Soros and Roubini cheer me up
According to the IMF's latest forecast, there will be just 0.5% growth in the global economy this year.
Which is so close to zero that we can see it as total stagnation - a phenomenon we haven't experienced since the World War II.
According to the IMF, the prize for worst performer among the big economies goes to you-know-which: our proud land, the UK.
It forecasts the UK will contract by 2.8% in 2009, a steeper decline than the US (predicted to contract by 1.6%), the euro area (minus 2%) and Japan (minus 2.6%).
Our combination of massive debts, an over-valued housing market and excessive economic dependence on financial services (the City) has been toxic.
Here's some mildly encouraging news however. I interviewed George Soros, the hedge-fund legend, this afternoon - and he thinks most of the bad stuff about the UK is in the price.
Or, as he put it, he thinks that sterling may have fallen enough, for now (which is something of a contrast with that mega-bear of the UK, Jim Rogers, who used to work with Soros).
That said, Soros had no qualms about using the "D" word: he says a full scale depression remains a very real risk.
As does Nouriel Roubini, who I also interviewed. Roubini is the economist who probably shouted loudest and earliest about the looming financial disaster.
And what he said cheered me up a bit (and I needed it) - in that he believes governments at last acknowledge the scale of the problem, even if (in his view) they haven't yet sufficiently co-ordinated their policies to create money, use taxes and public spending to stimulate demand, and fix banking systems.
I'm 
© MMIX~RS~q~RS~~RS~z~RS~42~RS~)
Comments
Sign in or register to comment.
Just because the governments have now realised the scale of the problem does not mean that they are any better equipped to deal with it.
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
I'm trying to see the positive. I really am so I am not going to add a "but".
Complain about this comment
The main phase of the 'credit-crunch' is nearing its end. There will be more write-downs, but the system has been 'saved' - pheeww ...
However, depression for 'real' economies is only just starting, and its going to be a long LONG haul before the full damage is done and recovery (2nd quarter 2010) can begin.
Complain about this comment
Robert - if you've been cheered up by those two, there's hope for us yet!
Complain about this comment
I'm always wary of people like George Soros - unless you know what positions they have, how can you know whether they're talking things up or down? Just a thought.
Complain about this comment
May I propose the bare bones of a 10 point plan to put the country back on its feet:
1. At the root of the current problems are over-valuations of many, if not all, assets and excess debt. It has to be accepted that both have to fall to a long-term sustainable level before we can begin to recover. Attempts to slow the declines may be entirely the right thing to do but it must be accepted and recognised that they can only delay reaching the bottom.
2. Creeping deflation will be very damaging to the economy and extremely painful. Equally, over-coming the problems through inflation will hit particularly hard the many innocent savers and pensioners. A controlled, one-off deflation may be an acceptable compromise. The first move would be encouragement to all businesses and employees to reduce wages and salaries by, say, 10%. The reductions should include the national minimum wage and there might be larger reductions for management. This should improve the financial state of businesses and might delay or make unnecessary redundancy plans. The additional job security should weigh against the reduced income.
3. All upward-only clauses in lease agreements should be immediately made void. Landlords should be encouraged to reduce rent charges by an immediate, one-off, say, 10%. This would represent one step towards re-balancing the return on property assets and would also improve the finances of many businesses.
4. The retail sector should realise the fundamental changes it has to face. The consumer debt-lead boom of recent years was unsustainable. Let us assume that consumer spending has to fall 20% to achieve long-term stability. High streeet retailers must accept that internet shopping is here to stay and has taken a large and permanent share of the market. In addition, the likes of Tesco have taken a large and permanent share of the market. The amount left for other high street retailers will be significantly lower than it has been - they must adapt to the new circumstances. This is starting to happen through various receiverships.
5. Consumers should be encouraged to "buy British" in order to support the economy. This can be assisted by retailers making clear the proportion of a product's value-added is British. It cannot, and certainly should not, be achieved through import duties and taxes. Every pound of spending should be made to count in the economic recovery. Sadly such publicity would highlight our dependancy on imports but the population truly understanding the situation would be the first step to effecting change.
6. The folly of the recent VAT cut should be recognised and immediately reversed. An equivalent amount should be put into the economy through a reduction in employers' national insurance with immediate effect. Together with the wages and salary cuts this would encourage employment and discourage redundancies.
7. The Government should introduce grants and incentives to re-establish manufacturing operations in the UK, there-by, over the medium term, seeking to reduce the dependency on imports. Green initiatives and sensible infrastructure projects should be given particular encouragement. Major unaffordable and "luxury" government expenditure projects should be scrapped - eg Trident and the identity card project.
8. An add-on policy might be the stabilisation of petrol prices at, say, £1 per litre through a flexible fuel duty system in which duty counter-acts the effect of market price fluctuations. This would bring greater certainty to business and household budgets and would maintain some green focus.
9. A new era of honesty and responsibility should be started with greed being driven out. The politicians should begin the process in the hope that, in passing, they might regain our respect.
10. A pre-condition to making progress on any of the above is the holding of a general election so that the country can vent its anger on Gordon Brown who should accept a large share of responsibility for the mess we are in but who is in complete denial that even the smallest part is down to him. His performance on the Today programme last week was truly appalling.
Complain about this comment
Until Flash admits to being a debtaholic he will continue to wreck everyones lives and drag us all into the world gutter.
I understand Soros holds no more sterling so would spoil his street cred if the pound was to fall another 25%.
Complain about this comment
On the day the IMF confirmed what we know, that due to the spendthrift incompetence of Gordon & co we are facing the worst recession amongst all advanced countries, (and not 'the best placed economy to benefit from the upturn when it happens') does Peston break the pattern and finally criticise the govt?
The answer is yet again no, Robert the price you are paying in diminishing credibility for them feeding you the odd scrap of information simply isnt worth it
Complain about this comment
What utter twaddle RP
How can you state Soros is happy that the pound has fallen enough for now and the D word is still a very high risk and deal relieved or happier???????????????
Governments have known and acknowleged the scale of this R soon to be D for months and they have done everthing they know to stem the negative flow - AND IT HAS FAILED on all fronts. Absolutely nothing they have done is working. This makes you feel happier??????????
Complain about this comment
If the Japanese economy is forecast to contract at the rate of 2.5% why is the Yen so strong?
The pound is oversold because it is an easy target and the city of London is the major currency trading centre where the dealers focus on UK problems and because of people like Soros.
There are well publicised concerns about the UK PSBR but is is low by international standards and less than a third of Japan's which is well over 150% of GDP. Can anyone explain the different treatment of the two currencies
Complain about this comment
Whilst nobody really knows which were the causes of the worldwide downturn, we now know for sure that the UK's not where it all started. Maybe it was US sub-primes, or US and European trade imbalances with Asia: or all of those together.
It will, of course, be interesting to argue about which countries turn out to be the most and the least affected - lots of jolly academic papers to be written on that - and which government remedies worked most effectively. [How can we tell?]
But the real test for us in the UK will be how much profit our shares in UK Banks will make for us? And when can we cash-in those profits! And for how long will the interest rate on my mortgage stay below 2% ?
Complain about this comment
ADDICTED TO BAD NEWS
well that isn't really what I'd call a more cheerful post from you Robert
come on, try harder; here's more good news:
Downing St have 'rejected' the IMF 2.8% prediction, saying that in fact the UK will only be 3rd worst of all 'the advanced nations' (what on earth do they mean by that - the G8?) over 3 years, according to their figures - better than Japan or Italy
The Institute of Fiscal Studies are predicting that UK decline of GDP may only be 1.3%
The lady from the British Bankers Assoc says that everything will be fine if the BBC will just turn their recession red arrow around so that it points up instead of down; go on Robert you have the influence to get that red arrow turned over don't you?
Complain about this comment
I bet it will get worse, a lot worse!
Complain about this comment
Why would Soros talk down the pound, he needs a good entry, doesn't he? ;)
It is too early to be encouraged by governments taking the problem seriously, so far their ideas have been more of what ails us. The last thing we need is an ill-considered stampede in the wrong direction.
Complain about this comment
"According to the IMF, the prize for worst performer among the big economies goes to you-know-which: our proud land, the UK.
It forecasts the UK will contract by 2.8% in 2009, a steeper decline than the US (predicted to contract by 1.6%), the euro area (minus 2%) and Japan (minus 2.6%)".
This is clear and unequivocal. We need an equally clear answer now from Gordon Brown - were we really, when he said it, 'best placed' to weather a downturn? If not, was he misleading us? If yes, what has changed since?
Complain about this comment
This information simply confirms what is already known and which GB refuses to acknowledge or apologise for. Every so called rescue plan has failed dismally and the only way out is for him to resign and go to the country before more public money is thrown at his half baked schemes. Aside from there being a worldwide problem, we must be the laughing stock of the world. Terrifying, truly terrifying.
Complain about this comment
Robert,
I was intending Peston Blog avoidance but It must be said:
Rogers and Soros? Are they still working together?
I am bearish on the Pound v. USD to a depressive effect this year and tended to agree with Rogers.
Soros now comes out with his view.
He seems to indicate that his actual exposure is now realized, with profits and range fluctuation is now the short to medium view for him to tell the rest of the World about.
This is not just "crowing".
After today's IMF projection on Sterling and the UK economy, do you or anyone else not think that their comments are contributing to volatility in this market?
I cannot profit from volatility, especially as no-one would give two whits about my market opinions.
I do write in self- moderated indignation.
N.
Complain about this comment
"Our combination of massive debts, an over-valued housing market and excessive economic dependence on financial services (the City) has been toxic."
As most people contributing to these blobs have been saying fro several months!
Complain about this comment
Soros is one of the few people who is more than prepard to talk his own book. Its flash, gaudy but uts also very courageous.
He doesn't hide behind 'the company' logo, he is the company logo as is Warren Buffet but to a much greater degree.
But the difference is that Soros is a trader and Buffet is an investor, which is why we must put Soros's views into perpsective.
Roubini was not alone but it is felt he was which is stupid. The difference here si that he again was prepared to stand up an be counted where others palyed the chattering classes route.
What we can learn from this is that real economic debate is stifled by the ignorant bankers who believe they are anything but, and politicians who are looking at retirement exits from day one.
Perhaps we will stop playing at dithering to perfection and do the right thing buy acting early as Blanchflower tried to get the Bank of England to do.
In the UK we are still prepared to defend the rights of the notoriously self interested yet totally ignorant lobbies before the national interest.
When that changes things, to coin the phrase, can and will only get better.
Complain about this comment
Well the big beasts have spoken to you Robert and it seams they fear the worst as many of us have for several years.
They do also recognise that there is a need for Global management and for a serious re-order of the financial institutions is vital but we have to acknowledge there are some real fundamentals which have to be addressed if we are to go forward.
I who have doggedly clung to the belief that the only thing that generates wealth that is of value in economics or to a community is something which is farmed, mined or made and or improved anything else is a drain on the economic growth.
Have now at last admitted the industrial age is dead the technology age is nearly over and we are in the knowledge age that is genuine knowledge not how to squeeze a few bucks out of a Mississippi local by giving him a credit card and a mortgage and then selling the debt as an asset to a greedy British banker.
All the above proves is we have passed from a national market to a world market and were as the morals ethics and codes of honesty and decency that guided us in the past have fade into greed and self interest and celebrity the world now needs a broader code of conduct and some very rigorous means of enforcing the standards.
Essentially-and this I doubt if anyone can get their heads round is this - we have to stop doing things by conflict and do things by cooperation not just something everything - we will not progress until we do.
Where do we start – I suggest Parliament rubout the two red lines and force every member to sit with at leas one shoulder to a member of an opposing party make every vote a free vote MP’s should represent their constituents.
