41 thoughts on “Lex on our 100 year bond”

  1. I don’t get it. The article lists a load of things that have to go right with the Irish economy for the bond to work out, but surely it is whoever bought the bond – rather than Ireland – that needs all of these things to go right. Unless the purchasers expect to have the futuristic equivalent of a historical gunship pour encourager les Paddies. After all, it wasn’t the British Exchequer that got screwed by 2 1/2% consols.

  2. What about the 150 year Irish sovereign bond with upward-only rent reviews attached:

    *In 1969 when Mr Haughey was Minister for Finance plans were agreed to build the largest single office block ever built in Dublin in Kildare Place. It was a massive eight -storey building which would provide four acres of office space for the Dept of Agriculture. The building was completed in 1972 and the the State contributed £500,000 towards the site acquisition costs. Laing got the £1.4 million building contract and by means of a “hire purchase” deal the state would eventually own the office block.

    Ownership of the building would revert back to the state, not in fifteen or twenty years as one might have expected, but in One Hundred And Fifty Years. And so, until the year 2123-if Agriculture House is still standing by then-Irish Life will be milking taxpayers for the rent. Suffice it to say that by 1984, just eleven years after the building was completed, Irish Life was already collecting as much in rent PER YEAR as it cost to build in the first place.
    * The Destruction of Dublin by Frank McDonald pages 181/2/3

  3. BeeCeeTee is right, of course, in that it is the investor who is taking the risk, presumably a life company seeking to extend the duration of its assets and a big believer in stagflation it would seem. Curious though, in that it will be those running the firm generations out that will face the consequences and the price volatility of the bond is extremely high.

    On the Irish economy I don’t want to steal JTO’s thunder but the current spate of forecasts for 2016 are noteworthy in implying a big slowdown through the year. The Central Bank, for example, have just published their latest quarterly Bulletin, with a 5.1% growth forecast. Irish annual growth in the final quarter of 2015 was 9.2% so to get a 5.1% average requires around 0.7% a quarter. Forecasters are nervous about the uncertainty around the export figures, and as per last year, most, including the CB, have penciled in a sharp deceleration in that component. The CB also has weaker investment and slower consumer spending.

  4. Anything with a pulse so it will be bought . Bonds have had a 40 year boom under neoliberalism so obviously this will continue forever. Markets are stupid . Let them be fleeced.

  5. Search for ‘Ireland: define normal’ on Twitter and you may get access to the article via a retweet rather than the FT’s own tweet.

    “Ireland, in short, needs the next 100 years to be quite unlike the century just gone,” the piece concludes.

    John Kenneth Galbraith’s comparing economic forecasting with astrology comes to mind.

    Argentina in 1914 was one of the world’s richest countries but even if it had inspired governance over the subsequent years, it would have unlikely held that position but there’s more to life than GDP — but in the modern urban economy, life is grim without sufficient money.

    Japan still has a huge invention capacity but it cannot match the US in innovation, while China will be the biggest R&D spender by 2020 but it’s uncertain how things will evolve — the Chinese given their long history of organisation, should of course not be underestimated.

    Europe is dependent on old technology and in the UK Brexit supporters dream of expanding trade through new trade agreements with distant countries but it’s not the fault of the EU that the only significant goods trade surpluses are with the US and Ireland.

    Kevin authored a paper in 1991, ‘Burn Everything British but Their Coal: The Anglo-Irish Economic War of the 1930s,’ and it’s interesting that despite the negatives on free trade exploited by Trump and Sanders, Ireland has hugely gained by trading some sovereignty with the EEC/EU and giant American companies to escape a generation of depression (although the tugging of the forelock to US firms was overdone while the indigenous international trading sector has underperformed for decades).

    Ireland’s national income per head at 56% of Great Britain’s in 1922 and 49% in 1938 & 1957

    On free trade, there should have been more attention given to disruption caused by the decline of manufacturing but crude responses now would hit the poor by raising prices in outlets such as Wal Mart.

