Rolling UK Economy Into The Shitbin Thread

good idea, nice to have a thread to use for the next few years. here's a link to the discussion on that old thread: This the thread about the post-Thatcher British economy

we are in a larger mess than the US

Speak for yourself.

the uk, collectively is in a more precarious position. You are correct in some respects about me, as I expect to be made redundant sometime in the next 18-24 months

Though as i do not work in finance, property or retail i would expect a certain time lag before job losses filter through. but filter through they will

what do you work in, laxalt?

Computers

Might be good (haven't heard yet):

http://www.bbc.co.uk/radio4/factual/pip/i2uff/

I can't work out whether I hate the heads buried in the sand or the self-fulfilling prophecy style doom-mongering more at the moment. If you can keep your job and keep your debt down to a manageable level you'll be fine.

Formal complaint by Radiohead: recession and debt worries cause low sales of limited edition £40 In Rainbows discbox. "Don't people WANT the future? What's so cool about food?" quipped Thom Yorke at a press conference, adding, "Gordon Brown is a safe pair of hands. I've got all his records at home - sorry, who is it we're talking about again?"

self-fulfilling prophecy style doom-mongering

"we're in danger of talking ourselves into a recession"???

I can't work out whether I hate the heads buried in the sand or the self-fulfilling prophecy style doom-mongering more at the moment. If you can keep your job and keep your debt down to a manageable level you'll be fine.

-- Matt DC, Tuesday, January 22, 2008 1:37 PM (6 minutes ago) Bookmark Link

i think the heads-buried thing just about steals this, because it's been going on for SUCH A LONG TIME.

Hey guys with some positive thinking perhaps we can talk ourselves into another boom

No I was saying that hysterical media coverage tends to exacerbate pre-existing problems, same as anything.

true. the headline of daily mail is asking for the same panic measures bernanke just dished out in the US.

though to be fair..i think the media has downplayed the economic situation over the last 6 months (its amazing its taken this long for the stock market to do this!)

Who the hell was gambling on the stock market between august and today?

Kate McCann?

she was too busy shaving

the BBC market data system (the back end that provides live updates of financial markets) has had so many requests today that it has fallen over

http://www.dkimages.com/discover/previews/746/52320.JPG

basically

self-fulfilling prophecy style doom-mongering more at the moment.

actually this really doesn't make any sense.

1. it wasn't really until this month that the press bothered with any of this beyond house prices (and even then they were spinning 'a year of stagnation') and northern rock (often treated as some kind of weird one off). Lower house prices in themselves are not 'doom-mongering' at all anyway, as they (theoretically) make it easier for first time buyers (though in practice it doesn't work out this way)

I haven't seen much 'recession coverage' anywhere other than the independent, until the last few days, and the redtops still haven't even touched it at all!

2. I just can't buy it being a self-prophecy coming true. I don't think ANY of the coverage has been doom-mongering for the simple fact that i think the facts are much worse than have been reported and it is precisely this which means every event is somehow a 'shock, when it was obvious for a long time

cf. the date this thread was started

Well we did tag along on that thatcher thread for a while, but yes the thread should have been started last summer really

haha woops i thought this was the "will the housing bubble be worse than the dotcom bubble" thread, which was started about two years ago

which, as a pre-emptive thread was probably a couple years too late even then

1. Not true - I've seen this covered at length in the Guardian, Times, Telegraph, FT (pretty much every day obviously), and to a lesser extent the Mail. As far as I can remember most of these has taken the 'may tip the global economy into recession' line which seems a sensible one to take.

2. I'm not saying there isn't going to be a recession (its likely there will be, there may just be a significant slowdown). In what way are the events of the last couple of days a shock to anyone who has taken even a passing interest over the last couple of weeks? The Indy a few weeks ago hd a front of enormous stormclouds gathering over Britain with 'THE PERFECT STORM' written on it, that's pretty doom-mongering isn't it, regardless of whether or not they were right?

Okay lets get the basics down before we go any further:

- When politicans keep saying "the economic fundamentals are sound" are we to assume they're just bullshitting?

- What was it that enabled Britain to ride out the recession in the early 00s? Presumably the conditions are so different this time around that this couldn't happen again?

- Assuming an ILX thread four years ago could have prevented this, what could people have done to prevent this in the early 00s?

1. 'may tip' is hardly excessive

2. they were a shock to those people who hadn't got themselves out of shares

The Independents headlines are always like that about everything, but I don't think that perfect storm headline was doom-mongering at all. 'perfect storm' refers to a series of events that were already well underway

if the fundamentals of the uk economy are strong, as we are told, then they will not be shaken by newspaper headlines as people would take advantage of the uncertainty. but the fundamentals of the uk economy are not strong in the slightest
(relying on unemployment data is downright dishonest)

I would still suggest that this is merely a difficult year, next year worse, but 2010 probably the big one. I still think that the press has glossed over how bad this is, even now

but 2010 probably the big one

Oh well then, fuck it, we've got to two more years to party

-When politicans keep saying "the economic fundamentals are sound" are we to assume they're just bullshitting?

yes, its called positive spin. they rely on two things

1) inflation. believe that?
2) unemployment. always the last domino to fall, because jobs get cut because outlook is bad, not the other way round

- What was it that enabled Britain to ride out the recession in the early 00s? Presumably the conditions are so different this time around that this couldn't happen again?

because there was a huge shift of debt from industry/govt to consumers, the british public basically took on the debt, ie we spent our way out of it. or, rather more to the point, we BORROWED our way out of it, and got very heavily in debt. the proposed solution appears to borrow and spend some more

- Assuming an ILX thread four years ago could have prevented this, what could people have done to prevent this in the early 00s?

thats a much longer question, but nipping speculative bubbles in the bud is a good start, and perhaps actually taking that recession then, rather than this bigger one now. also, engaging in productive activities, rather than speculation

basically, you cant put off recessions, they've been happening for 300+ years! if you put them off you store them up for later. banks lend lend lend, contraction occurs, people get caught high and dry

Oh well then, fuck it, we've got to two more years to party

comparatively, i think this year will be very bad, but it will get worse after that before it improves

- Assuming an ILX thread four years ago could have prevented this, what could people have done to prevent this in the early 00s?

- given frank the success they deserved
- adopted 'hen fap' meme
- film threads

- rockism
- geezaesthetics

I mean, i'd love to hear an economic fundamental other than 2% inflation (your loaf of bread, train ticket, gas bill, petrol go up by 2% this year?) and low unemployment, but that seems to be it! perhaps its our industries of finance (um), housing (er), buying with our credit cards (weelll...)?

- realized why 1974 is crucial here

- marcello carlin 'character'

perhaps its our industries of finance (um), housing (er), buying with our credit cards (weelll...)?

This is the problem really, the economy of this country is over-reliant on the City, we don't make anything* we just shunt money around. This would never have happened under Becky Lucas.

*Not much good either if export markets slump as well.

So, really, that 'economic fundamentals are sound' looks exactly like bullshit

GORDON BROWN: It's all the more remarkable that inflation generally is low, when you have, as everybody acknowledges, rising food prices round the world and rising oil and commodity prices.

http://news.bbc.co.uk/2/hi/programmes/politics_show/7202283.stm

It's all the more remarkable that black is generally white

TWO in every five employers plan redundancies over the next three months, according to an influential survey to be published tomorrow. It comes as two leading business groups warn of weak business confidence and a sharp slowdown in growth.

Retailers had been very downbeat about prospects for January following a poor December, with like-for-like sales rising only 0.3%. This week’s figures will come as a relief, but the BRC is likely to warn that any strength is likely to be temporary.

This will be the big fear if the warning of many redundancies from the Chartered Institute of Personnel and Development comes true. Its winter labour market outlook, also in conjunction with KPMG, is set to show that 38% of the more than 1,500 employers surveyed plan redundancies over the next three months, with a quarter intending to let go at least 10 employees.

Although it is normal for a proportion of employers to be planning redundancies, the latest figure is sharply up on the 17% number three months ago.

http://business.timesonline.co.uk/tol/business/economics/article3340863.ece

and to think i took public service job last year 'just until something better comes along'.

"Everything is OK because unemployment is low" can never be a good barometer of anything. Things aren't OK because unemployment is low! Its the other way round. Unemployment is low when things are OK. More accurately - unemployment is low when future outlook suggests more people will be needed to do/make things/services. Obviously the future outlook for the economy is very poor - therefore people will be let go

Unless of course people go on long term incapacity benefit - in which case unemployment can carry on being as low for as long as you like

Recession claims first casualty

Unless of course people go on long term incapacity benefit - in which case unemployment can carry on being as low for as long as you like

-- laxalt, Monday, February 11, 2008 3:58 PM (3 days ago) Bookmark Link

^^^ this. unemployment isn't low. people claiming JSA is comparatively low. depends how you slice and dice the figures innit.

How nice that the Times should include a detailed definition of the term "bankruptcy" in that Statto piece for the benefit of all those thrusting Thatcherkids who haven't got time to learn English. Still I suppose many thrusting Thatcherkids will know what the word means soon enough.

http://www.phill.co.uk/comedy/dadsarmy/da78.jpg

http://theliberati.net/quaequamblog/wp-content/comical_ali.jpg

how long till first "UNGRATEFUL IMMIGRANTS ABANDON UK: after taking advantage of our hospitality, mercenary poles and russians look to leave UK when going gets rough, proving they WERE only ever interested in our money" type stuff in the Daily Angry

It was in the Metro already this morning.

bah

(It actually was! Something about 'Poles abandon failing Britain')

looooooool

Looks like recession here is going to move much quicker than it has been arriving in the US

That "Poles leaving the UK story" was great, "Nowadays, the average British wage is only twice as high as the average Polish wage".

I'm still kind of amazed that thomas cook, woolworths and foxtons have staff

It's a shame Kazakhstan isn't in the EU, we'll have to wait until World Cup qualifying for that 'Borats leave sinking ship' headline.

I'm still kind of amazed that thomas cook, woolworths and foxtons have shops (with staff in them)

Foxtons have branches with fridges in them but I don't usually see much in the way of staff.

Aren't Foxtons Britain's most EVIL company? Although when I spoke to another estate agency dude, they were more critical of Foxtons for having 7:30am meetings, rather than the whole "ripping off innocent customers" thing.

Meanwhile in the real world where people aren't sitting around worrying about every dip and curve in the stock market...

Europe's second biggest holiday firm now says that bookings for both winter ski trips and summer beach breaks remain strong.

I'm not saying there's not going to be a recession, or a downturn, or whatever, I'm just saying it's not like we haven't been here before and, you know, we're still here. And things aren't so bad.

'Poles abandon failing Britain'

Fuck, that means the return of Australian barmaids and Sarf Ifrikan barmen :(

"Poles abandon failing Britain" - does that mean all our seaside piers will fall down? It's a disgrace.

Good article by Janice Turner in the Times about EVIL FOXTONS even if it does press the Our Children button a little too fervently.

im amazed they are still here when people can sort their own holidays out online

Europe's second biggest holiday firm now says that bookings for both winter ski trips and summer beach breaks remain strong.

Liverpool fans say this year is their year

I mean, who do you think that statement is actually intended for and what would you expect them to say? and even then, does it actually read that confidently to you? words like 'still' and 'remain' are pretty telling

No, I'm just bored of your doom and gloom.

Fair point. Though you maybe should expect a little of that on a thread called 'rolling UK economy into the shitbin thread'

the 'Rolling Street Style / Fashion Blog Thread' is quite cheery at the moment though, that is balancing things out somewhat

Is Thomas Cook a public company? If so they have an obligation to say things are going tits-up if they are going tits-up.

It's something of a red herring anyway as people won't stop booking holidays until things begin to bite, and they haven't bitten yet. And even then, holidays aren't the first thing people tighten their belts on unless they're actually made unemployed. I see no reason why holiday bookings wouldn't be holding up at this point in time (especially as this statement is retrospective anyway).

This is true, its more that im interested that their model survives when people can book things separately

Is Thomas Cook a public company? If so they have an obligation to say things are going tits-up if they are going tits-up

working a treat for alliance & leicester!

"england's second-largest widget retailer says customers abandoning its useless widgets in droves"

I believe Glen Campbell had a song about that, "Widget Alingment"

"Widget Alignment" even

And even then, holidays aren't the first thing people tighten their belts on unless they're actually made unemployed

Really?

i haven't been on holiday since 2005. this isn't really a money thing, more a being mental thing.

I'd say so - people tend to to value holidays very highly in this day and age. Your average family, if tightening the purse strings, is more likely to tighten them elsewhere so they can still afford a holiday ("we can wait for that new furniture?", "do we really need another TV?").

Of course, they may book cheaper holidays as well but Thomas Cook can still spin that as 'number of bookings remains high'.

(This is only true up to a point of course, but I don't think we've got to that point yet)

Unfortunately most families can't wait to pay those steeply escalating electricity, gas and council tax bills.

I aim for at least four holidays a year.

Thomas Cook can still spin that as 'number of bookings remains high'.

Is Thomas Cook a public company? If so they have an obligation to say things are going tits-up if they are going tits-up.

EXACTLY

though 'spin' isn't really working for Bradford & Bingley right now

We go on The Sun holidays - £38 for 4 nights! It is the ONLY thing The Sun is good for. Laxalt - you're right - why do I look at this thread? The same reason I pick up the Express sometimes - just so I can tut tut I suppose.