Make all courts have a persons perspective verses the other perspective no claimant no defendant no defence no prosecution the argument for x and the argument for y no laws other than the Ten Commandments. Everything else is a guide lines and a code of conduct for society of what is acceptable and what is not.
Contracts should be decide on fairness and benefit to both parties and benefit to the greater community in other word we decide by cooperation not confrontation
That a long way a way I hear you say not practical you couldn’t trust…… stop there - it can be as far away as you like it ten thousand years if you want but I tell you all this life, money, happiness, contentment, the economy, injustice, war and society is not going to get any better for 95% of the world population until we or some generation start to move in that direction and that is an indisputable fact.
Complain about this comment
My guess is that Soros is almost right; sterling is close to the bottom but it has a little further to go. The eventual consequence will be stagflation.
I note your comment, Robert, concerning our economy; massive debts, overvalued housing and excessive dependence on the City.
Now who would that be down to?
Be careful Robert, you can still be sent back to the factory.
Complain about this comment
Robert - feeling cheery me ole China? You're avin a Giraffe!
Time to march against these Bankers!
Interesting article in the Guardian yesterday:
---------
Week of mass strikes set to paralyse France in protest against Sarkozy's reforms
---------
Fair play to the French, it's time we did something here too to get heard!
Complain about this comment
Great that's wonderful news, isn't it?
UK PLC is busted, HMG is broke. We're into a Depression and the globe is in Stagnation.
Ok, so we can all go home, stop navel gazing and get on with life.
I don't think so. Not on the words of Mr Soros or anyone else.
the G20 leaders are going to have to bite the political bullet and come up with an enormous global infrastructure project to get heavy industry and supporting markets up and running.
anyone for a land grab on Mars? how about free land and access to mineral resources in return for colonising the red planet?
we could start again as we've messed this one up. anyone for Martian regulator? Robert?
Complain about this comment
So..... can we expect some backtracking from Mr Brown re: "The UK is best-placed to weather the downturn", etc, etc? Or will he just ignore the IMF and keep repeating his mantras?
Complain about this comment
2.8% is not as bad as it sounds! In the context of the UK's above-trend growth since 1992, this is a very 'affordable' recession. Some details of just how the UK has grown and how much better off we are as a result are here:
http://www.knowingandmaking.com/2009/01/comparative-growth-and-shrinkage.html
Complain about this comment
As I post, eddixon, number one has just appeared on the blog.
Who's off piste?
N.
Complain about this comment
As long as satirical responses to Roberts Blog continue then depression will be impossible.
Humour in dificult times proves that true wealth is the seed energy that both prepares and acts in expectation of the coming spring ,after the winter of discointent [the next millenium]
All we need now is for Jim Rodgers to return to the fray and restate stirling is overvalued and the two of them[including Sorros ]can do their tango shorting in phaze and clean up whats left of the surpluslickquiditty.
Complain about this comment
So the government now realises that the economy is free falling off a cliff without a parachute. That makes me feel a whole load better knowing that Gordon is at the bottom with his arms spread out shouting to his cronies.."uh ...get a blanket!", whilst Soros and his buddies are betting on whether we will survive or not.
Complain about this comment
In PMQ's this was dismissed by Crash
Are you now off message Robert?
Or are you trying to drag the government to the point where they realise the import of these market words?
Complain about this comment
UK the worst performer? But Gordon keeps saying how well placed we are!
Surely all of us saying he's been lying through his back teeth for the last few months, are evil minions of a Tory cadre - determined to bring down the UK by downtalking the economy!
That, or Brown is full of something coloured brown.
Complain about this comment
These are two interesting men, but I don't think either has the solutions to the problem we are facing.
We are never going to be able to hold the deficit where it is, never mind shrink it, unless we are prepared for this economy to absolutely scream with its death throes! So a deficit expansion is on the cards. Do the government have the courage for a massive one? It might not do much good in a shrinking world economy. Then again we might be in a good position when things turn-up.
Can the government really prop-up industry after industry? If they prop up the cars, they'll have to prop-up the pubs. If they prop-up them, they'll have to prop-up the restaurants etc. Its the collapse of other areas that is causing the problem.
The real problem is, and I keep repeating it, debt. The government are prepared to guarantee loans, support loans, give loans, but that increases the debt. The credit crunch happened because the banks had run out of markets, and had found the last group of people they could give sizeable loans to and keep the money supply expanding. The dirt poor. They never even credit-checked them - they were that desperate!
But there is literally no one left to lend to now to boost the money supply sufficently. Reliable people, sound companies may want loans but that will not expand the money supply sufficently to pay back the already borrowed money and keep us in the style we've become accustomed to. The banks know that if a money supply isn't expanding, it's contracting; and they don't want to be losers as it does so.
Why then do the government provide packages that wait on an increased appetite for lending to come along to boost the economy when it is obvious that it won't come fast enough and that by waiting for it they make it even harder for the banks to lend sensibly? The government is literally being hoisted by its own petard.
Ironically, the Tories with their prejudices about cutting debt would cause an economic disaster unlike anything witnessed here before, even after the Napoleonic wars, but...that's why they'll get in!
Complain about this comment
The peoples' republic of Gordistan is well placed to meet the challenges ahead of us, that are the creation of evil foreigners.
Complain about this comment
Ive also heard Dr Doom and he doesn't cheer me up.
Nor do his solutions for the world economy.
Far too broadbased and completely unworkable.
Ken Clarke cheered me up.
This country getting to grips with the nitty gritty. GB to stop burning billions of pounds of our future on scatterbrained throw of the dice ideas.
Acting now where possible ahead of the curve instead of being way behind it.
Finding someonr who can bring Gordon Brown back into the real world and keeping him well away from meddling any further.
I liked and agreed with what Ken Clarke had to say.
This is going to be a long and horrible time for most of us and the solutions will only be gradual but they must be right every time.
There is no time left for any more mistakes.
I do not listen to these high flying economists They are only in it to make money for themselves
I have to be highly suspicious of each's own agenda.
Complain about this comment
Mmm... how cosy. Roubini is worth listening to - he's got the moral courage to stand against the prevailing orthodoxy and that's something rare among businessmen, politicians and academics.
Had I been in your shoes, I'd have asked Soros (first, for a fiver and then) to spend some of his ERM gains on making sure that the 2.2bn people worldwide without clean drinking water got at least a water filtration system to stop them dying before they reach school age. He may be a sage - but unlike Roubini - he's a sage of unenlightened self-interest.
Part of the problem with our financial institutions and the people in them is that they see themselves as a sort of breed apart rather than being 'part of the main' as John Donne put it. That doesn't make for responsible behaviour and it inclines them to view the rest of the population with a sort of haughty detachment, whereas the commodity they deal in - money - has their undivided attention. They set the tone for what is permissible, which in this case is more money than they'lll ever need paid to the management and executives who sit at the head of the world's leading companies.
When the background to this is millions of people being thrown out of work it puts the activities of these same executives into their proper place - they are a squalid bunch of vultures pecking at thinning carcass.
They are among those other dimwits Croesus and Midas, who blinded by their own greed, lost sight of what mattered and what was important. oh, I know they do a lot for charity. So what! Attlee got in right when he said: "Charity is a cold grey loveless thing. If a rich man wants to help the poor, he should pay his taxes gladly, not dole out money at a whim."
Complain about this comment
The utter indifference of Jim Rogers when questioned about the UK economy spoke volumes about him as a man.
Complain about this comment
So now it is acknowledged what the problem is - and in particular just how bad it is for the UK - can we look forward to seeing the back of the person that keeps saying the problem is elsewhere. That would be a good start
Complain about this comment
poor old robert peston, even on a day like today when shares have rallied, he just cant help puoring salt in the wound
Complain about this comment
I have read the IMF forecast and am puzzled by Figs 1, 4, 5 & 6 where the grey (future) estimates seem to bear little or no relation to actual trends during 2008.
I guess that's because, as the report sub-heading half way down says, "The uncertainty surrounding the outlook is unusually large"
Finance-speak for "we have absolutely no idea what will really happen" I guess.
Complain about this comment
Isn't the problem that these hedge fund parasites have been allowed to commit financial terrorism for far too long.One whose name escapes me for the present,said in The Independent the other day that Britain in finished and he was going to short sell the pound.He now lives in Singapore which is like London in 1907! No doubt he means it has lax labour laws,no workers party and low taxes for the wealthy etc.
Thanks pal!
Complain about this comment
1.5 hours and no moderation, whats the point of this blog?
It has died, just like the labour party!
Complain about this comment
Nice thoughts 7 angryCB. I can tell you want the mess solved.
Unless Great Britain has a virtual presence on 2nd Life, they'll never all happen.
None will happen without calls such as yours though!
N.
Complain about this comment
So the conclusion to what you're saying is that the government needs to spend some serious lolly a la Roosevelt on some major capital projects. Yes? As far as I can remember from "O'Level" Social and Economic History it took WW2 and Lend Lease to get the United States to the position of the world's leading economic power. In other words, isn't this just a stop-gap? In the UK example it wasn't until the late 1930s that the economy started to pull out of the depression and then the war came along. Don't we need to look at the bigger picture re. manufacturing and finding new markets for it? The concomittant of this is that some of this funding ought to go in foreign aid: 1),to stimulate growth; 2) to secure raw materials and 3) to add to the existing pool of buyers on which any new and organic growth in the world economy will depend.
I can't see how anything tangible will come out of the following mix: low interest rates; high levels of unemployment; negative equity in the property market; high rates of government borrowing; lower tax revenues; reduced government spending; a low pound (in an economy where manufacturing way down the list of priorities) and poor demand for British goods from economies in a similar state to our own. What's your view?
Complain about this comment
Most of this negative media kicking around about the global economy, needs to be balanced out with positive solutions and leadership.
Complain about this comment
#7 angryCB
You suggest we all take a 10% pay cut.
WHY?
How about the Elite who own 98% of the wealth put their hand in their pocket!
Complain about this comment
Browns legacy
AN ECONOMY DROWNED BY DEBT FOR 20
PLUS YEARS.
If we are lucky the BIG R might level in 4 to
5 years with static performance for a further
5.
UK PLC IS BUST SO ARE VAST SECTIONS OF
THE POPULATION.
THE VALUE OF STERLING IS ANYONES GUESS
BUT MOST LIKELY: GOING DOWN?
Complain about this comment
I'm sure everyone is delighted that you've cheered up.
What about China? It's growth has been sustained by exports - what are the political consequences if this stops - can the Chinese internal economy take up the slack caused by what is likely to be a substantial slow down in exports?
BTW what is the definition of a depression as opposed to a recession?
Some of the above comments about the VAT reduction do miss the point. Although a reduction in employer NI is superficially attractive, companies this year will make decisions on hiring (or firing) staff not on this, but on their confidence as to whether consumers will buy thier goods. The VAT cut will put £12b into the economy and will provide a modest boost to consumer spending and confidence. It is not a magic bullet, indeed there is no such thing, but over the course of the year it may help.
Complain about this comment
Has anyone else noticed that all the prices have crept up to x.99 again. I asked why and was told it was inflation. So much for the VAT reduction, good for 3 months.
Complain about this comment
I watched those two jokers George Soros and Jimmy Rogers on TV for years and their advice stank. Rogers was so wrong so many times, he's hardly even on CNBC anymore. So they cheered you up. Doesn't take much Mr. Peston. I'm cheered today...because the one stock I own went up $1 a share. How did your portfolio do?
Is a depression "on the cards" as you Brits say? Yes and it has nothing to do with the UK. There is only one way out. The US must start printing money like crazy. It must inflate its markets with cash, devalue the dollar, and this will allow the rapid writedown of old debt including the biggest debtor of them all, the US government itself. Holders of debt will be paid pennies on the dollar but if this doesn't happen, most won't be paid at all as the debts go into default. The US therefore needs a massive round of wage price inflation. If other nations don't follow suit, they will go into a depression also because they will be priced out of the US market. How much money must the US print? I'd guess at least 5 to 15 trillion dollars, about 4 to 12 months of its GDP.