    The North American Free Trade Agreement (NAFTA) of 1994 remains controversial but trade with Canada and Mexico accounts for a small percentage of US GDP.

    US imports from China are said to have only 4% US content. Taken together, goods from Mexico and Canada represent about 75% of all the US domestic content that returns to the United States as imports according to the Congressional Research Service.

  6. On the subject of forecasts and the wider issue of the management – and future – of the Irish economy, two documents are, of course, available which demonstrate what the outgoing government has been up to and what the Commission thinks of it.

    http://www.finance.gov.ie/sites/default/files/SPU%20Final%20180515.pdf

    http://ec.europa.eu/economy_finance/publications/eeip/pdf/ip017_en.pdf

    As the body politic has been lost in fiscal space for some time, it will be interesting to see what happens now that the deadline for the submission of the SPU 2016 has been missed. The current charade has to end fairly soon or the markets’ faith in the future of the Irish economy may be tested.

  7. I haven’t read the article. To do so would require forking out a substantial chunk of cash to the FT, which on principle I’d never do. So, unless another poster kindly posts the gist of the article, I am destined to remain in ignorance of what it said. I doubt I’m missing much. In general I wouldn’t give an ounce of credence to anything the diehard-unionist FT said about the economies of any of the Celtic countries. A quick google reveals the following FT articles about Scotland in the past week alone:

    (1) Aren’t you glad Scotland voted NO?

    (2) Scotland narrowly averted disaster by rejecting independence.

    (3) Sharia law and Scottish Presbyterians have much in common.

    So, hardly surprising they’d have a negative view of Ireland’s economic prospects.

    While trying to forecast a century ahead is fairly daft, any reasonable analysis would conclude that growth prospects for Ireland in the next century are among the best, and quite possibly THE best, in Europe. The growth is not guaranteed, of course, but , for such a long-term time span, probabilities are all we have to go on. Based on the following factors, I’d say the probability is that growth in Ireland will be among the highest, and quite possibly THE highest, in Europe over the next century.

    (1) High growth (with short-term interruptions) has been a feature of the Irish economy for almost six decades and is now ingrained in the Irish system. After a shaky start between 1922 and 1958 (hardly surprising given (a) Partition and the hiving off of Ireland’s then industrial base, necessitating the development of a new industrial base from scratch (b) The Great Depression © The UK’s declaration of Economic War on Ireland in the 1930s (d) World War 2) Ireland’s economic growth took off in 1958/59 and has continued ever since. Between 1958 and 2016 Ireland’s mean annual (real) economic growth has been over 4%, versus 2% or under in most Western European countries. There is no sign whatever of this growth-pattern changing. Indeed, for the next several years, virtually all forecasts are for the gap to widen.

    (2) Ireland’s demographics are by far the best in Europe. Most central, southern and eastern European countries are in a demographic death spiral. In the EU as a whole, the number of births is barely higher than the number of deaths (about 1% higher). In Germany and some other of the worst-hit countries the number of births is less than two-thirds of the number of deaths. In contrast, in Ireland the number of births is 2.5 times the number of deaths. Ireland could, of course, eventually go down the same disastrous route that the rest of Europe has gone down, but, even in the worst-case scenario, Ireland would be 30-40 years behind the rest in hitting demography-driven growth inhibitors.

    (3) Ireland is politically stable (frequently to the point of excruciating boredom) with the extremes of left and right having little or no prospect of electoral success. There is a political consensus on the need for low taxation on business.

