Technology has used Covid-19 lockdown to show us who’s master
If one moment of soul-searching clarity has emerged for me during the Covid months, it is that technology is not a tool serving me. It is an uncompromising taskmaster that seeks to undermine and humiliate at every opportunity. I suspect that, having been forced to share our homes for months with the many manifestations of this flippant, unruly companion, all of us are united – though feebly, and without hope – against this common enemy. As the weeks unspooled, I found my collective technology was not satisfied with relentlessly disclosing my numerous digital world shortcomings to me alone in my quiet introspective moments of trying to troubleshoot our wireless network or install three years’ worth of Windows 10 updates but having all progress halt with the one from December 2019 (as go the Windows updates, so go us all). Instead, it relishes the chance to display my ineptitude to, at the very least, my lockdown partner but, ideally, a gathered Zoom audience. Article Source: click here.
Ireland wins appeal in €13 billion Apple tax case
Europe’s second-highest court ruled on Wednesday that the Republic did not give Apple illegal state aid, overturning a European Commission decision four years ago that the iPhone maker owed Revenue €13.1 billion in back taxes. The General Court in Luxembourg ruled that the commission “did not succeed in showing to the requisite legal standard” that Apple received tax advantages from the Republic. The ruling may still be appealed by the commission before the Court of Justice of the European Union, the EU’s highest court. It could take up to a further three years before there is a final outcome on the case, stemming from the world’s biggest-ever anti-trust decision. Most of the €14.3 billion collected by the Government in 2018 following directions from the commission, including €1.2 billion of interest, will remain in escrow until a final verdict is delivered. Article Source: click here.
Central Bank considers legal action over Covid-19 insurance cover
Central Bank governor Gabriel Makhlouf signalled on Tuesday the regulator is considering taking legal action to resolve standoffs between insurers and businesses over whether losses resulting from Covid-19 should be covered by insurance companies. The regulator is “taking advice” on whether it should follow the lead of the UK Financial Conduct Authority (FCA), which launched at test case last month against eight insurers who have denied business interruption claims and where there is a dispute over the meaning of wording in policy documents. Losses FBD Holdings’ pubs policy, which covers losses where a premises is closed under the orders of a local or government authority in the event of an infectious disease outbreak within 25 miles, is currently at the centre of litigation in the Republic. An action taken in May by the Lemon & Duke pub in Dublin is among four test cases against FBD to be heard in October. Article Source: click here.
OECD says 170,000 jobs could be lost if there is a second Covid wave
The number of people employed in the State could fall by as much as 8.2 per cent this year if a second Covid-19 outbreak takes place in October or November, according to a forecast from the Organisation for Economic Co-operation and Development (OECD). Based on a labour force survey from the Central Statistics Office, the worst case scenario could reduce the number of people employed by 169,770. The Paris-based think tank has forecast the possible hit to employment based on two scenarios. The “double-hit” scenario factors in a possible second wave, and suggests employment would contract by 8.2 per cent this year and by a further 1.7 per cent next year. This scenario assumes that further outbreaks will be avoided in 2021 due to pharmaceutical breakthroughs, “but these remain significant downside risks”. In the less severe single-hit scenario employment would contract 6.7 per cent this year before rebounding by 2 per cent next year. Under this scenario the effective reproduction rate of the virus is assumed to stay persistently below one. Article Source: click here.
Rents edge up in June as house prices fall
Renting a home continued to cost more in June while house prices declined despite a substantial increase in activity in the property market last month, according to a report from property website Daft.ie. Rents rose just 0.2 per cent in the 12 months to June with the average monthly listed rent now €1,402. The price of homes to buy was 3.3 per cent lower in June than the same month a year ago, a reversal from a marginal gain in May. The average listed sale price across the State is €253,868. Trinity College Dublin economist Ronan Lyons noted that significantly more homes were listed for rent in June this year compared with last year. “The concern remains that policymakers see this as the underlying problem solved. While the new Government may want to favour the construction of owner-occupied homes, the fundamental shortages are in the social and market rental segments and it is those segments that must be the focus for policymakers over the coming years,” he said. Article Source: click here.
Hysteria or prescience? Ireland goes big with financial response to coronavirus
It’s good politics to give worst-case scenarios. Most of the time they never arise and it’s better to be seen to be overly cautious than blasé. Think back to the recurring reassurances of a “soft landing” we got from officialdom ahead of the 2008 crash. Donald Trump’s assertion that coronavirus is “totally under control” or that cases in the US will soon drop to zero make him look like the mayor in Jaws, blithely ignoring reports of a killer shark to protect the local economy during tourist season. In contrast Taoiseach Leo Varadkar has jumped in with two feet, suggesting that as much as 60 per cent of the Republic’s population could contract the virus. This led to media reports that as many as 85,000 people here could die. It’s an extraordinary assertion in the context of a global pandemic that has killed 4,000, mainly in China, where it now appears to be under control. The figures are plausible: 60 per cent of the Republic’s population is 1.9 million and a Covid-19 mortality rate of 3.4 per cent presupposes 85,000 deaths. The Irish Association of Funeral Directors has even advised members that funeral services should not take place for people who die from the disease, at least not immediately, and their remains should be brought straight to the crematorium or cemetery for committal, presumably to control the spread of infection. Article Source: click here.