Complain about this comment
This credit crunch and housing slump has been excrutiatingly painful to extract admissions from economic forecasters and financial leaders.
Even when the obvious was clear to see, they were still on the late running train of admission.
It seems opinion slowly drifted from no impact of the crunch on the real economy, to a chance of a slowdown, to a technical recession, to a recession followed by recovery in the 2nd half of 2009, and then the latest a recovery in 2010.
As for the housing slump, this was pitched originally as a slow down in price increases.
Throughout all of this those arguing that a major slump was on the card were derided for abject pessimism.
Now it appears they were not far removed from reality if not on the nail in their estimates.
So, considering where the World opinion has been dragged reluctantly, those with form for accuracy are predicting a depression even Roubini. So to the likes of post 4 The NewPonzi, 2nd half 2010 (the current concensus) is highly unlikely, this could easily be a 10 year affair.
Failure to recognise the ensuing nature of the problems has (as has been commented by Roberts guests) been a major reason why the efforts by economists and ministers so far as been ineffective and belated.
When the value of money and assets has been reset, then and only then will the untenable boom be over, and this could take a good decade to rebalance (especially with money printing on the cards).
I would recommend Robert investigate what are still seen as the margins of economic forecasting as they could be right, and if so, to not prepare for it now could be devastating for the British people who are (on a Worldwide basis) suffering the impacts the most.
Complain about this comment
Gordon Brown is an annoying little nit!
Why can't this mealy mouthed man just admit his mistakes.
We are not prepared for the bust and he has not abolished boom and bust................................he's actually created the biggest boom and bust EVER known in this country!
How long will it be before Labour MP's dust off his ejection seat once again?
I for one cannot wait to see him booted out either by his own backbenchers or the electorate. Imagine his face.....makes me smile.
Meanwhile the rest of us suffer for his failed and imprudent policies.
Mega debt, millions without work, repo's, social disorder and no hope of salvation under this Gov't..............just months of knee jerk wretched governance from an administration most certainly as Cameron put it...........in it's death throes!
Let's get the dream team of Ken Clarke and Vince Cable to get us out of the mess.......or if the Conservatives win....Ken on his own will do!
At least we'll be running a sensible economic policy by a Gov't able to make the right medium term decisions rather than day to day policy rants designed for electoral expediency.
Brown must be throughly naffed off because the more he announces the more he goes down in the polls? He must wonder why?
It's because the British electorate have seen through your bluff and bluster and are now enduring hardships brought on by 12 years of utter incompetance.
I blame all those who voted Labour in 1997, 2001 and 2005.
Let's hope you guys have learned your lesson and don't repeat it in the next 18 months!
Complain about this comment
Robert...
..."Roubini is the economist who probably shouted loudest and earliest about the looming financial disaster.
And what he said cheered me up a bit (and I needed it) - in that he believes governments at last acknowledge the scale of the problem, even if (in his view) they haven't yet sufficiently co-ordinated their policies to create money, use taxes and public spending to stimulate demand, and fix banking systems. ..."
The revival of Banking Sector shares this week suggests that there are 'forces' at work... and would be at odds with your
analysis.
Surely The Great Godro hasn't fixed the Banks and not told everyone?
..."Our combination of massive debts, an over-valued housing market and excessive economic dependence on financial services (the City) has been toxic. ..."
Problem fixed?
The established World Order appears to be greed and chicanery...
Snake-oil Salesmen required... Adders/ bankers need not apply
Complain about this comment
If GB would finally come clean about the state of UK plc. we might have a chance to start to take some postive action to move forward.
The jig is up GB -- stop insulting the intelligence of the British public and continually repeating these tied old sound bites! You`re fooling no one but yourself as you will see come next election day.
Complain about this comment
As much as I despise Brown, I hate the thought of what Cameron will get up to.
Er Merv
What is it David,
Pass mal une Interest rate Lever Si vous plais (Cameron pulls down as hard as he can)
Result? You don’t want to know!
Complain about this comment
43 armchairstregist.
How many years have we had of foreign aid this decade in Iraq and Afghanistan not to mention domestic infrastructure spending [admittedly military]?
I seem to remember that Vietnam was paid for by inflation but that was many years ago. Not quite wearing shorts then but that's a previous discussion.
Let's give aid to Zimbabwe so long as it doesn't go into Mugo's short-term bottomless pockets.
N.
Complain about this comment
Forget Soros and Rubix
The only true indicator of the deepening impact of the depression is how many posts RP's blogs get as people lose their PC's or save their electicity.
If RP's blogs contract more than 2% then we're all in trouble .
If it keeps inflating then another bubble needs to be burst!
Complain about this comment
So we all bought into the dream, a piece of paper had some value and expected it to retain it's value when all across the world countries were making there own bits of paper.
The media outrage, the market spikes and our reliance on asset stripping the planet point to one thing. The system does not work. The media is just trying to scare us into accepting what is to come and we shouldn't.
We as humans can only recognize and remember a thousand names & people. We need to make cooperatives with just that many people. We should include workers, family, our elders and our children. Our cooperatives need to have a single goal, to better our lives and that of our neighbours.
We are perfectly capable of supporting ourselves and ours. We dont need a government redistributing our wealth. We dont need a government watching our every move.
Complain about this comment
A little "whistling in the dark"? It helps me at times, when I'm affraid. However, as to it having any effect on world debt in the millions and millions of billions, maybe putting our heads in the sand would be just as effective. I wonder what these two guys, Soros and Roubini, are doing right this minute, you can bet their not trying to figue out how to pay their heating bills, maybe getting a rubdown or having someone mix them a fresh martini by the pool?
Complain about this comment
This crisis must now move rapidly from one of morbid fascination with things financial and economic, to one of brutal political reality.
Gordon Brown has demonstrably been an unmitigated disaster for the UK; just look at the latest IMF and IFS Reports. It is shocking the extent to which our Prime Minister is prepared to spout barefaced claptrap about the other-worldliness of this situation and his benign involvement.
This behaviour in the face of incontrovertible evidence that, of all of the world's developed economies, the UK is careering fastest towards basket case. For Gordon, however, the crisis is all America's fault; the problem is global (and, therefore, not one he can/should own); the UK is in great shape. You what, Prime Minister?
Brown spews out this rubbish time and again on TV, on the wireless, during speeches, at press conferences, in Parliament ... anywhere he can really. To my utter astonishment a significant minority of the British people still believe him; what on earth are they on? What do they read/watch/listen to?
The latest reports from the IMF and IFS combine to drive a stake through the heart of Gordon Brown's pathological denial that he has anything to answer for in all of this.
All the portents are that the UK's problems will soon be moving swiftly from financial and economic forecasts, statistics and technicalities to dreadful social problems.
There is now a scary, bunker-mentality emanating from the Cabinet. Brown is seized with indecision, able only to make one panic-stricken tactical decision after the other, unable to grasp the true nature and scale of disaster he's masterminded, still less able to map out a strategy for recovery.
Gordon Brown has become an affront to the dignity of the office of Prime Minister of the United Kingdom. His cabinet colleagues are culpable for letting him get away with this; it's that bunker mentality again.
If Cameron doesn't up his game pretty damn quick and start landing some killer blows on Brown, I'll wager that the situation in this country will get ugly over the next 12 - 18 months. If Brown had an ounce of decency or statemanship, or the qualities of a gentleman, he'd resign tomorrow morning. Fat chance eh?
So, prepare for an ugly year and, like the IFS reports today, 20 years of austerity. Go on (unelected) Prime Minister, say it again, "No more boom and bust ...".
Complain about this comment
So, who do you believe? George Soros who has a proven and unenviable track record, or Gordon Brown who doesn't. Mr Brown still has still to explain what happened to our gold reserves and what we have got in return for billions sunk into the NHS. From today's news, it seems that they have got e-mail working and I am supposed to be impressed by this!
And my point is that Agius, Varley and Soros are professionals and haven't got where they are today by being stupid. On the other hand (and as far as I can tell) neither Gordon Brown or Alastair Darling have any formal qualifications in anything to do with money (economics, banking or even accountancy). Do you want to believe the amateurs of the professionals? - it's not a trick question.
In my lifeboat, I have Marcus Agius, John Varley and George Soros. Gordon Brown and Alastair Darling are a waste of rations and can take their chances with the sharks.
Complain about this comment
I would like you guys from the media to try and focus a little bit on the positive please!
For instance: Asda have created 1000 jobs as have BSkyB, i don't see you reporting on this. Our mortgages have gone down, of which i have fixed the rate for 2 years, yippee! and i have no intention of selling my house so i don't particularly care if it is worth £30k less, as in 2 years it will probably be worth £30k more :)
One of the reasons the economy is where it is now is the media focussing on the negatives and promoting a lack of confidence.
If you could look on the flip side and report on the positives, this will lift us all and raise everyone's moral.
Complain about this comment
"I blame all those who voted Labour in 1997, 2001 and 2005.
Let's hope you guys have learned your lesson and don't repeat it in the next 18 months!"
I see the quote in 15 years time:
"I blame all those who voted Tory in 2010, 2014 and 2018.
Let's hope you guys have learned your lesson and don't repeat it in the next 18 months!"
Complain about this comment
So pleased that we, the licence fee payers, have been able to pay for you to be cheered up. I'd be cheered up if someone else paid for a nice trip to Davos
Perhaps Robert you have some suggestions for the rest of us as to how we might be cheered up.
Complain about this comment
We sure as heck are 'best placed to face the downturn' in the words of Gordon Brown aren't we? Well are we? Oops!
Complain about this comment
Is this GDP, GNP or some other measure? Percentage of what? Sloppy reporting.
Oh and by the way 0.5% growth worldwide means that some people will still starve, some people will be in war zones, rather more will eat and keep warm, clothed, housed and fed. Some will do this with less in their back pockets.
We will not be back to the stone age
Enough moaning and groaning Robert, we don't pay you for you to tell us you need cheering up. I think your job is pretty safe, so please don't insult us with your 'anxieties and misery' whilst admitting you are on a working jolly
Complain about this comment
The site below keeps tabs on the latest layoff numbers.
http://www.layoffdaily.com/
Complain about this comment
I believe that this recession will take quite a number of years to recover from. It will be longer and more prolonged compared to other more recent downturns - possibly 5 to 7.5 years to recover. The structural changes that are required to stabilise and introduce confidence to the public and institutions will take a number of years to introduce and embed.
Complain about this comment
# 61 mysteriousfiona
You are joking ... aren't you?
If not, then I can see that Gordon Brown and you could have a lot in common. If you take a look at my post at # 59, it's possible that you're one of the folk that can answer my question about what it is exactly that people like you smoke? Nothing personal at all, but comments like yours are, er, a tad naive to say the least.
Complain about this comment
When you quote forecasts from supposed financial experts - , IMF etc - could we get an idea of the accuracy of their previous forecasts - - - IE lets have an accurate history of how good they are -- How accurately did they predict the Global Recession
Complain about this comment
No 32 speaks the whole truth.
Nobody in HMG live in the real world of ordinary people. They are protected from the realities of everyday life, most having never held down a proper job. For them making ends meet has never been a problem.
However these politicians are now saying that Banks must lend more money to people in order to save the economy.
I have said before, and I will say again, there are people with money and there are borrowers. Those with money only buy what they need when they need it, that is why they have the money in the first place. It is only those that live beyond their means that will borrow, and at the moment they are already maxed out.
I understand that Banks have been turning down 1600 requests a day for car finance. Most people are not refused for lack of funds, but because they are carrying too much debt already.
Surely this car "bail out" will not mean that more debt will piled on top of an already dodgy mountain.