    (4) This one is approaching the bounds of political correctness, but the reality is that Ireland has a much more homogeneous population, both in relation to religion and culture, than the rest of Western Europe. Thanks to unlimited immigration from North Africa, the Middle-East, the Indian subcontinent, and other parts of the proposed Caliphate, culminating in Frau Merkel’s crazy attempt to counter Germany’s demographic collapse by inviting in 2m refugees annually, of whom, on the basis of statistical probabilities, about 500k will eventually be jihadists, much of Western Europe is now in a state bordering on war. Recent events in Paris and Brussels are only the start. I was in Brussels in January and the atmosphere was eerily similar to Belfast in the 1970s. Without wishing to take any comfort in others’ misfortunes, I doubt if the 17% increase in tourism numbers recorded in Ireland so far in 2016 is being replicated in France, Belgium or Germany. While there is no certainty that Ireland won’t one day be hit by these crazies, the relatively homogeneous nature of the population, both in relation to religion and culture, make it less likely than elsewhere in Western Europe.

    (5) Ireland has a low population density, allowing plenty of room for expansion, which isn’t the case in current economic core of Europe, the region bounded by London. Paris, Brussels, Amsterdam and Merlin.

    (6) Ireland’s education system is among the best in europe, with its aggregate score in the last PISA tests the 6th highest (out of 40) in Europe.

    Taking all these factors into account, I doubt if anyone can come up with country in Europe that has better growth prospects. It doesn’t mean its certain to happen, of course. For all I know, the electorate could go mad and elect Paul Murphy as Taoiseach of an AAA/PBP-led government (in which case, ignore all I’ve written above) but any bond issued today will be priced on the basis of current probabilities, rather than absolute certainty.

  8. The HSE owes 250 to 300 mn to benighted hospital consultants following a legal challenge over back pay. Anyone buying long term bonds should understand how crap Irish governance is and how leaky spending estimates are as a result.

  9. @ Dan McLaughlin

    Forecasters are nervous about the uncertainty around the export figures,

    It’s very simple Dan — the 2015 exports rise was mainly bullshit :roll:

    Mainly indigenous food and drinks exports rose at low single-digit rates while Chemicals provided the magic data.

    Official data show a fall in jobs in the chemicals/pharma sector since 2005 but nevermind, any additional billion, fake or not, is a big boost to growth because of the low imports ratio.

    In addition this sector has the lowest for locally purchased goods and services.

    Enda Kenny paid the price for believing in fairytales :mrgreen:

  10. 100 year bonds are really for pension funds to hedge longevity risk the way abc1 mortality is going. Insurers hold less capital if they can match cashflows and of course bonds are risk free since fiscal is banned under neoliberalism. Unfortunately economic growth is dead so lotsa bonds will not deliver but the consultants don’t care as long as the fees are coming in.

    Allianz wants to flog its Italian sub which is stuffed with Italian bonds yielding less than 2%. Its German bonds yield even less and most policies guarantee 3 to 4%. Sure it will be grand.

  11. @ JTO

    The nub of the blog comment was in these two paragraphs.

    “Even so, 2.35 per cent is reasonable, in a limited sense. No bond is an island. Each sits within a matrix of currency, maturity and default risks. If you think Ireland borrowing that cheaply is mad, boggle too at Italy’s 30-year yields (2.6 per cent) or Germany’s (83bps). Mexico has issued 100-year bonds at 4.2 per cent. Ireland’s bond is certainly a bad deal, save for all the alternatives. Money has to go somewhere.

    Considering the deal in isolation, lots needs to happen to justify the pricing. The euro must survive or whatever Ireland replaces it with be of Germanic rather than Italian character. Quantitative easing has to work, dragging Europe away from deflation and the threat of sovereign default — but not work so well that inflation lets rip. Ireland itself will need steady growth to manage its debts, without risking a repeat of the financial madness of the 2000s. Finally, the bond needs a healthy world economy (Ireland relies on exports) and yet global capital must remain happy with titchy real interest rates.”

    The rest, like your own piece, is crystal-ball gazing.

    It may be noted that the acting MOF has now begun to lift the veil i.e there is no money in fiscal space. Such as there was is being swallowed up by, you guessed it, the black hole of Irish public expenditure, the HSE (technically no longer in independent financial existence but the Vote responsibility of the acting Minister for Health).

