployment, we will have to cut back the general social welfare benefits for able-bodied adults.
Parallel to these reforms we also need to change the way we do business in the areas such as childcare and life-long-learning. The goal of such reforms should be to increase access and supports for families at risk of unemployment in the 30-35 years of age and older cohorts. One possible long-term improvement would be to incentivize on-shoring of corporate training services into Ireland by the multinationals, coupled with requirement that such services take on a set percentage of Irish workers for training purposes and apprenticeships. Another reform can see greater and more strategic engagement of multinationals with indigenous entrepreneurs and SMEs.
A deep re-think of our current policies on dealing with unemployment requires breaking down traditional siloes in public policy and management that exist between various departments. The last two years – filled with good intentions and loud policies announcements show that the strategies deployed to-date are not working.
Box-out:
The latest data from the Residential Property Price Index (RPPI) shows that Dublin property prices posted a year on year price increase of 4.15% in June and a 1.69% cumulative rise over the last six months. However encouraging this might sound, the data must be treated with caution for a number of reasons. Firstly, the main driver for the latest improvement in the RPPI was sales of Dublin apartments. These are highly volatile and are based on few transactions. Secondly, outside Dublin, the markets remain weak. Thirdly, latest mortgages data shows that while borrowing posted a cautious rise in the first half of 2013, mortgages affordability is falling. Lastly, current sales levels and valuations are not pricing in the upcoming wave of foreclosures (starting with Buy-to-Let markets around Q4 2013 and running though 2014) that will be required to deleverage banks balance sheets. The fact is: in June 2013 the All-Properties RPPI, was still down 1.5% on Q1 2012 average and is basically unchanged on December 2012-January 2013 levels. In other words, while pockets of strength might emerge in Dublin market, overall property market is currently bouncing at the bottom of the negative cycle, looking for a catalyst either up or down.
7/8/2013: Sunday Times, July 21, 2013: New Financial Order
Catching up on some of my past articles from the Sunday Times, here's an unedited version from July 21, 2013.
Five years into the Great Recession collapse of Irish domestic investment, underpinned by the unprecedented in history of the EU drop in lending to indigenous enterprises, continues to act as the main force holding back Irish recovery. Despite serious policy efforts to unlock banks lending, especially to the SMEs sector, expanded by the current Government and its predecessor there are many structural reasons as to why a return to the rampant lending and lending-backed investment in this economy remains elusive. After years of waiting for lending to return, we need to shift our policies focus away from attempting to refuel another SMEs credit bubble toward incentivising new forms of capital formation and accelerating the rate of existent debt restructuring in the real economy.
This week, research published by the Bruegel Institute reminded us about the horrors of the Irish credit system collapse. Looking at the outstanding credit to non-financial corporations from September 2008 through April 2013, the researchers found that Irish banking system experienced the largest decline in overall credit of all EU27 states. Ireland's outstanding credit to non-financial companies has fallen more than 50 percent over the period covered in the study, with the second-worst performing economy, Spain coming in with a more benign drop of 30 percent. Bankrupted Greece is in a distant fifth place, having posted a 'mere' 25 percent credit contraction.
Most recent Central Bank data, relating directly to the SMEs lending in Ireland, shows that new lending in Q1 2013 was 41 percent below the Q1 average for 2010-2012, despite the figures showing a slight rise quarter on quarter. Netting out new loans issued for financial intermediation and property, credit extended to SMEs in the first three months of this year was down 11 percent compared to the 2010-2012 average for the same period.
Strikingly, as Irish credit volumes shrunk faster than in any other EU state, interest rates for loans to Irish enterprises under EUR1 million in volume have declined in line with those for the lower credit risk economies. When it can be had, Irish SMEs credit is priced in line with such countries as Denmark, the Netherlands, Sweden and the UK.
On the other hand, SMEs’ demand for loans remains high. In Q2 2013, according to the latest ISME survey, demand for new credit rose to 41 percent from 38 percent a year ago. On average, 48 percent of all companies that applied for funding in the first six months of 2013 were refused credit by the bank, slightly down on 51 percent average rejection rate for 2012.
Good news: demand and refusal rates are starting to move in the opposite directions, just as credit supply is beginning to turn positive. Bad news: all improvements are shallow in nature and are yet to show sustainability over time.
All of this presents us with a paradox: while credit demand is high, both supply of loans and the cost is low. The reason for this is that Irish SMEs and banks are continuing to operate in a highly abnormal environment. Changing this will require reducing a severe debt overhang in the Irish SMEs sector, regulatory changes aimed at improving banks ability and incentives to restructure legacy loans, and a lengthy period of time to heal the overall collapse in SMEs willingness to undertake risky investment.