Your average family, if tightening the purse strings, is more likely to tighten them elsewhere so they can still afford a holiday ("we can wait for that new furniture?", "do we really need another TV?").

these are all things that have been increasingly paid for with credit. those lines of credit are being withdrawn quicker than harry kewell on a match day right now

Bradford & Bingley evidently didn't take hedge ineffectiveness into account(s).

Laxalt - you're right

No he isn't! He did the same "We're all doomed" routine, on the Rolling US Economy Into The Shitbin Thread! And they weren't all doomed!

Look no one's saying everyone in the UK is going to be sacked and we're about to enter a Great Depression where we have to huddle together for warmth and eat rats, they're just saying lots of people may be laid off, the economy might slow or perhaps shrink and we'll be through it after three years. Jesus.

that is exactly right

even the head of the bank of england is saying it. depends on your definition of 'shitbin' i suppose.

I meant he was right about the title being indicative of its content.

I think also that 'shitbin' offends me. It reminds me of all the HYS posts that start "This country has now officially gone to the dogs".

would you prefer "the dumper"?

dunno about 3 years, most other times its really been more like 5 (though the periods of 'technical recession' are often around 2 if you don't count below inflation growth, which is still pretty poor). i think it will be worse this time as the credit expansion period has been longer and fuller, but whether this means a heavy short(ish) recession, or a longer less immediately sharp one, only time will tell

No, what's going to happen is that everyone in the UK is going to be starved in order to subsidise the lifestyles of hedge fund managers and shareholder pension fund subscribers and then made to eat rats in the workhouse. Jehovah.

I think also that 'shitbin' offends me.

merely copying the US title. i wouldn't have chosen that word either, otherwise

Will they be eating these rats on their holidays?

'Rats abandon failing Britain'

Quipped Geldof at Gatwick: "Too much f***ing tax!"

but if anyone doesn't like it, i think maybe we should start a list of things that are good about the uk economy

1. Whiskey Distilleries

i'm going to need your help for the others:/

or, if we can't manage good things...how about 'things that are more promising here than in the USA'? i'm stumped

Where do they distill whiskey in the UK? Norn Ireland?

Biosciences and shit will probably be okay.

i think we kind of are in the shitbin; HYS talks about symptoms mostly, but it's a country with a now very wide gap between rich and poor, a middle-class living on credit based on their overvalued houses, and with a public sector now insanely in hock (enron style, off the books) to its private-sector 'partners' and consultants.

What is HYS?

Technology sector will probably be hit less hard as well, especially if not too reliant on the consumer or individual big business customers.

(xpost - BBC Comments Box mentalists innit)

have your say -----> I think also that 'shitbin' offends me. It reminds me of all the HYS posts that start "This country has now officially gone to the dogs".

-- Ned Trifle II, Thursday, February 14, 2008 11:46 AM (9 minutes ago) Bookmark Link

Where do they distill whiskey in the UK? Norn Ireland?

scotland? ok i was clutching at a straw

Whisky!!!!!!!!!!

oops!

"Shitbin" was first used to bash the Bush administration = it is an liberal word. Official right-wing parlance is "hell in a handcart".

Since most of HYS is written by a curious alliance of ILxors and bored BBC staffers I don't think we need to pay it too much serious attention.

Have Dolcis gone under? Or are they being taken over?

Are they one of those companies that are to pricey to be budget, but too cheap to have cachet? Would think such a store should do ok in middle england though, all the same.

Into administration: "the first big high street casualty of the credit crunch".

http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article3228324.ece

"The writing was on the wall when the foreign rubbish started to flood in and shoes gave way to trainers, it all seems like "LIFE ON MARS " now the end of another British era.

Steve, coventry, uk"

That Poles Depart story (do you see what I did there?)

http://www.metro.co.uk/news/article.html?in_article_id=98895&in_page_id=34

There was a time when East European migrants looking to boost their finances felt Britain's streets were paved with gold.

But now it seems these shores have lost their economic lustre and the Poles are going back home.

Our weak pound and failing economy combined with a boom in Poland is tempting many to head East, say Polish economists.

The news came as the Bank of England predicted a tough year ahead with growth slowing dramatically and inflation remaining high.

'Many Poles left for Britain when British salaries were four times higher than Polish ones. But now they are only twice as high,' said Alfred Adamiec at Poland's Noble Bank.

A mass exodus was unlikely, but the Poles are going rather than coming, said Dr Jan Mokrzycki, head of the Federation of Poles in Great Britain.

Those who failed to save up money in Britain can now return home without the 'stigma of failure', said migration expert Pawel Kaczmarczyk.

But it's not all about the money, reckons Adam Pniewski, 28, who returned to West Poland, this month.

He said: 'I've had enough of doing nothing but earning money. It's more important to live among people that love you.'

An estimated one million Poles have come to Britain or Ireland since 2004.

http://img.metro.co.uk/i/pix/2008/02/PolesAN_175x125.jpg
Fewwer(sic) Poles now check the small ads

Sales of M&Ms and Coke remain strong.

Credit crunch not really all that relevant here - Dolcis has been struggling for years and had zero brand equity anyway. People don't want shit mid-market when they can go to Primark, or whatever the equivalent for shoes is.

Meanwhile house prices are sliding, with Scotland experiencing its first quarterly fall in seven years:
http://ukpress.google.com/article/ALeqM5gWVCOTd8BfjnQDBi3R79JqWL0yrw

Average Scottish house price falling £60 a day:
http://www.eveningtimes.co.uk/news/display.var.2047526.0.house_prices_fall_by_60_a_day.php

Number of unsold properties in England highest since 1999, ratio of agents reporting falling prices vs rising price at highest since the 1992 crash:
http://www.eveningtimes.co.uk/news/display.var.2047526.0.house_prices_fall_by_60_a_day.php

oops, final link should be
http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article3361789.ece

Yes I was kind of wondering if Dolcis had just finally reached the end of the line. Wouldn't normally expect a midrange shoe shop to be one of the first casualties

in say 2 years time what will the impact of the recession be on rent prices on a flat in a city centre? in the city where i live, apparently 45% of flats are unoccupied at any one time, admittedly this includes all the nasty rougher places on the outskirts but is this normal and can it be sustained?

Which city do you live in?

Conventional logic says if people stop buying completely and consider themselves longer term renters, and investors sell flats off, this would increase number of renters and decrease numbers of places to rent, and finally push prices up

But:

-The huge oversupply of city centre flats available to rent isn't going to disappear overnight (and, incredibly, they're still building them!

-In a recession, numbers of people renting might actually fall, partly immigrants returning home, but also people returning to live with parents as job market implodes

Personally I think large numbers of those city centre flats may never be occupied. may well end up functioning as social housing in the end, but the govt will probably have to build more people to put in them

Also the appeal of living in them is going to pall, for renters now as well as buyers, most are as you say half-empty at best, questionably built, and will probably function as social housing in the nearish future. They were always going to be the slums of the future, but that future might be a lot nearer than imagined

or, to put it another way, can you think of even one reason why the rent on one of those would be more expensive in 2010 than today?

"slums of the future" has become my phrase of the day.

(I'm in Manchester, where I notice new building work for apartment complexes pretty much every month.)

had a feeling it might be Manchester!

Is this social housing of the future thing a realistic prospect? How would it work? ie. would the govt pay a decent price to landlords to buy it off them?

Are rent prices artificially high right now, like house prices?

I don't know how it will work. I don't think the landlords are in a position to ask for a decent price (but it might be that they buy directly from developers) - this is pure speculation, i actually really don't know how they are going to fill those places, they may well just be left, but empty blocks is not good for crime etc

Are rent prices artificially high? No, i wouldn't say that exactly, after all they are lower than house prices, but i guess they are also a consequence of years of flooding the economy with cheap debt

I think the ASKING prices for these particular places is probably too high, im sure you get most of them a LOT cheaper. and perhaps the actual rents on these particular glass fronted city centre flats is too high (do they really look like 'luxury 21st century living' to anyone?), but i'd say its a jump from that to saying that rent prices are too high

It'll be interesting to see what happens to rent prices in general in the recession, but these city centre flats aren't indicative of much, other than enormous folly

(sorry, i mean i think its a jump to saying that rent prices - in general, for regular places - is too high)

for regular places, i think rents will probably stay around the same, depending how bad the recession pans out (but its been distorted so much its very difficult to tell)

Thoughts on the nationalisation of Northern Rock anyone? I'm not really sure I know what I think of this.

If it was going to happen, should have happened last September. Interesting that no one ever talked about bailing out, or nationalizing, Dolcis tho;)

I think they have changed the rules so that any other banks in same boats can now be bailed out in secret? Bradford & Bingley and Alliance & Leicester obviously both in similar waters to NR over the last year or so. All 3 of these are still relatively small fry though (I guess the interesting one is RBS/Natwest). Banks, more than anything else, really can't be permitted to go under - but at the moment it can still be painted that NR is a one-off situation

The thing is, aren't NR still dishing out crazy mortgages? Which means, the govt, and by extension we the public, are now sub-prime lenders!

If you have savings, could think about moving them to NR, their rates aren't bad, and its the safest bank in town now

The other thing is..if NR were the dodgiest of the subprime lenders, this means they will surely have the highest repossession figures once they start really rising

Which means the government will be the ones repossessing peoples houses?

When NR initially got into difficulties we were repeatedly told that their "mortgage book" was one of the best about, i.e. they specifically weren't a dodgy subprime lender. The problem, we were told, was their method of raising the cash to fund these good mortgages (i.e. loan finance) which was going to the money markets, which had crunched up bigstyle.

Is that wrong?

No, Northern Rock got into shit because their business model was over-reliant on being able to access credit, which suddenly dried up. It wasn't because they were particularly dodgy subprime lenders themselves.

(xpost yes, Tim is correct)

They did source a larger amount of their finance from money markets than any of the others, correct

But NR were one of the ones that were lending out the very high salary multiples, and while its true that outfits like B&B are probably more active in subprime than NR, i think they all have been to some extent (read recently that Derbyshire Building Society have a high % of non-prime, and they're a mutual, with supposedly some sense!)

http://www.northernrock.co.uk/mortgages/together.asp

together is different to a normal mortgage. It works by combining your secured mortgage with an unsecured loan at a single interest rate with one monthly payment. This combination can be worth up to 125% of your home’s value.

I'm not really sure what your point is. If your point is that Northern Rock are worse/more mental mortgage lenders than any of the others, I don't really know but it seems doubtful and certainly wasn't the main reason for what went wrong.

If you mean the government will be the ones repossessing homes then yes, by extension, some, and there could be an enormous furore about this if Northern Rock repossessions do appear disproportionate to other banks later down the line. I've no idea whether they will. Presumably the government will look to get Northern Rock off its hands as quickly as possible?

My point is that NR were a subprime lender (even though, yes, the trigger for their collapse, was a model over-reliant on money markets for financing - which i'm not disputing. However the reasons they were reliant on that sourcing were partly because of how they leant out)

And that this therefore means a significant proportion of forthcoming repossessions will be by NR/govt

we were repeatedly told that their "mortgage book" was one of the best about

Yes, we were. But, considering no one has been persuaded to take on this profitable 'mortgage book', even with many incentives to do so, then...do we believe it?

Presumably the government will look to get Northern Rock off its hands as quickly as possible?

bang-up job so far!

re. NR's subprime exposure -- are we talking about subprime lending in the UK?

yes

oic.

repossessions are going up anyway -- faith in a "good mortgage book" is hard to come by even if the loans aren't strictly subprime. or at least that seems to explain why no-one would touch NR with yours.

Also, what is prime today can be subprime tomorrow

Also when your brand is a national byword for 'financial incompetence and failing economy' its going to be difficult to persuade people it's worth investing in.

Ugh apostrophes.

Ironically this means the government is now be responsible for the creation of money!

(other than coins and notes obviously)

On the other hand, Barclays seems to have done alright, considering.

yes, considering.

although of course those are the 2007 figures, including the benign first 7 months of last year.

Northern Rock has apparently put 2% on Labour's poll ratings.

Does anyone in this country actually have the slighest fucking clue who they're voting for next election?

Mentalist swings in poll ratings are kind of New Labour chickens coming home to roost. In the same way the Tories were undone in 1997 by the fact the voters they created had loyalty to no one, New Labour neutralisation of ideology means that people will grasp at anything that may swing their decision.

although of course those are the 2007 figures, including the benign first 7 months of last year.

Yes, it also depends on the extent to which Barclays' accountants have written off its exposure to subprime-based securities though. If they've taken the full hit now then they'll be able to move on, if there are worse revelations to come then they're kind of inaccurate.

They'd have been wise to write it off now IMO.

Since constituency-wise I now come under Hammersmith and Fulham (CON) I suspect I may have to vote tactically yet again.

Well presumably this is all still largely related to exposure to US based subprime. Its going to be difficult to even rate, never mind write off, homegrown subprime exposure until it actually goes bad.

Plus the US stuff is still early days, a lot of that is spreading into prime, auto, student debt

Setting up an ISA with the scarborough building society and came across this from august 2006

http://www.scarboroughbs.co.uk/publicrelations/pressreleases/2006/august14_ssm_announce.html

quote: "‘We have a great deal of experience in the sub-prime arena through our existing subsidiaries and we believe this will give us a head start in the non-conforming sector.’"

