There is an odd and uncomfortable divergence currently taking place between the general mood around Ireland and the experience of international financial investors, writes Joe Gill
It is a queasy and challenging juxtaposition which is sending off alarm bells in some quarters.
On one side, we find an economy relatively buoyant and upbeat as a succession of forecasters upgrade their GDP expectations for Ireland.
Employment is growing, investment is rising, and inflation is subdued, while interest rates continue to be fixed at ultra low levels.
Added to that are exchange rates versus sterling and the US dollar, which continue to be highly supportive of export-oriented goods and services companies.
On the other side are financial markets and their behaviour outside of Ireland.
There has been a period of volatility evident since mid-summer that unfortunately reminds me of conditions during parts of the global financial crisis after 2008.
That volatility is evident, particularly in developing economies that were advanced as the source for global economic sweetness and light a short time ago.
This volatility first spread into currency markets, where emerging economies endured material weakness in their foreign exchange rates.
International commodity markets, too, have been under pressure for some time but took a turn for the worse during summer, with metals, agri-products, and energy declining materially.
All of this activity has been compounded by a series of corporate disasters, led by auto maker Volkswagen.
Its share price collapsed, but so did a number of other large companies in the agricultural, commodity, IT, and bio-tech sectors.
This sharp change in the fortunes of companies on the stock market has triggered a crisis among some asset managers.
Hedge funds, which are now large parts of the financial world globally, lost almost $80bn alone in the four weeks of August, and that was before the Volkswagen explosion occurred.
To add salt to the wounds, some very large oil-producing countries have begun to repatriate billions of dollars from fund managers around the world as they move to shore up domestic economies amid very poor oil prices.
That, in turn, is forcing some fund managers to liquidate positions and sell shares they would otherwise keep. This, too, is compounding the pressure on financial markets.
I read that the Citigroup thought leader Willem Buiter is saying it is likely that the world is about to sink in to a global recession.
That’s tough reading in an economy which appears like an oasis of tranquillity in the week of a generous budget.
Ireland is the love child of globalisation, like it or not. We live and die according to the ebbs and flows of worldwide trade because we are a classic small, open economy.
Unlike the US, for example, Ireland is critically dependent on how a group of international economies such as the UK, continental Europe, and the US perform. When they do well, we tend to prosper as well, and vice versa.
It is convenient for all of us, luxuriating in the warm glow of vastly improved domestic economic data, to turn a blind eye to the shifting sands of global economics.
That attitude is partly vindicated by a nascent recovery in construction markets with both residential and commercial projects springing into life and augmenting the external factors that were so positive in 2013 and 2014.
Stability across the international economy would be a welcome development over coming quarters.
If China finds its feet, if policymakers in Europe, and if the US can pull levers that offset the threats identified by economists, then our new-found optimism can continue.
If things further deteriorate abroad, though, we need to be on high alert for how that could influence economic momentum in 2016 and beyond.
Joe Gill is director of corporate broking with Goodbody Stockbrokers. His views are personal.
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