  12. “To do so would require forking out a substantial chunk of cash to the FT, which on principle I’d never do”

    Your memes need an NCT, JTO , especially with neoliberalism in spasm in the hospice.

  13. I’m not sure that economic folk actually ‘get it’ – at least judging by the nature of comments across a range of blogs. It is bordering on the delusional to expect a higly complex, deeply interdependent set of processes (our economy) to expand exponentially. Its simply, physically, an impossibility. Eventually the mathematical expression dY/dt inflects over toward a maximum. And – that’s it.

    Its arguable whether or not that inflection has occurred. However, there is reliable evidence that it has. Economic rates-of-growth which averaged 3% p/a, compounding or so, are now averaging 1.5% p/a, compounding. Its possible that rates-of-growth will resume their 3% value, but the probability is they will stagnate out at the lower rate and will decline slowly over the following decades. If your annual, compounding rate of ecoomic expansion is close to zero: then bad stuff happens.

    A suggestion (since I am unable to do this) – use Marxian analysis to assess whether or not the economic surpluses being generated are sufficient to actually sustain those parts of our economies that are non-productive. I’m guessing the whole thing is marginal.

    Its been 156 years since the ‘oil-based’ economy commenced. Assuming a 3% p/a, compounding rate-of-growth, our aggregate economy will have gone through 7 doubling iterations. So in aggregate, our economy has ‘grown’ or expanded by; 2 raised to power 7 = 128 times!

    [The average rate-of-growth for the last 23 years has been consistently lower than 3% p/a, so that x128 value is too high. The 23 year doubling-time seems to have slowly elongated and is now probably approaching 46 years. A -33% decline in rates-of-growth would give a doubling-time of 69 years. However, if the economic rate-of-growth declines to 0.7% p/a, compounding …. but your economic model predicted 3% – you’re in financial Sh*tsville – up to your nostrils. “No ripples, please”]

    And please take note: that that 7th doubling iteration (over nn years) of our economy will have to consume more stuff during that time than ALL of the prior 6 iterations combined. That’s an awful lot of stuff. Its not happening.

  14. Unfortunately US Treasury doesn’t issue beyond about 30Yrs…… If they *did* then spreading the Irish 100Yr vs. a US equivalent would be a great trade. Positive yield differential between the two, probably about 1% per year to hold the position … and a huge mismatch in risk, with zero default risk on the US Treasury versus the very real default risk of a country that is essentially issuing under a currency peg (Euro).

  15. @ JohnTheOptimist

    “Ireland’s education system is among the best in europe,”

    A lot of people believe this because a lot of people say it — Ruairí Quinn, minister of education, said in 2013 that it was a delusion and:

    an assertion based on no evidence whatsoever other than something of a feelgood factor that was communicated to us at home by the greater Irish Diaspora who felt, for whatever reason, that it was better than what their children were experiencing in other parts of the world.

    According to the OECD who organise the PISA and adult skills tests, the skills of the Irish workforce are poor compared with many other developed countries — of course there will be nothing done to change course because the conventional wisdom is that there is no problem.

    http://www.finfacts.ie/Irish_finance_news/articleDetail.php?Returning-Irish-needed-to-fill-workforce-s-big-skills-gap-527

    Wonder why German manufacturing responded much better than the US sector to the remergence of China and why Ireland has the worst vocational education system in Western Europe?

  16. @Michael Hennigan

    These are the aggregate scores in the PISA 2012 tests for EU countries plus Norway, Switzerland and Icelaand:

    [01] Finland 1,588
    [02] Estonia 1,578
    [03] Poland 1,562
    [04] Netherlands 1,556
    [05] Switzerland 1,555
    [06] Ireland 1,546
    [06] Germany 1,546
    [08] Belgium 1,529
    [09] U. Kingdom 1,507
    [10] Austria 1,502
    [11] Czech Republic 1,500
    [12] France 1,499
    [13] Slovenia 1,496
    [14] Denmark 1,494
    [15] Norway 1,488
    [16] Latvia 1,482
    [17] Italy 1,469
    [18] Luxembourg 1,469
    [19] Spain 1,468
    [20] Portugal 1,464
    [21] Hungary 1,459
    [22] Iceland 1,454
    [23] Lithuania 1,452
    [24] Croatia 1,447
    [25] Sweden 1,446
    [26] Slovakia 1,416
    [27] Greece 1,397
    [28] Cyprus 1,327
    [29] Romania 1,322
    [30] Bulgaria 1,321