All indicators suggest that gradual improvements in the credit quality of SMEs are not keeping up with rising demand for loans.
Per ISME data, 12 percent of SMEs that do require bank finance abstain from applying for it; over half of them in fear that making an application can lead to the banks shutting down existent credit facilities. Of those SMEs that do apply, 28 percent saw demands for overdrafts reductions imposed onto them. Over half of the credit requests made but the SMEs were for overdrafts or invoice discounting/factoring.
This largely confirms the findings of our recent research based on the ECB data collected at enterprise level across the euro area. Applied to Ireland, our findings strongly suggested that significant contributor to the decline in credit was due to structural insolvency of SMEs’ balance sheets. These drivers are not being dealt with fast enough at the policy and banks levels to allow for the recovery in private sector investment.
Firstly, Irish SMEs remain heavily exposed to legacy loans secured against or for the purpose of property investment. Back in the early 2008, several investment banks have estimated that up to 90 percent of Irish business sector loans issued from 1998-1999 through 2006-2007 were exposed to the risk of collapse in property valuations. The main outcome of this is a wave of bankruptcies that is still consuming the sector. High debt levels tied to property loans mean that over one half of all Irish SMEs loans are currently in arrears, based on the Central Bank estimates. Referencing dynamics in residential buy-to-let markets (representing household side of the investment markets) and new lending data for SMEs, my own estimates suggest that closer to 70 percent of all SMEs loans still outstanding are either in arrears or at risk of failing.
However, even for the enterprises that survived the immediate drop in asset prices, property values decline has meant reduced borrowing capacity for years to come, greater propensity to avoid seeking new credit, and weakened existent production base. Behavioural studies suggest that SMEs hit by the property valuations declines, in contrast to newer enterprises formed after the property bust, will tend to reduce their future borrowings, even if they are given access to new finance. This applies also to companies that have completed successful debt restructuring. In addition, as SMEs lower their investment in new equipment, product R&D, and strategic and operational improvements, they reduce their future competitiveness and profit margins.
Secondly, Irish SMEs are operating in the environment of malfunctioning debt restructuring mechanism.
In a normal recession, banks hold sufficient capital to actively engage with SMEs in restructuring their debts. At the same time, short time span of a normal recession means that a bulk of businesses liquidations extend into the period of early economic recovery. Sales of distressed business assets, in normal recession, often take place in rising markets.
In a severe balance sheet recession, like that experienced today in Ireland, banks transfer costs of keeping the non-performing enterprises alive to other clients. One sign of this is that charges on short-term loans, often used to cover balance sheet pressures, tend to rise slower than charges on larger, capital investment-linked loans. From the bottom of the interest rate cycle through May 2013, cost of new credit for loans up to EUR1 million based on floating rate rose 33 percent. Cost of loans over EUR1 million with over 1 year fixation rose 87 percent. Such cost transfers harm better companies' ability to raise investment, while slowing down the rate at which the insolvency works through to weed out the unsustainable businesses. End game - delayed resolution of the debt crisis at the expense of suppressed capital investment and growth.
All of the above helps explain why less than a third of all Irish SMEs that do apply for credit from their bank end up drawing down any loans. But the above also suggests the policy direction that should be taken in trying to increase domestic capital formation while continuing to pursue system-wide deleveraging.
Unlocking investment requires, first and foremost, finding new sources for funding business expansion, distinct from bank lending. Such sources include equity financing and direct borrowing. The Government needs to develop incentives for equity investment in, and peer-to-peer and public-to-business lending to Irish SMEs.
To expand the pool of potential investors, we need to open these platforms and Irish investment services to international investors and institutions. Government re-insurance scheme for exports finance can be a good step forward in making Irish SMEs more attractive to foreign investors and freeing up some operating capital for growth. Another similar measure would involve more state co-investment in existent enterprises (as opposed to new ventures) based on their ability to generate intellectual property, associated with new products and services development.
While stimulating new forms of SME funding, Ireland also needs to accelerate the process of business insolvency resolution. This will require two major changes in the way our insolvency process is regulated.
We need to recognize the necessity for allowing banks to treat business equity as lower risk asset when restructuring legacy loans for sustainable enterprises. This can help increase debt-for-equity swaps between lenders and borrowers. In return, such swaps can allow banks to use their limited resources on deleveraging out of unsustainable loans. We also need to revise our targets for banks deleveraging, potentially extending the period over which the pillar banks are required to reduce their loans exposures and increase allowance for SMEs loans to be held by the banks. To reduce overall systemic risks, we can require banks to put their restructured SMEs loans through more rigorous stress-testing.