Most of the "big" purchases in the last few years have been achieved through reckless people taking equity out of their home in order to buy 4x4 cars, holidays, luxury items etc.
This form of borrowing has now ceased causing an annual shortfall of 50bn being spent within the economy. It was not real money but created by a false asset gain.
This asset is now depreciating leaving the lenders and the borrowers with a lot less collateral against the loan.
How can the Banks possibly cover the 50bn spent then when people have no other asset to borrow against, at a time when many other lenders have left the market place.
What I have said may be simplistic but who in their right mind would want to borrow money in todays world to purchase an item like a car, that will depreciate by at least 20% as soon as you drive it away. You only have to visit the car auction house near where I live to witness the cars under two years of age, that are passing through unsold. And I am talking here of cars that cost in excess of 30k when they were new.
Complain about this comment
I have to agree with a few of Ron Pauls observations of the problems in the USA and thr solution and it will work here
We can assume there will be a big bang, if China decides to start using the money it has saved up, if it holds it then god knows why they would that is all that is saving us just now
But rather than wait these proposals will help.
1. House prices need to come down
2.If people are in neg equity banks can extend the time of the mortgage
3.Reduce the cost of commercial rent, to encourage the small startups to populate the high street, this can be done , by making commercial property rent tax free.
Commercial rent to be frozen and no other fees to be considered to allow for fair distribution.
4.Move runway 3 to the midlands , build a high speed rail link to Heathrow from the North
5.Make it financially attractive to move things from London to the North and Midlands.
6 Retire the house of Lords
7 Do away with the Circus that is PMQ and have him or her answer questions from the public , in a different city televised every week
8 If you become a minister then no other jobs may be done.
9 Imprisonment for corruption
10 ten percent tax rate for all income from 50k- £100k anything over £250k 50%
anything under 20k tax free
11 statutory work for the unemployed , be it sweeping streets, helping out the elderly, if you dont do this , you will get no money, this goes for single mums and dads too.
12.Accountants and Auditors Liable for signing off of company accounts, if they dont blow the whistle they get huge fines, if they do blow the whistle they get huge reward , this will encourage big business to be nice and play fair
13.All accounts to be settled within 30 days, no negotiation, illegal to negotiate longer payment terms, even if you are the company doing the bidding, this can be checked again by accountants same rule as above.
Take note Tesco et al fines of a million quid per offence for them, and also for Tesco Asda etc to have to renegotiate their purchase price upwards to be at least cost + 10% in favour of the supplier, to allow small business to make a living
14.Utility companies to be nationalised
15. National credit unions set up , all loan shark companies to be made illegal or if they would like to stay in business no more than 1% higher than average bank lending rate
16 Daily publication of all government minutes
17 Scrap the Anti Terrorist laws
18 Bring home all troops from abroad
19 Have local community wardens employed in all areas with harsh sentences for all who break the law, using video evidence from the wardens
20 theres more but its time for a cuppa
the above is very very doable and would not cost very much compared to what they are doing now
Let companies that are going to fail, fail, let the bones be picked and have private investment buy the bones and restart
Have a national saving scheme and get rid of government borrowing.
Get rid of 80% of the government.
Complain about this comment
Those greedy companies who got fat over the last ten years are using the Crunch as an excuse to shed the extra pounds.
Most of them thought the sky was the limit. Expand, expand, expand and forget about your debts. Exactly like those people who lived the high life on borrowed time and money.
We will see this trend continue until the UK gets leaner once again and the British more cautious with their money.
We will a lot of businesses fold over the next few months but I really believe that apart from a small unlucky proportion, those companies who are run efficiently and responsibly will manage to survive and come out stronger.
Complain about this comment
61. mysteriousFiona
"I would like you guys from the media to try and focus a little bit on the positive please!"
Fiona,
RP is a "lagging indicator". Hence the reason he's on holiday in Davos (at your expense as a licence payer) with groups of people whose businesses are falling apart (private equity, Hedge Fund managers, senior bankers etc). These people are yesterday's news on the whole. If they had proper jobs that could improve the economy, they'd be doing them, not glugging Krug in Davos. RP could be here, getting the scoop on the good news you note, plus a few others, such as the fact that Citi have called Lloyds a "Buy". It's quite a while since any broker recommended any bank as a shareholding. He'd also see that banks shares generally have now gone up, sharply, for three successive days. Much more of this and we'll have to acknowledge that real investors must be buying them.
Or he could go to Washington DC and report on the positive impact Pres Obama's plans (especially his "bad bank" one, I think) is having on sentiment there (S&P up a further 3.5% today).
I don't think it's quite accurate to say there's lots of good "real" economic news on the streets right now. Most of the stuff that affects us day-to-day (reposessions, job losses etc) are lagging indicators. However, it is true to say that the news is getting less bad and, more importantly, is now starting to be not as bad as forecast. The positives I've noted are leading indicators, and I can chuck in a couple more from Europe: French consumer confidence up (ie less negative) from last month and better than forecast. German investor confidence up for the last two months (again, less bad than previously rather than positively good, but beating expectations).
So I agree RP and others should report on these more. But you won't get any of it from Davos. This year's theme is "DOOM", as Davos is a media circus, not a serious economic gathering.
RP was late getting into the "Doom" scenario, and he'll be late pulling out of it. Like I say, a lagging indicator.
Complain about this comment
I was thinking about what the next stage of this whole unravelling will be and then something happened at work. I am in aviation and like a lot of industries most of our assets (aircraft) are leased. The lessors borrow money to buy the aircraft but the banks insist on a Loan-to-Value on the amount so that they aren't over-exposed on the loan - just like your mortgage. Trouble is with the current downturn in demand and aircraft deliveries being deferred the residual value of aircraft has dropped dramatically - upwards of 20% in some cases. This is obliging the banks to demand money to make up the LTV ratio. If you own a lot of aircraft you could owe a lot of money which you probably haven't got without selling some other aircraft in a depressed market thus driving values even lower. There are two really big lessors - ILFC - owned by AIG - and GECAS - owned by GE. Watch this space as they do their best to get out of this.
Complain about this comment
# 60 bankshareholder....
had to laugh at your last part, i'm afraid that you have kept the real sharks in the lifeboat with you!!!
Have to agree though, gordy and ally are out of their depth and swimming further up the deep end with every move they make.
Robert, i am concerned that george may have pokerfaced you, nothing is priced in when the banks are hiding the scale of their, sorry our exposure.
Still, glad they cheered you up old son, lets hope we can return to indiana peston and the blog of doom soon!
Complain about this comment
#61
Yes ASDA and Morrisons have created jobs BUT (and it is a significant but) people don't eat MORE food during a recession - if anything they eat less - but more likely they are switching to lower quality and thereby cheaper produce.
It seems to me, therefore that the Jobs being created by these two supermarkets will, in effect, be just shifting jobs from the higher quality end of the market.
Indeed, if ASDA and Morrisons are more efficient in the usage of staff than other organisations (very likely) then more workers will be laid off e.g. many sole trader shopkeepers than new jobs created. However 1000 corner stores over the country each losing 2 or 3 staff do not in themselves make the news headline.
Complain about this comment
Is it just a case of an economic model, adopted by all world economies virtually, that depends on a slightly unreal assumption that world economies will grow perpetually and as soon as that fails we all go into "OMG what do we do now?" mode.
Those assumptions then get embodied into numerous computerised models and we all stop thinking; we just believe what the computer models tell us.
Surprise surprise; human societies don't behave like pieces of software and the adaptation of software is virtually always in response to actual events and hence lags reality.
This is an event that was bound to happen; let’s hope we can use our collective, and I stress collective, brain power and communications skills to develop and critically execute a plan that will develop a feasible workable model for the future of global economies.
A huge benefit that could potentially come out of this exercise is that we can plan on the basis of sustainable use of resources; may be this little depression will prevent us from heading towards a much bigger environmental catastrophe. A global slowdown must mean a reduction in consumption of global resources hence less use of Hydro-carbons and generation of CO2 and thus a big reduction in our individual and collective carbon footprints.
The drama queens on here don't know what hardship is; just remember "What doesn't kill you makes you stronger"
The other mantra that needs to be developed and adopted by everybody is one based on not blaming everybody apart from oneself. We have all been part of this experiment and seen the many benefits and most of those will remain.
Just look to see what we can do individually and collectively to improve the situation and act accordingly; it’s just too easy to blame everybody else and do nothing.
Complain about this comment
68. moraymint wrote:
"# 61 mysteriousfiona
You are joking ... aren't you?...Nothing personal at all, but comments like yours are, er, a tad naive to say the least"
I've left out the middle bit of your post which was,well, personal. More imortantly, I'd just make the comment that Fiona included a few facts to back up the point she was making. Your post # 59 was just a mindless rant. You took a couple of reports, ie FORECASTS, and asserted them as fact. I'll bet that you can't remember what either the IMF or IFS was forecasting the UK economy would grow at in 2008 this time last year. I think you'll find they were both wrong by a considerable margin. They may well be equally wrong about UK's economic performance in 2009.
By all means criticise GB if you're not happy with his performance. Few of us will have any real disagreements. But if you're going to criticise others on here with a view that doesn't fit your own, at least do them the courtesy of finding a few facts to back up your position.
Complain about this comment
Predict the worse and then be pleasantly surprised.....
A client of mine is a broker in the City and was predicting all of this over 2 years ago. I saw him this morning and he reckons the FTSE will end the year in the 5000-5500 range but will dip back again in 2010 following a premature surge. I asked about the housing market and he reckons prices will bottom at the year 2000 levels and then we just start again.
But we will survive and the good news is that we are unlikely to witness a period like this again in our lifetimes.
So come on people appreciate that we are part of history and we will be able to tell our children and grandchildren how any future downturn is nothing compared to 2009... and more importantly how we came through and prospered... and believe me WE WILL!!!
In the meantime - heads down, work hard and live according to your means . Caution but not panic.
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
#61. mysteriousFiona wrote:
That we should all be more positive and talk things up. Unlike #68. Jan 2009, moraymint I have some sympathy with mysteriousFiona's view. I do not view it as a charming, but misguided expectation that being positive is a good thing in itself.
The sooner that we can talk up the economy; the sooner we can really see green shoots then we must talk it up.
However, even as an optimist myself, I am unable to find much to be cheerful about yet and I have been looking, except possibly that time has passed and the worst catastrophes have not yet happened. (Quite obviously I will not describe them here!)
I don't feel that those who we have charged with running things have much of a grip on events or of the data of past events. I want to see a complete refreshment of the professional personnel in the Bank of England, The Treasury and the FSA. I cannot accept that those 'skilled professional' who led us into this catastrophe are capable of so changing their mindset to be able to understand how to extract us from this mess.
It is not through a sense of justifiable vengeance, but it would make me even more optimistic if new untainted hands were on the regulatory tiller.
Complain about this comment
Regarding bank lending I contacted our bank manager this week and asked for details of the government backed loans for small businesses.
Apparently all home county and london managers were called together and told by their superiors they have to start lending to small businesses.
The scheme - 2% premium on interest paid to government who guarantee 75% of the loan. The bank has less risk so demands a higher interest rate. Lending is from £1,000 to £500,000 and the lending period can be up to 10 years.
He said "for a firm with a good credit rating you could be looking at 2.5% over base plus the 2% which today is 6%"
The manager asked me if he could contact 3 of my clients that he had turned down in recent months as he now thinks they can lend.
If you run a business and need help call your bank manager and ask about the Government Backed Loan Schemes.
Complain about this comment
RE: selling gold and foreign reserves. (all details courtesy of BoE which publishes the details in the 1st week of each month.)
THE RESERVES IN APRIL 1997
The overall level of the UK's official reserves rose by $552 million in April, bringing the end April reserves to $40,609 million (£25,029 million[1] ), compared with $40,057 million (£24,570 million[2] ) at the end of March.