    Clearly, joint 6th of these merits my description ‘among the best in europe’,

  17. @DOCM

    Thank you for that information.

    Do you happen to know what rate of interest the UK pays on a 100-year bond?

    The FT commentator’s remarks sound typically condescending. Notwithstanding that the UK is doing better than the other large countries in western Europe, given (a) the propensity of the UK to print money and generate inflation (b) its propensity to devalue its currency (the latest devaluation is now in full swing) © the fact that its budget deficit is stuck at 5% of GDP and barely budging (while Ireland’s has melted away to nothing) (d) the fact that its net debt/GDP ratio is rising and is now well above Ireland (e) the fact that it just recorded a record balance-of-payments deficit in 2015 (7.2% of GDP versus 4% surplus in Ireland) (f) almost certainly won’t exist in 10 years, let alone 100 – given all these, if it was my money, I’d certainly want a higher rate of interest if I was lending to the UK government.

    However, among the figures quoted, the really daft one is Germany’s 83bps 100-year interest rate. This is daft because, given its demographics, there are going to be very few Germans in 100 years. While the Germans are undoubtedly superb at making cars and heavy machinery, they are proving themselves useless at making babies. As a result, Germany has been ageing and depopulating at a phenomenal rate. In a plan worthy of Baldrick, Frau Merkel has now called in ISIS to rectify these deficiencies. So, while the country known as Germany may exist in 100 years, current demographics and migration flows indicate its not going to be Germany as its been known for centuries, but a totally new Germany in which the majority of indigenous Germans are over 50, the majority of its under-50 population are followers of Islam, and many of its large cities are under Sharia Law. That would be the last country I’d purchase a 100-year bond from.

  18. Those seeking an explanation for the perceived creditworthiness of the Irish sovereign might have regard to the legislation currently on the statute books in the matter of “fiscal responsibility”.

    http://www.irishstatutebook.ie/eli/2012/act/39/enacted/en/html

    http://www.irishstatutebook.ie/eli/2013/act/29/enacted/en/pdf

    This legislation is mainly form and very, very little content in terms of of its objective i.e. to limit the capacity of the government to behave in a fiscally irresponsible manner (as recent events have demonstrated). The investment community seems not to care. This suggests that it considers that the broader context, that of being a minnow in the wider euro circle, will force adherence to content, irrespective of the porous nature of the legislation actually adopted.

    Now that a “partnership” government (“a rose by any other name”!) is looming on the horizon, this view will be put to the test.

    It is, however, almost certainly correct.

  19. Last time I looked Italian 10y yield was 132 bps meaning the Draghi put is worth at least 500bps . The collapse of the chf peg to the euro was a good example of how to shaft complacent markets.

  20. @Michael Hennigan

    “Ireland’s national income per head at 56% of Great Britain’s in 1922 and 49% in 1938 & 1957”

    Haven’t you got a more up-to-date figure than that for 1957? Its almost 60 years ago. Louth won the All-Ireland that year, which tells you how far back in the mists of time it is.

    Let me help you out.

    Having just looked up the Eurostat site, it looks like GDP per capita in Ireland in 2016 will be 35% higher than that of the UK – GNI about 12% higher. Given predicted growth rates, it is reasonable to think that these figures will be 50% and 25% respectively by 2022, the centenary of Ireland exiting the UK.

    So, in a century of independence Ireland’s GDP per capita will have gone from 56% of that of the UK to 150%.