Tourism industry says VAT deferral scheme vital
The Irish Tourism Industry Confederation (ITIC) has said a VAT deferral scheme is vital to alleviate serious cashflow pressures in the tourism and hospitality sectors. The representative body said immediate action is critical because thousands of jobs are at stake due to the volume of cancellations and lack of future bookings. “Coronavirus is first and foremost a public health issue but the business and economic implications are stark,” said Eoghan O’Mara Walsh, CEO of ITIC. “We fear that thousands of tourism jobs will be lost in the next few weeks and are urging Government to do all within its power to support the county’s largest indigenous industry and biggest regional employer.” In order to alleviate cashflow pressures, ITIC has called for VAT payments due on March 19th to be deferred for tourism and hospitality businesses. This happened during the Foot and Mouth Crisis in 2001. The call was backed by other industry groups, including the Irish Hotels Federation, the Restaurants Association of Ireland, the Association of Visitor Experiences and Attractions and other ITIC members. The call came as new data released by the Central Statistics Office today showed the number of overseas trips made to Ireland rose just 1.8% last year. Article Source: click here.
Coronavirus: Central Bank under pressure to allow banks to tap rainy-day capital
The Central Bank is under mounting pressure to allow banks to tap capital reserves set aside for a rainy day to allow them to continue to lend during the coronavirus crisis, according to analysts. Lenders in the UK have already been given the go-ahead to do so. The Bank of England accompanied an announcement of an emergency 0.5 percentage point interest rates cut on Wednesday by saying that it was lowering a capital buffer that banks are required to build up in a buoyant economy to zero. UK banks had been required since late 2018 to hold so-called counter cyclical capital buffer (CCYB) of 1 per cent of their risk-weighted assets, and this had been set to rise to 2 per cent by the end of this year. The Bank of England estimates that the capital relief would free banks up to provide up to €190 billion of lending to businesses, equivalent to 13 times their net business lending in 2019. “The Central Bank of Ireland is now under pressure to remove its counter-cyclical capital buffer requirement as monetary authorities need to demonstrate actions,” said Diarmaid Sheridan, an analyst with Davy. Goodbody Stockbrokers analyst Eamonn Hughes estimates that a removal of the a 1 per cent CCYB that Irish banks have had to hold since last July could support about €10 billion of additional lending in the economy as households and businesses grapple with the effects of the spread of Covid-19. Central banks and regulators across the EU have been obliged since the start of 2016 to make lenders ringfence funds as a CCYB when they judge that credit growth is becoming excessive. The buffers are in addition to normal capital reserve demands, and are part of a raft of new rules designed to avoid a future crisis. Article Source: click here.
New car sales slow down again in February – CSO
The number of new private cars sold fell by 6.5% in February compared with the same time last year, new figures from the Central Statistics Office show. A total of 13,263 new private cars were licensed last month, down 6.5% compared with February 2019. Today’s figure is also 19.6% lower than the same month in 2018, the CSO noted. Meanwhile, the number of used, or imported, private cars licensed decreased by 18.3% compared with February 2019. The CSO said that in the first two months of 2019, a total of 33,928 new private cars were licensed, down 6.9% on the same time last year. The number of used cars licensed also slowed down by 12.1% compared with the same time in 2019. Today’s CSO figures show that 18% of new private cars licensed were hybrid or electric compared with 6.1% in February 2018. They also showed that electric and hybrid vehicles accounted for 16.7% of all private cars licensed in the first two months of this year, compared with 10.7% in the same time last year. Article Source: click here.
Investor psychology tips for surviving Covid-19
Investor nerves have been jangling since Covid-19 infected the stock market. Some strategists say a vicious bear market is ahead, while others argue that investors have overreacted, divergent opinions mirrored in the confused market reaction – after suffering their worst week since the financial crisis, stocks subsequently enjoyed their biggest one-day gain in 11 years. Behavioural finance experts will tell you that keeping your cool is never easy during any market correction but today’s environment is particularly emotional and uncertain. Here are three behavioural biases all investors need to be aware of in the current climate. Intolerance of uncertainty Financial commentators habitually trot out the old cliche that markets hate uncertainty, and there’s certainly no shortage of that right now. How far will the infection spread? How long will it last? How will consumers and workers react? If draconian containment measures are enacted, how much economic damage is likely? History provides few clues. “This is kind of a new thing,” as Nobel economist Robert Shiller has noted. “It’s too much to ask for the market to get it right.” Shiller’s uncertainty is echoed by New York-based Tanaka Capital, which says we “don’t know what the limits are and we don’t know where it’s going to peak”. Article Source: click here.