The Economy of Czechia

Czechia is an advanced country that ranks among the countries with the most developed economy in the world. Czechia is a member of the OECD (Organisation for Economic Co-operation and Development). It is based on industry and services (60%), agriculture and other primary production.

The main industries are automotive manufacturing, electronics, mechanical engineering, high technology , steel manufacturing, transportation equipment, chemical manufacturing and pharmaceuticals.

The main agricultural products are cereals, vegetable oils and hops. Key mineral resources mined in Czechia include black and brown cleansing, kaolin, building materials and uranium. The most important product of the Czech economy is Škoda Auto.

Czechia has the most self-employment per population in Europe. The average wage as of 2021 is around CZK 37,800 (EUR 1,540). It is among the countries with the lowest proportion of people at risk of income poverty in the EU. Unemployment and state indebtedness in Czechia remain among the lowest in Europe.

In the first quarter of 2015, the Czech economy grew the fastest among the EU states. The Czech economy grew by 3.3% in 2021 and the following …

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Are Irish banks the most generous in Europe?

Mortgage rates are rising, but at the time of writing they are higher in Germany than in Ireland, that isn’t the strange bit though.

What’s really strange is that the risk free rate in Ireland is higher than the mortgage rates available. In other words, financially speaking it is safer (if by ‘safe’ you mean accepting a lower return) to lend to a person in Ireland on a house than it is to lend to the Irish government. This is insane and it won’t last.

The response will need to be one of two things.

Banks stop lending Banks raise mortgage rates (or perhaps a little of 1 and a good dash of 2).

Take a look at government bond yields from last week, if a bank has a choice they can lend to the Irish government at 2.8% but they lend to people at closer to 2%. This is typically seen as an impossibility in financial markets so it will only last for a short time because as a rule there is no arbitrage, markets close them down …

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Understanding the Irish Housing Crisis

A housing crisis can be detrimental to the economy of a country. A housing crisis occurs when the availability of affordable housing is rare and you need a higher income to be able to afford a place to live.

 

A housing crisis happens due to a change in supply and demand for real estate. If there are a lot of houses with few people looking, housing prices will drop. Likewise if there are lots of people looking for houses with few properties available prices will go up.

 

The problem with this system is the availability of housing does not have to do with salaries in the area, so when housing prices go up too much and the income does not change it creates a crisis.

 

Digital Mortgages can help people get out of the expensive rental market, allowing them to own property.

 

Why There’s a Crisis

 

Housing is a big part of a person’s monthly budget. For the typical person housing should account for about 35% of their monthly income.

 

When looking at the …

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The In’s and Out’s of Mortgage Technology in 2022

Mortgage technology has changed a lot in the past decade. Keeping up to date with the changes is important, to understand how to simplify the process for yourself while also saving the most money.

 

The future of mortgages is online with the increasing development of Fintech (Financial Technology). Learning how to take advantage of the new ways of doing business will help prepare through this transition from face to face business to online business.

 

Mortgage Tech in 2022

 

Mortgage Technology has improved significantly in recent years. This is due in large part to the COVID pandemic. Businesses and mortgage lenders specifically had to adapt quickly to the sudden shift to an all online business format.

 

This led to the implementation of the digital mortgage application process becoming standardized as no business was being done in person and on paper. Fintech markets are continuing to grow and with this the technology to make financial processes easier is now becoming available.

 

OnlineApplication is a company that makes software that assists lenders with digital mortgage applications which simplifies …

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Fintech is the Future, Here’s Everything You Need to Know

FinTech (Financial Technology) is the new modern technology designed to compete with the traditional financial methods of delivering services.

 

With the increase of importance of technology due to the COVID pandemic, Fintech has evolved and became significantly more important to banks and people alike.

 

With this transition occurring it is important for everyone to understand what these changes mean and how it will continue to evolve in the future. 

 

What’s new

 

With the generations of people who grew up with technology getting older, businesses have had to adapt to please these generations.

 

People have become more and more comfortable managing their money and businesses online. They are eager to use new technology because it offers these businesses and people flexibility that they did not have before.

 

Some of the results of this increase in Fintech is the addition of digital mortgages and digital lenders. This technology was very important for banks because when COVID happened it was the only way to do business.

