Tuesday, Aug 25, 2009
Setting yourself up for a fall again?
The Times: No cause for celebrations across Europe just yet
".....the recovery will be stronger than generally expected in America and possibly in Britain, while in continental Europe and possibly Japan the depth of the recession will produce longer-term structural problems that limit growth for several years ahead."
How so?
Most of it is about Germany, it's manufacturing vulnerability and how the 1991-3 recession there ended up in much more unemployment for far longer than in the UK recession of the time.
Hello Analtoe? Remember Reunification in 1989? If we had had 17million extra people and a huge country to fix and invest in we'd have had a bit more strife than 2-3 years more unemployment than normal, and a small mid 90s recession.
We'd be finished.
Posted by growler @ 03:46 PM (592 views) Add Comment
5 Comments
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1. paul said...
But hang on, I heard the exact opposite a week ago - Germany and Japan already emerging from the recession but the UK still mired. Could Kaletsky be rambling on, not really knowing what he's talking about, true to past form?
2. icarus said...
(sigh) let's remind ourselves. The Fed has used all its firepower to no avail - near-zero IRs, the backstopping of the entire financial system, propping up zombies and monetising a trillion's worth of MBSs and US Treasuries. Credit is still falling as the securitisation markets have crashed and banks are hoarding to deal with toxic 'assets', 'non-performing' loans and a multi-trillion commercial realestate bubble that's following housing down the drain, and rising numbers of bank failures. The only things thriving are Fed-stimulated markets.
Falls in credit, employment and total real wages mean the real economy is in a tailspin - any rise in profitability is due to downsizing, offshoring and outsourcing. If the Fed stops printing money IRs will rise and stockmarkets and house prices will fall. If it continues to print China will sell its US bonds and there'll be a run on the dollar. Either way the credit markets and consumption will be stagnant or in decline.
End of the Great Recession? That's a sketch at the Assetz Friday Afternoon Comedy Club.
3. taffee said...
bernanke is a nutcase....problem solved by inreasing the things that caused it.......huge problems ahead imo
printing money is no different to borrowing on your credit cards to stave off bankruptsy
euphoria when you 'sorted out my finances'....then the backlash
4. icarus said...
taffee - if he's a nutcase that would mean that US (and to some extent global) economic policy was in the hands of a nutcase / incompetent. That would mean that the US (the world) is being led to economic decline because nobody is willing or able to remove a nutcase. It seems more likely that he's still there because he's looking after Wall Street.
5. growler said...
Frankly, Bernanke is fine by me. And to be fair to him, he's done a good job of saving a savage amount of immediate unemployment in the US.
As for property and the HPC? If you're an investor - would you rather buy real shares in a bull stock market or assets related to property - or worse still - property itself?
Thought so.
The better the equity market does, investors will flock. When it falls into a suckers' rally, they'll go for safe haven.
Property value is about sentiment and security. There are too many competitors for property and a lot of burnt fingers.