The second major change is to relax the constraints on entrepreneurship and professional standing for business owners going through bankruptcy proceedings. This will allow for a quicker return of past entrepreneurs to new ventures and will aid SME sector deleveraging.
All of the research on SME credit in the Euro area and Ireland shows that both supply and demand drivers are responsible for the collapse of investment during the current crisis. Instead of attempting to rebuild the legacy systems based on unsustainable lending, we need to think outside the box to identify new ways for funding productive investment. Both banking and the SME sector will require significant changes to deliver on this.
Box-out:
Largely ignored by the Irish media headlines, there is a new longer-term threat to our economy emerging from the EU's penchant for policies harmonisation. This week, at the talks in Vilnius, Lithuania, EU officials were discussing the need for pan-European regulation of data protection. In part, these talks were driven by the EU-US Free Trade Agreement negotiations and the recent scandal relating to e-spying. However, the main impetus for harmonising European regulations is the emerging imbalances in the ICT services investment across the EU. Ireland’s EU partners, especially Germany and France, are unhappy that our, allegedly, light-touch regulations act as a major attractor for foreign direct investment in ICT sector, ‘stealing’ jobs from Germany and tax revenues from France. The risks implied by harmonisation of EU regulations in this area are of significant economic concern. It is, perhaps, ironic that data protection regulations or their potential harmonisation did not make it into the ESRI's latest paper on ICT-related FDI, titled "Boosting Foreign Direct Investment in the Information and Communication Technologies Sector: What Works?" published this week. Foreign providers of ICT services in Ireland dominate the sub-sector which acts as the sole source of growth in Ireland from 2008 through today. Between Q1 2008 through Q1 2013, Irish ICT services credit to the current account rose from EUR5.86 billion to EUR9.35 billion. In Q1 2013, ICT services trade surplus exceeded our economy’s total external balance by 37 percent. Squeeze this sector through regulatory harmonisation and Ireland’s latest recession will look like a walk in a park, while our debt sustainability risks will go back to 2011 levels.
Five years into the Great Recession collapse of Irish domestic investment, underpinned by the unprecedented in history of the EU drop in lending to indigenous enterprises, continues to act as the main force holding back Irish recovery. Despite serious policy efforts to unlock banks lending, especially to the SMEs sector, expanded by the current Government and its predecessor there are many structural reasons as to why a return to the rampant lending and lending-backed investment in this economy remains elusive. After years of waiting for lending to return, we need to shift our policies focus away from attempting to refuel another SMEs credit bubble toward incentivising new forms of capital formation and accelerating the rate of existent debt restructuring in the real economy.
This week, research published by the Bruegel Institute reminded us about the horrors of the Irish credit system collapse. Looking at the outstanding credit to non-financial corporations from September 2008 through April 2013, the researchers found that Irish banking system experienced the largest decline in overall credit of all EU27 states. Ireland's outstanding credit to non-financial companies has fallen more than 50 percent over the period covered in the study, with the second-worst performing economy, Spain coming in with a more benign drop of 30 percent. Bankrupted Greece is in a distant fifth place, having posted a 'mere' 25 percent credit contraction.
Most recent Central Bank data, relating directly to the SMEs lending in Ireland, shows that new lending in Q1 2013 was 41 percent below the Q1 average for 2010-2012, despite the figures showing a slight rise quarter on quarter. Netting out new loans issued for financial intermediation and property, credit extended to SMEs in the first three months of this year was down 11 percent compared to the 2010-2012 average for the same period.
Strikingly, as Irish credit volumes shrunk faster than in any other EU state, interest rates for loans to Irish enterprises under EUR1 million in volume have declined in line with those for the lower credit risk economies. When it can be had, Irish SMEs credit is priced in line with such countries as Denmark, the Netherlands, Sweden and the UK.
On the other hand, SMEs’ demand for loans remains high. In Q2 2013, according to the latest ISME survey, demand for new credit rose to 41 percent from 38 percent a year ago. On average, 48 percent of all companies that applied for funding in the first six months of 2013 were refused credit by the bank, slightly down on 51 percent average rejection rate for 2012.
Good news: demand and refusal rates are starting to move in the opposite directions, just as credit supply is beginning to turn positive. Bad news: all improvements are shallow in nature and are yet to show sustainability over time.
All of this presents us with a paradox: while credit demand is high, both supply of loans and the cost is low. The reason for this is that Irish SMEs and banks are continuing to operate in a highly abnormal environment. Changing this will require reducing a severe debt overhang in the Irish SMEs sector, regulatory changes aimed at improving banks ability and incentives to restructure legacy loans, and a lengthy period of time to heal the overall collapse in SMEs willingness to undertake risky investment.
All indicators suggest that gradual improvements in the credit quality of SMEs are not keeping up with rising demand for loans.
