Gdp Negative

[thecrashingisles]

Britain's longest downturn

http://www.spectator.co.uk/coffeehouse/7806453/britains-longest-downturn.thtml

How long will it take for people to put two and two together and realise that the persistence of our housing bubble is not propping things up as they think, but rather suffocating any hope of recovery. We need to lance the boil sooner rather than later.

Shock therapy is in order.

[JaneTracy]

So we find bad economic news making the headlines in the UK again. However I note that the article below thinks that we are more in danger of an economic depression than a recession (which may well be revised away..). We seem to be in a real mess!

The NIESR also has an interesting view on whether the UK is in a depression which it defines as ” a period when output is depressed below its previous peak”. On such a definition it feels this.

the period of depression is likely to continue for some time. We do not expect output to pass its peak in early 2008 until 2014.

An interesting view is it not? By their measure we are not in recession but we are in a depression! What is particularly interesting from their chart is that this period of depression is different from past ones. They would all be showing clear signs of recovery by now but this one is not,in medical terms we are flat-lining. By now even the 1930-34 depression had a level of economic output which had exceeded the previous peak whereas we remain just over 4% below it.

Since then we have discovered that the Office for National Statistics thinks that the UK is in a recession. Not much of a double-act is it? One putting us in recession and the other in a depression…

http://www.mindfulmoney.co.uk/wp/shaun-richards/now-we-are-told-that-the-uk-is-back-in-recession-the-real-question-is-are-we-in-a-depression-too/

I notice that there are some interesting views on the housing market in that article too.

[Democorruptcy]

How long will it take for people to put two and two together and realise that the persistence of our housing bubble is not propping things up as they think, but rather suffocating any hope of recovery. We need to lance the boil sooner rather than later.

Shock therapy is in order.

But... but.... but.... those nice men in government and at the B of E say that high house prices encourages homeowners to spend more.

Just do the maths.

We now have an all time low homeowner rate of 65% so that's 35% economically stuffed by the rentier class

Of the 65% at least 50% must be up to their eyeballs in debt so have nothing to spend in the economy

Of the 65% another chunk of people will be mortgage free living on saving/pension income which is now stuffed so they are skint

What percentage is it actually good for?

The banks continue to suck up what was disposable income but retailers and other businesses cannot see where it's going. Such as Cridland at the CBI favours such as mortgage indemnity which will carry on diverting money away from business growth to banks!

[Sour Mash]

Christ on a bike, only just got up and seen this, can you imgine how bad it would have been had a petrol panic not been engineered. Good god, no wonder they were acting like a bunch of clowns to create a panic.

It will rebound on them badly in the second quarter as that was where they 'borrowed' the GDP from (seems like our government is fundamentally addicted to borrowing).

Third quarter is sure to be positive thanks to the Olympics.

[shindigger]

But... but.... but.... those nice men in government and at the B of E say that high house prices encourages homeowners to spend more.

Just do the maths.

We now have an all time low homeowner rate of 65% so that's 35% economically stuffed by the rentier class

Of the 65% at least 50% must be up to their eyeballs in debt so have nothing to spend in the economy

Of the 65% another chunk of people will be mortgage free living on saving/pension income which is now stuffed so they are skint

What percentage is it actually good for?

The banks continue to suck up what was disposable income but retailers and other businesses cannot see where it's going. Such as Cridland at the CBI favours such as mortgage indemnity which will carry on diverting money away from business growth to banks!

And then Dave gets up in the house and reaffirms that the answer to paying off debt isn't more debt.

Unless it's used to buy a house of course.

All complete cobblers.

[Dorkins]

Looks to be government's cut in infrastructure/construction spending (my interpretation) wot done it.

i.e. Chancellor's self-imposed recession

And yet total government spending is still going up year on year...

[Shrink Proof]

How long will it take for people to put two and two together and realise that the persistence of our housing bubble is not propping things up as they think, but rather suffocating any hope of recovery.

A very long time. Never underestimate the power of very stupid people in very large groups.

[winkie]

And then Dave gets up in the house and reaffirms that the answer to paying off debt isn't more debt.

Unless it's used to buy a house of course.

All complete cobblers.

...that is so funny.

[R K]

And yet total government spending is still going up year on year...

It's a depression. Output is still below '08 levels 4 years on. Slashing govt. spending overall as Osborne apparently intends would clearly be insane (even Hayek would agree with that would he not?)

[Georgia O'Keeffe]

Actually, I think you'll find an Olympian amount of blame headed that way next quarter...along with poor old queeny of course.

yep they should blame the Germans everyone else is

Edited April 25, 2012 by Georgia O'Keeffe

[19 year mortgage 8itch]

It's a depression. Output is still below '08 levels 4 years on. Slashing govt. spending overall as Osborne apparently intends would clearly be insane (even Hayek would agree with that would he not?)

Name me 10 politicians/governmentalists (all parties) you would trust to spend the money sensibly?

I'd take 1 to start with.

Edited April 25, 2012 by SeeYouNextTuesday

[aussieboy]

Oddly enough, we're in an even greater mess:

The graph that lacks the point of inflection experienced by the US and EU.