    Scotland, Wales and N. Ireland have not increased their GDP per capita level (relative to the UK as a whole) in that time, while Ireland has almost trebled it (or more than doubled it, if we use GNI instead). Which won’t, of course, stop the FT screaming how mad these countries would be to follow Ireland’s example.

  21. Zero default risk on treasuries? Pull the other one. Cruz nearly set off a default in 2013. The main opposition is in meltdown mode. There is no growth.

  22. @Seafoid

    Of course Treasuries are zero risk. How could they default on a liability they print?
    You buy the Treasury *with* Dollars, essentially they’re the same thing, just with different durations.

    It would be like you defaulting on Seafoid-Dollars….
    Those Seafoid-Dollars *may* prove “worthless” – but that is inflation, not default.

  23. Clearly the NTMA could not resist the release of some testosterone, by issuing a wholly needless and wasteful 100 bond.

    Compared to the current 10 year bond, if the State needed the money- which it doesn’t- this bond will cost about 1.5% pa more than a 10 year bond. A cool €1.5 million of money thrown into a fire every year, just to celebrate official Ireland’s big boy club bravado.

    That is about 15 million over 10 years, or about 75 houses for people who need houses very badly.
    Clearly the State needs a display juvenile bravado, more than she needs houses.

  24. @ JohnTheOptimist

    My main point was to highlight the period before a significant change in policies in the late 1950s.

    I did point to a proxy for standard of living per head that is more reliable than GDP, which shows that in 2014 Ireland was below the EU28 average, the Euro Area average and Italy’s — after a decade of stagnation in the latter.

    In the US, GDP per capita and middle incomes diverged from 1999 but as about 5% of consumers account for almost 40% of consumer outlays, real median household income is possibly a better metric for many households as it is at the 1989 level.

    GDP and GNI are not reliable as proxies of income per head in Ireland. US FDI investment of $310 billion reflecting tax avoidance, supports 108,000 Irish jobs; $115 billion in Germany supports 615,000 jobs in US affiliates.

    http://www.finfacts.ie/Irish_finance_news/articleDetail.php?Irish-standard-of-living-per-inhabitant-at-23rd-of-34-richest-nations-185

    It’s a good achievement to be at 23rd in a global ranking but it’s foolish to believe that a small economy with the biggest dependence on foreign firms among developed countries, could become wealthier than countries with their own innovation capacity and range of durable firms.

    I guess you were one of the demography nuts during the bubble? Supply doesn’t always create it’s own demand. :roll:

    In services, most of the jobs in foreign firms are in administration; there is only 40% occupational pension coverage in the private sector and the majority of sector workers are in low-pay non-exporting firms.

    In Israel where there are about 250 foreign-owned R&D centres, but there is limited spillover from high tech to the rest of the economy.

    Despite the hype, high tech is seldom a jobs engine:

    http://www.finfacts.ie/Irish_finance_news/articleDetail.php?High-tech-sectors-not-big-job-creators-in-Europe-and-US-575

    About 90% of the value of Ireland’s tradebale exports are made by foreign-owned firms (about 76% of 50% of headline exports if tax avoidance was excluded). OECD data show that foreign firms account for 42% of Austrian goods exports, 36% of Danish exports and 26% of German exports.

    Denmark and Austria are Europe’s best exporters — Ireland and Greece are among the worst. “Not a lot of people know that,” as Michael Caine might say.

    In 2014, the population ratio per exporting firm was 187 in Denmark; 236 in Germany; 550 in France and 1,150 in Ireland.

  25. @Michael Hennigan

    What is your problem with foreign-owned firms?

    I worked for a foreign-owned firm (American) for 20 years. It gave me a very good standard-of-living plus lots of free travel worldwide.

    What matters is the amount of value-added in a country, not the nationality of the owners of a company. Foreign-owned operations in Ireland are increasingly sophisticated, with more and more added value. This is one of the reasons for Ireland’s exceptionally high economic growth.

