Nick Rost van Tonningen ~ Gleanings II ~ 518 Posted by John on July 5, 2013
It’s always worth remembering that the Fed has little control over long term interest rates. In fact, after spending US$1+TR so far on QE3, the yield on 10-year USTs is now higher than when the Fed lauched it in October 1911 (the same was true for QE1 & 2). The only tool it has to lower long rates is an ‘Operation Twist” scheme such as it conducted between QE2 & QE3 that seeks to lower long rates by selling long-dated-, & buying short-, dated securities.
In June US car, & especially light truck, sales were strong, as they had been in May. GM sold 264,843 units, up 6.5% YoY, triple the 2% hike analysts had expected (& the most for the month in any June since 2008), Ford 235,643 units, up 13.4% (also ahead of the 11% increase expected) & Chrysler 156,868 units (up 8%, right on the mark of expectations), with sales of their flagship light trucks up 29%, 24% & 24% respectively. Toyota’s & Nissan’s sales were also strong, up 10% & 11% respectively but, rather surprisingly, Volkswagen was a laggard. And there were hints of a shift from upscale to less-expensive vehicles, provided they had the gadgetry (like GPS & Blue Tooth) that buyers want.
Whereas not long ago state & local government spending was a drag on economic growth and federal spending a boon to it, these roles have now been reversed as lower sequestration-driven federal spending is now a drag on the economy while growing state & local government employment & construction spending is boosting growth. And the state & local governments are doing so in a fiscally responsible manner; for their First Quarter tax revenues grew at a 10,3% annualized rate due in part due to new revenue-raising initiatives but mostly to the economic recovery. This will help realize an increase in the annualized GDP growth rate from 1.5% in the Third-, to 2.0% in the Fourth-, Quarter – this view is not universally shared; in fact several bank’s have just cut their forecast Third Quarter growth rate to as little as 0.6% (the good short-term part of which for markets will be that it will make the Fed more reluctant to start ‘tapering’).
US domestic natural gas output rose from next to nothing in 1930 slowly until the 1950’s & then accelerated from about 5BCFD to 22BCFD in 1970, after which it stagnated below 20BCFD for the next four decades. But since 2005 it has risen from 18BCFD to 25BCFD, and it is still climbing. A not dissimilar pattern is discernible in domestic oil output, although the onset of the latest pickup in output materialized later, & has recently been faster, than for gas first since fracking was more widely used sooner in gas than oil, & more recently because low gas prices have shifted the industry focus from shale gas to shale oil – all this has given rise to Jack-and-the Beanstalk forecasts of US energy self-sufficiency within the foreseeable future even though spoil sports warn not to count the chickens before they are hatched because of a growing mountain of evidence of the unusually fast & sharp drop-off in production from fracked shale oil & gas wells. And there is likely another potentially serious constraint on America’s growth in the output of fracked oil & gas : water; for the current state-of-the-art fracking technology uses huge amounts of water (as much as 10MM gallons per well); thus in 2011 & much of 2012 it did so at a 38BN gallon annual rate, much of it in states like Texas where water is not abundant.
While from time to time a bridge collapse or other attention-grabbing incident serves to herald problems in the nation’s aging national transportation infrastructure (made worse in recent years by governments’ fiscal predicaments), it has gone totally unnoticed that across the US there are over 800 major watermain breaks every day, with estimates being it will cost more than US$100BN to bring the nation’s water distribution system up to something even remotely resembling an acceptable quality & level of efficiency. Like roads & bridges (& pipelines for that matter) the cause is the same : age, insufficient maintenance & usage far in excess of the specifications to which it was built many decades ago. This is what John Naismith in his 1982 book Megatrends was talking about, social/cultural/financial trends that will develop no matter what else may, or may not, happen [among the really big ones of which are world population growth, the rapid aging of the developed country’s populations (and Japan & China), the increasing CO2 level in the atmosphere, the growing scarcity of water & pressure on the world’s food-growing ability)] that are ignored at one’s peril (& the cost of correcting them will increase disproportionately over time).
