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Listed below are comments made by Rugbyprof between Wednesday, 2nd December 2009 and Wednesday, 23rd December 2009.

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Intriguing economic questions for 2010 10:55pm on 23 Dec 2009 Steph and fellow bloggers

For the latest related to some of your questions read some hot off the press scary stuff at:

http://www.telegraph.co.uk/finance/financetopics/recession/6874992/Gilts-sell-off-as-Britain-joins-Italy-in-debt-house.html

It seems as though the truth is out there for those interested in reality....
Intriguing economic questions for 2010 9:02pm on 23 Dec 2009 Hi Riverside #35

No problem with your assessment....

Incidentally, my post was a riposte to Steph who seems to be focused on a very narrow channel of thought.

Incidentally, public sector 'cuts' may come through outsourcing see IBM's new deal with Essex CC announced yesterday - though the cuts are fairly illusory in many ways as direct taxpayer costs become indirect but it sounds good and a vast army of public sector clerical do become private sector.

However this has its limits if you look at the likes of BT and BA re their pension problems (legacy at privatisation) as you mention pensions in your post.

What people don't realise generally is that a considerable amount of your council tax goes towards current pension provision e.g. teachers, police etc.

The real battleground is the private/public sector provision. I would suggest that this may spark off riots at some point once the truth is known sufficiently across the populace. Never mind everything else.
Intriguing economic questions for 2010 4:10pm on 23 Dec 2009 Actually Stephanie here's four more really crucial questions to ask:

1. Why are media analysts, economists and government still in denial about the economic situation and what is driving their myopia?

2. What is the case for not expecting a double dip recession to start in 2010 would be the easire question to ask (after all its what happened in the UK in both 80s and 90s)?

3. How much hidden unemployment is there once you take account of false recovery expectation (i.e. pipeline unemployement), push-driven subsidies/schemes/initiatives that will have to stop, the amount of people without a job but nor currently counted (e.g. include the new army of self-employed for at least the next 12 months) and the PS restructuring and what 'drag' effect this is likely to have on the wider economy?

4. What is the PS borrowing requirement if growth is around 1.5% for the next 3 years rather than the Goldilocks forecast of HM Treasury and what is the likely costs of servicing it given the various sovereign rating factors?

And there's about another 20 or so questions which are equally as important which haven't been asked either........That would be really good......
Lagging no more? 10:40pm on 16 Dec 2009 Hi Stephanie

Joining the party a bit late. Having being critical lf late I thought your blog today contianed a good degree of scepticism and quite rightly (whichever figures you believe).

Reading through most postings here (save for the odd silliness) gives you a good idea of what reality is really like out there.

I think that the 'recovery is here' mantra that's being whipped up again is way too early. I would expect to see the claimant count to increase again in the 1st Quarter no matter what the Government does to cover it up.

SMEs are always a good indicator of whether employment is going to improve. A recent survey in the FT on SMEs provided a sobering forecast. Employment increase is not going to come from there for a while. And if its not the SMEs, who are the largest market for employment (about 60%, I believe), then whom?

It can't be the public sector becasue finally the real economy has caught up and reductions are going to start there.

But if anybody has some rabbits to pull out be sure to let us know.............
Overrated? 11:28pm on 15 Dec 2009 Onward-ho

Not sure what you've been smoking.....
Overrated? 7:08pm on 15 Dec 2009 Hi Stephanie

Interesting post. Your choice of the word 'depressed' in the same sentence as 'the conservatives' is subtle - very subtle, and very spin manipulative.

The message isn't depressing but 'reality'. I've met your sort before in management - very dangerous.

Keep to the facts and the evidence. This is an official warning - next time a complaint goes in if you can't hide your bias - you may fool some of the people (see #53 for example) but not all - certainly not on this blog.

As Simon Bailey #8 pointed out (amongst others) there is an inherent increased cost of borrowing (a few billion) on our soveriegn debt (rating agency comment is a red herring). This can only increase as our sovereign debt increases.

Once QE stops we shall then see just what is the true cost of borrowing on gilts. My previous estimate of c. 6% I don't think will be far out given the state of the economy. Just think on £1.4trillion debt (2013-2014) that's around £84 billion in interest which is not far short of the cost of the NHS on an annual basis.

Depressing. No - just getting real - I'm too optimistic re my own business for that. But then somebody's gotta pay taxes haven't they to pay for it all?

Please stop spinning else I will really have to review paying my BBC license.....
Why £73bn is the new £90bn 8:31pm on 10 Dec 2009 Steph

Before I comment generally can I just clear up what seems to be an oversight on your behalf.

