Gordon Brown Gets A Right Kicking

[right_freds_dead]

Can anyone explain 'the business cycle' please?

wasnt this the sinclair C5, with optional business class cashews and warmed plates ?

Edited October 13, 2005 by right_freds_dead

[bubbleturbo]

wasnt this the sinclair C5, with optional business class cashews and warmed plates ?

You on the crack pipe tonight or summink?

[right_freds_dead]

naw. ive had an asda stonebake pizza with jalepenos. only they had the heat rating wrong and i got a mexican chiller when i was expecting a southern state tex mex. i had the ribena diluted to grade 2 thinking id be ok. but this was grade 4. before you knew it i was drinking steam and strutting around the flat like a rooster.

[Jason]

I can't believe what a bumbling idiot he is.

A complete liar. And this man is in control of the economy.

I think the coming recession will be harder than I first thought.

[kinesin]

That was awesome!!

Thanks for the link people.. - If Brown ever becomes PM he's going to get a grilling at every turn.

[delite1]

naw. ive had an asda stonebake pizza with jalepenos. only they had the heat rating wrong and i got a mexican chiller when i was expecting a southern state tex mex. i had the ribena diluted to grade 2 thinking id be ok. but this was grade 4. before you knew it i was drinking steam and strutting around the flat like a rooster.

I just showed this to my wife who has no interest in house prices whatsoever, she's had the best laugh in a long time, thanks.

[brainclamp]

Some geezer won the nobel prize explaining what causes the business cycle.

It seems to be based on innovation, and the start of the business cycle occurs after recession seems to be based on businesses catching onto the greater profits from knocked down assets, cheaper labour , cheaper land, even though money is often more expensive, with this innovation having the 'fertile soil' to catch on as costs drop and business investment grows rapidly.

For instance, although I could not imagine as remotely possible it in the UK with all the red tape and mad laws today, if a UK version of Bill Gates or Steve Job was beavering away offering expertise and spunk to create a new operating system for a client (which was the foundation for microsoft - basically illegal under IR35 apparently), or designed something which would lower costs, it would create an investment boom and companies find raised profits and new markets via greater productivity.

For instance, when Robert Stevenson demostrated the steam powered rocket, in 1829 in Rainhill, Liverpool as part of a competition held by the Liverpool to Manchester Railway company, what followed was a railway boom changing the face of the economy forever. Transport costs dropped and many goods and foods became available for the first time. The standard fo living shot up in a decade. Huge 'landlord' economies which depended on lots of ever cheaper labour to produce, like Russia, or even China/India found thier share of world markets collapsed as a vast array of value added goods hit world markets partly due to this infrastructure innovation creating other innnovations in the UK.

The Railway boom lasted from 1830 to 1840 before collapsing because of a financial crisis, a run on the pound and too many small railways. A uncontrolled, chaotic expansion of credit in the US and printed currency in the UK creates a major crisis in the terms of trade and banking. The crisis leads to a depression in the economy which lasts until 1843 as the damage is unwound in both countries by shutting down the money supply.

However, In 1844 cheap money was available for knocked down assets: the lending rate had been cut to 3¼%. Also, the 1844 Bank Charter Act created stability and confidence in the pound.

The result was a great deal of wild speculation on railway construction!

http://www.historyhome.co.uk/peel/railways/railways.htm

Here then are two business cycles. A recession was needed in the industry so that all the smaller railway lines and assets could be bought at knockdown prices cheaply with 'free money' and then consolodated into one functioning mainline system. At one stage 33% of the railway was owned by one stock speculator.

I hope this illuminates what a business cycle is all about - its all about investment.

Now Meryvn King expects business investment to pick up where the consumer left off. I don't think we quite have the right climate somehow.

[Guest Charlie The Tramp]

Now Meryvn King expects business investment to pick up where the consumer left off. I don't think we quite have the right climate somehow.

As they all say its different this time, you may be right.

The good ship HMS UK is about to sail through uncharted waters and an ocean of debt.