Last year the media paid much attention to the US drought while this year there has been little, while that part of the Lower 48 West from the Washington-Oregon border to Wisconsin & hence South to the Texas-Louisiana border is again/still in the throes of drought, with 75% thereof termed “severe”, “extreme” or “exceptional” & a similar share “long-term” (i.e. over 6 months)
According to the Wall Street Journal China’s recent jump in interbank lending rates was driven by the PBOC’s belief it was the only way to check out-of-control (20% per annum) credit growth. But it said that by badly communicating its intention it had created a mini-panic & that it had since been injecting more liquidity into the system on a selective basis since (hence the decline in the 7-day rate to 4.75%, from a peak of 30%) – but what it failed to note was that the degree of mutual distrust that this episode has engendered among the banks has far from run its course (which, of course, enhances the PBOC’s control over the system through its choice of to which banks it will, or won’t, dole out its liquidity largesse).
While it has received little media coverage, there seems to be a growing risk of a full-blown civil war in Iraq (which, together with events elsewhere in the region, incl. Syria & Egypt, is making markets sufficiently nervous to strengthen oil prices). In May violence between the three main political groupings (Shiite, Sunni & Kurd) cost over 1,000 lives. Pipelines have been bombed and/or sabotaged. And the increasingly active involvement by other regional ‘powers’, incl. Iran, Turkey & Saudi Arabia, isn’t helping matters. Elsewhere in the Middle East interesting, & potentially positive, developments included Iran’s President-elect Hassan Rowhani calling for the government & the clergy to quit interfering with people’s private lives, for freeing up Internet access & for giving the local media more freedom to report on the nation’s problems, while in Istanbul a court, in a blow to the Prime Minister, cancelled the mall building project in a city park he had endorsed that had led to the recent demonstrations in that city (that had spread to other cities in Turkey proper).
The Brussels Eurocrats who push the idea that what Europe needs is more integration face an uphill battle. For, according to a recent survey by Pew Research that asked voters in six European countries whether economic integration to date had benefitted their economies, they were predominantly negative, in Greece by 78-11, France 77-22, Italy 75-11, UK 66-26, Spain 60-37 & Germany 43-54. And another poll, by Harris Interactive, found that over the past two years the share of respondents that felt that Germany’s influence over the decision-making process was “too strong” had risen in Britain from 41% to 48%, in France from 40% to 59%, in Italy from 42% to 81%, in Spain from 56% to 86%, and even in Germany from 10% to 21%; furthermore that, while only 8% of Germans believe that their country has not shown enough solidarity with its Eurozone partners, the corresponding percentages in Britain were 30%, in France 31%, in Italy 71% & in Spain 75% respectively.
In the wake of the recent trial of former Rail Minister Liu Zhijin for accepting 65MM Yuan in bribes (& for using his official post to maintain ‘improper sexual relations’ with 20 actresses), President Xi Jinping has launched a new anti-corruption campaign with the slogan “Look in the mirror, fix your attire, take a bath & treat your illness.” On June 18th, in his first speech since launching it, he said that Party members have “separated themselves from the masses”, that they should “return to serving the people wholeheartedly”, & that the Party will be rid of the four ills afflicting it : formalism, bureaucratism, hedonism & extravagance. The campaign will be run by his friend from university days, Chen Xi, who all his career has ridden on Xi’s coattails, who three months ago was appointed Executive Deputy Secretary of the Organization Department (that is responsible for appointments), & who now carries the weighty title of “Deputy Group Leader of the Mass Line Education and Practice Movement Leading Small Group” – this only serves to show that in China, as elsewhere, the concept of public service, period, has for many public servants (over a decade ago two eminent Chinese scholars suggested four out of five Chinese officials were corrupt) been perverted into ‘public service for personal gain’ (an estimate by the Carnegie Foundation put the cost of corruption to the Chinese economy at about US$200BN annually).
In Greece the EU & IMF are threatening to withhold the next, critically needed, instalment of bailout money due to their dissatisfaction with the government’s progress in reforming the public sector (or rather lack thereof). And in Portugal public resentment of austerity has reached new heights. This has led to the resignation of the pro-austerity Finance Minister & then to that of the Foreign Minister (& leader of the coalition’s junior partner) due to his dissatisfaction with the Prime Minister’s choice of a new Finance Minister, thereby creating a full-fledged government crisis. Both these events are likely to have a destabilizing effect on European government bond markets & create another Eurozone political crisis.