But I thought there was no subprime in the UK!?

There probably still was in August 2006.

Might explain why their ISA is a notice ISA.

http://www.theonion.com/content/files/images/Cartoon-Mortgage.article.jpg

http://www.bloomberg.com/apps/news?pid=20601102&sid=aEaHw4s_pqKg&refer=uk

BOE been reading the feds notes?

fuck you BOE, and fuck you the city.

My experience up here in the grim up north at the moment is of being in a recession. Would anybody like to buy a bike? I have plenty, and no takers at the moment.

I desperately need a bike actually. If I were up there Pash I'd know exactly who to buy it from! :/

If only you had a bike to get up to South Shields...

He does orders, if you know what you need.

That whole Bear deal reeks of pre panic

What is incredible to me is that Bear's employees accepted approx. 1/3 of their compensation as shares?? (I would hope that's an average, and that the top fund managers had more like 1/2 and the support and tech people had more like 1/10)

Oh, they should have a bit put away.

Oh no, wait! They don't have plump financial financial cushions!.

A plum cushion, yesterday...

http://www.shopdekko.com/products/630787m.jpg

Wow, it seems like it was only yesterday when they paid their CEO a
http://www.nytimes.com/2006/12/22/business/22bonus.html4.8 Million bonus. In fact it was a whole 15 months ago. Bet he's kicking himself he didn't get it in cash.

Ooops, fckd up...
http://www.nytimes.com/2006/12/22/business/22bonus.html

finding myself curiously indifferent as to the fate of bear employees :/

Well I'm not sure it's fair that they have to shoulder the burden of risky strategies undertaken by the whizmenschen managers at the top of the pyramid.

Ana amazing fact that I've not seen on any of these threads yet: on Thursday, the chairman of Bear Stearns was participating in the North American Bridge Championships in Detroit. He and his partner were fourth in a field of 130. By Friday, they'd fallen to 26th.

yeh, this is the same guy who took a lot of shit for being away playing golf during some previous crisis.

Is he some distant relation of the Bush family?

^ well wasnt Carlyle one ot the dominoes for bear?

The day Katrina hit New Orleans, Condoleeza Rice bought shoes at Ferragamo and saw a Broadway play.

As SoS Rice isn't that concerned with domestic shit. Not on her beat.

That's true.

every C-level executive is part of the marketing effort!!

ask seth godin!!!

That whole Bear deal reeks of pre panic

-- Dandy Don Weiner, Monday, March 17, 2008 12:46 PM (Yesterday) Bookmark Link

the spectacular run on Bear's liquidity was the panic... If the same happens to Lehman (however unlikely) the shitbin will burst.

The share prices of the banks got a hammering today. RBS at 304p, HBOS at 460p. It was 1000p+ less than 12 months ago.

HBOS at 460p. It was 1000p+ less than 12 months ago.

We sold at 1087p :)

so.....do we believe that the hbos business this week was all down to 'rogues shorting the market'?

they still went and got their extra funding from the boe, right? even though they told us they didn't need it when they were blaming it on the rogue shorters?

Anyway this is what the banks wanted after Northern Rock, to be able to go get funding in secret. For them to complain now about this, when it was them that wanted transparency moved is ridiculuous. more likely that it is just fig leaf bluster

I love it how the losers in these situations always blame people shorting the market when actually what they mean is "I wish I'd thought of/been able to do that".

"Debt-Gorged British Start to Worry that the Party is Ending"

http://www.nytimes.com/2008/03/22/business/worldbusiness/22debt.html?_r=1&scp=2&sq=england+debt&st=nyt&oref=slogin

http://timesofindia.indiatimes.com/World/Queen_cancels_party_to_mark_wedding_anniversary/articleshow/2911091.cms

even the queen thinks recession has come to UK

Does anyone have any idea what the point of todays rate cut actually is?

http://news.bbc.co.uk/1/hi/business/7288909.stm

Suppose we discover that before the economy gets back on track to normal growth of 2.25% to 2.5%, it endures two years of 1.5% growth.

That is far from the worst outcome one can imagine. But it leaves the economy permanently about 1% or 2% smaller than the chancellor has been assuming.

That small error would translate into a permanent annual deterioration in government revenues of about £9bn. When you add that to the shortfall we already have, you are half way to a very nasty problem.

In addition, raising large amounts of new money from the public - in return for no extra services - might feel somewhat uncomfortable when a significant economic slowdown is underway.

http://commentisfree.guardian.co.uk/carole_cadwalladr/2008/04/albion_come_to_great_confusion.html

slightly emotional yet schadenfreude-tinged piece -- it's basically otm, though, that this whole thing has been a ridiculous pyramid scheme.

http://news.bbc.co.uk/1/hi/business/7351073.stm

Anyone else think this is a bad idea? Where is the punishment for the bank's executives and shareholders for making such bad business decisions?

Indicative of anything or not, I don't know, but this is a pretty big case of tits-upness:

http://www.soundonsound.com/forum/showflat.php?Cat=&Number=610091&page=0&view=collapsed&sb=5&o=&fpart=1#610091

Never knew they owned Turnkey. I'd have thought that it's more of a Fopp-style screw-up than 'oh noes uk musicians aren't splashing the cash anymore', but I know nothing anyway.

http://news.bbc.co.uk/nol/shared/spl/hi/pop_ups/08/uk_politics_enl_1210682649/img/1.jpg

I don't know what the fuss is about with those notes. Seems completely right for a minister to have various scenerios to hand and for a minister to be also reminded to make some point about 'being on the publics side'.

Really, it's getting like this government can't even do a completely normal thing (like have private notes for a meeting) without it appearing in some way sinister.

What I don't understand is why, as I would have done by now if I were Gordy, he just doesn't give up, force a confidence vote or something. Clearly there's a load of treacherous bastards on the backbenches panicking about their seats. There's going to be nothing but bad news for a year or more. Why put yourself through it?

This is why I am not a politician though I guess.

The govt are encouraging people to enter a market (including via disgraceful shared ownership schemes) that in private they admit is going to have at least 10% falls

Really, it's getting like this government can't even do a completely normal thing (like have private notes for a meeting) without it appearing in some way sinister.

momentum is a bitch.

Laxalt, what should the government do then?

It's all part of the plan, locking them in with negative equity will stop them from emigrating.

Yeh, government ministers can't go around saying that market is going to fall 10% or it automatically becomes true and falls even further than it would have.

And don't tell what they "should have done" either.
xp

i dunno

- make a stronger commitment to affordable housing
- buy up languishing residential buildings and rent them out as council flats
- insert a million other sensible progressive ideas here

It's not as if the housing market is going to fall 10% across the board. The idea of a decent quality house in a reasonable area of London doing so seems faintly preposterous.

But yes, Tracer OTM.

I'm aware of the above! That is why it is news. Obviously the govt cannot admit to the economic situation for the reasons outlined above. But when there own memos admit to it at the same time that they go on television to attempt to persuade people to go into the market

In the same way that internal memos which said "lol there are no wmds in iraq" being photographed from afar would have also been news

The idea of a decent quality house in a reasonable area of London doing so seems faintly preposterous.

Why?

I'm not saying they won't fall, but 10%?

decent quality houses in reasonable areas of london fell 20%+ last time around

More than that, I think, up to 35% (last time).

What sort of worries me about those notes is that they're just basic ideas that somebody doing an economics A-level would have realised by now. Like the government has no more insight into this than your average "Evanomics" reader.

Is possible that this was staged;)

rest of memo is the same old rubbish they spout to the public. people know falls are here, this pretends falls of only 10%

unless they actually really believe the nonsense on that sheet. in which case...its no wonder we're at where we're at now

(I can glibly say that because I'm not trying to buy a house in this market).

Economics A-Level, learning the Oligopoly graphs etc. off by heart! Ah, those were the days!

Historical figures here: http://www.nationwide.co.uk/hpi/historical.htm

In the worst affected area (the 'Outer South East') property prices fell by 36% between the summer of 1989 and the end of 1992 (and by about 32% in London during the same period) and took until the autumn of 1999 to get back up to their 1989 levels.

It does say "speaking notes" at the top of the page, which would suggest this is the a-level stuff anyway.

Those are nominals prices too presumably - real falls would have been more pronounced.

TBH the only reason I'd buy a house was if I was planning on never moving out of it ever, the idea of a 'ladder' existing, or worrying about a sale price, is kind of alien to me. Ten years doesn't seem that long in this context. I'm not the best person to be involving myself in this debate really.

Considering the UK economy is so tied to houses (unlike say Germany) it will affect all regardless of whether own or rent

Matt - is it just the idea of a property ladder that you find weird, or the idea of ladders in general?

It is specifically the idea of property ladders - I associate actually buying a house with a settled period of eg more than ten years, it's entirely a personal thing. I accept that for people who need to move around for work reasons or have kids or whatever things are very different.

Haha spot the flaky commitmentphobe.

So you have no problem with the ladders that window cleaners use?

Kind of scary.

Those are nominals prices too presumably - real falls would have been more pronounced

I hadn't thought of that. Inflation was much higher then. Apparently the RPI rose nationally by just under 25% between the summer of 89 and the winter of 92, so that would make the real fall in house prices in London and the south east more like 50-60%.

I think the above is correct and that a larger proportion of the falls this time around may be experienced almost entirely nominally, as opposed to the crash 18 years ago when it was partially nominal and partially hidden by inflation, and the 'hidden' crash 18 years before that when it was entirely masked by inflation

Of course there is some dispute at the moment as to wether the CPI/RPI reflect real inflation right now.

In the worst affected area (the 'Outer South East') property prices fell by 36% between the summer of 1989 and the end of 1992 (and by about 32% in London during the same period) and took until the autumn of 1999 to get back up to their 1989 levels.

So how much are these houses worth now?

Washers

So how much are these houses worth now?

At the peak last summer they were worth 4 times what they were (nominally) worth in the trough at the end of 1992. It's difficult to say what they're 'worth' now as the housing market has pretty much seized up.

So how much are these houses worth now?

-- Ned Trifle II, Tuesday, 13 May 2008 16:43

in london? 15x average salary?

CPI/RPI reflect real inflation right now.

-- Ed, Tuesday, 13 May 2008 16:40 (13 minutes ago)

what about m4?

what's crazy to me is that the financial authorities, the govt and the mortgage lenders have

1) seen this coming for about two years
2) done fuck all about it
3) have no plans to do fuck all about it any time soon

i mean, i know that is the subject of pretty much every opinion column about this ever, but still

Why would they? To curtail things at the time would have been electorally unpopular. No elected govt has ever tried to curtail a boom. As for lenders, 1) were chasing market share, 2) huge bonuses for bringing in business at any cost, 3) protected to an extent because consumers still responsible for debt even after repossession - no jingle mail here, 4) knew they would be bailed out by govt as no serious bank can be allowed to fail

no one ever wants to know when the cash is rolling in, it will always be someone elses problem down the line

Plus Nulab has always been in thrall to the city

http://www.boltdepot.com/images/Chrome/chrome-flat-washers.jpg

Wrong image!

http://www.geocities.com/susanmhpublishersmarketplace/2007/litparkrocktheboat.jpg

Also looking back to previous episodes, particularly pre-war, many of the smaller banks went under and ended up being picked up at basement rates by bigger institutions (esp in US, where the fed was basically created to facilitate this)

or to put it another way. jp morgan getting bear stearns for basically nothing, with help from the fed, which they part own

<i>2) done fuck all about it </i>
This is all basic incentives: the banks had a fucked-up bonus system that rewarded people for behaving like this. And MPs have a massive incentive system for keeping house prices going up, as it gets them votes (witness the massacre right now). There was nobody else to prevent it apart from the people in the market, and that's not gonna happen unless they're too busy panic-buying petrol or something.

Er...and also a lot of people (myself included) did alright out of the whole thing. We've moved pretty painlessly from an inner city two-bed terrace with a yard to a four bed detached house in the 'burbs with a lovely garden. We're not high earners by any stretch and have no major debts (except of course the mortgage), we rarely save any money but being sensible we are sitting on a house which even if it were to drop 50% would still not be less than we paid for it five years ago. There are a lot of people like us, but, it seems unlike a lot of them, I regard myself as quite lucky and am not crying to Cameron about how hard done by I am.

Yes booms produce many winners if your timing is right

Timing nothing. We bought when we got fed up with paying crappy landlords tons of cash for shitty housing. We had no idea what would happen and cared even less. The worse that could have happened is that we went back to renting.

Timing everything, even if you weren't aware of it! The worse that could have happened is that you ended up in horror negative equity or had yr home reposessed and the end of yr credit rating forever.

Ahh, you guys worry too much. Plenty of people (no, scratch that, just about everybody I know who bought around that time) went into negative equity. They didn't die, or get their houses repossessed or have their credit rating nuked. They sat tight and now are sitting on houses worth, as laxalt implied, about 15/20 times what they earn. With tiny mortgages. They did better than we did in the long run.

They sat tight and now are sitting on houses worth, as laxalt implied, about 15/20 times what they earn

Think about the implications of this sentence

Don't patronise me.

Again.