Per ISME data, 12 percent of SMEs that do require bank finance abstain from applying for it; over half of them in fear that making an application can lead to the banks shutting down existent credit facilities. Of those SMEs that do apply, 28 percent saw demands for overdrafts reductions imposed onto them. Over half of the credit requests made but the SMEs were for overdrafts or invoice discounting/factoring.
This largely confirms the findings of our recent research based on the ECB data collected at enterprise level across the euro area. Applied to Ireland, our findings strongly suggested that significant contributor to the decline in credit was due to structural insolvency of SMEs’ balance sheets. These drivers are not being dealt with fast enough at the policy and banks levels to allow for the recovery in private sector investment.
Firstly, Irish SMEs remain heavily exposed to legacy loans secured against or for the purpose of property investment. Back in the early 2008, several investment banks have estimated that up to 90 percent of Irish business sector loans issued from 1998-1999 through 2006-2007 were exposed to the risk of collapse in property valuations. The main outcome of this is a wave of bankruptcies that is still consuming the sector. High debt levels tied to property loans mean that over one half of all Irish SMEs loans are currently in arrears, based on the Central Bank estimates. Referencing dynamics in residential buy-to-let markets (representing household side of the investment markets) and new lending data for SMEs, my own estimates suggest that closer to 70 percent of all SMEs loans still outstanding are either in arrears or at risk of failing.
However, even for the enterprises that survived the immediate drop in asset prices, property values decline has meant reduced borrowing capacity for years to come, greater propensity to avoid seeking new credit, and weakened existent production base. Behavioural studies suggest that SMEs hit by the property valuations declines, in contrast to newer enterprises formed after the property bust, will tend to reduce their future borrowings, even if they are given access to new finance. This applies also to companies that have completed successful debt restructuring. In addition, as SMEs lower their investment in new equipment, product R&D, and strategic and operational improvements, they reduce their future competitiveness and profit margins.
Secondly, Irish SMEs are operating in the environment of malfunctioning debt restructuring mechanism.
In a normal recession, banks hold sufficient capital to actively engage with SMEs in restructuring their debts. At the same time, short time span of a normal recession means that a bulk of businesses liquidations extend into the period of early economic recovery. Sales of distressed business assets, in normal recession, often take place in rising markets.
In a severe balance sheet recession, like that experienced today in Ireland, banks transfer costs of keeping the non-performing enterprises alive to other clients. One sign of this is that charges on short-term loans, often used to cover balance sheet pressures, tend to rise slower than charges on larger, capital investment-linked loans. From the bottom of the interest rate cycle through May 2013, cost of new credit for loans up to EUR1 million based on floating rate rose 33 percent. Cost of loans over EUR1 million with over 1 year fixation rose 87 percent. Such cost transfers harm better companies' ability to raise investment, while slowing down the rate at which the insolvency works through to weed out the unsustainable businesses. End game - delayed resolution of the debt crisis at the expense of suppressed capital investment and growth.
All of the above helps explain why less than a third of all Irish SMEs that do apply for credit from their bank end up drawing down any loans. But the above also suggests the policy direction that should be taken in trying to increase domestic capital formation while continuing to pursue system-wide deleveraging.
Unlocking investment requires, first and foremost, finding new sources for funding business expansion, distinct from bank lending. Such sources include equity financing and direct borrowing. The Government needs to develop incentives for equity investment in, and peer-to-peer and public-to-business lending to Irish SMEs.
To expand the pool of potential investors, we need to open these platforms and Irish investment services to international investors and institutions. Government re-insurance scheme for exports finance can be a good step forward in making Irish SMEs more attractive to foreign investors and freeing up some operating capital for growth. Another similar measure would involve more state co-investment in existent enterprises (as opposed to new ventures) based on their ability to generate intellectual property, associated with new products and services development.
While stimulating new forms of SME funding, Ireland also needs to accelerate the process of business insolvency resolution. This will require two major changes in the way our insolvency process is regulated.
We need to recognize the necessity for allowing banks to treat business equity as lower risk asset when restructuring legacy loans for sustainable enterprises. This can help increase debt-for-equity swaps between lenders and borrowers. In return, such swaps can allow banks to use their limited resources on deleveraging out of unsustainable loans. We also need to revise our targets for banks deleveraging, potentially extending the period over which the pillar banks are required to reduce their loans exposures and increase allowance for SMEs loans to be held by the banks. To reduce overall systemic risks, we can require banks to put their restructured SMEs loans through more rigorous stress-testing.
The second major change is to relax the constraints on entrepreneurship and professional standing for business owners going through bankruptcy proceedings. This will allow for a quicker return of past entrepreneurs to new ventures and will aid SME sector deleveraging.