In Brazil President Dilma Rousseff has seen her popularity plunge by almost half in three weeks, from 57% to 30%, as the hoi polloi rebelled against her government’s spending huge amounts of money on vanity projects like the soccer Confederations & World Cups, and the Olympics, while public health spending languishes – while part of the ballooning cost of staging these events has been due to the usual ‘lowballing’ of costs by their promoters in their ‘selling’- them-to-the-government phase, much of it has been due to large dollops of corruption & mismanagement involved. But what really put the cat among the pigeons was that to make up for that the government then cancelled many of the associated public infrastructure projects the public had been promised & then added insult to injury by hik0ng public transit charges (by 9¢). Be that as it may, the likely outcome will be political reform, not instability.
The Iguazu Falls, 4x the width of the Niagara Falls, are located on the Brazil/Argentina border. One of South America’s biggest tourist attractions, in recent two weeks heavy rains upstream swelled the volume of water going over them nine-fold to 13MM liters/second, causing officials to close the walkway near it, thereby depriving tourists from experiencing it from up close.
Maersk, the Danish maritime concern that, among others, operates the West’s, if not the world’s, largest container ship fleet, just launched, in South Korea, its first Triple-E 18,000 TEU, 400 metre-long, 20 story-high container ship. Weighing 165,000 tons it dwarfs even the world’s biggest aircaft carrier (& size-wise is bigger than all the ships in the Ottawa’s $35BN shipbuilding program combined, despite having cost only US$185MM to build). It is so big that only 13 ports in the entire world, all of them in Asia & Northern Europe can handle it, while and the Panama Canal, even its expanded version, cannot (although the Suez Canal can). And it has been designed in an environmentally-friendly manner (thus it emits 50% less CO2 than the ordinary container ships & uses 0.003% as much fuel per tonne mile of freight as a jumbo jet.
While on the subject of container ships, the Mitsue O.S.K. Line’s MOL Comfort, enroute from Singapore to Jeddah carrying 7,000+ TEUs (twenty foot equivalent units), in mid-June broke in half off Yemen, with the stern section sinking & the bow section at last report (July 3rd) being under tow. The ship was only five years old & for the moment this incident is blamed on excessive “hogging”, the phenomenon that refers to a loaded container ship drawing more water at the bow & the stern than in the midsection. This hogging effect was news to me although I knew that in heavy weather it is not unusual to have the ship being bent sideways by several feet. Fascinating story about modern ship building technology & the progress in dealing with metal fatigue. Those interested can find photos by googling the name or on Captain
GLEANINGS II – 518
Thursday July 4th, 2013
FOOD PRICES FAR OUTPACE CONSUMER PRICE INDEX (G&M, Josh Kerr)
$ An analysis published by Statistics Canada shows that over the past five years food prices have risen at almost twice the rate (19.0% to 10.7%) of those of the other items used to calculate the CPI, with the price of nuts, eggs & coffee rising at above-average 32.6%, 26.8% & 25.8% rates respectively, and meat, restaurant food, fresh vegetables & seafood going up by a below-average 18.0%, 14.5%, 12.6% & 5.7% rates.The same was true in many other countries; for between 2007 & 2012 in 24 of the 39 OECD member countries food prices went up faster than overall inflation. Even during the eye of the financial storm, between October 2008 & January 2009, while most other items became cheaper, food prices rose, both in Canada & around the world. And according to Prof. Sylvain Charlebois of the University of Guelph, who authors an annual report on food prices, they won’t cool off soon; he expects them to rise this year by up to 3.5% overall, with the price of meat going up at a clip of up to 6.5%.
Any grocery shopper learnt this first hand long ago (which undermined the credibility of the “core inflation” concept). While in the developed world the price of food is but small potatoes in the typical household budget, it nevertheless has a high profile since it involves a “need”, rather than a “want”. But in the developing world, where food costs tend to be a much greater, if not dominant, household budget component, rising food costs therefore are a prime cause of unrest
ASSET PURCHASES WOULD DEPEND ON ECONOMY (Bloomberg, Joshua Zumbrun)
$ New York Fed President Bill Dudley said on June 27th in New York that the Fed may prolong its asset-buying program “If labour market conditions and the economy’s growth momentum were … less favorable than the FOMC’s outlook – and this is what happened in recent years – I would expect the asset purchases would continue at a higher pace for longer.” And that same day Fed Governor Jerome H. Powell[1] said in Washington that, while the Fed’s asset purchases may be scaled back later this year if growth holds up, any such trimming will depend on economic data, not on the calendar.