No,actually, you can. I sound like an asshole. Forgive me, I'm having a bad day for completely unrelated reasons! And I always end up taking it out on laxalt!

http://realonomics.net/wp-content/uploads/2007/05/chill-pill.jpg

Thanks, I need 2.

a £200m fund to buy unsold new homes and rent them to social tenants
So if you can't sell your overpriced house, don't worry -- the government will buy it! This is a good idea how?

http://news.bbc.co.uk/1/hi/uk_politics/7399340.stm

Don't think they are going to buy *your* house, its new houses only to keep builders and developers afloat and to continue building all the new houses that will also be unsold

Shared Ownership is an incredible ripoff, the govt really shouldn't be pushing this kind of thing...especially now

Shared ownership is a way of forcing people to long term save. So that this equity can be released back to pay for care once decrepit. Bricks and mortar are magic like that.

Shared equity means the buyer gets 50% the profit. In a rising market this means other houses are actually getting further away from them

Shared equity means the buyer gets 100% the losses. In a falling market the buyers equity is wiped out before the govt lose their share

oh and guess who is responsible for 100% the maintenance?

oops ive just noticed the actual figure here

a £200m fund to buy unsold new homes

how many houses do they think this will actually buy?

more tomorrow than today

Are they finally beginning to admit to it now? Did Healey or even Philip Snowdon actually say anything like that? (Esp when you consider the last 60 years included rationing of food!)

Motive: Is it

a) Breaking ranks
b) Preparing us for a series of 'rescue packages' of some kind

LOL HBOS

http://newsvote.bbc.co.uk/nol/shared/fds/hi/business/market_data/chart?style=bbc-big_thick-line&ins=1.E:HBOS&from=2008-09-12%2015:27:00&to=2008-09-15%2015:30:00&timeoffset=0&filter=weekend&filter=markettime(07:00,15:30)&src=intraday&plot=value&fixedxaxis=on

Uh, please don't LOL at my bank. Am I fuX0red?

I've never known trade as bad as this. It's worse than the '80's up here.

you are fine as long as you don't have more that £35,000 in savings and even then the government ended up guaranteeing all deposits when Northern Rock went titsup.

Oh, that's share price, not the bank actually falling apart or anything. I hope? What happens to your savings (ha ha, they just gave me an overdraft... oh wait, my paycheck just went in.) in the UK if your bank fails? There isn't an FDIC or whatever over here, is there?

x-post OK, phew.

Best comment I've heard so far, 'I'm keeping my money in my mattress, at least I know it'll be there in the spring'.

RBOS owns my US bank... let me know when I should be worried.

Strange. It's like I've posted here before.

Never mind, it was just a passing sensation.

Best comment I've heard so far, 'I'm keeping my money in my mattress, at least I know it'll be there in the spring'.

― Billy Dods, Tuesday, September 16, 2008 7:00 PM (3 hours ago) Bookmark Suggest Ban Permalink

not where i live.

you used to be able to kick a ball in the street.

http://news.bbc.co.uk/1/hi/business/7620483.stm

RBOS != HBOS.

Royal (have Scotland actually had royalty since the Glorious Revolution?) vs. Halifax/Bank of Scotland.

(I have never understood why there were two. I can only assume it's some devious Sassenach plot.)

yes, they are different in that HBOS is on the maelstrom's cusp while RBOS is only heading in its general direction

FSA have apparently banned short trading on shares in banks and insurers. Classic shutting stable door after horse has bolted scenario.

As I said on the other thread: "Wouldn't a ban on short selling allow an overvalued stock to remain so for longer? So once investors decide to bail there's pretty much the same effect, especially in a climate of complete panic."

It just removes some liquidity from the market, which might restrict some of the herd instinct. However if people want to go short there wil still be ways for people to do it and that sentiment will feed back into the market.

Also it was hilarious to watch the mid-market Tory tabloids going "YES! ABOUT TIME TOO!" Lol Tory supporters not understanding modern Conservatism at all.

i think they all have been to some extent (read recently that Derbyshire Building Society have a high % of non-prime, and they're a mutual, with supposedly some sense!)

― laxalt, Monday, 18 February 2008 10:38 (7 months ago) Permalink

wonder whatever happened to them!

lol bradford and bingley

Is that all the demutualizeds gone now? Not a single one left?

Any of the mutuals vulnerable? I think Britannia and then Scarboro

So then, how does it feel to be a share holder ina bunch of clapped out banks?

Great, can I sell my shares immediately?

When the tories get back in they will be able to pull the scam of selling us things we already own again. Tell Sid he can fuck off.

^ and then using the proceeds to cut tax rates for the rich

Tories remarkably silent this week.

I think Cameron is hoping for doing an atlee from behind brown's churchill, except that atlee had ministries and plans.

Tories remarkably silent this week.

Biding their time until PMQs this afternoon.

Nah, it was all softball

http://www.guardian.co.uk/politics/blog/2008/oct/08/pmqs.gordonbrown

You know how Gordon Brown totally disappeared during the build-up to the Iraq war, and tacitly signalled his support, stumped up the money, but otherwise kept totally out of the headlines? That's exactly what Cameron's doing now.

except he has to stand up every week and raise the issues of the day, so it doesn't work so well.

Nah, it was all softball

Ha! I didn't realise the time - I've been on a mercy dash to Watford Gap and have lost the morning.

And now we wait.

useful summary:

http://www.moneyweek.com/news-and-charts/the-banking-sector-turns-into-the-public-sector-13778.aspx

Will it work? Well, the FTSE 100 has already fallen by 350-odd points this morning.

Actually it's up and down like a fuckin' yo-yo.

I really do think just a couple of days quiet reflection might be good for everyone instead of this constant barrage of STUFF from people who are all such experts they all should be chancellor of the f-ing exchequer.

And I'm not talking about ilx here, it's pretty calm and restrained really but just look at some of the new forums and really I've never read so much shit in my life. And I've been on the internet since 1993.

"News forums"

Huge bonuses for City high flyers will be hard to rein in

And if London becomes badly paid then there will be an exodus to Mumbai, Shanghai or Dubai.

Well, FUCK OFF THEN!

So much for having a day of quiet reflection.

Well, FUCK OFF THEN!
:-)

(Question passed on from an interested foreigner)

What would you say is the safest UK bank at this point? Is that an answerable question?

What Which would you say is the safest UK bank at this point?

Any of them really. Your money will be safe as the government won't let them fail. Of the main high street clearers then Barclays has come through this the strongest, followed by HSBC. Citi is strong and has accounts available to UKers (and allows you to save and bank in Dollars on the side). I still like Nationwide for sticking to mutuality, Co-op has decided to merge with Britannia but is still a reasonable bet. Abbey and A&L look dodgy as they are Spanish owned and no-one quite knows how spain will play out yet or how well Santander has diversified. However for cast iron solidity you can't beat government owned Northern Rock, and RBS will probably majority government owned by the end of the week.

Thanks brah.

Pretty big short positions against Santander at the moment tho.

Its best to split between multiple institutions. This doesn't cost anything to do

10 people who predicted financial meltdown

An ok list I guess but no mention of faber, schiff, harrison, (taleb?)

Kind of amusing for that to appear in The Times, whose own writers still appear to be in the latter stages of denial even now

http://4.bp.blogspot.com/_ozdg0g2E4Vk/SPHLunW29mI/AAAAAAAAB8w/j11d1yn4bis/s1600-h/6a00d8341c823e53ef0105356c4c25970b-400wi.jpg

thundersplurge

OK, best Sun front page ever.

Pretty big short positions against Santander at the moment tho.

where do you get this data?

http://www.afund.com/

http://gossamer.open-site.org/robodance/tri-bot-and-mini-large.jpg

hmmm
http://news.bbc.co.uk/1/hi/business/7667072.stm

Would it be unwise to open a current account with Lloyds right now?

Current account banking: you are probably be fine anywhere the government seems to be disinclined to accept any discontinuity in that sort of thing.

Falcone, the same guy that made the bet against subprime early last year, and also took a big short against wachovia

shorting still legal in Spain

but where is the data on the shorting, just santader's falling share price?

how do i shot shorts?

i like shot shorts

p.s. isn't barclays signing up for £3bn bailout?

also, another question: you know how UK and US economy are going into the shitbin, but economy must be some kind of zero sum thing, so someone's winning in all of this - who is it? China?

£3bn is small potatoes compared to RBS handing over the keys to darling and kicking out the CEO. Barclays also hope to get that £3bn from temasek, DIC or the Chinese although the government will underwrite if need be.

Economy is far from zero sum, the money didn't go anywhere the money just went, money is debt.

economy must be some kind of zero sum thing

i once asked pretty much the same question in an economics class, but in relation to national debt. i tihnk he failed me on principle 6 months later.

i think most of the 'missing' money has gone into the pockets of private individuals that are keeping very quiet now, if you can pinpoint anywhere. but probably it's just 'gone'. xposts.

but surely it's all relative. so countries/places where they didn't lose any/as much money must in a sense have earned loads of money, in the percentage of money in the whole world owned stakes? cos like, it's not like aliens just took loads of money?

ah i see so basically loads of greedy fuckers are what i said were the 'aliens' ?

i wish i was one of them greedy fuckers!

see david icke for more details.

Aren't institutions holding on to the money? Cos they don't trust anyone else to give it back. That's the whole problem: liquidity, not solvency, although that is now an issue too.

Anyway, no, the economy is not a zero-sum game, so this hurts everyone, so make it stop, please.

but surely it's all relative. so countries/places where they didn't lose any/as much money must in a sense have earned loads of money, in the percentage of money in the whole world owned stakes? cos like, it's not like aliens just took loads of money?

If this led to deflation, that would be true, I think (scratches head).

All that the producer countries have are promissory notes from consumer countries, China etc. have been lending the money they receive from America etc. back to US so we can buy more stuff. We've stopped buying stuff so all the chinese etc. have are promissory notes issued by economies that are in no position to repay them.

xpost

Everyone will get their pieces of paper back don't worry.

No one said the pieces of paper would be worth anything

i think most of the 'missing' money has gone into the pockets of private individuals that are keeping very quiet now, if you can pinpoint anywhere. but probably it's just 'gone'. xposts.

― darraghmac, Monday, 13 October 2008 13:36 (7 minutes ago) Bookmark Suggest Ban Permalink

A lot in human terms has leaked into these people's pockets but the inhuman sums have disappeared.

Everyone will get their pieces of paper back don't worry.

No one said the pieces of paper would be worth anything

― Kondratieff, Monday, 13 October 2008 13:45 (13 seconds ago) Bookmark Suggest Ban Permalink

I don't know, some of the curly writing is quite attractive.

We've stopped buying stuff so all the chinese etc. have are promissory notes issued by economies that are in no position to repay them.

This kind of implies a US sovereign default, which isn't going to happen, IS IT?

For now, it can repay the interest, mainly through the issuing of more paper, the US is still allowed way more debt than typical countries.

This question of "where is the money" kind of underlines how silly the whole thing is. These fucking genius morons have invented this towering edifice of confusion that has fallen down and sucked all the money out of the world.

The US could have had a nice little housing crash and a mild or even serious recession, and the rest of the world would have taken a couple of percentage points off GDP growth and got on with it, but instead we have this confusing and serious mess. Makes me cross.

Its not 'where is the money', it is 'what is money'

money and bank credit are not the same thing. the money that has disappeared was never there in the first place.

person A deposits £10 cash in bank A. this is no longer cash. bank A lends £8 to person B to buy a car from person C. Person A has £10 in the bank, person C has £8 in Bank B, which then lends £6 of it to person D. Person A has £10 in the bank, Person C has £8 in the bank, Person D has £6 in his pocket, Person B has a car. There is £24 pounds in the economy. Person A faces a margin call and goes to withdraw his £10. Where is it?

The disappearance of money from the economy isn't really a disappearance. It was never there

But no money is ever there.

bingo

just want to illustrate the point that that first £10 is faerie gold too.

Yes but there is still a difference between notes/coins and credit. Cash in your position belongs to you. Once deposited in a bank it is no longer cash and no longer belongs to you. You now have an asset. The disappearance of money is the unwinding of the example above, most os it disappears rather than ending up in someone elses pocket. Same way as the repaying of debt destroys money

One way to avoid bank runs in general rather than on one specific bank is to introduce 'temporary emergency measures' - limiting the amount one can withdraw from the system. An attempt to preserve the illusion that your money exists. Such a move would be a final roll of dice for that country as Argentina found out in 2001

xpost

Exactly, and what Kondratieff described is on the whole, a good thing, because all those people have the money or the car or whatever. It's also good for the person who made the car.

We're just talking about different sorts of money supply here, aren't we? M0 and so on.

And even M0 (notes and coins in circulation) is a confidence trick. A fiver isn't actually worth anything, it relies on the confidence of those using it.

And none of this has that much to do with the problems we're facing, although it is part of the mechanism in which things are falling apart.

ie Bank A didn't lend Person B £8 to buy a car. Bank A bought up trillions of dollars of weird complex financial instruments that since no-one can now decide the value of, are considered worthless.

and fractional reserve banking, capital adequacy ratios, basle ii etc

Actually I think it has a lot to do with the current problems. I see the rapid expansion of money supply as directly responsible for the current situation. This has gradually accelerated since the 1970s. I also see the diminishing amounts held in reserve as directly responsible, via offbalance sheet and other trickery. You devalue the currency and accelerate the money supply and you kick off a credit expansion, devalue savings and encourage debtor status, while creating the illusion of wealth

Didn't Basel II TIGHTEN reserve ratio requirements?