Part I: UK Government Foreign Currency Assets and Liabilities – December 2008
1. UK Government net reserves rose by $1,534 million in December 2008, bringing the end-December
total to $28,022 million (£19,374 million1) compared with $26,487 million (£17,263 million2) at end-
November 2008.
It should be pointed out that reserves have been much lower than this, however. IN August 2007 the reserves were only $22 billion (£10.9 billion due to high exchange rate) and in 2002 they were even lower - $14 billion.
Something funny happened in March/ April 2000. I was not interested in the figires then but they are reported as:
Part I: UK Government Reserves - March 2000
1. The overall level of the UK Government's reserves, including the forward book, rose by $40 million in March, bringing the end-March total to $31,575 million (£19,794 million(1) ) compared with $31,535 million (£19,972 million(2) ) at the end of February 2000.
Part I: UK Government Foreign Currency Assets and Liabilities - April 2000
1. The UK Government's net reserves, fell by $41 million in April, bringing the end-April total to $13,643 million (£8,764 million(1)) compared with $13,684 million (£8,589 million(2)) at the end of March. 58/00 4 May 2000
So somewhere we seem to have lost $18 billion - a bit careless to my way of thinking.
Complain about this comment
robert,
what are we to do?
we could of cause continue with the existing model.
the rich remain rich or super-rich and the poor pay the price or we could attempt something DIFFERENT!
how about looking more closely at income.
the minimum wage is set at below poverty level.
large employers settle wage claims well below the cost of living, even staging pay rises across the year.
energy, water and food costs had been running at double digits and still are!.
the result the average family is surviving with no disposable income.
a recent survey in the south west of the u.k revealed that income there is 16k per annum but the "national average" is 26k
should employers be encouraged to increase pay particularly those who are benefiting from the current issues. or should they be allowed to target the long term unemployed pay them the minimum wage or just above and receive a government kick back for doing so.
20% of the population benefit 20% of the economy but the model we are following at the moment is expecting the top 20% to benefit 100% of the economy
Complain about this comment
What on EARTH is going on with the moderation. Lately?
2-3 hours at times to moderate posts.
Has the recession bitten Auntie and now the moderators lost their jobs?
Has someone made a divine gooey chocolate cake for tea breaks so all their fingers are too sticky to press the 'yes' button?
Are the moderators being retrained as car builders?
Or, for conspiracy theorists, is it all part of the masterplan to put a stop to possible insurrection by slowing it all down so much that noone bothers to post?
One last thing-
Alexander Curzon, it's SO GOOD to have you back! I've missed your direct, easy to read comments! Hope you're ok-was worried.
Tigs
Complain about this comment
Although things are clearly bad I still feel the gloom is being overdone. It is not the 1930s. We are not, unless I have missed something, about to engage in war with 10 million other Europeans. Total gov. borrowing at 57% of GDP (IFS) will not be unserviceable. The economy is much more flexible now than in the 70s, and more flexible than other majorEuropean economies. The one thing that will screw up recovery is lack of international co-ordination with some nations trying to free ride on fiscal stimulus of others or engaging in covert protectionism. The one thing that will prolong the recession in the UK is the return of a Conservative Government that, to avoid making tough decisions on current spending, cuts capital spending. The last 18 year period of Conservative Govt saw negligible public and infrastructure investment.
Complain about this comment
Shares up some again today-guess they were so cheap everyone's buying them!
I'm sure these gentleman of whom you speak, Robert, are esteemed within their fields, but forgive me, I find it very hard to trust what they say.
Frankly, any bigwig in finance I view with extreme suspicion.
The highest level players have bankrupted our country (even if the government doesn't know it yet). My children, and theirs (if they have any) have yet another dirty legacy to deal with.
That, in any language, is unforgivable.
Complain about this comment
I believe it is now necessary for New Labour to ask themselves questions on the errors of their policies which have led to this economic catastrophe. The IMF clearly stating that the UK is in the worst economic position of the developed world.
It must be clear to most, including New Labour that Gordon Brown's position is no longer tenable as Prime Minister. Is he not now far too synonymous with rising unemployment and falling sterling. In my view a first best move would be for New Labour to replace Gordon Brown with their best 'statesman' available. For what its worth my vote would be on Charles Clarke at the tiller for the rest of this parliament.
Complain about this comment
At this stage it does still all seem to be about perceptions and confidence. With that in mind I noticed a raft (why is it always a raft?) of new job announcements for the UK yesterday. Is it the case that such things are not normally reported and that the governement is doing all it can to increase confidence or am I just been cynical.
Complain about this comment
Robert,
I've just viewed the internet interview between you and George Soros in Davos.
Just for a little more cheeriness on this blog, I was struck by the similarity you have with David Tennant in his role as the 'Doctor'. Perhaps it was the scarf.
With a sonic screwdriver and a Tardis you'll know no bounds [or expense claims].
I seem unable to go for an honest chuckle; tainted by the last four months?
Oh, what the ...., if some of us laugh and smile it will spread to others. Humour and good feeling cost nothing.
Good luck to you and your respondants.
[Bloody Yank spell checker, I'm sure the correct word is 'respondant'. Mind you, I'm not a lawyer.].
N.
Complain about this comment
I have very little faith in the IMF forecast - their record doesn't stand scrutiny. If things are deteriorating more rapidly then their global predictions appear to be a tad optimistic for 2009.
As for the UK, who knows. Both we and the US at least appear to be ahead of the game in recognising that our current economic structure is no longer viable.
However, whilst I do not support GB's proposals I an sick and tired of the silly comments that our position would be improved by replacing him with either Clarke or Cable. Neither has the answer.
Complain about this comment
Re government loans?
Is it a case of 'computer says yes or no' still?
Not many businesses will have a 'good' credit rating as I doubt any lending criteria programs ignore performance on the last 4 months-you know, when banks started foreclosing on loans, overdrafts etc. Or when businesses have had default notices registered against them because of cash flow problems from customers taking longer to pay and suppliers demanding earlier and earlier settlement of bills.
Sorry to sound cynical, but until the rating agencies are sorted out or bank managers are given more ability to override the computers, credit of any kind is not going to flow well at all!
Credit should be scarce, but suppliers and customers should settle accounts in 30 days. Then there would be no need for some firms to require credit.
Trading needs to become honorable again. The giants should be fined massively for taking in excess of 100 days to pay, forcing discounts on settlements no matter how long they take to settle and negotiating costs down so low that suppliers are forced to operate at a loss.
Throw in a decent tax cut all round and a modest base rate rise and we'll all be laughing about this by the summer!
The icing would be investigations and prosecutions of the perpetrators of our misery.
Now then, which political party would do this I wonder?
Complain about this comment
How can anyone let alone economic experts or gurus qualify or quantify anything when the UK has items such as PFI and off balance sheet items?
Quite frankly these comments are as useful and as satisfying as p***ing into the wind!
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
there's enough for all my need
but not for all the greed
we got investment
we got the asset
we have the income band
and all the outcome band
we have the sun and the rain now
we got the white clouds
and the sun in my eyes
too much money
you've got too much money
Complain about this comment
"mysteriousFiona wrote:
I would like you guys from the media to try and focus a little bit on the positive please!
For instance: Asda have created 1000 jobs as have BSkyB, i don't see you reporting on this. Our mortgages have gone down, of which i have fixed the rate for 2 years, yippee! and i have no intention of selling my house so i don't particularly care if it is worth ?30k less, as in 2 years it will probably be worth ?30k more :)
One of the reasons the economy is where it is now is the media focussing on the negatives and promoting a lack of confidence.
If you could look on the flip side and report on the positives, this will lift us all and raise everyone's moral."
mysteriousFiona are you actually aware of anything that's going on around you??? The reason we are in this mess is because of the global housing bubble whereby house prices rose well above their long-term trend related to affordability (The problem is worse in theis Country than moist others). I can assure you in a couple of years time your house will be worth another 30k less not more. I you bothered to do 2 minutes research on house price trends you would come to the conclusion that it will be at least 5 years before they reach bottom in real terms. If any government is to address the current problems they will need to raise interest rates within the time-frame you've mentioned. The reason the economy is the way it is is because of basic economics - too much debt, it has NOTHING to do with people talking down the economy.
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
Soros and Roubini? Nah, they are probably only playing up their own books. It is not so much opinions as trying to whip up a more profitable sentiment.
Maxwell betrayed his workers and their future. He once said "You can trust me.".
Madoff swindled those who trusted him - includign friends of many decade. We don't really know who Soros and Roubini are, what they had in mind or what are the agenda. Likely to be another two devote, failthful worshippers of G.O.D (Gold. Oil. Dollas).
Over 40% of Wall Street bankers surveyed are not happy with their bonuses for 2008.
(source. Bloomberg).
Last week two hedge funds – RAB Special Situations and SRM Global Master Fund – claimed that the nationalisation of Northern Rock amounted to a violation of their right to "peaceful enjoyment of possessions" set out in the first protocol to the European convention on human rights.
(source. Guardian. 28 Jan 2009)
From Peston's blog on Davos, it seem the bankers and financiers are vey concerned about themselves and more about themselves.
What have some of these very well paid bankers done to us and to their business?
Since 1999 or during length of serviceThe following 7 bankers/financiers have received/taken a total renumeration of £977m. For the £977m, their businesses took a total credit crunch hits, since August 2007, of £404bn. It is like an emplyee on £20K losing the company £8.26m.
The names are :
Stan O’Neal, Merrill Lynch.
Jimmy Cayne, Bear Stearns.
Lloyd Blankfein, Goldman Sachs.
Dick Fuld, Lehman Bros.
Sandy Weill, Citigroup.
Hank Paulson, Goldman Sachs.
Chuck Prince, Citigroup.
(source - Guardian)
Do I believe what they say? Maybe, because they and their connections have enormous power to move things.
Do I trust their motives to be benevolent to all? Wait ... I just saw three glowing flying pigs.
New World Order indeed.
Complain about this comment
This is turning into a repeat of the 70s.
As Robert says, printing money has started already. The political cycle demands this remedy as it's the only thing that will work quick enough to get the incumbent re-elected.
But remember that in the 1970's there were years of inflationary turmoil - a sort of Methadone treatment when coming off Heroin. The belief is that to go 'Cold Turkey' will kill the patient. This eventualy happens when the desperate population elect someone like Thatcher.
So the sum total of pain is actually more, but it is diluted over time. Both the innocent and guilty suffer.
Let's say Cameron gets a majority of 120. He could go the Thatcher route and get us on our feet much quicker since he has 5 years to do it.
1. Massive cuts in Public Spending.
2. Public workers to retire at 70.
3. Prison places to go to 250k with chain gangs.
Naturally, he wont because circumstances dictate he will be playing the Ted Heath role this time round...
Complain about this comment
@71:
"7 Do away with the Circus that is PMQ and have him or her answer questions from the public , in a different city televised every week"
Great idea! I wish your ideas could be put into action immediately.
But do you have any suggestions on how to get rid of the pitiful lot in charge?
Complain about this comment
#71 romeplebian wrote:
"13.All accounts to be settled within 30 days, no negotiation, illegal to negotiate longer payment terms, even if you are the company doing the bidding, this can be checked again by accountants same rule as above."
My alternative take on this:-
1. Statutory maximum time limit on payments. 21 days should be adequate.
2. Should a firm go into receivership then the receiver to have a statutory obligation to collect double the payment for all overdue accounts.
3. Payment to have the meaning of irrevocable value and not "cheque in post".
This would I am sure make big firms think about their payment policy. They would not be able to put any pressure on their suppliers as the obligation would not be on the firm but the receiver.
Small firms could pop into receivership, get paid double and then go out of receivership.