The Fed has clearly been taken aback by the ferocity of the markets’ reaction to its tapering chatter & is now in a ‘damage control’ mode, with its various representatives speaking more ‘off the same song sheet’ (namely that tapering does not mean a more hawkish monetary stance) than they used to. And the markets likely took note of the recent sharp downward revision of the First Quarter GDP growth rate number as a reason to be less obsessed with early tapering.
LAGARDE URGES CLEARER MESSAGES FROM THE FED (Bloomberg, Jeanna Smialek)
$ In an interview with MSNBC on June 27th IMF Managing Director Christine Lagarde said Fed Chairman Bernanke must communicate exit plans mere clearly to prevent future tumult, saying “Clearly what happened, it was an announcement that took the markets by surprise … What he’s probably doing is announcing, giving signals, and giving expectations,
[1]Appointed by Obama effective May 25th, 2012, he is a lawyer by training & a one-time investment banker who is serving out someone else’s unexpired term until January 31st, 2014 – the same day that Bernanke’s term ends -, & who is deemed a centrist as opposed to Dudley’s dovishness.
which is always extremely difficult, when markets react so feverishly.
TIPPING POINT [Pimco Investment Outlook, William H. (Bill) Gross]
$ In March I tweeted “Never … have investors reached so high (on the risk scale) for so little return. Never have investors stooped so low for so much risk.” And risk was at the heart of the credit system, incl. Treasuries. All markets were artificially propped up, as we had claimed all along & the Fed has now confirmed. So everyone knew that at some point QE would have to be withdrawn. But that always seemed like a long way off & eanwhile investors continued to pile into leverage. Furthermore, if the Fed & the BoJ were to keep writing trillion dollar cheques, they might end up with 70%-80% of all developed markets’ future bond supplies, leaving little for others to buy. So there was also a fear of too little supply (that reinforced the effect of the excess leverage). Hence the May 22nd start of the tapering talk & the Fed’s June 19th statement. But in trying to lay out what would prompt tapering, it caused a panic among over-leveraged investors & “selling begat more selling, even among Treasuries”.
$ But the US economy is not sinking, & neither are the majority of the other major global economies. So we believe that the overleveraged investors have overdone it, & that the Fed’s economic forecast is too optimistic, especially with mortgage rates up 1½% in the past six months, while inflation is close to 1%, i.e. well below its 2% target. So we think yields have adjusted too much, that global markets are just re-risking & that the bond market is not disappearing (how could it, with seemingly endless new supply?).
Every Everyone knew that, with bond yields at historically record-low levels, at some point a turnaround was inevitable. But meanwhile there was money in leveraging. And, as is always the case, when the turnaround does come, like a fire in a crowded theatre, there aren’t enough exits. As I learnt long ago, there is plenty of scope for selling when the market is “hot” & little when it cools
MARKETS HAVEN’T CAUGHT ON TO A RED FLAG FROM THE SERVICE SECTOR
(G&M, David Parkinson)
$ The ISM’s Index of Non-Manufacturing Activity (that measures the pace of the US service sector) is sending out a bearish signal the markets are oblivious to. For in June it came in at 52.2, its lowest level in over three years; and while any reading over 50 still hallmarks growth, the pace of that growth, after hitting a one-year high 56 in February has fallen in three of the four months since. And while economists tend to pay more attention to the sexier ISM Index of Manufacturing Activity (which in June showed a modest uptick to 50.9) since it deals with tangible goods, the reality of life is that the service sector accounts for two-thirds of all US economic activity; so forecasters ignore the Non-Manufacturing Index at their own peril. Moreover, since 2007 it has, at several key turning points for the stock market signaled a sea change before the latter caught wind of it; in fact in the past six years there hasn’t been a single meaningful move in the Non-Manufacturing Index that stock markets didn’t follow, eventually.
The market is focused for direction solely on QE3 & tapering. And I recently saw forecasts of S&P earnings growth for the Third & Fourth Quarter that seemed to defy logic, especially since corporate earnings as a percentage of GDP are already at all-time high record levels.
AMERICAN WAY OF BIRTH, COSTLIEST IN THE WORLD (NYT, Elizabeth Rosenthal)
$ With the cost of the nation’s 4MM births each year coming in at well over US$50BN, child birth in the US is uniquely expensive while the outcome is no better than elsewhere in the developed world. According to a recent report by Truven Health Analytics, between 2004 & 2010 the prices that health insurers paid for child birth rose 49% for vaginal births & 41% for C-sections. But is also found that, while the total cost for pregnancy & newborn care averaged US$30,000 for the former & US$50,000 for the latter, the commercial insurers on average only paid US$18,329 & US$27,866 thereof.