All of the research on SME credit in the Euro area and Ireland shows that both supply and demand drivers are responsible for the collapse of investment during the current crisis. Instead of attempting to rebuild the legacy systems based on unsustainable lending, we need to think outside the box to identify new ways for funding productive investment. Both banking and the SME sector will require significant changes to deliver on this.
Box-out:
Largely ignored by the Irish media headlines, there is a new longer-term threat to our economy emerging from the EU's penchant for policies harmonisation. This week, at the talks in Vilnius, Lithuania, EU officials were discussing the need for pan-European regulation of data protection. In part, these talks were driven by the EU-US Free Trade Agreement negotiations and the recent scandal relating to e-spying. However, the main impetus for harmonising European regulations is the emerging imbalances in the ICT services investment across the EU. Ireland’s EU partners, especially Germany and France, are unhappy that our, allegedly, light-touch regulations act as a major attractor for foreign direct investment in ICT sector, ‘stealing’ jobs from Germany and tax revenues from France. The risks implied by harmonisation of EU regulations in this area are of significant economic concern. It is, perhaps, ironic that data protection regulations or their potential harmonisation did not make it into the ESRI's latest paper on ICT-related FDI, titled "Boosting Foreign Direct Investment in the Information and Communication Technologies Sector: What Works?" published this week. Foreign providers of ICT services in Ireland dominate the sub-sector which acts as the sole source of growth in Ireland from 2008 through today. Between Q1 2008 through Q1 2013, Irish ICT services credit to the current account rose from EUR5.86 billion to EUR9.35 billion. In Q1 2013, ICT services trade surplus exceeded our economy’s total external balance by 37 percent. Squeeze this sector through regulatory harmonisation and Ireland’s latest recession will look like a walk in a park, while our debt sustainability risks will go back to 2011 levels.
Sunday, August 4, 2013
4/8/2013: WLASze Part 2: Weekend Links on Arts, Sciences and zero economics
This is the second part of my regular WLASze: Weekly Links on Arts, Sciences and zero economics posts for this weekend. Part 1 is available here. Enjoy...
A beautiful medium and a perfect balance between art (texture, colour, composition) and design (geometry, balance, space, utility): http://the189.com/design/art/works-by-japanese-ceramic-artist-shinobu-hashimoto/
Shinobu Hashimoto's site is here: https://www.facebook.com/shinobuceramic
On a similar theme, wonderful works in different wood media, united by the weaving technique:
http://howtospendit.ft.com/home-accessories/30923-woven-wonders-of-the-world
Scottish artist Lizzie Farey's 'sculptural baskets'
An interesting new (at least to me) artist: Glasgow-based artist Scott Naismith
http://www.mymodernmet.com/profiles/blogs/scott-naismith-landscape-paintings
Pushing the range of colour out to higher contrast limits and juxtaposing these against light and composition. Not bad… not bad at all… A bit more of the artist's portfolio: http://www.redbubble.com/people/scottnaismith/works/3579801-2-deep-blue
I am not quite decided on his work, yet - it seems to need more careful definition and a build up of selective quality works not to be fully confused with over-exposed kitsch street art, but… I intuitively like it.
Intuitive liking, however, is dangerous, just like intuitive disliking, whenever action is concerned. Good reminder - the recent controversy in Kiev, Ukraine:
http://www.theartnewspaper.com/articles/Kiev-museum-director-accused-of-censoring-work-by-covering-it-with-black-paint/30156
Political over-sensitivity leading to censorship is never a sign of strength, always of weakness of the regime and underlying national fundamentals… There is nothing that screams louder 'Massive chip on ya shoulder!' than painting murals over… More paint over paint and you might end up in a world similar to this: http://instagram.com/p/cYpGAEgw2B/
On a much more positive note relating to the national identity and art, Happy Birthday this week to Henry Moore - British most brilliant sculptor of all times:
http://www.tate.org.uk/context-comment/blogs/pictures-big-birthday-tribute-giant-british-art
Saatchi were running a list this week, asking people to relate their memory of the first encounter with Moore's works. My own was at UCLA - in the sculpture garden. If you ever in the vicinity of the campus - I suggest you stop by and experience the sculpture garden: http://www.youtube.com/watch?v=c2GK7aV-UeY
It was only a matter of time that Zaha Hadid - with her practice's prolific stamping out of the curvature-obsessed architecture around the globe - will run into some trouble. And so she did…
http://www.dezeen.com/2013/08/03/zaha-hadid-galaxy-soho-riba-award-lubetkin-prize-chinese-heritage/
It looks like Hadid's firm oversaw bulldozing of a historical heritage (already generally lacking in China's urban jungles) and replacing it with a… you guessed it… megalomaniac curvature set. The Royal Institute of British Architects decided to award this 'mushrooming of honey pots' an award… I am not convinced by RIBA call there... [Note: MrsG disagrees]
A fascinating topic of gender differences in behaviour is a tricky one and not exactly rewarding, but important. Here are four links on the same study which uncovered significant differences in managing risk between men and women: http://www.scientificamerican.com/article.cfm?id=men-and-women-gauge-risk-differentl and abstract of the study itself is here http://www.sciencedirect.com/science/article/pii/S0166432812006419, while whole paper can be seen here http://www.wangqiyu.com/bio/index.php/archives/693.
