Thursday, Aug 13, 2009
Phew, for a while, i thought we were in the biggest recession since WW2
Bbc: France and Germany exit recession
The French and German economies both grew by 0.3% between April and June, bringing to an end year-long recessions in two of Europe's largest economies.
Posted by happy mondays @ 08:45 AM (1666 views) Add Comment
13 Comments
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1. waitingfor hpc said...
Typical BBC - give one side of teh coin only. I work in manufacturing - no sign of a recovery here. Infact August was like falling of a cliff, no orders and further redundancies in my sector.
This in my opinion is figures reflecting some re stocking and basic production. It will not be the start of an up curve. Also August is a shut down month so you ramp up production beforehand.
2. Niley said...
Can someone explain these figures a bit more (economics novice here)? If it fell by 3.5% over the first three months is this a rise of 0.3% from the -3.5% meaning it's still down by 3.2% or has it actually grown 3.8% (the -3.5% plus 0.3%)
3. paul said...
But France and Germany didn't have anything near the credit-driven speculative boom that we had.
This article could just as well read "UK Still Mired While Europe Grows".
4. george monsoon said...
In the absence of real solutions, the only recourse must be to try to talk the population into thinking its okay and hope people will spend.
5. jack c said...
I cant quite remember who said it but it sticks in my mind that Britain was better placed to deal with any economic downturn
6. bellwether said...
It takes a number of quarters to technically call a recession but a slight percentage increase in one quarter (that will probably be revised down later) to declare the end of it.
What is it with the BBC and cheerleading, is this what public service means selling hopium to the masses.
7. shining wit said...
8. mark wadsworth said...
What Paul says.
@ Jack C, in a funny way, the UK is better placed to deal with a recession (if only the government had the guts to 'fess up and do something about it).
1. We had been running up huge overseas debts, largely in sterling, sterling fell by a quarter in 2008, so that gives us a retrospective 25% discount.
2. We produce rather less and export rather less than other countries (the difference is nowhere near as big as people make out, but it is there), therefore we are least hit by a fall in world trade.
3. We've stocked up on enough plasma tellies and cars to keep us going for ten years without importing any more.
4. Banks can be easily fixed with debt-for-equity swaps, as can all other businesses with some underlying value.
5. Our government wastes so much money that it could easily cut expenditure by a fifth and nobody (outside the quangocracy) would even notice.
6. Our tax system is so stupendously awful (but not the worst in the world) that it wouldn't be too difficult to improve it.
and so on.
9. jack c said...
@mark wadsworth - thanks for the response and to shining wit for the reminder (LOL). Mark - as you intimate political ambitions are placed way above the needs of the country and as a consequence things are going to get a whole lot worse (IMO) before they ever get better. At this rate I can see things bumping along the bottom for another 10 years or so.
10. europeanbear said...
Nah...its just recovery from the first dip of the double dip..
11. icarus said...
mw @ 8 Debt-for-equity swaps. Argument for : They make banks more solvent - reduction of debt and interest payments, increased equity and confidence of investors that banks are solvent, leading to the unfreezing of credit markets).
On the other hand the capitalisation of banks by governments in exchange for equity hasn't done this. And of course the banks say that their bondholders / creditors will flee the markets (e.g. as after the Lehman collapse). if they are forced to take a 'haircut'. They'll say things like "if GM's bondholders take a haircut Honda will still be making cars, but if the bondholders of a big bank (especially holders of senior debt, the banks' chief funding mechanism) take a haircut they could feel that the crisis is systemic and flee / freeze the markets".
On the other hand if banks are in trouble these bond prices are already deeply discounted, so is there enough there to significantly boost equity anyway?
12. iguana said...
I have not been to France or Germany for some years, but I recall that France in particular 'closed' for August the same but to a lesser extent happened in north Germany. Is this growth in the economy solely due to the increase in the sales of chilled Warsteiner, bratwurst and Pernod?
13. Dgj said...
All this is based on 1 quarter and the growth only being 0.3%, this just shows that the media is off on one again!