Complain about this comment
as Economics is not a science, can any report have any credibility ?
each report is based on an assumption, backed up by guesses/estimates with a large margin of error !
the shame is that economists get well paid to waffle and come with theoretical solutions to problems that may not exist !
the problems that do exist will only be analysed in many years time when the outcome is known and for each theory there will be many still disputing what should have happened !
when will there be a recession in Economics ? will there be job losses for analysts who got it wrong ? or will they claim it wasn't their fault ?
Complain about this comment
Can anyone give a considered view if this recent IMF news points to interest rates remaining near zero for ten or more years, similar to Japan.
Alternatively will all this liquidity input and recapitilisation pent up the demand for rising inflation and higher interest rates within a ten year horizon ?
Complain about this comment
#103
The natural consequence of printing money and pumping it into the system will be an explosion in inflation rates.
By default, this will also mean much higher interest rates too.
Based upon recent history (1970's) I would estimate that we are looking forward to rates in excess of 20per cent per annum in about 18 months to two years time and there will be precious little that HMG can do about it (even if they wanted to).
It is to be hoped that new homebuyers do not mortgage themselves to the hilt whilst interest rates are low (as they are at the moment).
p.s Robert,
what happened to the 37Billion pounds paid to the banks? This is equivalent to 750 pounds per person in the UK. We know that it has disappeared (like the US 350B) but what was it spent on.....I think the taxpayers have a RIGHT to know.
Complain about this comment
# 49 marcus aurelius
your theories about the amount of 'quantitative easing' needed in the States is interesting and a different take on things than what is usually seen on these blogs or in the mainstream papers
are you an economist?
you must be one of those one-armed economists then, as you didn't even suggest an alternative scenario
or a follower of the notorious Jimmy Rogers, trying to talk up some more currency instability
personally I suspect that all this 'poond is doomed' talk has been v. exaggerated and if anything it will float back up to $1.50
but then you don't know who I am either or why I would say that ....
PS to Robert: when you return from your ski trip could you perhaps look into what is happening with PFI schemes? as I understand it there is c 100bn of planned spending on hospital and school rebuilding as well as other things and it can't continue under current PFI arrangements; so will the govt socialise this risk too? or let projects drift to a halt? it is a lot of projects and therefore has a big impact on various bits of the economy
Complain about this comment
From: [Personal details removed by Moderator]
To: [Personal details removed by Moderator]
Subject:
Date: Thu, 29 Jan 2009 02:39:26 +0000
Who benefits from a collapse in the economy.Construction companies get money thrown at them if they have the correct carded workforce.then they can tender for massive contracts. How do you get a skilled workforce.You send your employees on a course that is really only accessible through government funding.Who runs these Training schemes.The construction companies of course.What a fantastic way of generating income both to fund your training and to gain the available contracts.I now realise why it is so difficult to become a registered member of the CITB.Its nearly impossible to access info on their site.Why?Somebody doesn't want you to.Who.Primarily the people responsible for these government funded training centres.So we now have an answer to our initial question.Brilliant isnt it.Now im not saying these agencies do this for this reason but when they are open to fraud as i have discoverred someone is responsible for wasting TAX PAYERS money.I have forwarded this email to several people .I hope someone will put it into the public domain.Im only not sure i like the consequences.and i see the day things change.
Complain about this comment
Blair is as cupable as Brown, pre election '97 he carved up the PM job with Brown in some cafe, and then rubber stamped or kept stum on everything Brown did in the ensuing years, from the pension fund 'raid' onwards. However most of the time they didn't appear to be talking to each other.Rather like the MD of a company not being on speaking terms with the Financial Director. Time for Brown to consult the 'moral compass' and resign , that would be the best boost to the economy/confidence without doing anything else!
Complain about this comment
Soros and Roubini cheer me up
shouldn't that read
Soros and Roubini, cheer me up
# gruad999
'This is turning into a repeat of the 70s.'
No it's not a repeat of the 70s, that was a time of full employment and strong unions, a sudden rise in the price of oil forced prices to rise followed by higher wage demands, higher price inflation and a viscously increasing cycle.
'As Robert says, printing money has started already'
This started as early as december although the floodgates (helicopters) have not yet been opened as they can't be released to early or in isolation.
interesting thing though, today I saw 4 brand new RBS 20 pound notes (I don't live anywhere near scotland) does anyone know if they have to report weekly like the BoE currently does
Initial bank stabilisation is complete, the 37Bn (in bonds not cash) that was poured in hasn't gone anywhere, it is sitting in the vaults, at the same time as he lent the money at 12% interest, he forced them to de-leverage (ie. keep more liquid reserves)
Other banks and institutions may require further support as the toxic debt is flushed from the system
Support for perceived key industrials has started
(the perception of key is different for all of us)
most of these measures are aimed at calming markets although some are interlinked with the general population perception (re-trained not re-dundant)
Although caution must be used as the markets may not react to one action but may over-react to another which would hinder further actions.
Demand must be stimulated in the short term, Expect more tax cuts of one form or another for the poorest elements of society as they are more likely to spend rather than save. Do not expect corporation tax cuts as these take too long to feed into the greater economy.
Key infrastructure projects that are already in the pipeline will be brought forward to provide further stimulus.
Inflation will be used to reduce the value of debt
Confidence is key and timing is everything.
(obviously they attended the briefing but didn't understand a word of it, 'green shoots', you can hear GB on the phone 'yes I told you to sound upbeat, but I also told you to wait. Fools, I'm surrounded by fools and idiots')
Either it will work or it won't.
But for all this governments faults (CSA, ID cards, national childrens database (do you know that all of your childrens details will be left on a bus somewhere) unelected ministers, frankly barking home secretary etc.)
I would rather have this lot than some kind of a return to sudo-thatcherism with DC and co
(now that really would bring me out on the streets)
Complain about this comment
It's a bit of a rollercoaster this economy lark isn't it
one day it's
Collapse of confidence in banks
* Robert Peston
* 19 Jan 09, 01:46 PM
and the next it's
Faith in banks
* Robert Peston
* 20 Jan 09, 09:55 AM
Complain about this comment
Fine! vent your spleen on Brown and Blaire - it'll make you feel better.
Now sit down quietly and ask your self the following question:
Would the net effect have been any different had the Conservatives been in power? - answer honestly. If you do then the conclusion would be - probably not!!
Far more importantly for us all in the UK is how do we get out of this mess?
I am tempted to believe that both the IMF and IFS reports overstate the UK position. Just a gut feel you understand as I don't have their accumulated 'expertise' or resources. Sure Britain has appeared to lead the way in the sharpness of the downturn. This is mostly because of our reliance upon financial services. However, other countries in The West are suffering as badly.
Now we are being urged to not adopt protectionist economic policies by the very people who led us into this mess - the economists and the financiers. However, it is the responsibility of each government to protect the state and that means its people and economy. Therefore their only response as the situation worsens must be to adopt some form of protectionist policy. In the UK, we will have to protect ourselves and the fragile other legs of our economy if we are to have any prospect of 'coming out of this' in any shape. It is now that we should be identifying what and how we will protect.
yes, I feel sorry for the people of emerging nations who will be effected by protectionism. However, I doubt that the people of the UK (who are also going to suffer in the depression) will accept even more pain in the name of some 'global' ideal.
We must start now to plan what industries and companies we are going to protect.
Complain about this comment
Given that the IMF is now on it's third or fourth downward revision of it's six monthly forecast and each one has got grimmer as the economic collapse has progressed, is there any reason to assume that this one is correct?
With China and India slowing to almost zero growth and all the major economies shrinking, where on earth does even half a percent come from?
An alternative view is to ask how much "growth"will be left once all of the illusory money which the banks created using over-inflated house prices as security for loans at 33 gearing is out of the system. In my view, this suggests that any positive growth would be a miracle.
All this is showing is that the nice computer models which everyone is using cannot cope with the current crisis.
Finally, I do not think that Soros is actually disagreeing with Rogers. All he said is that the pound has fallen far enough "for now". That doesn't mean that he expects it to stay this high in the longer term.
Complain about this comment
111. At 05:48am on 29 Jan 2009, agc3167 wrote:
'Given that the IMF is now on it's third or fourth downward revision of it's six monthly forecast.
'All this is showing is that the nice computer models which everyone is using cannot cope with the current crisis. '
The computer models are fine, it's the human interpreters that can't cope.
The first (unpublished) forecast showed much worse numbers than the latest published forecast. The analysts gathered round and thought the model was wrong. A bit of tweaking here and a bit of tweaking there and they run the model again.
A horrible realisation starts to spread that the model is in actual fact right and the extremely gloomy forecast must be right.
They take the sad news to the boss who makes them do it again...same result
He knows they can't publish that, it would cause real panic in the streets but they have to publish something or everyone will suspect something is up.
So they hide the model in the cupboard and tweak the results, things still look bad but not enough to cause panic.
Time passes and the economy starts to pan, time to update the results, another downward tweak and another downward forecast.
This cycle of bad results being tweaked will continue until the published results coincide with the models first output and then they will get the model out of the cupboard and run some more numbers.
Smoke and Mirrors (or excel spreadsheets)
Complain about this comment
The Shakers in America live very simply , they do not need a new car every three years. They grow their own food , build their own houses and make their own clothes, they do not get into debt, they are not obese either as they keep fit doing all these things. I am not saying we can all be Shakers, but we can all live more simply if we want.. and is isn't bad !
I notice that there are no charity shops going out of business in my high street...
Complain about this comment
What concerns me is that all efforts seem to be aimed at returning things to the way they were.
Surely this is the time when we should examine what is wrong and make profound changes to ensure that this never happens again.
A re-engineering of global capitalism is long overdue.
Complain about this comment
The most important thing people can do, is to keep spending in moderation. The more we hold back, the worse things will get.
Complain about this comment
114. colin
re the undervalued pound v overvalued yen, you seem to know the answer to your own question:
Soros and co. had the bright idea that International finance was in big trouble in late 2007. Then in Sep 2008 they realised they were right.
Shorting the pound and bankshares was one way to make money out of this bright idea. It's nothing to do with debt levels, or economic strength- otherwise the Dollar and Euro would have done worse than the Pound, as would the yen.
Shorting the pound (and bankshares) is a way of shorting Finance in general, as the City and banks are most dominant in the UK.
Sooner or later, the Hedge Fund gurus like Rogers will try to take profit on sterling and bankshares all at the same time, and we'll see a spike upwards in the prices of both. It might be that Rogers' recent talking-down of the UK was a way to test the water to see how much mileage there still is in being short, before he takes his profit.
What would be of interest to know would be which British Hedge Fund operators and other whizzkids have also been shorting sterling, and what political affiliations they might have. It could show the apparently rash and hysterical comments of some UK politicians in a new light to know who has benefited financially from the talking down of the pound.
Complain about this comment
If that cheered you up it must be a laugh a minute in the RP house.
Complain about this comment
how come ,as the oil price is still falling, petrol prices are rising slightly? is it that mythical mathematician some where who calculates 1+1=3......you know the bloke who runs the country.also did you notice how rattled hes getting at pmqs...cameron keeps ramming home the boom and bust scenario, and brown doesnt like it.
Complain about this comment
Sorry to ask the same question twice, but I think my post yesterday got lost in all the delayed moderation.
What would happen if the Bank of England set interest rates back to the level it was so fond of in the 18th century (5% - which seems reasonable enough to me, with more sounding a bit greedy and less bad for pensioners etc) and then the Government stopped trying to control inflation?
Would everything go even more insane than it is at the moment, or would knowing that interest rates would always be at a specific level have a stabilising effect?
BTW, I don`t think I have a personal agenda here - I`m just curious!
Complain about this comment
re 116, it should be 11 Colin, not 114.
Complain about this comment
49,
I believe you are correct with that, to me this also shows how gorless Gordon has completely misjudged the situation.
He haprs on about wage inflation as an evil, whilst not seeing this as a potential solution!