To wrap things up for this week, a really off-beat and wonderfully light-hearted photography by Samuel Bradley http://www.blog.samuelbradley.com/
http://the189.com/design/art/imagery-from-samuel-bradley/
Enjoy!..
Saturday, August 3, 2013
3/8/2013: 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...
When science meets art, and it happens often, the awe is magnified… Behold the colour-coded eucalyptus:
Two links with more images and stories: http://blog.cuipo.org/natures-painted-tree-the-rainbow-eucalyptus/ and http://all-that-is-interesting.com/the-worlds-most-amazing-trees .
And more on trees, the forests - to be more precise - this time around with more science:
http://arstechnica.com/science/2013/07/forests-not-as-thirsty-because-of-increasing-carbon-dioxide/
To run through the usual 'complexity' quote: "Early predictions by climate scientists were that increasing temperatures would devastate forests because elevated temperatures increase the rate of evaporation and transpiration at leaf surfaces, potentially causing trees to suffer from “water-stress.” Instead, this paper suggests that increased efficiency of water-use by forests might mean that water does not become a limiting factor in productivity as temperatures rise. This new finding seems like unadulterated good news, therefore, until you factor in the effect that water usage by forests has on components of the ecosystem."
Now to art or rather design and the Cool Stuff: it was only a matter of time before it came from one of those 3D printers:
http://www.dezeen.com/2013/08/02/stedelijk-museum-acquires-first-3d-printed-chair-solid-c2/
"Stedelijk Museum in Amsterdam has acquired Solid C2 by Patrick Jouin, the first item of furniture to be 3D-printed in one piece" Stunning design. Jouin's site will be here: http://www.patrickjouin.com/ once it is constructed (presumably he is not using a 3D printer for that task).
Last week I wrote about the Science Gallery and their one-off event which did include 3D printers - a tent full of them really. The printers are gone, but the main event - ILLUSION - is still going on and is 177.1% worth a visit. original post is here:
http://trueeconomics.blogspot.ie/2013/07/2772013-wlasze-part-2-weekend-links-on.html
Link to the event is here: http://www.youtube.com/watch?v=R_5rsqsx4lY
And a couple of images from the event:
@ScienceGallery
Irish Architecture Foundation is hosting an Open House in Dublin on October 4-6th:
http://www.architecturefoundation.ie/activities/open-house-dublin-2013-100-great-buildings-from-the-obvious-to-the-overlooked/
It's free, and it covers 100 buildings. There will be a "special “Architrek” event in Dún Laoghaire" too.
And more from the IAF: http://www.architecturefoundation.ie/news-item/riai-2013-irish-architecture-awards/
The Royal Institute of the Architects of Ireland announced 13 awards across categories including the Public Choice Award.
http://www.riai.ie/index.php/news/article/riai_2013_irish_architecture_awards_minister_quinn_praises_collective_achie
Irony has it, Minister Quinn was presenting and speaking - just before he made his subsequent statements about the low prioritisation of History in Irish educational curriculum: link here http://www.independent.ie/irish-news/quinn-takes-aim-at-historians-over-junior-cert-criticism-29466898.html
Brodsky wrote: "That's why Urania's older than sister Clio!" but that wasn't quite on the mind of our Minister… obviously… for I doubt he has much of an idea of the muses hierarchies, for, of course, Clio's equivalent existed in Pausanias' accounts of the original muses, while Urania was a later addition to muses… But then again, Minister Quinn would probably also deem Urania's domain of astronomy not worthy of studies, since it does;t quite lend itself easily to code writing or adwords sales or other noble activities that Ireland Inc promotes.
Still back to the topic: great awards, and congratulations to the hosts @RIAIPresident
Now for some 'Wow, that's just gross' relief: Foreign Policy has joined on the Summer fun and shed its usually academic veneer for a set of 'This Week' photos… Number 7 is priceless…
http://www.foreignpolicy.com/articles/2013/08/02/the_world_in_photos_this_week#7
There is something basic that is missing in this… people stuffed like capers in a tiny can of an artificially-made beach… You'd think that's mad. But a better image is here:
http://www.theworldofchinese.com/2013/07/dead-sea-of-china-gets-sardine-packed/
It is a beach under a roof with fake 'rocks' and 'waves'… and… oh… I guess that just might beat all the daft ideas one ever could have had about filling the Grand Canyon with something...