    Real GDP growth rates between 1995 and 2015 (from Eurostat):

    Ireland +156.7%
    Poland +119.3%
    U. Kingdom +57.2%
    Netherlands +45.1%
    Austria +41.8%
    France +35.8%
    Germany +29.7%
    Denmark +28.4%
    Greece +16.6%
    Italy +9.8%

    Ireland’s GNP growth in that period is lower, but only slightly.

    You seem obsessed with the glories of Denmark. Compared with Ireland, Denmark is a ‘snail’, barely growing at 1% per annum since the early 1990s. That’s what high taxation does to a country (56% of GDP in Denmark’s case). It also gets little social benefit from such extortionate taxation. It has the lowest life expectancy in western Europe (considerably lower than low-tax Ireland) and, as the table above shows, it did much worse than Ireland in the most recent PISA tests. Not to mention its political system fracturing with right-wing racist parties surging.

    Regarding growth, while the future is never certain, 2015-2020 and beyond looks like being more of the same. Ireland shows no sign of slowing down long-term, while none of the ‘snail’ countries show any sign of speeding-up.

    Regarding the purchase of a 100-year-bond, I won’t be buying one as I’d be 167 when it matures and not sure what I could do with the money at that age. But, if I was buying one, then, given the recent history of growth, plus the collapsed demographics in most of Europe, plus the flood of ‘refugees’ from the Middle-East and North Africa to much of Europe, I’d see Ireland as by far the best bet for long-term growth in western Europe and therefore my first choice for the said bond.

    Poland would be another good choice as it has stuck to traditional values, scored brilliantly in the recent PISA tests and has been growing faster than any Western European country (bar Ireland) since Reagan, Thatcher, and Pope John Paul liberated it from communism. On current growth rates, Poland can overtake Germany in GDP per capita by 2039, the centenary of 1939. Hitler must be rotating in his grave.

    On a different note, how disappointing for many in the Dublin 4 media that Ireland figured so little in the ‘Panama Papers’ leaks. How their hearts must have leapt with joy when they saw the headline ‘Prime Minister of Ireland named in Panama tax fraud’. Alas, it was a misprint. ‘Iceland’ not ‘Ireland”, with the culprit being one Sigmunder Davio Gunnlaugsson, erstwhile hero of the left for jailing the bankers, but now tragically being burnt in effigy by the same people who were applauding him a few weeks ago.

  26. The multinational sector certainly helps to generate some weird and wonderful Irish statistics. Industrial production in January rose by an annual 44% but in February was down an annual 1.3%. Within that, the ‘modern’ sector, as the CSO defines it, saw annual growth of 74% in January and an annual fall of 1% in Feb.

    Corporation tax to end-March is running 87% above profile , although both income tax and VAT are running well behind. Stamp duty also below profile, not surprising given sharp fall in housing transactions from last autumn.

  27. Pension funds need long tail bonds. Pension funds convert mostly equity at retirement into guaranteed annuities. Most pension funds are full of seriously overvalued equities which are the equivalent of push up bras. Hello boys! Demand for the bonds is going to be more like A than DDD.

  28. fyi

    Supreme Court reserves judgement in appeal against €31bn promissory notes

    The Supreme Court has reserved judgement in Joan Collins’ appeal over the High Court’s rejection of her challenge to the €31bn promissory notes.

    The Independent TD claims the 2009 issuing of the controversial IOUs to bail out Anglo Irish Bank and other financial institutions was unconstitutional.

    http://www.irishexaminer.com/breakingnews/ireland/supreme-court-reserves-judgement-in-appeal-against-31bn-promissory-notes-728265.html

  29. @ JohnTheOptimist

    You are among the people who would not change entrenched views despite the facts, unlike the uninformed. You would always find your own stats or what “facts” suit you.

    I have had long experience in US and European multinationals. You say about your experience: “It gave me a very good standard-of-living plus lots of free travel worldwide” — the exporting foreign-owned firms account for just over 8% of the workforce.