Or did it just try to make them more sensitive to a with hindsight spuriously defined set of risks?

The securitisation of debt was a response to Basel II, move the debt beyond the scope of the narrowly defined criteria.

Seeing more and more talk about a run on credit rather than savings (which nobody has in these modren times)

talking of which I won 50 quid on the premium bonds this month, my return is still pretty shite, but I'm glad I didn't put it in an ICESAVE ISA.

Crisis must be over the Today programme had 10 minutes for a piece on a woman in the Congo who had been raped by rebel soldiers and then helped by Radio 4 listeners. Everything is just dandy, KEEP CALM AND CARRY ON.

Oh, Wait, whoops

http://news.bbc.co.uk/1/hi/business/7668608.stm

how do you like those negative real interest rates?

i still haven't seen any sort of interview with or explanation from any of the people at the heart of this, the bankers and lenders who created or OKed these insane financial instruments.

It must be an interesting time to be a financial advisor: "Well, you could put your £1,000 under the mattress, but it will lose 5% of its value each year. Alternatively, you could put it in the bank and it will only lose 0.5% of its value each year, but the bank might well go bust. Property is looking like a sound investment: you could lose up to 15% a year that way. Or, for life in the fast lane, you could invest in the stockmarket, and you could lose up to 25% of your money in just one week. I suggest you buy lots of dairy products."

That sort of depends on what you think the heart actually is, but yes humility and apologies are in short supply (haha newsflash).

(xpost to Lex)

They should measure inflation in maple syrup - £4.40 a bottle in Sainsburys - first time I've ever put anything back on the shelve. Hard times indeed.

i'm not even really looking for humility and apologies, just a "wtf were you supposedly smart people thinking when you created this mental edifice out of matchsticks and dust? and how was it possible that no one saw this coming when the entire structure seems so obviously to be based on, like, thin air?"

after they've answered that the humility can come, and then the stringing-up-in-the-streets &c &c

There was no incentive to worry about what happened later, at pretty much every link in the chain from the mortgage lender up, that was the whole point/problem.

wtf were you supposedly smart people thinking when you created this mental edifice

http://www.fishandonions.com/randomFK/loadsamoney.jpg

how do you like those negative real interest rates?

It's a good job no one can borrow anything at the moment:

Oh, wait.

http://news.bbc.co.uk/1/hi/business/7667072.stm

So, Kondratieff, do you believe in wage inflation now?

lex i thought this was pretty good but it's telling that something like this can apparently only appear in a literary magazine:

http://www.nplusonemag.com/financial-meltdown

the first interview with this person is here - http://www.nplusonemag.com/?q=node/418

Haha I love the opening to that first interview.

Either I'm suffering deja-vu or I swear I've read that somewhere other than n+1. I hate it when that happens.

love that link

But it turned out the clock struck midnight and these assets turned into — pumpkins.

Best explanation yet.

It must be an interesting time to be a financial advisor: "Well, you could put your £1,000 under the mattress, but it will lose 5% of its value each year. Alternatively, you could put it in the bank and it will only lose 0.5% of its value each year, but the bank might well go bust. Property is looking like a sound investment: you could lose up to 15% a year that way. Or, for life in the fast lane, you could invest in the stockmarket, and you could lose up to 25% of your money in just one week. I suggest you buy lots of dairy products."

I imagine they are saying BUY SHARES now, no?

Also, the policy rate may be negative, but the savings rates offered by the banks aren't, cos they are desperate for cash (the flipside of them being unwilling to lend is that they are v keen to borrow). And no retail depositor has lost a penny as yet, and your savings are guaranteed up to £50,000, so not too diffcult to see that there's no problem with keeping it in the bank.

How about Iraq?

Baghdad’s property market has experienced a new breath of life in recent months after being stagnant for some time due to excessive violence. This was prompted by a dramatic fall in violence. While most real estate agents saw themselves jobless when sectarian killings raged in the city only last year, now they can’t seem to keep up with the new found demand.

Excessive violence.

Ironically (?) the photo accompanying that appears to be from 2003 and of the huge mosque started by Saddam.

Sorry still don't believe in forthcoming wage inflation (especially as public sector workers were cajoled into multiyear below inflation payrises). I see lots of job cuts though, if that helps

So can you have negative real interest rates in the absence of wage inflation?

Although devaluing the currency would certainly allow for wage inflation (albeit with consequences for commodity prices, esp fuel)

negative real interest rates

worked the last 6 years (unless you like official stats)

You can't have it both ways, you can't say there is no debt erosion without wage inflation and then say we have negative real interest rates without wage inflation.

we have had effective negative real interest rates without wage inflation.

Which sectors do you see the wage inflation occuring in?

we have had effective negative real interest rates without wage inflation.

how

real wages have fallen throughout the 2000s. interest rates may have been above official inflation stats, but looking at those statistics is rather like looking at unemployment figures to count the unemployed

But if wage inflation is to occur (via currency devaluation) it does rather suggest now is a good time to get out of the pound

So, has debt been eroded by inflation?

rather depends which currency you are paying it back in

But yes if wages go up I will be happy to agree that debt is being eroded by inflation

For those that still have wages anyway

Or personal circumstances, how did your basket of good rise in price, what pay settlement did you get.

Still doesn't why you think we have both negative real interest rates and no debt erosion.

pay went up less than the basket of goods. a larger proportion of pay went towards goods than it did pre-payrise, leaving less to go towards anything else

The Police have negotiated themselves 2.6% this year, 2.6% for 2009, and 2.6% for 2010

3%, blimey.

Jings

Crivens.

Can't wait for the minutes of this meeting in a couple of weeks. How the hell did they make this cut about inflation?

Help ma Bob.

Somebody just murdered the £

Don't worry. The savings won't be passed on to us customers and will instead continue to be used to subsidise world cruises and golf club fees for elderly shareholders.

As a saver I have no doubt it will be passed on to me immediately

The reduced interest will certainly be passed to all savers.

http://uk.ichart.yahoo.com/z?s=USDGBP=X&t=2y&l=on&z=m&q=l

House rents fall as unsold properties flood market

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5176440.ece

And still no apology from Kirsty Allsop.

Great, I should really look for a new flat

http://news.bbc.co.uk/1/hi/business/7751064.stm

Heaven needed some shears, a sandwich toaster and a bag of cola bottles.

Woolie's went bust in the US about a decade ago, I figured it was only a matter of time. How were they expected to compete with a chain of shopfronts filled with catalogs and sullen conveyor belt jockeys?

Peston at the BBC has an interesting angle: Woolworths is an obvious candidate for going pop, since the have no definite identity, but what they do have right now is a lot of stock that liquidators will want to get rid of, so this really hasn't done their competitors any favours. Sure, a lot of their stuff is something no-one would go to them first for, but this Christmas people will be wanting bargains more than That One Perfect Present.

This will be a one-year-only return to the traditional "get all your presents in Woolies in one hit" Christmas.

http://news.bbc.co.uk/1/hi/business/7796751.stm

Heaven needed bergamot

lol deflation

http://business.timesonline.co.uk/tol/business/economics/article5549629.ece

BBC now have a mini-site: http://bbc.co.uk/downturn

Why are bank shares collapsing quite so spectacularly? RBS's problems are fairly distinct - ie ABN Amro purchase - so I don't quite get why all the others are affected by their HUGE losses so much.

Are people building in the risk of them being nationalised completely or something?

Seems a bit crazy to me, but hey, crazy times.

"downturn"

A personal note: never make a banking decision based on the fact that your bank manager likes cricket and heavy metal, ha, oh well.

Telegraph headline this morning was "BLUE MONDAY", and since then I've been walking around going "dundundundundundundundundun dun dun dundundundundundundundundun dun dun"

I'm interested in how long it'll take the daytime TV schedule to catch up with the downturn - it's all property, antiques, and new life down under still.

I was wondering that last time I tried to find something to watch that wasn't full of people looking to supplement their flat in Kensington with a £600k Tudor farmhouse in a small remote country village, and then being surprised that small remote country villages are often a bit small and remote, and that Tudor farmhouses may have wonky floors, low ceilings and no chic modern interior design.

Rolling Don't-Call-Them-British Isles Economy Into The Shitbin Question: if Ireland is substantially more fucked sooner than many other countries with which it shares a currency, which seems to be the case, well... then what?

(Sorry if this question only makes sense in my head; I can't explain what I'm getting at any further, which is often a sign that it doesn't make any sense)

Ireland would ideally like much lower (zero) interest rates, I would guess, but the ECB sets rates for the whole EU, which isn't doing as badly, so they are 2%. Tough luck, Ireland. It would also like a much weaker currency, to make its exports more competitive, but as it's stuck in the euro, it can't devalue.

I know nothing about Ireland, but those are the issues you would expect.

Interest rates were too low for them in the boom times, as Germany was having a torrid time, and are now too high.

Good (non-nationalistic) argument for keeping out of the euro, really.

On the other hand, you're not going to get a run on your currency like Iceland did, so maybe it's a good job that they and other smaller economies are euro-fied.

What do the Irish ilxors reckon?

http://www.guardian.co.uk/politics/2009/jan/19/economy-banking

Privately, something close to desperation is starting to develop inside government. After watching the slide in bank shares on Friday, one cabinet minister did not altogether joke when he said: "The banks are fucked, we're fucked, the country's fucked."

"I'm not going to say to you I think we've now at least reached a set of measures and actions that almost for sure are going to work."

Can anyone explain what this means?

the fact that the irish govt's guarantees were backed by the euro probably saved their banking industry

George Monbiot bringing the LOLs yesterday

In Russell Hoban's novel Riddley Walker, the descendants of nuclear holocaust survivors seek amid the rubble the key to recovering their lost civilisation. They end up believing that the answer is to re-invent the atom bomb. I was reminded of this when I read the government's new plans to save us from the credit crunch.

Privately, something close to desperation is starting to develop inside government. After watching the slide in bank shares on Friday, one cabinet minister did not altogether joke when he said: "The banks are fucked, we're fucked, the country's fucked."

BTW this is an in-joke ministers like to quote, making a reference to supposed unruffled elite mandarin civil servant Dick Mottram and his "You're fucked, I'm fucked, We're all fucked. The whole department is fucked. It's the biggest cock-up ever. We're all completely fucked" crisis management quote when he was locked into battle with Byer's special adviser.

yeah.

hey, you gotta laugh.

Gallows humour - helping to getting through grim times

it'd be funnier if it wasn't someone who was partly to blame, but yeah lol rofl etc.

[brief Dick Mottram diversion:

there's an anecdote in John Prescott's autobiog where he recounts how he blames (erroneously, I am sure) Dick Mottram for having the furniture removed from a 'Grace and Favour' Whitehall apartment shortly before Prescott took it over.

In revenge, some time later - when Dick Mottram joined Prescott's jumbo-Department, Prescott proudly recounts that in revenge he showed Mottram to a completely unfurnished Perm Sec's office. He was disappointed that Mottram took it completely in his stride and was completely unfazed (though he must have thought Prescott quite mad).]

For this generation to think about what it was like before the Great Crash of 2008 will take the same mental wrench as the 30s generation needed to see back before the Great Crash of 1929.

errrr, no.

http://www.guardian.co.uk/politics/2009/jan/25/creditcrunch

God, that article is awful.

Sanctimonious grandstanding journo plugs forthcoming book- full of great insights such as:

The best answer is also the simplest: Britain crashed because Britain did not have a Plan B.

Fortunately the Guardian still has some journalists that write more more balanced informative articles:

http://www.guardian.co.uk/business/2009/jan/25/uk-recession

Godalmighty, Nick Cohen...is there any more to be said about him? That article is all the things Bob says + confusing.

Only yesterday, City dealers in nightclubs threw handfuls of notes in the air for giggling girls to catch as waitresses marching to the theme tune from Rocky brought £500 bottles of vodka and methuselahs of champagne to their tables.

I thought that was the 80s? And the 90s?

Incidentally this, the 4th recession I've lived through, is the weirdest one I can remember. Huge queues to get into a out of town shopping centre yesterday (after the sales, in January) and I had to stand in a queue in Next this morning (on a sunday!). Someone is making a fortune out of this doom and gloom (and it's not just the short sellers).

this is only my second recession, and the odd thing is recognizing that the baseline of expectations/wealth is that much higher each time. (lord knows how this will all play out in the medium term, of course.)

Haha, yeah, I've already heard someone complaining that they're cutting down on the number of holidays they're taking abroad this year. Cutting down from 3 to 2. Shocking depravation.

Ooops, I meant deprivation. Or did I.

muggins 'ere hasn't had a holiday of any kind since 2005 :/

Someone is making a fortune out of this doom and gloom

It's early days still. The psychology will change before this year ends. But even in the Great Depression there were some people with good jobs and other people with plenty of money to spend.

I'm interested to know how many people were in this bracket back then. When you say some people, what do you mean percentage wise? Is there any way of knowing that I wonder. Personally I refuse to join in the doomsayers. What's the point? I have no savings, a crappy pension, if I lose my job (or worse if Mrs T loses hers) I'm fucked anyway, what difference will it make if I worry about it now? Serious question.

Serious answer. If there is anything you can think of that would strengthen your position, even a meager increase in your savings, then even though "worry" won't do you any good, such small actions as you may choose to take should do you some correspondingly small amount of good.