Add onto that the fact that many people have had no insurance coverage & that even many health insurance plans don’t cover pregnancy & newborn care, and one wonders why still so many babies are born in the US each year. And the author is kind in saying the outcome “is no better than elsewhere”, for the US’ 5.9 infant mortality rate (i.e. the number of children per thousand who die before their first birthday) compares unfavourably with those of, for instance, Japan (2.2), Sweden (2.7), France (3.3), Norway & Germany (3.5), Holland (3.7), Switzerland (3.8), Israel (4.0), South Korea (4.1), the UK (4.5) & Taiwan (4.6) and even Canada’s 5.2; in addition most of these countries in the past 60 years were far more successful in bringing down their infant mortality rates..
SELL DETROIT (FP, Lawrence Solomon)
$ The State-appointed city emergency manager has issued a 128-page rescue proposal that, among others, proposes selling off all city assets of value piecemeal, incl. the masterpieces in its museum, which is rated the nation’s sixth-best, & cutting pensions for all present & past staff. Reading it prompted both S&P & Fitch to lower their rating to “C” (default imminent).
$ This year the city will have a US$386MM deficit. It has a US$17BN debt-, & pension obligation-, burden (on a per capita basis about equal to its citizens’ annual household income). With 90,000 lots, & 30,000 houses, vacant, and 70,000 abandoned buildings, the average house sells for US$7,500. And while many reasons have been given for Detroit’s fall from grace, the big elephant in the room, that nobody wants to talk about, has been union power. For if the car makers hadn’t been straightjacketed by union rules & union wages, they wouldn’t have fled to Right-To-Work states. And if the municipal workers’ unions hadn’t controlled city government the way they did, Detroit home owners wouldn’t have fled to suburbia, or beyond.
$ Rather than extend the agony, as the city manager’s proposal suggests, it would be better to declare bankruptcy, pay off those creditors it must & stiff the rest. The solution lies not in conducting a firesale of city assets bit by bit without addressing the underlying problems but to go through bankruptcy, privatize assets en bloc and in a disciplined manner, as well as many services now provided by the city, to turn the city into a low-tax, business-friendly jurisdiction that, helped by Michigan’s recent decision to become itself a Right-To-Work state, would capitalize on its geographical location.
He might be onto something. For far better pricing would be obtained by, rather than targeting the sale of its assets to bargain-hunting hedge funds, seeking to tap the demand among the nation’s pension funds for free-standing, long-life, steady cashflow-generating assets. The main challenge in doing the latter would be to find a way to get them to buy into the Detroit revival scenario, a potentially huge fringe benefit of which would be to generate a potential universe of investors for any of the city’s future off-balance sheet funding needs.
ARMY BLOCKS GUARDIAN WEBSITE (Monterey Herald, Phillip Molnar)
$ The Army admitted on June 30th it was restricting access to the Guardian news website (that had broken the Snowden/NSA data collection scandal). For Gordon VanVleet, an Arizona-based spokesman for the Army Network Enterprise Technology Command (NETCOM), a unit of the Fort Belvoir, Va.-based Army Cyber Command, said in an email that the Army is filtering “some access to press coverage and online content about the NSA leaks”, adding it is routine for the DoD to take preventative “network hygiene” measures to mitigate unauthorized disclosures of classified information and saying “we make every effort to balance the need to preserve information access with operational security … however, there are strict policies and directives in place regarding protecting and handling classified information.” But, he said, it wouldn’t block “websites from the American public … to do so would violate our highest-held principle of upholding and defending the Constitution and respecting civil liberties and privacy.”
This is pure bafflegab from a bureaucracy caught with its hand in the cookie jar. With the horse bolted, it’s hard to know what NETCOM hoped to achieve, other than to save itself embarrassment by doing what it has been doing when every soldier could access the Guardian news website from his/her home computer, cell phone and/or Internet café.
EVERYBODY’S DOING IT (AP)
$ That was basically President Obama’s reaction when asked, during his recent African tour, at a June 30th press conference in Tanzania with that country’s President Jakaya Kikwete, about the latest revelations that the NSA had been bugging the EU offices in Washington, New York & Brussels; for he brushed away references to the resultant French & German expressions of outrage by suggesting that all nations spy on each other.
That may, or may not, & may well, be the case, but it becomes a problematic when caught at it.