Increasing NI contributions has two parts - those paid by the employee and the corresponding bit paid by employers. NI is a tax on jobs pure and simple. The Tories claim on the NHS is quite right. It is the employers NI bill that also goes up and has to be accounted for in public sector budgets like that of the NHS (think of it as a tax funded by tax).

Of course anybody who has ever been in business will recognise this - those of course funded through the public purse - like you Stephanie - won't.

Whatever else from yesterday's Homer Simpson pre-budget report the NI increase is a SILENT KILLER. PERIOD.

I do hope that those who have been burying their collective heads in the sand finally woke up yesterday. If you hadn't noticed the country is in deep, deep trouble.

Alistair's lala land growth forecasts make a mockery of the troubles ahead.

I watched the BBC news and newsnight (as a licence fee payer I feel I must). Analysis? you must be joking....

I've unfortunately realised for sometime that the country is run by half-wits, and that the reporting media is also full of half-wits.

No wonder we're in such a state.......Steph - by the way look up 'pontification'.....
Flattening, not falling? 8:37pm on 06 Dec 2009 To Andrew Measor #66 and #76

Obviously we've had a couple of excellent contributions providing a little more guidance to your earlier comments.

I believe the impact of the VAT reduction has been well overstated. Most household spend (after housing costs) goes on food and energy. These, as has been pointed out, are either zero- or reduced-rated.

The 2.5% reduction is a pretty negligible margin on an average purchase of say £20-30 (on an average item). It's about 50p.

It's hard to imagine any real benefit. It may be of some benefit to the poorest but by definition this category will not make any difference in the grand scheme of things.

If a section of society thought that buying big ticket items from say washing machines to cars may save them some money (about a tenner on £500 item - wow!!) and then all's we've done is brought tomorrow's 'recovery' purchases forward which is not that clever.

Then there's the cost to retail operations in having to change things twice. (Consider - am I going to buy 2 £50 coats instead of 1 to save £2?) which is what the retailer really needs. I don't think so. Neither as a family have we said 'oh - let's go out for another 'eat-out meal' as we can save £1. As far as I can see its a completely bogus argument.

Of course VAT reduction was useful for charities and public sector organisations in terms of costs (as VAT not reclaimable as far as I know) but they are not going to help the recovery are they?

It may have been of more benefit (if you're into short term sales) if the Government announced it was putting VAT up (as it will no doubt have to). But then that's not going to help either is it?
Flattening, not falling? 10:13am on 06 Dec 2009 Stephanie

Your comments were accurate right up until you omitted the bit that said:

'The growth in the construction sector was driven by a 10% quarterly rise in activity in maintenance and repair...........which includes work on public infrastructure such as hospitals, schools and roads leapt by 26% between July and September...........' (The Times)

Note volume of new work fell by 4% in the same period.

So now we know - even when the government is trying to 'cook the statistics' GDP growth was still negative.

The reason why there was such an 'outcry' over the initial 3rd Qtr ONS figures is very clear. The Government and those close too it thought that by engineering the data thorugh public spend it would lift the GDP output into growth. That's why there was so much shock and indignation.

If this was a PLC reporting its figures it would be taken apart for 'manipulating the numbers'.

The infrastructure spend may be a fine motive but it is 'artificial factor' when trying to decide whether we are on the road to recovery as an economy. It's basically just another stimulus.

Your reporting once again serves to show that you are not being 'fit for purpose' when reporting on these matters. Please report factually and independently.

You just create even more (rightful) scepticism and scorn demonstrated in the comments above (allowing for any 'la-la land, head in the sand 'it's not that bad' types).
Bad in Japan 9:52pm on 02 Dec 2009 Before my serious economic comment is reduced to a pile of empty Mc-cartons I see breaking news of RBS board threatening en masse resignation over bonus rights.

Mmm - that didn't last long then. Obviously some posturing but the circus takes a new turn.

Next question:
If Japan's QE has failed to stop the emergence and re-emergence of deflation given the similarities with the UK (and also some differences for example we are much more reliant on inflationary imports) is the UK heading for deflation, inflation or stagflation?

This one has been vexing for some time.

Real estate is heading downwards as are commodities (gold the exception).
Energy going up.
Basics going up (due to import prices through weaker sterling)
Basic wages frozen or going downwards certainly when PS restraint kicks in
Interest rates? Ah - staying low but will have to rise due to market pull (we're no longer in control)

Previous recessions have seen the emergence of one of DEF, INF and STAG. This time it looks like all three in some form. It's nice to think that they cancel each other out in a kind of 'Merv type of way'. But that's too simplistic isn't it?

If you put three voraciously hungry sharks in a sea-cage you don't get peace and tranquillity do you?

Or have we got a giant game of paper, rock and scissors going on?

Anybody want some fries?

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