But not in China, where the ridiculous never becomes sublime even when it is based on it…
http://www.businessinsider.com/tianducheng-a-paris-replica-in-china-2013-8
This stuff really does blow your mind: A Ghost Town that is Paris...
Of course, there is always room on the WLASze page for some Russian-focused links. Aside from the usual medley of world/cosmos domination, Russians also like to stake some claims on world history. And this time around MrsG, MiniG and MicroG - with their Native American bloods - better be prepared. Per report in Pravda.ru (yeah, I know…) Native American Indians are originally from Russia...
http://english.pravda.ru/science/mysteries/19-07-2013/125188-american_indians-0/
May be Sarah Palin was right when she said she often saw Russians on Alaska's beaches…
Bering Straight - the former bridge that allowed early human migration to the Americas, is nowadays an ice-flanked inhospitable space. Not quite as cold as the ice space of Enceladus. And not as cool as Enceladus...
http://arstechnica.com/science/2013/07/enceladus-icy-jets-pulse-to-the-rhythm-of-its-orbit/
When science meets art, and it happens often, the awe is magnified… Behold the colour-coded eucalyptus:
And more on trees, the forests - to be more precise - this time around with more science:
http://arstechnica.com/science/2013/07/forests-not-as-thirsty-because-of-increasing-carbon-dioxide/
To run through the usual 'complexity' quote: "Early predictions by climate scientists were that increasing temperatures would devastate forests because elevated temperatures increase the rate of evaporation and transpiration at leaf surfaces, potentially causing trees to suffer from “water-stress.” Instead, this paper suggests that increased efficiency of water-use by forests might mean that water does not become a limiting factor in productivity as temperatures rise. This new finding seems like unadulterated good news, therefore, until you factor in the effect that water usage by forests has on components of the ecosystem."
Now to art or rather design and the Cool Stuff: it was only a matter of time before it came from one of those 3D printers:
http://www.dezeen.com/2013/08/02/stedelijk-museum-acquires-first-3d-printed-chair-solid-c2/
"Stedelijk Museum in Amsterdam has acquired Solid C2 by Patrick Jouin, the first item of furniture to be 3D-printed in one piece" Stunning design. Jouin's site will be here: http://www.patrickjouin.com/ once it is constructed (presumably he is not using a 3D printer for that task).
Last week I wrote about the Science Gallery and their one-off event which did include 3D printers - a tent full of them really. The printers are gone, but the main event - ILLUSION - is still going on and is 177.1% worth a visit. original post is here:
http://trueeconomics.blogspot.ie/2013/07/2772013-wlasze-part-2-weekend-links-on.html
Link to the event is here: http://www.youtube.com/watch?v=R_5rsqsx4lY
And a couple of images from the event:
@ScienceGallery
Irish Architecture Foundation is hosting an Open House in Dublin on October 4-6th:
http://www.architecturefoundation.ie/activities/open-house-dublin-2013-100-great-buildings-from-the-obvious-to-the-overlooked/
It's free, and it covers 100 buildings. There will be a "special “Architrek” event in Dún Laoghaire" too.
And more from the IAF: http://www.architecturefoundation.ie/news-item/riai-2013-irish-architecture-awards/
The Royal Institute of the Architects of Ireland announced 13 awards across categories including the Public Choice Award.
http://www.riai.ie/index.php/news/article/riai_2013_irish_architecture_awards_minister_quinn_praises_collective_achie
Irony has it, Minister Quinn was presenting and speaking - just before he made his subsequent statements about the low prioritisation of History in Irish educational curriculum: link here http://www.independent.ie/irish-news/quinn-takes-aim-at-historians-over-junior-cert-criticism-29466898.html
Brodsky wrote: "That's why Urania's older than sister Clio!" but that wasn't quite on the mind of our Minister… obviously… for I doubt he has much of an idea of the muses hierarchies, for, of course, Clio's equivalent existed in Pausanias' accounts of the original muses, while Urania was a later addition to muses… But then again, Minister Quinn would probably also deem Urania's domain of astronomy not worthy of studies, since it does;t quite lend itself easily to code writing or adwords sales or other noble activities that Ireland Inc promotes.