    The GNP per head rose by 85% in 1995-2015 and has been distorted in recent times while the majority of investment during the bubble was in housing. There was little in indigenous exporting firms as windfalls were invested overseas as the Irish became the second biggest investors in European commercial property after the Germans.

    It’s interesting that about 88% of the investment in NAMA’s asset sales have been by US funds.

    As for Denmark, Kevin O’Rourke would know more about the country than myself but the picture painted is ridiculous.

    Voter turnout in both Denmark and Sweden (voluntary) since the early 1990s has generally exceeded the Irish one by double digits — suggesting more engaged publics. Even in 2011 after the loss of 300,000 jobs, only 64% of the Irish adult population voted compared with Denmark’s voter turnout at 82% last year.

    Even in 2007 15% of Irish households had adults without any jobs, again suggesting challenging social problems — the highest in Europe.

    The Danish death due to assault rate is among the lowest in the OECD area. Denmark has the highest life satisfaction in the OECD. The long-term unemployment rate (1.66%) is lower than the OECD average and life expectancy at 80.4 years is above the OECD average.

    IMF Oct 2015 forecasts for net public debt in Denmark in 2016 was 8.8%; Sweden was at -16.9% and Finland’s is -42.7% — Finland and Ireland in 2007 had similar levels of GDP but Finland had minus net debt.

    Denmark has for years been ranked among Europe’s most innovative economies.

    In recent years the Dutch economic affairs ministry asked a local think-tank to benchmark the Netherlands against seven other countries for innovation in the agri-food industry and Denmark was selected as the most innovative and the Netherlands got a third rank.

    In 2014, a University College Dublin study also ranked Denmark as No. 1 and it concluded: “Ireland has a number of truly world class innovative companies, however the problem is there are simply not enough of them and there are too few new innovative companies emerging from which world leading companies could emerge.”

    According to Invest in Denmark, the inward investment agency, within ingredients for the food industry, Denmark holds a strong global position: 14% of all food ingredients supplied to the global industry come from Denmark.

  30. @ MH

    The problem of households “with low work intensity” is acute in Ireland, only matched by the UK at comparable levels of economic development.

    http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Proportion_of_population_aged_less_than_60_living_in_households_with_very_low_work_intensity,_by_household_type,_2013.png

    Denmark scores among the best performers on practically all indicators when it comes to the bottom line i.e. how equitably is economic well-being shared.

  31. Talking of Irish bonds, some interesting data of late from the ECB They had bought €10bn Irish government bonds at end-March under QE and it was recently disclosed that they still hold €9.7bn under the Securities Market Programme. The Irish Central Bank owns €22bn as part of the Prom note deal, bringing the total to some €44bn out of total issuance of €127bn,a 35% share.

    Under the current QE rules the ESCB can own 33% of the market, the latter defined as maturity over 2 and under 30 years, which means €97bn of Irish bonds. Only €6bn of the Central Bank holding is under 30 years and perhaps €2bn of the SMP holding is now under 2 years but QE by the end of the year will have reached over €17bn and around €20bn by end -March 2017. The NTMA will be issuing, of course, but that 33% limit starts to look more like a binding constraint.

  32. According to the latest issue of Forbes, 191 billionaires own usd 6.5 tn in assets. These are the ultimate beneficiaries of the economic system. These are the ones neoliberalism was designed for. The people for whom the anglo costs were passed onto the Irish sov. The reason the the EZ has no bank recap. The reason monetarism is the only game in town. The reason the system is doomed.

  33. @Seafoid

    If I were buying that bond to increase average maturities for € liability matching purposes I would (notwithstanding the actuaries) consider the distribution of those liabilities between Eurozone states. If the liabilities were mainly in other, even more, non-core (than Ireland) states then the purchase would make more sense than if they were mainly in states closer to the core than Ireland.

    Also, FYI:

    http://www.reuters.com/article/us-ecb-policy-germany-idUSKCN0X81GF

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