Complain about this comment
How about a digital-Davos conference? I am sure those attending have access to video conferencing and internet. It saves shareholders' money, good for the planet, no need to leave the business fora few days etc.
Yes, the restaurants, the catereres, the hotels, the airlines, the gift shops, the conference center will miss out on some good business. But, Switzerland is in a much better financial situation than most, so they can afford it.
As Robert said it is the "jaw jaw" and the canape.
Complain about this comment
Crash Gordon can froth and spin all he likes, but in a few month's time people are going to start to wake up to the fact that his world-leading recovery scheme consists of effectively paying one half of the country to dig holes and the other half to fill them in.
All the while being heavily taxed for the pleasure of it...
Complain about this comment
Comment No: 6 - you are so right!
That bloke (Rogers) last week in my view was so clearly talking the £ down it was pathetic when he said ''well I was thinking of shorting the £, but then I didnt'' (BBC TV News report).
Not at all convincing - probably had the deal in his mothers name too!
Mr Soros? ''Who Knows'' but I bet again whatever he is up to its working very nicely for him.
Truth is, ''we'' will never know - these people are far too smart for that.
Complain about this comment
Post 108. Excellent!
One little comma changes it all.
Complain about this comment
Message 118
The reason why petrol is going up when oil prices are falling is due to the ongoing run on sterling. Once the value of pound settles on the currency markets hopefully the price increase will ease.
Since government policy is directed at undermining the value of sterling by borrowing billions and billions from the future, the prospect of any easure depends upon how long this government clings to office.
It is time for change. Indeed change is now very overdue.
When will the Parliamentary Labour Party wake up to the fact that if they don't dump Brown and his crew now their party will never get back into office at any time between now and the Last Judgement?
Complain about this comment
Well, when professional business Investors 3i say life is going to be tough, I don't think anyone can argue against it.
But it still boils down to the Pound (or Dollar) in peoples pockets.
If earnings (salaries) are held down People cannot spend in the Shops, and that, slowly but surely kills off any business relying on discretionary consumer spending.
Increasing the Pounds in peoples pockets is one way to stimulate the economy.
They cannot cut Mortgage Interest much further. They cannot cut Taxes much further (though they could cut it quite a bit for the lowest earners by raising the Tax thresholds).
They cannot order the Private Sector to raise Salaries.
They can raise Salaries in the Public Sector.
This would cost far less than the Billions they have and will have to pump into the Banking Sector, but ironically, would have far greater impact.
Each Pound in Wages to the Public Sector will circulate many many times through the Private Sector creating Jobs and profits for Investors.
So what about a nice big rise for the Public Sector, say thirty percent ?
That would kick start the Consumer economy.
Complain about this comment
Now, if you want something to cheer you up, consider the letter my colleague Rahere's drafting to the BBC Trust.
He has to outdo this masterpiece sent to Richard Branson recently, which is of Parrot Sketch grade.
Complain about this comment
#126 ok thanks ..whats happened to the 3 month lag then ? its a lag when the price goes down and instant when it goes up.the problem with economics is that its not an exact science these economists wouldnt last 2 seconds in the real world
Complain about this comment
Sterlings biggest problem is that it does not have a USP (unique selling point).
If you are an International Investor, what do you look for?
Well, if buying Shares, you look for businesses with excellent medium to long term growth potential.
If investing in Cash, you want high Interest Rates and a stable or appreciating exchange rate.
At the moment Britain does not offer either of those possibilities.
So, the International Investors will stay away until our economy picks up.
That means domestic companies suppling to the World something the World wants to buy.
This is where the Gov't should be focusing its energies.
Finding out what Britain can do for the World (for a fee!) and then encouraging our private sector to actually meet those needs.
Only then are we going to start rebuilding our economy.
We cannot Import more than we Export for ever, to believe that to be so is Naive.
Complain about this comment
BBC 4 Today reports the IMF single out the UK as the worst performing economy and the recession will be deeper. It also pointed out more than this "one line" news story, and reported that the IMF think the UK economy will recover earlier and faster than other economies.
I suppose we should therefore be thankful for a two line news report, rather than a sensationalist and negative one line report. Nevertheless, the BBC were able to cram the negative IMF one-liner into the report on the housing market this morning. I also heard the report from a farmer's market on Saturday morning and the effects of the recession - answer none. I await discussion of the IMF report in Gardener's Question Time.
Robert - re. Davos. Have you talked to someone who has actually done some good out there?
Complain about this comment
The Fed statement yesterday said its prediction of a “gradual recovery” in the U.S. economy later this year has “significant” risks of failing to materialize. Deflation and Depression replacing Recession then Rebound later this year ?
According to the IMF, the worst placed performer among the big economies will be the UK.
According to RP, two spivs cheered him up yesterday because they said it wasnt all that bad.
As governments and their agencies use spin and propoganda to talk up negatives , I take their statements as best -case and Soros as head-case.
At least Rogers is on the curve.
Complain about this comment
#127 - I think you should declare if you have an interest!
The effect of increasing public sector salaries by 30% are:
1) Increased Government debt to be paid by the private sector
2) Movement of employees away from the private (wealth generating) sector to the public (wealth wasting) sector attracted by higher wages.
3) Increased anger and social tension caused by the appearance of preferential treatment in the public sector - probably resulting in riots.
4) Increased inflation as the retailers desperately try and get hold of the increased money available to the public sector.
And the good points?????
Personally I think that the Government should increase the tax allowances for all employees in the manufacturing sector - they DO know what each company does due to the company tax code so in theory they could do it - however no doubt many companies would then amend the description of their activities at Companies House.
Complain about this comment
Having just been told I am a victim of Mondays Corus announcement and being middle aged and a father of 4 school aged children, I feel nothing but despair for the future for both my children and myself.
It saddens me that this once great country has been brought to its knees by the greedy minority, the salt on the wound is that the greedy minority have not paid the price, honest righteous hardworking people like myself have.
I am in a position for the 1st time in my working life where I have to go cap in hand for handouts or take a job that pays either a pittance (and probably lose my house) or either commute hrs / day or work away from home.
So much for the family.
So much for the environment.
The government talks about help and retraining, what for ? Where is the action ?? It seems pretty clear to me - an ignorant thick ex steelworker to be - that they neither understand nor care about the plight of the working man.
Complain about this comment
One trend line that remains predictable is the trend towards greater and greater levels of shock and surprise in the faces of the western bankers, politicians and economists.
The latest IMF figures may yet be revised......downwards.
As for Soros and Roubini....ye gods these guys are not exactly intellectual heavy weights.
Where are the new Galbraiths, Keynes's, Smiths?
Remember the saying; THERE IS NOTHING SO PRACTICAL AS A GOOD THEORY.
And here is my theory;
LAND, LABOUR AND CAPITAL are the ONLY factors of production.....forget intellectual property and the knowledge economy....that died last year.
If we continue to believe that our domestic economy will grow and grow and grow we have to find more land (forests, mines, fisheries, land-fills, grazing land, arable land, building land, run-way land, car-park land etc....)
I am happy to be shown to be wrong by any of you superbright bloggers out there.
Complain about this comment
Well RP you certainly wrong footed me today!
I spent last night going over how i could reply that the IMF projections have all been anticipated and you beat me too it.
at least i can be critical that you did not refer to the institute of fiscal studies predicition of a 1.3% contraction.
To be fair, if the ongoing growth rate is c 2% a 2.8% contraction is really a 4.8% contraction if i understand right which is still something of concern.
However congratulations on new founded optimism, hopefully this is not too insensitive to people who have lost their jobs or are struggling but thier is still a good deal of activity out there and the uk is still a very nice place to be
Cheers
Peter
Complain about this comment
Glad you are cheered, Robert. Roubini, and Soros for that matter, are exactly right. President Obama has made a giant concrete step in the right direction in the US. What I'm hoping for now is that further coordinated measures worldwide will follow. Of particular urgency in my opinion is, as reported by th IMF yesterday, that a concerted effort be made to buy up the remaining toxic securities. But governments had better move fast! Cheers
Complain about this comment
We note with interest the 'D' word but as a major player in the advertising of commercial property could it stand for deflation? We think so?
Complain about this comment
12
One of the more interesting snippets that will be available from the Banks reports and accounts will be the breakdown of regions and business lines that usually appears in the statements by the chairman.
Who wants to bet that UK has been the part they have been milking?
16
If we hit bottom deeper than everyone else, we have the furthest to climb out.
Therefore, we will have gone up the most. I think that is what he means by best placed. I think that is how it will be spun when he is in opposition, assuming he does not slink away like his predecessor.
61
Sorry, your house may equally be worth 50K less than now in two years, if you are lucky.
I know which way I am betting.
66
Looks like an American site but Starbucks closing 300 stores is a sure-fire indicator
77
So if GB surgically removes an arm and a leg, which is what he is doing to the economy, you will be stronger?
86
If supply and demand forces up interest rates, the debt will rapidly cease to be sustainable.
89
Part of the longer malaise is that the jobs on offer are apparently at the lower end of the skills and value adding and salary graphs.
93
Give 10 economists a mass of identical economic data and you will get 10 different sets of forecasts. Economics is a busted flush, a pseudo science and a confidence trick.
108
The Germans are already checking their Euro notes and refusing PIGS printed notes.
I have no idea how they tell.
118
I wish Cameron would ask some REAL questions. PMQ was devalued by TB and has steadily worsened. The best questioner they had was Hague.
121
I suspect he cannot just inflate wages, he has a manifesto commitment to tie pensions to wages and that will be a PSBR disaster if it happened because benefits are inflation linked Rooker\Wise
134
Says almost everything you need to know
Sorry, got fed up with moderator times so ignored blog. Possibly a good future strategy.
Complain about this comment
I've got some questions for you? How come in your Soros interview, he mentioned that if the UK Banks are nationalised, our debt would suddenly become 400% of GDP. How come Soros knows the depth of the UK bank problems and we don't?! How come these figures haven't been released in the public domain? How come you didn't mention this? How come the banks in affect have been printing money for the last decade, as I thought only the reserve bank does this? How come you don't ask Gordon Brown why he doesn't seem to know these figures - but Hedge funds do? Let us know the answers please. Then we can all 'short' the markets and make billions! Thanks.
Complain about this comment
Most of you Human Beings are stupid reckless creatures and need lots and lots of laws, rules, regulations and other inducements to control your behaviour.
Many being rendered silent would not go amiss either.
You let Gordon remove regulations and lo, a new mess is born.
Dont you lot ever learn.
Tis ok here on Pluto, just far enough away to not feel the draught.
Complain about this comment
Is the reason for the UK's economy being the worst down to the amount of people reading and commenting on this colunm rather than getting some work done?
Just a thought....
Complain about this comment
Yesterday's second day bounce arrived in the markets,albeit a day later than I thought. Similar to Oct 30/31 1929.I think the next two weeks possibly could indicate further whether we are on a similar course (to nov 14th),or a different stream altogether.
[Barclays are currently down 10% having been up 4% on the day]
Complain about this comment
Recession and depression?
Our government have yet to so their R and D methinks!
Complain about this comment
I am due to retire next July . Thank you Gordon for giving me 20 future years of Poverty to look forward to !!!!
Complain about this comment
BBC Breaking News!!
First signs of Recovery!!
Other top stories this Thursday morning!!!
- No sign of recovery yet!
- Will there ever be a recovery?!
- Recovery definitely on the way!
- Pound falls again!
- It will be over in a year!
- Are we in recession?!
- Pound bounces back!
- It will be worse than the Great Depression!
- China will save us all!
- It won't be over for twenty years!
- Bugger the environment let's get the world economy moving again!
- China's economy on its knees!
- Brown says don't be pessimistic!
- World leaders pessimistic at Davos!
- Greens say downturn a blessing for the environment!