Coincides with the day the Conservatives won the general election.

Edit - typo

Edited April 25, 2012 by aussieboy

[shindigger]

...that is so funny.

And sad.

[Bloo Loo]

It's a depression. Output is still below '08 levels 4 years on. Slashing govt. spending overall as Osborne apparently intends would clearly be insane (even Hayek would agree with that would he not?)

Hayek would move out of the fast "mad maxing" of the economy.

[Dorkins]

It's a depression. Output is still below '08 levels 4 years on. Slashing govt. spending overall as Osborne apparently intends would clearly be insane (even Hayek would agree with that would he not?)

Osborne does not intend to cut government spending overall. Dig out the pdf of the last budget and look at the spending forecasts.

[Josieful]

So we find bad economic news making the headlines in the UK again. However I note that the article below thinks that we are more in danger of an economic depression than a recession (which may well be revised away..). We seem to be in a real mess!

http://www.mindfulmoney.co.uk/wp/shaun-richards/now-we-are-told-that-the-uk-is-back-in-recession-the-real-question-is-are-we-in-a-depression-too/

I notice that there are some interesting views on the housing market in that article too.

Thanks I found the housing data interesting and share the authors views that rising mortgage rates will affect house prices.

House prices?

The latest survey data tells us this and 50 is the benchmark here.

Knight Frank/Markit House Price Sentiment Index (HPSI) signalled a further drop in house prices during April. A perceived reduction in home values was reported by 17% of households, versus around 8% indicating a rise. At 45.4, the resulting HPSI figure is down from March’s 46.6.

So no great sign here of an improvement although sentiment going forwards was positive for nine of the UK eleven’s regions. The Central London property bubble recorded a level of 62.2 indicating that there is little sign yet of this particular bubble bursting.

However with the planned rises in some mortgage rates I find it hard to see a recovery in house prices and feel that they will continue to drift lower.

The Commercial Property Market is optimistic

The Total Commercial Development Activity Index, a net balance monitoring the overall performance of the UK commercial property sector, registered +13.1% in March, from -3.6% in February.

This reverses nine months of declines and gains in both public and private-sector activity were seen.

[jaspers]

The graph that lacks the point of inflection experienced by the US and EU.

Coincides with the day the Conservatives won the general election.

Edit - typo

US : HPC and output back to pre '08 levels

UK : noHPC and output stuck in recession

Coincidence?

[Gone baby gone]

Coincidence?

Or a US election year?

[Ash4781]

british retail consortium director general has said we wont see a convincing revival until real wage growth returns. A very interesting statement. Wage growth would entrench inflation and force the boe hand. Or those in certain areas(town halls?) get wage increases while others are left with frozen wages and rapidly falling standard of living?

[Democorruptcy]

Slashing govt. spending overall as Osborne apparently intends

He's reigning in gilt expectations like the Bof E does with it's inflation.

[winkie]

Osborne does not intend to cut government spending overall. Dig out the pdf of the last budget and look at the spending forecasts.

.......of course the debt will continue to grow and grow......it is not the debt per se, more the interest rate payable on that debt and tax collection generated to keep the difference between the two to a minimum........ neither looking too healthy especially when people don't have the jobs, earning power or disposable income that keeps them spending., and our neighbours are in the same boat as ourselves.....I made some nice jam last week, I couldn't sell it at the market at a price that covered my costs to make it, I went home with my jam, will not be returning next week......who has the money that can pay me what I need to cover my cost of living, who wants it, who will think I will make my own if I do?

[aussieboy]

US : HPC and output back to pre '08 levels

UK : noHPC and output stuck in recession

Coincidence?

Hmm... GDP was doing OK during the 09-10 "mini-boom" according to the graph.

[OnlyMe]

british retail consortium director general has said we wont see a convincing revival until real wage growth returns. A very interesting statement. Wage growth would entrench inflation and force the boe hand. Or those in certain areas(town halls?) get wage increases while others are left with frozen wages and rapidly falling standard of living?

Better get his memebers increasnig their member employee's wages up to the level of inflaion being flooded into the system by the BOE then, and make yup for the previous decade of costs of living and in particular housing cost increases, especially as the young are core workers in this sector.

That'll go down well I'm sure. Still a chink of light and realisation in the the BRC.

[frederico]

None of them have a clue

[homeless]

Didn't it snow in February ?For a day or so.

The reason we are going to remain in recession is debt. Private aus well as public. Benefits and house prices are too high. Let's have a proper recession to clear the markets, the bulk of the pain will be felt by the asset rich as we can transfer their wealth to the poor and the young through land taxes, rent controls and lower housing costs.

Wake me up when it's done. In the meantime I'm saving and keeping a good proportion in gold. Tax that Osborne

there was snow from 6pm till around 8am from ullapool to aberdeen on one night, that was pretty much it. Rest of the country was spared. By midday inverness ect were pretty much cleared. During the night there was nothing open to buy as usual.

On this note, i noticed for a couple of months salt and grit and snow shovels and tobogans stacked high for sale at the doorways of the supermarkets. They were well prepared this year for some bumper sales. And then the snow never came.