I wish you luck and I hope you both keep your jobs. That is really the most important factor. But you are right that worry is not a help.

Europe's economic slump deeper than expected
By Eric Pfanner

Friday, February 13, 2009
PARIS: Europe sank even deeper into recession than the United States in the closing months of last year, according to figures published Friday, as finance ministers of leading industrialized nations gathered in one of the worst-affected countries, Italy, for discussions on the crisis.

In the fourth quarter, the economy of the countries sharing the euro declined by 1.5 percent, according to the European Union's statistics office. That is even worse than the 1 percent decline in the U.S. economy during that period, compared with the previous quarter.

"Today's data wipes out any illusion that the euro zone is getting off lightly in this global downturn," said Jörg Radeke, an economist at the Center for Economics and Business Research in London.

Until recently, some economists had thought that Europe might suffer less from the recession, which started in the United States before spreading to most of the rest of the world. While some European economies, including Britain, Ireland and Spain, have seen U.S.-style plunges in home prices, housing markets have held up better elsewhere in Europe. Consumers have also cut back less on their spending in Europe than in the United States.

But instead, European industry has been walloped as businesses around the world, and particularly in the United States, cut back on new orders to bring down their inventories. That has hit euro-zone countries hard, particularly Germany, which relies on exports to fuel economic growth.

In Germany, the biggest economy in Europe, the economy shrank by 2.1 percent in the final three months of 2008, compared with the third quarter, when it had already contracted by 0.5 percent, according to the federal statistics office. In an effort to arrest the plunge, the lower house of the German Parliament, the Bundestag, on Friday approved a €50 billion stimulus plan that includes new spending measures and tax cuts.

Germany was not the only European economy to do worse than analysts had expected in the period. In France, output declined by 1.2 percent, while Italy contracted by 1.8 percent.

The data "confirm that the recession in the region is deepening at an alarming rate," said Jennifer McKeown, an economist at Capital Economics in London.

For the euro-zone economy, it was by far the worst quarter since the euro was introduced in 1999, and economists said they would have to go significantly further back in time to find a comparable period.

"For Europe, as for the rest of the industrialized world, this is surely the worst downturn since the Second World War," Radeke said.

Drawing precise historical comparisons for the entire euro zone is challenging because of currency fluctuations before the single currency was introduced and because of incomplete or incompatible data from euro-zone members like Slovenia, which was not an independent country until 1991.

But McKeown said she had run the numbers for the major euro-zone economies back to 1970 and found only one other quarter that was even close to as bad as the latest one: the fourth quarter of 1974, when the economy was reeling from the oil shock and a plunge in stock prices. In that quarter, the main euro-zone economies fell by a combined 1.2 percent.

The 1.5 percent decline in the euro-zone economy matches the rate of contraction during the period in Britain, which has been additionally battered by the crisis in the financial sector, on which much of its economy depends.

The report from Germany on Friday showed a sharp rise in inventories - indicating more bad news for the first quarter, economists said.

That will give finance ministers of the Group of 7, including the U.S. Treasury secretary, Timothy Geithner, plenty to discuss this weekend during meetings in Rome. Among other things, the officials were expected to look at proposals for new financial market regulations and concerns about rising protectionist sentiment in some countries.

As the G-7 representatives arrived on Friday, tens of thousands of workers marched through the streets of the Italian capital, snarling traffic and demanding action to ameliorate the crisis. With three straight quarters of declining output, Italy has been in a slump longer than some of its neighbors, like France, where the economy actually eked out a small gain in the third quarter.

"Compared to other countries, not enough has been done," Mauro Bianchi, a representative of the CGIL union, told The Associated Press. "They are trying to cure a serious illness with aspirin."

While Italy is in particularly bad shape, the severity of the downturn across the euro zone was driven home by the report Friday. On an annualized basis, economists said, the 1.5 percent decline in output would amount to a roughly 6 percent drop - a significantly bigger fall than the 3.8 percent annual rate of contraction in the United States during the fourth quarter.

On a year-over-year basis, Europe also performed more poorly than the United States in the fourth quarter, with gross domestic product falling by 1.2 percent from the fourth quarter of 2007, compared with a comparable decline of 0.2 percent in the United States.

Europe typically lags behind the United States in recovering from recessions, McKeown said, so any return to growth in the euro zone is probably at least a year away.

"We had hoped that the euro zone might not do as badly as the U.S.," she said. "As it turned out, the slump in the industrial sector has completely turned things around."

UK banking giant HSBC has said it is to cut 1,700 jobs in the UK.

The job losses will come from retail banking, but will come from support services rather than branches, an HSBC spokesman told the BBC.

The company also said it would create "several hundred" new roles next year.

LLOYDS BANKING GROUP is being kept afloat with £165 billion of loans and guarantees from the Bank of England and other central banks around the world, The Sunday Times can reveal.

The bank’s reliance on state funding, detailed in a document released last week in connection with a separate £21 billion fundraising, gives the first insight into the huge scale of aid extended to banks during the financial crisis.

in lieu of the guardian's left-wing writers getting into it, simon jenkins is otm here:

http://www.guardian.co.uk/commentisfree/2010/mar/11/banks-lied-darling-puppet-city

He may be otm re: there should be questions asked/ inquiries held, but it's not a great article. In fact it dishes out the same kind of generalities (a trilion pounds spent! one in four shops might close!) that he usually criticises elsewhere.

idk ned, i think we have jizzed about a trilli on saving the bankers? give or take. the basic analysis, that we'll be paying for this, big-time, over the next few years, is true. a number not unlike one in four shops on my street have closed, and i live in a reasonably off area. and we've only just begun because the cuts to pay off the enormous deficit haven't arrived yet.

i think we have jizzed about a trilli on saving the bankers?

Not really.

It's 850bn and that figure represents all the guarantees and insurance that we offered ie it is the notional cost if the doomsday scenario happened. We haven't actually "spent" that money. It also includes the money spent directly on part-nationalising Lloyds and RBS, but doesn't count what they're worth, either now or when we eventually sell them (which will fingers crossed be at a huge fucking profit).

The commitments include buying £76bn of shares in Royal Bank of Scotland and the Lloyds Banking Group; indemnifying the Bank of England against losses incurred in providing more than £200bn of liquidity support; guaranteeing up to £250bn of wholesale borrowing by banks to strengthen liquidity; providing £40bn of loans and other funding to Bradford & Bingley and the Financial Services Compensation Scheme; and insurance cover of over £280bn for bank assets. From an independent article on the NAO report.

Also, Germany, Italy and Japan had worse recessions than us, last time I checked, so he makes two major fuck-ups in the first two paragraphs, at which point I can't be bothered to read the rest.

similarly tbh you guys are such labour stans im unlikely to believe yr posts: i've seen the bailout put at well over a trillion, for example:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a0_DlDun684Q

even if it is a mere £850bn, no-one is being held accountable for encouraging it to happen

It depends what you mean by a worse recession - dunno about Italy but while Germany and Japan may have fallen further they've also recovered faster.

xpost - I'm not sure there's really a convincing argument against the bailout, and Jenkins going "pics or it didn't happen" certainly isn't it, but the failure to adequately control the banks in which the government is a majority shareholder is surely a huge fuck-up?

xp - i've taken such a time to write my post Jamie's done it for me. But just to emphasise.

We haven't SPENT a trillion, we've loaned it (I know, I can hear the hollow laughing of laxalt from here - maybe this revive will tempt him back?) and, of course, we may never see it again, but it's a bit different from what Jenkins says.

As for shops, I was thinking about this only this morning as I was driving to work along what is euphimistically called the "Golden Mile" in Leicester (google it if you like). This is a long road of various businesses ranging from takeaways to banks to sari shops to jewellers. I counted three new businesses along there to-day, a new restaurant, a clothes shop and, believe it or not, a bank. I've never known a street change so regularly over the years, but there's very few empty shops on it. This contrats with several more salubrious areas I've visited recently where I noticed various, er, "boutiques" were closing. So, yeah, you're right (and so is Jenkins) I can see a lot of shops closing, but I don't think it's going to be across the board, or that they might not replaced by something else (something people need for instance - I'm sure no-one would argue we had a glut of shops selling nice mugs in recent years). harsh though that may sound.

I'm really trying not to be such a stan these days HM but you know, it's hard, it's been a long time...

xpost

It might be over a trillion, god knows the numbers are so large it's unimaginable, but I think the same point stands, that that isn't all money that we have actually "spent", and it doesn't include all the fees and interest that the banks have had to pay to receive this support.

I dunno, the "narrative" to me seems to be colossal private-sector fuck-up followed by strong collective internationalist state action saving the day. I'm sure questions should be asked and people strung up, but as a leftist I'm pretty happy with how it went.

Matt - yeah fell further (just) recoverd faster is probably right. Not up on latest figures, though.

xp

HM even in that Bloomberg article it doesn't say anyone has spent £1 trillion.

The Treasury, in the budget submitted to Parliament yesterday, estimated the bailout may cost taxpayers 50 billion pounds. That contradicts with the International Monetary Fund’s estimate that the bill may climb to 9.1 percent of GDP, or about 132 billion pounds.

I dunno, the "narrative" to me seems to be colossal private-sector fuck-up followed by strong collective internationalist state action saving the day.

no -- this is too simple. it was a "private-sector fuck-up" colossally encouraged by the state. and the "day" may have been saved -- the stock market is doing well, bankers got their bonuses -- but in the next few years the people who suffer are the people whose money was used to prop up the banks. ie muggins ere.

But Jenkins's argument isn't really "we have spunked and wasted a trillion", it's "we have committed a trillion so why are the government not taking a firmer line on how these banks are run?", which is fair, surely? Especially if we're looking to restore the banks to health and get them off the public balance sheet as soon as is sensibly possible.

as a leftist I'm pretty happy with how it went

!!!!!! You do know what this has done to the consensus on public spending don't you?

idk where our exciting "printing money" policy comes into the whole question of how much this has cost

everyone basically agrees that

- hiving off the casino functions of banks
- creating a transaction tax on all trades
- regulating derivatives just like everything else
- increasing capital leverage ratios

are the answers, right? any chance of these things happening?

i mean fuck, the tobin tax alone would plug the deficit bigstyle

Matt - In reply, while we're linking Guardian articles ... http://www.guardian.co.uk/commentisfree/2010/mar/11/defeatist-nonsense-leftwing-thinking

I don't agree with everything, but I kind of feel like the intellectual argument has moved in the left's favour. It's just capitalising on it ...

xps

No-one seems to have any idea what the cost of not bailing out would have been. I'd be very interested to read a good analysis of that scenerio if anyone has one to hand?

On the US Shitbin thread, I made the point that in the States there seems to be this mix of hatred of banks/big business AND hatred of the state that fuelled the anger at the government intervening in the banks, or bailing them out or whatever, but that that didn't seem to be the case here. More a general anger at incompetence.

I don't know if that's still the case, and certainly articles like the Jenkins one seem to be an attempt to whip up that kind of fervour.

Part of it has to do with the fact that in the US you had guys like Paulson and Geithner who literally a year or so before were running the companies that were now getting handed blank checks. It was like Halliburton all over again.

Ned - I think the argument is that the cost of not bailing them out would have been a collapse of the whole financial system, which on one level would have been a laugh, but on many others would have been quite shit.

I can't quite imagine what that would mean. Maybe others can help?

similarly tbh you guys are such labour stans im unlikely to believe yr posts:

Charming as ever

Part of it has to do with the fact that in the US you had guys like Paulson and Geithner who literally a year or so before were running the companies that were now getting handed blank checks. It was like Halliburton all over again.

― Tracer Hand, Friday, March 12, 2010 3:07 PM (49 minutes ago) Bookmark

true. here we have... lord myners! and a mania for paying city consultancy firms. and a relatively supine media -- at least on matters of substance. there *ought* to be more fervour against the government over what just happened here. and there probably will be once the cuts really begin. but it's too late for it to have any purpose.

I hardly think Lord Myners is equivalent in importance and influence to Geitner and Paulson. Not that I'm disagreeing with you, by and large.

The thing is Myners is wandering around slamming people for ludicrous salaries whenever he gets the chance, Adair Turner is basically working out what exotic financial practice to ban first for not being "socially useful" and even Mervyn King is arguing for a Tobin Tax. Hell, even the IMF is calling for exchange controls and higher inflation targets. I feel that to a great extent, the left has won loads of the arguments.

That's why it's particularly galling to have people nominally on the left essentially parroting Dan Hannan or whoever.

The thing is Myners is wandering around slamming people for ludicrous salaries whenever he gets the chance

slamming people is all well and good but the bonuses were paid. if you're right, great. but i don't personally think there's a snowball's chance of anything much happening: the political agenda for the election is about who will cut when. if there is movement towards regulation it's being kept very quiet.

Yeah anyone who thinks all of this represents this represents a triumph for the left will be celebrating a pyrrhic victory, and losing the argument over welfare and public service funding strikes me as defeat bigger than the 'victory' represented by state intervention in the market.

Why is there such a huge deficit in the public finances? I'm sure this has been covered before, but I can't remember.

Obviously there have been a lot of one-off costs over the last 18 months or so where the government has had to step in to stop the collapse of the banking system, but presumably these aren't costs that will continue to be paid each year (and so don't contribute projected future deficits) and presumably also a lot of it is effectively equity in the banks which can be sold in the future (perhaps at a profit) and so isn't really money which has disappeared down the drain.