- Very few at Davos this year!
- Brown over-optimistic says Cameron!
- It won't be as bad as the Great Depression!
- House prices going up!
- Unemployed rising!
- Macdonalds opening more stores!
- Unemployment falls!
- House prices still dropping!
- It's caused by FEAR says IMF!
- CBI fears the recession may be worse than expected.
- Sheffield mum has triplets!
- Recession worse in the USA!
- US mum has octuplets!
- Recession worse in the UK
- Nobody knows what's going on!
- Knighthood for Evan Davies!
IF ONLY THEY'D TELL US WHAT TO DO!!
GC
Complain about this comment
No 24
Wouldn't bank on being able to Bank on Mars
or do anything else there for that matter.
Dec. 1998 vanishing Spaceship to Mars still
missing. Navigating Engineers calibrating instruments using Imperial measurements while Mission Control at Nassau thought they were using Metric. (Thanks to Evan Davis' City
programme for that fascinating information)
Complain about this comment
No131 Slowleft
Well done, a little balance in reporting will serve us well. It is worth reminding ourselves that the IMF is infested with unfettered free-market ideologues. The very people that have caused the global economic crises. I hope the British PM will completely ignore anything they have to say.
Complain about this comment
Is it my imagination or do I remember GB stating that the UK was uniquely placed to weather the coming recession?
It turns out he was right - we are uniquely badly placed!
Complain about this comment
#110 foredeckdave
Sorry Dave my answer was "Yes"
I accept that this is a truely Global issue and that many countires will be undertaking to sort of bail outs for Banks and industry that we are - the issue is, they may well be able to afford it without too much damage, we can't!
... and even more disturbing are some of the comments from Brown, among them are the classic "we are best placed" to handle it - the world seems to think we are "worst placed"!!!
Over the next few months people will start to realise what a clown he is - his Phd in History "The Labour Party and Political change in Scotland 1918-29" will be useful in getting us out of this mess - he is a career politician and nothing more, be very careful when his lips move!
PS – anyone else notice how quiet the Champaign Socialist are at the moment, isn’t it time to have a bash at Downing St with the Film Stars, Musicians and other assorted Celebrities
Complain about this comment
A point or two
To those saying ASDA have created jobs while GKN and others shed jobs but that is an up turn.
Think again GKN lay off 300 full time skilled engineers. ASDA take on 1000 unskilled partimers
You need 3 times as many part time jobs to replace full time jobs
Thats been part of the issue with the government unemployment figures for the last 12 years.
1 million quango non economic value non jobs and 3 million part time jobs.
the figures look great but the reality is that the number on the breadline gets worse.
Labour are not true to there stated values and people are gradually waking up to the sham
Complain about this comment
Life is a puzzle.
Someone who has never run a business is called The Business Editor?
The same business editor pontificates as if he is the font of all knowledge?
But where does he get his information from?
The contempt the BBC holds the public in is evidenced every evening by the appearance of the talking head Mr Peston with his put on voice. Done no doubt to create a celebrity out of a non-entity.
If Mr Peston is so clever as he thinks he his then why did he not predict whats happening.
Complain about this comment
re 51
I take you are a Tory party member ?
some of us remember "do nothing" Tory governments who squandered vast amounts of revenue simply paying dole money to people they put out of work !
do you want that again ?
Complain about this comment
Jan. 29 (Bloomberg) -- The majority of U.S. banks are insolvent and should be nationalized, Nouriel Roubini, a professor at New York University said in a Bloomberg television interview in Davos, Switzerland today.
Complain about this comment
I totally agree with mysteriousfiona, the whole of the media have done their utmost to talk the whole economy down. They started back in 2007 with the housing and have continued to try and kill off every other sector. Maybe they were just trying to bring the Government down, if so it has certainly backfired!!
Channel Four last night had headlines of the fact the UK economy was going to shrink the most in the western world but when you look at the figures the percentage is negligible (but they didn't mention that) so why go over the top and anyway who knows what all the so called experts are talking about.
They didn't know all this was coming, so who the can possibly know where it will all lead but the media and the opposition are really not thinking about the UK, they are thinking about selling news or buying votes.
Politicians like David Cameron only seeems interested in political point scoring. He doesn't even seem to have grapsed the fact that it is a global crisis!!!
You may not like Brown but Cameron & Osborne would be a disaster. They are truly out of their depth at the moment.
We need all the media and all politicians to get behind this Country and be supportive be positive.
Negativity is a solely British disease, which the media must take full responsibility for.
If we are going to climb out the hole the financial sector dug for all of us, we need to reproduce the spirit people apparently had in the war. They didn't sit down and moan, wait for someone else to do something or wait for the inevitable, they got on with it
and got through but the way the media is at the moment, we aren't going anywhere.
Why are they not supporting British manufacture, British farmers, British anything etc. We need them to be backing Britain, not constantly knocking it. Why can they not highlight the best of Britain, not constantly look to doing it down. Other nations have a great sense of pride, why don't we try to do that?
Its in no-one's interest to be so negative.
No-one should consider themselves immuned from this and the media could well find themselves on the wrong side and loose their jobs too!!
I sometimes wonder was the essential criteria is on a person specification for a journalist.
Manic depressive comes to mind!!!!
Complain about this comment
Robert
I think its time for you to interview Gordon again and in the light of everything we are going through quize him about what he plans to do next. All those who have previously interviewed him have not been persistent enough with their line of questioning and in true politicians manner he has ducked and dived and evaded the answers. So has his sidekick Alistair.
GB was at one taime hailed as the greatest chancellor ever. You would'nt think so with todays problems.
He threw caution and regulation out of the window, and now to cap it all wants us to spend our way out of a recession and saddle us and our children with the prospect of higher taxes, VAT increases and widening the scope of VAT, higher NI, and whatever other forms of stealth taxes he can think of.
It's probably gone beyond the stage of recovery for even the most skilful of chancellors or even a new party in government.
Looks like we will have to turn to the IMF for help and be the laughing stock of the financial world. Am I proud to be British.....not at this moment in time.
Complain about this comment
#11 makes a good point. I think the answer is that in addition to having very poor Government finances we have also run a balance of payments deficit for many years resulting in a deteriorating capital position for the country as a whole. Japan has run substantial surpluses until very recently and as a country (if not a Government) has massive foreign currency reserves. This means the yen is not at all dependent on hot money flows from international sources to fund government borrowing. This breeds confidence in the currency and makes it a safe haven. In fact at the moment hot money is pushing the yen uncomfortably high as a result of its safe haven status.
In contrast the chronic deficits of many years standing means that the UK does need international lending to support its Government borrowing and hence its currency.
The balance of payments is a very important measure. We have been running a deficit because Crash allowed consumption (driven in part by Government "investment") to run ahead of production for many years. This would normally have caused severe inflation and a traditional recession but the deflationary effect of China as well as the amazing availability of international capital generated by new Financial instruments hid the problem.
In the future we must aim as a country for a combination of balanced Government accounts (banning borrowing in trend+ growth years) and broadly neutral balance of payments. This will take some doing and will require sharp drops in both consumption and Government expenditure. The sooner we start down that path the better.
Complain about this comment
The only thing that happens 100% of the time following global economic depressions is world war.
With that in mind it doesn't matter what any governments do because with any world war there won't be much worth saving.
Money? Pah ... who needs it.
Complain about this comment
#152
RP is as qualified to comment on business as GB is to run an economy! (in fact RP is probably more qualified..!)
a business editor is a journalist.....journalists just report the news......
Complain about this comment
155. timetoponder wrote:
"I totally agree with mysteriousfiona, the whole of the media have done their utmost to talk the whole economy down. They started back in 2007 with the housing and have continued to try and kill off every other sector."
The housing market is currently experiencing an upturn in affordability. This is not bad news to millions of people - it is simply a return to sanity and those wishing to buy a new house will be better off as they don't have to take on as much debt. The housing bubble is the cause of the economic misery we are now experiencing, not the fact that people are talking negatively. How do you arrive at your logic(sic) that ridiculously overpriced houses are a good thing? I really fail to understand what goes on in the minds of people like you, so could you please explain?
Complain about this comment
Is it just me but isn't a bit funny that the IMF, the organisation that GB says is just the way to create a new finacial world order, is rubbished as soon it says anything that contradicts the government line ?
Complain about this comment
Message 129
The answers to your question are oil stocks, currency hedging and local competition.
In my view the economy is shortly going to take a clobbering from the inflation which will ensue from a drop in about six months from US$2 to GBP 1 to US$1.35 to GBP 1.
This is a drop of 33%. All we need now is a Labour Prime Minister telling us that `this does not mean the pound in your pocket will be worth less'.
Message 130
The government did focus its energies on the financial sector as the USP for GB PLC. The only problem was that neither the government nor the financial sector knew what they were doing.
In order to do this the government failed to support the manufacturing sector causing the loss of a million jobs over ten years.
You need more than one basket in which to keep your eggs.
Complain about this comment
No155 timetoponder.
You are right to draw attention to the do nothing political novice leading the Tories. Being a member of the thuggish Bullingdon Club and being sacked by Kenneth Clark when he was masquerading as an advisor at the Treasury is hardly conducive to developing an economic strategy for dealing with the global crises. It is a scandal that the taxpayers are paying him approximately £150,000 a year, as leader of the opposition, for making no contribution to the debate on how to deal with the problems facing the British people.
Complain about this comment
No51 bankrupt.
I note with interest that you are not an economic historian dealing with the period 1979-1996, often referred to as the eighteen wasted years.
Complain about this comment
155 timetoponder
congratulations, probably the most sensible post I've yet to read on any BBC blog.
Complain about this comment
the 'secret' Finance ministers meeting will be a select gathering - US & UK aren't even going?
RP seems excessively dazzled by China's performance. Such excessive dependence on exports to promote growth is inherently unstable. It is prolonged by the Chinese Government buying up the dollars earned by exporters, thus keeping the Yuan low, whilst these Dollars are then invested in US Treasuries, funding the US Govt deficit and, indirectly excessive consumption in the US. Much of this consumption is of course of chinese exports. As a byproduct, China has to prop up the Dollar to preserve the value of its reserves. This is all madness which will end in tears for China when the Dollar and / or US Treasuries fall in value, which can not be far off given the size of US deficits.
Complain about this comment
It's a welcome relief to see the harbinger of doom has something positive to say at last. Whilst many of us are working hard to try and keep things going it seems that whenever we feel optimistic Ole Rob comes along with another barrel full of misery .
My wife - who is intelligent, hard working and has a good degree is on the verge of a nervous breakdown because of the continuing conveyer belt of doom we are fed. Even when jobs are created (14,000 at Asda and Subway in recent weeks) this is swept aside by bad stuff
There is a point to my comments - the 1990's recession was worse than it needed to be because we talked ourselves into it, and were talked into it by continuing gloom mongers in the media who never look at the upside
No-one is saying that this recession isn't bad - but 24 hour news continuing to feed on it is developing in the public a sense of paranoia - so they decide to keep safe and stop spending, so the recession gets worse.
The media has a major part to play in this loss of confidence and they should be very aware of the big responsibility they bear
In the 1990's eventually the tone of the news suddenly changed to become more positive and having talked ourselves into it, we talked ourselves out of it.
Perhaps a more balanced approach now would stop any further declines in confidence and give us a chance to start feeling optimistic, or at least less miserable!
Complain about this comment
Soro's has had a visit from the MI6.
When will Rogers get his?
Complain about this comment
With regards to Bankers bonus payments, yes the staff who are concerned with direct face-to-face to the public at large should receive a bonus (although I suspect it will not a significant amount, if any at all). As for the senior exec bankers, they should receive a negative bonus based on what has been lost due their actions. This then will claw a little back from previous years of high pay with results based on their mistakes and greed.
Complain about this comment
View these comments in RSS