Still back to the topic: great awards, and congratulations to the hosts @RIAIPresident
Now for some 'Wow, that's just gross' relief: Foreign Policy has joined on the Summer fun and shed its usually academic veneer for a set of 'This Week' photos… Number 7 is priceless…
http://www.foreignpolicy.com/articles/2013/08/02/the_world_in_photos_this_week#7
There is something basic that is missing in this… people stuffed like capers in a tiny can of an artificially-made beach… You'd think that's mad. But a better image is here:
http://www.theworldofchinese.com/2013/07/dead-sea-of-china-gets-sardine-packed/
It is a beach under a roof with fake 'rocks' and 'waves'… and… oh… I guess that just might beat all the daft ideas one ever could have had about filling the Grand Canyon with something...
But not in China, where the ridiculous never becomes sublime even when it is based on it…
http://www.businessinsider.com/tianducheng-a-paris-replica-in-china-2013-8
This stuff really does blow your mind: A Ghost Town that is Paris...
Of course, there is always room on the WLASze page for some Russian-focused links. Aside from the usual medley of world/cosmos domination, Russians also like to stake some claims on world history. And this time around MrsG, MiniG and MicroG - with their Native American bloods - better be prepared. Per report in Pravda.ru (yeah, I know…) Native American Indians are originally from Russia...
http://english.pravda.ru/science/mysteries/19-07-2013/125188-american_indians-0/
May be Sarah Palin was right when she said she often saw Russians on Alaska's beaches…
Bering Straight - the former bridge that allowed early human migration to the Americas, is nowadays an ice-flanked inhospitable space. Not quite as cold as the ice space of Enceladus. And not as cool as Enceladus...
http://arstechnica.com/science/2013/07/enceladus-icy-jets-pulse-to-the-rhythm-of-its-orbit/
More WLASze to come in Part 2, so stay tuned.
3/8/2013: Humanities: Don't Just Discount the Vital Set of Skills
Over a month ago, I wrote in the Sunday Times about the topic of balance in education between the humanities and sciences and led this point toward the reforms needed. Last week, Washington Post run a story worth reading on the same subject: http://www.washingtonpost.com/blogs/innovations/wp/2013/07/30/we-need-more-humanities-majors/
My original article and few more links on the topic is here:
Friday, August 2, 2013
2/8/2013: The Impossible Monetary Dilemma: July update
Two charts updating the Impossible Monetary Dilemma through July:
Good luck to all believing tapering will be enough to get monetary policy to mean-revert. Oh, and in case you wonder, mean reverting refers to historical mean - which is skewed downward by the period of historical lows of 2001-2005 and H2 2008- present. Even that historical mean is out of reach for any ordinary tightening.
Good luck to all believing tapering will be enough to get monetary policy to mean-revert. Oh, and in case you wonder, mean reverting refers to historical mean - which is skewed downward by the period of historical lows of 2001-2005 and H2 2008- present. Even that historical mean is out of reach for any ordinary tightening.
2/8/2013: June's Great Recession Update
The usual monthly chart from Calculated Risk (h/t for the reminder to check to @businessinsider )... US Great Recession in comparison:
Source: http://www.calculatedriskblog.com/2013/07/june-employment-report-195000-jobs-76.html
Continue to be scared... cause we've been scared for the last 65 months... And a reminder from my previous re-posts of this chart: notice how frighteningly longer are the durations of employment recoveries in recent recessions since 1981.
And while we are on this, here's a good discussion of completely unrealistic US expectations for fiscal recovery: http://www.bloomberg.com/news/2013-08-01/why-the-cbo-s-deficit-forecasts-are-too-optimistic.html via @BloombergView
Source: http://www.calculatedriskblog.com/2013/07/june-employment-report-195000-jobs-76.html
Continue to be scared... cause we've been scared for the last 65 months... And a reminder from my previous re-posts of this chart: notice how frighteningly longer are the durations of employment recoveries in recent recessions since 1981.
And while we are on this, here's a good discussion of completely unrealistic US expectations for fiscal recovery: http://www.bloomberg.com/news/2013-08-01/why-the-cbo-s-deficit-forecasts-are-too-optimistic.html via @BloombergView
2/8/2013: Nice uptick in Ireland's risk ratings: ECR
Small thing, but all counts... Ireland's Euromoney Country Risk scores are continuing to improve:
Latest score up at 57.81 ranking Ireland at 42nd in terms of risk, with lower rank / higher score implying lower risk:
Comparatives:
Score components on aggregate:
Historical trend:
Economic Assessment score sub-components:
Political Assessment score sub-components:
Structural Assessment score sub-components:
Latest score up at 57.81 ranking Ireland at 42nd in terms of risk, with lower rank / higher score implying lower risk:
Economic Assessment score sub-components:
Political Assessment score sub-components:
Structural Assessment score sub-components:
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