In terms of the actual deficit, I can appreciate that in a recession tax receipts fall and benefit payments rise and this can lead to a shortfall, but this must have been true in every other recession as well, and unemployment is nowhere near 1980s levels at the moment. So what is the problem?

lol overpaid public servants

lol equity in banks

Since the last recession, the government's become more reliant on tax generated by the financial sector and its problems have contributed to the hole that's opened up in the public finances. Probably a huge fall in the amount generated through stamp duty as well.

Also the interest payments on that debt have to be enormous.

Also the interest payment on that debt have to be enormous

Ah, yes. That's probably the big thing I forgot.

Lol Glazerite.

Yeah, you'd have thought I could have figured that one out for myself.

There is certainly an argument to be had about how the UK cuts its overdraft, but voters aren't getting that debate – instead they have to contend with the Mafioso-like figure of the market.
http://www.guardian.co.uk/commentisfree/2010/may/18/brain-food-markets-politics-religion

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/7862246/How-a-broker-spent-520m-in-a-drunken-stupor-and-moved-the-global-oil-price.html

The 34-year old broker at first claimed he had spent the night trading alongside a client. But the story began to fall apart when he refused to put the customer in touch with his desk for official approval of the trades.
By 10am it emerged that Mr Perkins had single-handedly moved the global price of oil to an eight-month high during a "drunken blackout". Prices leapt by more than $1.50 a barrel in under half an hour at around 2am – the kind of sharp swing caused by events of geo-political significance. Ten times the usual volume of futures contracts changed hands in just one hour.

In this circumstance it seems only fair to hate the game and not the playa

ya was gonna say wld kick it with tbh

Well done BBC on only showing this in Scotland:

In an interview due to be broadcast on BBC Scotland on Monday, Mr Tate - group executive director of Lloyds - told reporter Mark Daly: "There are a whole lot of people, myself included, who would love to get the kind of return on their investment that the taxpayer has made into this bank.

Here we go again kids

did you ever hear that thing about the british being the only group who feel schadenfraude toward themselves? totally all i am getting out of this whole thing, some kind of sick pleasure in being proved right that the people in charge are terrible. it's like willing your driver to crash.

Nah, don't think it's just a British thing, I don't really believe any opposition politician anywhere who says he wants the economy to do well, they want to go down the toilet so they can get elected!

here's the interest rate on 10-year UK bonds right before the con-dems got elected:

http://www.bloomberg.com/apps/chart?h=200&w=280&range=1y&type=gp_line&cfg=BQuoteComp_10.xml&ticks=GUKG10:IND&img=png

can someone explain to me where the "crisis of confidence" is here? a crisis that required austerity budgeting?

Feb-May 2010 looks pretty bad TBF although so does Nov 10 - Present. Feb May looks like response to uncertainty, Nov 10 - Present looks like the response to the certainty of Cuts and Contraction.

August 3, 2011, 7:25 am
Osborne’s Delusions

Britain’s experiment in austerity is going really, really badly. But the Chancellor of the Exchequer is finding solace in well, fantasy. Interest rates on UK debt are falling, and:

“This is proof that we are now seen as a safe haven, we’re not seeing the increase in yields seen in Europe and the US,” said Mr Osborne’s spokesman.

Yields in the US have, of course, plunged rather than risen. And they’ve plunged for the same reason UK yields have plunged: a scarily weak economy suggests that it will be years before the central bank raises rates.

For what it’s worth, credit default swaps suggest that perceived risk of a UK default has been low all along, except for a panicky few months after Lehman.

It’s sad, actually: the wolf is at the door, and Osborne thinks it’s the confidence fairy.

was about to say 'who dat?' but then read 'confidence fairy'

and knew

Anyone else cynical enough to think Osborne is happy to have austerity now and a few green shoots before the election followed by a campaign that says Labour got us into the mire and can't be trusted to maintain the "recovery"? It's worked for the Tories before. It's not about what's best for the economy, it's about getting your timing right.

Osborne long term plan is surely to sell off the bank stakes or some of them and use some of that to pay off debt but also a large chunk to fund tax cuts right before the election. But he'll still be wanting better growth than this regardless - as it is we're teetering on the brink of another recession and that'll be disastrous for them. Assuming Labour can actually string together a narrative that sticks on this, which is a huge huge 'if'.

this'll sound student-y, but i think the crisis is so vast that the 'solution' (aka means of muddling through) has to be more than even the labour party of ed balls can offer. i don't think we're going to see really 'green shoots' at any time -- house price inflation, sure -- and much as i loved the last ~15 years, i don't think another round of what we had will see us through.

hollow laugh: george osborne is coming home from his hols early to... do whatever the fuck he does

so has ed milliband actually said anything about this yet?

ha, wrong thread, but i guess it works here too.

awaiting policy review iirc

there are a few 'i agree' kinda things on his twitter account. really feel like he could seem sorta persuasive if he said like, thoughtful things he probably thinks, but he seems a bit trapped in trying to sound like a guy who is able to say the right boilerplate politician things, for the most part, as a demonstration of his grown-up real-and-viable politician skills. like banal 'my heart is with the people of _____' platitudes.

https://si0.twimg.com/profile_images/135126819/404-fffuuu_bigger.png

https://www.youtube.com/watch?v=aC19fEqR5bA&feature=player_embedded

.

the good people of twitter are coming around to the opinion that it's a Yes Men stunt?

have been trying to find mention of 'alessio rastani' on the interwhat prior to april 2010 (that's quite a long game!) but it's rendered surprisingly hard by automated news tickers/rss type things - google brings up pages ostensibly from 2007 but with recent headlines etc on 'em.

that would be so awesome.

i can't decide whether it would or not! if it's a stunt, then wouldn't it be easier for people to ignore?

i am pretty bad at faces but it didn't seem to me that this was the same man as the Bhopal disaster interview, this one is so much younger.

Yeah, reading the Yes Men theories now as well. Soz about that.

Still, I wonder what percentage of people who saw it were disgusted v the percentage of people who went to look up "how to make money in a downmarket"

if it's a stunt, then wouldn't it be easier for people to ignore?

it's gotten through to enough people already to have made a difference i think.

His advice to protect your assets as best you can is very good advice right now.

The great majority of ilxors have few or no assets other than their skills and abilities. Sadly, in a cash famine and deflationary spiral (which is what this guy is obv predicting) there is no good way to protect those assets, since they must be converted to cash to become negotiable. Therefore, the best strategy would be to reduce debt, save as much as you can from your present earnings, and keep your powder dry. Also, evaluate your skill set and try to strengthen it by adding as many valuable skills as you can.

So the dude is kind of a fraud, but not a hoaxer.

"Not only are we going to be in debt to the bank, we're also in debt to our parents... we're probably never going to afford to get married, and god forbid we ever decide to have a child. I've worked my arѕe off, (so) how the hell has this happened?"

http://uk.reuters.com/article/2012/01/05/uk-housing-analysis-idUKTRE8040EK20120105

speaking of houses the benefit cap comes into effect this week i think?

"Not only are we going to be in debt to the bank, we're also in debt to our parents... we're probably never going to afford to get married, and god forbid we ever decide to have a child. I've worked my arѕe off, (so) how the hell has this happened?"

i've had a few and it's late here so i'm not pumped to get into it but it seems to me that this kind of argument, which you hear a lot re: the recession/economic climate/decline of the West/whatevs is loaded with entitlement and ahistoricity and point-missing and it doesn't pull at the heart or brain-strings as to why we're at the evil end of an evil age

they're using the word ARSE in a reuters article next thing it will be big bottom this and blood sausage that all over the newsy wewsies

nv otm, difference being i'm sober

i feel bad for the dude if he can't afford to get married tho, it's only 60 quid

yah god forbid those feebs ever have kids

housing is a universal right oh and also a maketable good oh and also yr pension kthxbye

UK/Irish govts, 1993-2007

yeah the demise of the benevolent blair govt really saw told to that

Britons' love affair with housing on rocks

big improvement on previous gov's love affair with housing on sand

i can't even look at that 2nd rate brian connelly who played blair tbh, let alone think about the baldingrinning prickdemon himself

I was thinking about this in relation to the divide-and-rule talk that's being going on this week. The anger felt by people who are in that situation is entirely justified but seems to be increasingly turned against those propped up by child support and housing benefit, rather than those responsible for the root causes of why couples earning 60k between them don't feel like they can afford homes and families. There's a well of legitimate outrage building up - i'm not sure how it can be harnessed to point in the right direction at the moment.

tbf it can be both

FT blazing all guns

Cameron is consigning the UK to stagnation

By Martin Wolf
Can it make sense for policy makers to stick with their policies, regardless of adverse changes in circumstances and outcomes? David Cameron thinks not. In a speech earlier this week, Britain’s prime minister advises the eurozone to change its monetary policies and fiscal institutions. But what does he think about the policies his government is following at home? On that he is not for turning. The policies decided when the coalition came into office two years ago are, he insists, also correct now.

The world, eurozone and UK economies are in a far worse state than expected. Yet Mr Cameron insists that “we are moving in the right direction”. Who is this “we”? UK gross domestic product is stuck at 4 per cent below its pre-crisis peak in what is the longest such slump since the 19th century, with no end in sight. Even if one believes that part of the pre-crisis output was an illusion, why should one accept that the UK economy has lost the capacity to grow altogether? How can Mr Cameron believe the economy is moving in the right direction when it is not moving?

The reason Mr Cameron believes this is because he is fixated not with the dire economic performance, but with the public sector’s balance sheet – and not even the whole balance sheet, but with its liabilities. “We cannot blow the budget on more spending and more debt,” he says.

Yet if not now, when? As Jonathan Portes, director of the National Institute of Economic and Social Research, argues in a recent blog post: “With long-term government borrowing as cheap as in living memory, with unemployed workers and plenty of spare capacity, and with the UK suffering from both creaking infrastructure and a chronic lack of housing supply, now is the time for government to borrow and invest. This is not just basic macro-economics, it is common sense.”

With real interest rates close to zero – yes, zero – it is impossible to believe that the government cannot find investments to make itself, or investments it can make with the private sector, or private investments whose tail risks it can insure that do not earn more than the real cost of funds. If that were not true, the UK would be finished. Not only the economy, but the government itself is virtually certain to be better off if it undertook such investments and if it were to do its accounting in a rational way. No sane institution analyses its decisions on the basis of cash flows, annual borrowings and its debt stock. Yet government is the longest-lived agent in the economy. This does not even deserve the label primitive. It is simply ridiculous.

The results, however, are not at all ridiculous. They are extremely costly to both the economy and society. Yet, instead of taking advantage of the opportunity of a lifetime to repair and upgrade the capital stock, as Mr Portes notes: “Public sector net investment – spending on building roads, schools and hospitals – has been cut by about half over the past three years, and will be cut even further over the next two.”

He recommends a £30bn investment programme (about 2 per cent of GDP). I would go for far more. Note that the impact on the government’s debt stock would be trivial even if it brought no longer-term gains. Indeed, it would be modest at many times this level.

It is a scandal that in an exceptionally severe downturn, the Treasury, in its majestic unwisdom, slashed its investment so deeply. Penny wise, pound-foolish does not come close to it. As Brad de Long of Berkeley and Larry Summers of Harvard argue in a paper that I have commented on in the Wolf Exchange blog, with a positive impact on output and modest “hysteresis” effects (permanent costs from high unemployment and low activity), extra spending can pay for itself.

Why is the government determined to stick to its plans even though the weak economy has led to far higher borrowing than originally expected? The answer is that it is terrified of what Warren Buffett calls “Mr Market”. It believes that if it raised investment and supported demand, the market for its bonds would not just fall – as one must hope it would, once recovery came – but collapse. Yet a country with huge private sector financial surpluses, a floating exchange rate and an independent central bank is most unlikely to experience the runs it fears, as I have recently argued in the Wolf Exchange. The eurozone is simply a different case. It is more likely that the bond markets would collapse if the economy did not recover and so huge deficits continued indefinitely.

In its fear of the spectre of a bond price collapse, the government is consigning the UK to stagnation. It is refusing to take advantage of the borrowing opportunities of a lifetime. It is unwilling to contemplate even a clearly time-limited fiscal boost out of fear that the gilt markets would promptly panic. It is determined to persist with its course, regardless of the unexpectedly adverse changes in the external environment. The result is likely to be a permanent reduction in the output of the UK, not to mention permanent damage to a whole generation of the unemployed. I have words for such behaviour. Not on this list is the word “sensible”.
- http://www.ft.com/cms/s/0/5853d1c0-9ea9-11e1-9cc8-00144feabdc0.html

GDP fell by 0.7% in the last quarter, much worse than expected.

so psyched for the next Tory government

uk gilts now at an all-time low of 0.04%, so this massive deficit that we absolutely must cut down as soon as possible could in fact be largely refinanced into an interest-free loan.

But, yes, let's stop everything until we've paid back all the 0% money. This is like somebody not buying food until they've paid off their entire student loan as fast as possible. It's just financially illiterate.

(i mean, okay that's the 2yr, but even the 10yr is sitting at 1.4%, compared to 5% at the time of the bailout)

Cameron refusing to budge. Won't the Lib Dems just revolt?

Of course they won't. Revolt = electoral oblivion.

surely that'll happen either way?

