Thursday, May 31, 2012

Buoyant Ireland

Nick Rowe is pessimistic, and points to one of the dreariest articles I've read to date on the Europe situation.

I noticed that Ireland seems to be doing much better than the other peripherals. See the chart below. Its stock market is relatively strong, having outperformed markets in Greece, Italy, and Spain while keeping up to the German DAX. At the same time, Ireland isn't seeing capital outflows anymore. While Greece, Spain and Italy's TARGET2 balance is deteriorating, Ireland's has been improving for over a year. (Note that data is to end of April).

(click here for expanded version)

What are the Irish doing differently? Is Ireland presaging how the other peripherals might be stabilized, or are they just lagging behind?

Note: For one explanation of the difference, see this Allied Irish Bank report (pdf).

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