Author: Karl Whelan

February Retail Sales

Retail sales in February were down 20.9% relative to a year earlier, up from a 26.6% year-over-year decline in January.  Total sales rose 5.7% in February but this was nearly all due to a partial unwinding of the horrible January motor trade sales.  Excluding the motor trade, sales were up 1.3% in February and the year-over-year decline stands at -6.9%, which is up a little from its low point of -8.5% recorded in November. 

I’m not going to write about second deriviatives or, god forbid, green shoots.  But, still, I’ll just observe that these numbers are not as horrible as I might have expected and leave those that know more about this release to add further comment.

Lenihan on the ECB and the Guarantee

In my earlier post on the government’s criticisms of the IMF, I left out what was probably the most interesting argument because it raised a number of other issues.

Speaking on This Week on Sunday, the Minister for Finance criticised the IMF’s assessment of the cost of the liability guarantee on the grounds that the guarantee would not be called on. I’ve already noted that this is a somewhat spurious way to look at the cost of the guarantee. However, what was particularly odd about the Minister’s comments was his particular explanation of why the guarantee would not be called upon.

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Unemployment Up to 11.4% in April

Today’s release shows that the standardised unemployment rate, which is based on the Live Register, rose to 11.4% in April from 11% in March. 

I’m tempted to greet the four-tenths increase as a sign that the pace of slowdown is moderating relative to the disastrous increases observed in January and February.   This is pretty cold comfort—this is still consistent with an annualised pace of increase in the unemployment rate of almost 5%—but I guess second derivatives have to turn negative before we reach a global maximum. 

On the whole, though, I still reckon we’re looking a double digit rate of decline for average-over-average GDP this year.

Sarah Carey on NAMA and Nationalisation

Sarah Carey’s article in today’s Irish Times is worth reading because it is perhaps the most articulate version yet of the key argument that tends to convince people that nationalisation is a bad idea and that NAMA and limited state ownership is the way to go.  The government has made a series of arguments against nationalisation but it’s hard for them to bluntly say “we don’t want to own the banks because we’re scared we’ll make a mess of them.”  But an opinion columnist can and this is the essence of Carey’s argument.

I think Sarah is too pessimistic about the long-term performance of semi-state bodies in Ireland and that, in any case, there’s little point in applying these analogies to businesses for which state ownership is an explicitly temporary measure. 

Beyond that, at the risk of making Sarah’s head hurt a bit more, let me put the case for why she should trust her instincts and support the college boys.

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Government Criticism of the IMF

Government ministers have been saying some pretty silly things about the IMF’s estimates of the fiscal cost of the measures taken to solve the banking crisis.

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