We're all going to die either way, doesn't mean don't want to put it off for as long as possible.

Now taking us longer to get out of this than it did the great depression:
http://www.zerohedge.com/news/forget-double-dip-uk-now-depression

here we go http://www.bbc.co.uk/news/business-19174649

this cyprus thing is bananas

http://www.economist.com/blogs/schumpeter/2013/03/cyprus-bail-out

Whatever the rationale, it is a mistake for three reasons. The first error is to reawaken contagion risk elsewhere in the euro zone. Depositors have come through the financial crisis largely unscathed. Now they have been bailed in, some of them in breach of an explicit promise that they can be sure of getting their money back even if a bank goes belly-up.

Euro-zone leaders will spin the deal as reflecting the unique circumstances surrounding Cyprus, just as they did the Greek debt restructuring last year. But if you were a depositor in a peripheral country that looked like it needed more money from the euro zone, what would your calculation be? That you would never be treated like the people in Cyprus, or that a precedent had been set which reflected the consistent demands of creditor countries for burden-sharing? The chances of big, destabilising movements of money (into cash, if not into other banks) have just shot up.

The second error is one of equity. There is an argument to be made over the principles of bailing in uninsured depositors. And there is a case for hitting everyone in Cypriot banks before any taxpayer in another country. But there is no moral imperative for whacking Cypriot widows and leaving senior bank bondholders untouched, as appears to be the case here; or not imposing any losses on sovereign-debt investors in Cyprus; or protecting depositors in the Greek operations of Cypriot banks, as has also happened. The euro zone may cloak this bail-out in the language of fairness but it is a highly selective treatment. Indeed, the euro zone’s insistence that this is a one-off makes that perfectly plain: with enough foreigners at risk and a small enough country to push around, you get an outcome like Cyprus. (That is one reason why people are now wondering about the implications of this deal for little Latvia, also home to lots of Russian money and itself due to join the euro zone in 2014.)

The final error is strategic. The Cypriot deal has no coherence in the larger context. The euro crisis has been in abeyance for a few months, thanks largely to the readiness of the European Central Bank to intervene to help struggling countries. The ECB’s price for helping countries is to insist they go into a bail-out programme. The political price of going into a programme has just gone up, so the ECB’s safety net looks a little thinner.

is there a better thread for this?

I started this one but nobody posted to it: The Eurozone Crisis Thread

thanking you i will post there

You've never had it so bad

http://blogs.spectator.co.uk/coffeehouse/2013/11/help-to-buy-mortgage-subsidies-shows-how-little-politicians-have-learned-from-bubble-years/

'Why don’t we call this policy by the name it really is, namely the indentured servitude of our young people. I believe it truly is a moronic policy that stands head and shoulders above most of the stupid economic policies I have seen implemented during my 30 years in this business.’

did a thread for it cuz it is that stupid

Help to Buy

Sorry state of affairs when Freazzzuur Neyaaaalsuuuun starts criticizing Tory policy

subsidizing shit mortgagors is not conservative politics, this is an attempt at a thatcher/council house sale votewinner

Winning votes (and elections) is Conservative (with a large C) politics

RBS - "fuck it, sell everything now. Everything!

$10-$20 oil is going to be a killer.

It's going to be a very hard time for a lot of companies who took the, at the time fairly sensible-looking, decision to channel most of their investment in BRICS.

Oil prices have also fallen sharply on fears of lower demand and a supply glut, especially with Iran due to start exporting once more when sanctions are lifted. Tensions between Iran and Saudia Arabia make it less likely that Opec can agree to cut production to halt the slide in prices.

i love how the second half of this is supposed to be a bad thing. oligopolist may fail to restrict supply, making inputs cheaper, oh no!

Don't most bulk oil/petrol orders happen like six months out, so producers are still making like $50/barrel? And then this summer they'll face the real crunch? Not that I really know what I'm talking about

$20/barrel - there was a piece somewhere looking at (x) oil producing country and the effect of low prices on its politics - a lot more instability to come!

Saudi is manipulating the price to fuck up everyone else and try to get long term competitor projects canned. It's going to be an economic disaster for Nigeria, Russia, Venezuela, Brazil, etc and potentially the US in the long run. Also makes it less attractive to invest in green energy. Oh no! does not seem far off the mark.

you saying the reason oil is low is because Saudi Arabia is initiating a price war? i don't know much about OPEC

i was under the impression the problem is the underlying weak demand for oil (which sounds good for green energy?), in which case a falling price is good, that's just the new equilibrium price. you hear pundits get this wrong all the time, say shit like "low cost of oil is hurting the global economy"--no, weak global demand created a low cost of oil. cheap inputs are good for the global economy

There was a big OPEC showdown last year where Saudi refused to raise the prices, damaging the economy of the other nations. At the time (and I'm not sure how true this is), it was said they were trying to price fracking companies out of the market (they're only financially viable at around $70 a barrel), but I'm not sure how true this is. I assume it's partly that, plus some falling demand and an attempt to gain market share in China (who tended to buy a lot from Russia).

Demand has fallen in China but Saudi is pumping like crazy to keep the price below ROI rates for marginal ventures. iirc lots of offshore projects need $80+ oil to break even.

tbh, I don't know that much about it either.

xp

A low oil price is a good thing for industries that are bulk buyers of oil, but there are others that are being shafted, in Scotland particularly there are jobs going right across the oil industry, which has a knock on effect on the wider economy.

Is there anything worth reading on what the Saudi endgame is here (and specifically how long they can keep this up for without building up massive deficits?)

the new 'competitive' price is low, other OPEC countries want saudis to sacrifice market share for a high or above-market-share price, letting non-OPEC countries increase their share. saudis aren't really driving the price down so much as not raising it above market value. if they can wait it out and demand goes back up, they've held onto their share

The price has more to do with supply than demand, doesn't it? Demand hasn't absolutely tanked - there's a glut with shale. When shale gets shut down as unsustainable, and supplies are used, the price will go up again irrespective of what happens with supply.

http://www.theguardian.com/business/2016/jan/12/rbs-forecast-doom-global-economy-2016

Follow-up. Consensus seems to be: not as gloomy as RBS. Just bad, sorta flat.

China seems to be tanking: "2% GDP Growth". There always seems to be a lot of fiddling from their end - and maybe most countries do it which is why sentiment and emotion mean something.

Economics = crazy magick.

Economics = people born into enough money to go to school to become professional economists in thrall to / justifying the pronouncements and whims of people born into enough money not to have to work at all

Well, there are economists and there are economists, that's a pretty weird blanket pronouncement to make.

Brexit issues are surely a bigger drag on the economy than anything else right now? By the time the referendum finally happens there will have been four years at least of profound uncertainty about the short-term make-up of the country, taking Scotland into account as well.

Economics = people born into enough money to go to school to become professional economists in thrall to / justifying the pronouncements and whims of people born into enough money not to have to work at all

― reggie (qualmsley), Wednesday, January 13, 2016 6:10 AM (4 hours ago) Bookmark Flag Post Permalink

this may have been sort of true in like, the 80s. not the case anymore

also it doesn't study more to major in economics?

i find it weird that the worst thing happening in the global economy right now is a negative second derivative. like, get back to me when something is actually decreasing

and specifically how long they can keep this up for without building up massive deficits?

on Newsnight the other night I believe they said the Sauds have approx 6-8 more months of cash reserves

also it doesn't study more to major in economics?

i find it weird that the worst thing happening in the global economy right now is a negative second derivative. like, get back to me when something is actually decreasing

― flopson, Wednesday, 13 January 2016 Bookmark Flag Post Permalink

The number of jobs that pay a decent wage?

boom

on Newsnight the other night I believe they said the Sauds have approx 6-8 more months of cash reserves

That is... a considerably shorter period of time than I'd been expecting.

on Newsnight the other night I believe they said the Sauds have approx 6-8 more months of cash reserves

iirc it is thought to be five years at $50 a barrel so you could extrapolate from that. Their break-even point is higher than almost everyone else, i think.

They are raising money through different routes, though - hence the mooted Aramco IPO.

The number of jobs that pay a decent wage?

― xyzzzz__, Wednesday, January 13, 2016 12:06 PM (1 hour ago) Bookmark Flag Post Permalink

this is certainly not the case globally. anyways the rich world has had low median wage growth for decades for mostly well-understood reasons, why would that suddenty cause a global crisis now?

Obviously that was a joke - but your post shows a lack of awareness of what might be happening to people. Talk of a 2nd derivative sounds delusional.

Whatever that is (yes I know I can google)

i find it weird that the worst thing happening in the global economy right now is a negative second derivative. like, get back to me when something is actually decreasing

― flopson, Wednesday, January 13, 2016 10:31 AM Bookmark Flag Post Permalink

http://www.sfgate.com/business/article/Stocks-plunge-S-P-500-is-down-10-percent-from-6757200.php

"I find it weird that the worst thing happening is markets down ten percent. get back to me when you're wearing a burlap sack."

i guess that's for the u.s. thread, so here's the 3mo ftse too

http://www.bbc.co.uk/news/business/market_data/chart?chart_primary_ticker=LSE:UKX&chart_time_period=3_month&canvas_colour=000000&primary_chart_colour=CC0000&use_transparency=0&plot_colour=ffffff&cp_line_colour=1F4F82&margin_left=35&margin_bottom=20&margin_right=20&time_24hr=1&tiny_chart=1&tiny_month_view=1&logo_strength=light&y_axis_left=1&x_axis_plain=1&cp_line=1&cp_line_style=dotline&charting_freq=1_minute&co_dimension%5Ewidth=203&co_dimension%5Eheight=152&small_chart_x_label_format=1&date_label_spacing=30

Bump

http://dvdmedia.ign.com/media/reviews/image/apes_damnyou.jpg

UBS is predicting £350bn wiped off the value of the FTSE today. Anything under £200bn would probably be a success.

but we've £351M a week we don't have to pay to brussels. we could pay that off in, er, 1000 weeks.

The FTSE dropped 531 points (8.something per cent) in the time it took me to walk 200 metres from Charing Cross to my office.

11.4%
https://twitter.com/FT/status/746243856165933056/photo/1?ref_src=twsrc%5Etfw

i need to book a trip

FAP?

well sure

mi casa et su casa

in casa emergency break ice

https://www.youtube.com/watch?v=XK9doTm8CH8

http://www.express.co.uk/news/uk/866946/brexit-latest-updates-ons-data-wipes-490-billion-uk-wealth

Can someone please have a look at this post and thoroughly debunk it (or otherwise)? Pretty please. Yours, an economics idiot

http://forum.charltonlife.com/discussion/comment/2994686/#Comment_2994686

Just looking at Wikipedia, the China-Australia deal took a decade, not 13 months, so that guy’s nuts

And the Walloons held firm against the EU-Canada agreement for a whole... two weeks, just looking at the google news headlines.

The old “throwing out easily disprovable ‘facts’ in a barrage because there’s no referee so just try and prove me wrong” school

guess the old 'we can be like singapore' line is p raving mad too

i dunno, a lot of Tories are into corporal punishment

I feel that in a normal year this type of thing might be bigger news.

BBC News - Interserve rescue plan prompts share collapse
http://www.bbc.co.uk/news/business-46505688

No mention of the half a million+ they paid their CEO in April. But at least the million shares they also gave her are now worth less so that's something?

shit-bin-manufacturing-relocating-to-eire

https://www.theguardian.com/business/2022/jun/18/we-face-a-global-economic-crisis-and-no-one-knows-what-to-do-about-it

We know that an increase in the cost of borrowing in the UK, the eurozone and the US, which is what we are now witnessing, will do nothing to bring down prices.

Inflation is an affliction caused by Russia’s invasion of Ukraine, and to a lesser but important extent by China’s difficulties with Covid after its vaccine development failures, which have caused repeated lockdowns and holdups at ports. In the UK, Brexit adds a further big twist because it has damaged trade and cut the number of available workers.

The justification for higher interest rates, then, must lie elsewhere, and central banks, to justify their spasm of action, argue they must go ahead to avert a wages spiral – one where pay exceeds inflation.

In Britain, this argument presumes that the average worker, to prevent a fall in personal living standards, will be able to negotiate a pay deal that beats the Bank of England’s latest forecast for peak inflation later this year of 11%.

When the government is expected to limit public sector pay rises to between 0% and 3% this year, that means private sector increases would have to be even higher – about 12% or 13% on average. These levels of pay rise are a fiction.

Oof

I literally did not believe this when it was first explained to me, but the UK effectively puts housing prices in the CPI for student loan interest, so anyone with a student loan is levered synthetic short housing as well needing to rent. It's shocking their TFR isn't 0. https://t.co/Z6tkux9mQA

— Quantian (@quantian1) August 3, 2022

this thread is key reading imo:

The Bank of England’s going to increase interest rates today. It may be by 0.25%. It could be by 0.5%. But the question is, why are they choosing to increase the price of money when we already have an inflation problem? A thread to explain…..

— Richard Murphy (@RichardJMurphy) August 4, 2022

it’s almost as if “cooling” (sunak) vs “stimulating” the economy (truss) is too simplistic a way to think about this quite grim challenge of profiteering, war and chronic underinvestment

Bump

negative growth in last 3 months blamed on... the extra bank holiday and not the fuckwittery of the truss government.

Christmas and a world cup in the next quarter though.

food inflation now running at 19%. not a typo.