 

Now people prefer the business to be online because it …

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Negative interest rates are both gone and here at the same time.

Many commentators are talking about the end of negative interest rates in nominal terms and it’s true, interest rates are rising but in real terms they are still negative. Look at mortgage rates (for instance), you can borrow at 3% and below and meanwhile you have property price appreciation at 15% meaning that in real terms you are paying -12%.

If you can ever get something on a continuous basis at -12% that indicates ‘buy’, and that’s what people are doing, but notice that we mentioned ‘continuous’, the reality is that there is no arbitrage most of the time and this will be closed down by either rising costs, falling prices or some other outcome that we can’t forsee. Trees don’t grow to the sky, they never have and never will so the trajectory of house prices must rationalise but it’s hard to see how or where at present because the demand side seems so demonstrably strong.

I bumped into Kieran McQuinn on Pearse Street today and in our brief chat mentioned how the price changes are not sustainable, he …

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What is happening with interest rates, why, and what can you do?

What is happening with interest rates?

Interest rates rise and fall, we have been in a secular-ZIRP (zero interest rate policy) environment for quite some time and as people who subscribe to the monetarist school of thought, this would always lead to inflation which we are seeing now, albeit a fairly delayed response given how long this policy has been in place.

Why?

Not too long ago the yield curve was negative 20 years into the future such was the dismal outlook of markets for any level of inflation, but then you had a pandemic, the ‘great resignation’ and between labor and supply constraints along with monetary policy effects, there is inflation you haven’t seen in 40 years. Now the curve is negative only one year into the future and the price in the money markets has risen.

Just to clarify this, many mortgage providers get their money by buying it (you buy at X + interest rate and then ‘sell’ it to borrowers at X+margin [which is ideally above the price you bought it at]). In an oversimplified manner, …

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Irish Mortgage Brokers featured in the Irish Times

We were mentioned in the Irish Times in a piece by Cliff Taylor about the increase in the number of people seeking to refinance their home.

Rather than a fear of higher interest rates, Karl Deeter, of Irish Mortgage Brokers, believes it is primarily driven by people facing tightening (link to article here)

The crux of the point being made is that as inflation is affecting people and rates look set to rise that it is naturally driving people to consider ways to get better prices on one of their biggest outgoings and to get some assurance on what the price levels of their outgoings will be.

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History of the Landesbank (Bavaria)

In Germany, Landesbanken are credit institutions that carry out banking transactions for individual federal states and support the state in promoting the economy.

The history of the legal predecessors of today’s Landesbanken often dates back to the 18th century. In their now familiar form, the banks emerged in the years after World War II, when the German states issued their first state bonds with the help of the Landesbanken. In the respective federal state for which they carry out banking transactions and act in an advisory capacity, they perform a kind of house bank function. In addition, the Landesbanken are authorized to conduct all banking transactions permitted under their statutes. In this respect, they have been operating on the market for years as general commercial or universal banks.

The business model of the Landesbanken has faced a dilemma since the abolition of institutional burden and guarantor liability in 2005; on the one hand, they conduct banking business for their federal state, but on the other hand, they are on a par with private banks and have to hold their own …

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The economy of Nuremberg

Nuremberg is the second-largest city in Bavaria after Munich. According to the population register in December 2021 530,222 people had a registered main residence in Nuremberg. Within the last two Corona years, Nuremberg’s population has thus declined by 1.1%. The main reason for this is the Corona pandemic. Since October 2021, the number of inhabitants has been increasing significantly again. According to the Nuremberg and Fürth Statistical Information System, about 32.000 people moved away from Nuremberg in the year 2021.

Nuremberg was ranked among the top 25 cities with the best quality of life worldwide in a study (Worldwide Quality of Living Survey) conducted by the consulting firm Mercer, and was ranked sixth among German cities in 2010.

The overall quality of living and satisfaction of the population is continually determined every three years in most German cities. The last survey took place in 2019 with over 1,000 participants. More than 80% of all attendees from Nuremberg were satisfied with the public areas such as markets, squares, and pedestrian zones in their city. The condition of roads and buildings as …

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