ENVIRONMENTAL TOXINS FOUND IN CORD BLOOD OF NEWBORNS (Epoch Times/CP)
$ A report released recently by Environmental Defence, an environmental pressure group, said it had tested the umbilical cord blood of three anonymous newborns from the Toronto/Hamilton & had found in it traces of 137 different chemicals, with individual counts ranging from 55 to 121. Included among them were flame retardants, PCBs (despite the fact that they have been banned in Canada since 1977), PFCs (from non-stick coatings & from products used to make textiles more stain-resistant) & organo-chlorine pesticides (one of them being the now long-banned DDT), many of which have been linked to cancer in humans & animals, are deemed toxic to the brain and/or believed to cause developmental & reproductive problems in mammals. According to the group’s Acting Executive Director, Sarah Winterton, while the sample is extremely small, these findings are consistent with similar studies done elsewhere, incl. the U.S.
This group has been on this track for some time & a few years ago shamed representatives from the four parties in Canada’s Parliament into having their blood tested for such chemicals, with equally distressing results. And the truly disconcerting part of these latest findings is that the umbilical cord blood used likely originated with mothers sympathetic to the group’s cause, i.e. women likely are more environmentally sensitive than the average Canadian.
EGYPTIANS JUBILANT AFTER ARMY GIVES MORSI THE BOOT (AP)
$ On Wednesday July 3rd the Egyptian army announced it had ousted President Morsi, the country’s first-ever democratically elected president, after just one year in the job (& placed him under house arrest?), suspending the constitution, installing a caretaker government headed by the Chief Justice (who had been just two days in the job), & calling for new elections. This gave rise to fireworks, & to celebrations in a number of major cities, incl. in Cairo’s Tahrir Square, of a kind not seen since those in 2011 that led to the ouster of President Mubarrak.
Morsi came to power with great expectations abroad because he had studied in the US. But he & the Brotherhood squandered whatever opportunities they might have had when they decided to rule in what has come known as a “majorist” manner, i.e. on the assumption that having received a majority of the votes in a democratic election they could bloody well do what they liked regardless of what anyone who hadn’t voted for them (& possiblye some/many of those who had voted for them) thought, or felt, about that. The current state of affairs is Washington’s nightmare scenario, being caught between Scylla (of supporting a popular movement) & Charybdis (of justifying the ouster of a democratically elected president). What we are witnessing is a struggle for power between the Brotherhood/Salafist-dominated dogmatically religious, largely rural, mostly poor & often uneducated part of the population, and the more worldly, urban, upwardly ambitious & better educated, but politically less disciplined or homogeneous, rest. Things will only get even more difficult for Washington if the military were to conclude the outcome of another election would only bring more of the same, only worse, in the form of another Brotherhood/Salafist majority.
IRELAND’S ECONOMY SHRINKS AS END OF BAILOUT NEARS
(Reuters, Conor Humphries)
$ Its GDP shrank 0.6% in the First Quarter (while 0.3% growth had been expected); in addition, the latest data show that, while it was thought to have grown at a 0.9% clip last year, it had only done so at 0.2%, as, largely due to the slowdown in the Eurozone, its export-led recovery stalled in the Second Half. Coming after a 0.2% contraction in the Fourth Quarter, this means it’s now in its first recession in four years, after having been one of only a few EU countries to have eked out, albeit modest, growth since, despite brutal spending cuts (incl. salary cuts of up to 20%) & tax hikes, & a 14% unemployment rate.
$ The government has enough cash on hand to meet its needs through most of next year; so the hope still is that if it can exit its aid deal on schedule later this year, it will provide a welcome example of austerity working. But all’s not well. While the Irish haven’t so far protested against austerity as violently as people elsewhere in the Eurozone, public anger was fueled recently by leaked 2008 tapes of bankers laughing at the government’s rescue of the banks. This has reinforced already smouldering public anger about the growing rift between the well-to-do & the hoi polloi. Thus, while, overall, house prices are down 50% & the landscape is dotted with the skeletons of unfinished houses, property in upmarket Dublin is selling like hotcakes & human resource people complain they cannot find suitable rented accommodation for people who are relocating to Ireland
People once again starting to relocate there is encouraging news. And China’s growing interest in Ireland as a preferred entry point into the Eurozone may also help the country overcome some of the speed bumps on the road to an exit from its external aid deal & to a solid discovery.
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