BTW a very interesting and informative post

[Guest Riser]

John Humpries comments about a Housing Bubble are in todays Independant:

Brown refuses to rule out tax rises to fill £10bn 'black hole'

Gordon Brown has refused to rule out the prospect that taxes will have to rise to plug the gap in the nation's finances. Aides played down his refusal, but the Conservatives seized on his remarks, claiming he had let slip his future intentions.........

.........."The vast majority of the problem is home grown due to weakness in private investment and nervousness among private consumers about their large levels of personal debt and the possibility of a bursting of the housing bubble," he said........

[Guest Charlie The Tramp]

and nervousness among private consumers about their large levels of personal debt

Maybe the press will now get the message, that the downturn has been caused by debt, more debt, and even more debt.

To those who say there is not going to be one hell of a correction in house prices I will admit it is going to be a long drawn out process. Debt will create a very long denial period for those who haved maxed out and those with good equity and sensible debt will keep the market ticking over as I have witnessed in my area.

Surveyor is finding the same in the South East.

As Humphrys pointed out to Brown that Mervyn King has said the next ten years will not be the same as the past ten years.

It will be interesting to see if other financial journos have picked up on this.

[expatowner]

Humphrys gives Brown a run for his money

Is Broon still in charge?

[HPCatlast.]

Some geezer won the nobel prize explaining what causes the business cycle.

It seems to be based on innovation, and the start of the business cycle occurs after recession seems to be based on businesses catching onto the greater profits from knocked down assets, cheaper labour , cheaper land, even though money is often more expensive, with this innovation having the 'fertile soil' to catch on as costs drop and business investment grows rapidly.

For instance, when Robert Stevenson demostrated the steam powered rocket, in 1829 in Rainhill, Liverpool as part of a competition held by the Liverpool to Manchester Railway company, what followed was a railway boom changing the face of the economy forever. Transport costs dropped and many goods and foods became available for the first time. The standard fo living shot up in a decade. Huge 'landlord' economies which depended on lots of ever cheaper labour to produce, like Russia, or even China/India found thier share of world markets collapsed as a vast array of value added goods hit world markets partly due to this infrastructure innovation creating other innnovations in the UK.

The Railway boom lasted from 1830 to 1840 before collapsing because of a financial crisis, a run on the pound and too many small railways. A uncontrolled, chaotic expansion of credit in the US and printed currency in the UK creates a major crisis in the terms of trade and banking. The crisis leads to a depression in the economy which lasts until 1843 as the damage is unwound in both countries by shutting down the money supply.

However, In 1844 cheap money was available for knocked down assets: the lending rate had been cut to 3¼%. Also, the 1844 Bank Charter Act created stability and confidence in the pound.

The result was a great deal of wild speculation on railway construction!

http://www.historyhome.co.uk/peel/railways/railways.htm

Here then are two business cycles. A recession was needed in the industry so that all the smaller railway lines and assets could be bought at knockdown prices cheaply with 'free money' and then consolodated into one functioning mainline system. At one stage 33% of the railway was owned by one stock speculator.

I hope this illuminates what a business cycle is all about - its all about investment.

Now Meryvn King expects business investment to pick up where the consumer left off. I don't think we quite have the right climate somehow.

Does this sound familiar? And crash Gordon's major is in HISTORY, obviously got no knowledge of economics!

[Home_To_Roost]

Humphrys: Economy relying on consumer spending, fuelled by debt, and high house prices.

He was right! I began to wake up to the UK's debt-fuelled economy in 2006, long before I joined HPC!

Edited February 25, 2009 by Home_To_Roost

[expatowner]

You have to ask yourself what is the point in bothering to listen to a politician like Chemical Crash Gordon. He spins and twists his statistics like a fish on a line. Every statement is qualified, every direct question avoided and a completely different question is 'half' answered instead using open ended statistics. 37% of me found the broadcast interesting, 40% of me found it amusing but 20% of me was getting very angry. Worryingly 3% of me wanted to spread chum over his fat naked carcas and dangle him over a pit filled with hungry, narrow-minded Australian crocodiles which had been forced to listen to a tape of his speeches for a month.

Oh if only you had done this back in 2005 the UK might be in a whole better situation than it finds itself today.