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BBC Linky

The UK's recession will last between one and a half and two years, a leading economist has warned.

That is the estimate of Nouriel Roubini, professor of economics at New York University, and one of the few people to predict the credit crunch.

The problems facing the UK economy are "pretty severe" and "will take quite a while to resolve", he told the BBC's Today programme.

Yet he said things were manageable, and the UK could afford the banks bail-out.

Mr Roubini's comments came before official data confirmed that the UK is now in recession after two consecutive quarters of falling economic output.

'Affordable'

The government spent more than £37bn last autumn in a rescue deal for Royal Bank of Scotland, Lloyds TSB and HBOS.

And earlier this week it announced a new government insurance scheme for the whole banking sector, that may also prove expensive for taxpayers.

"The public debt of the UK relative to its GDP is relatively small even if the final deal of bailing out the banks is significant and large," said Mr Roubini.

He added that it was wrong to compare the UK with Iceland, which due to its small population size, was struggling to pay for its own banking rescue plans.

Mr Roubini said that the UK was more like the US, and therefore able to afford the final bill for rescuing the banking sector.

Turning his attention to the recent falls in the value of the pound, Mr Roubini said some decline was inevitable, as sterling had previously been overvalued.

"The pound might be falling slowly, slowly over time, but the risk of total crash is still limited," he said.

"The problem should be manageable with the right policies... and [in the meantime] the weak pound is a good way of stimulating exports."

Pretty upbeat, especially about the potential (or not) for the banks to overwhelm us.

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But the debt of the UK relative to GDP IS NOT SMALL. Its only small if you believe the crap Gordon pushes out. When you factor in the true debt, including public sector pensions, PFI, bank bailouts, bank liabilities etc etc it is simply massive.

Roubini has based his assessment on figures drafted by Hans Christian Anderson. It is therefore invalid.

uk_real_debt_.gif

post-4500-1232742149_thumb.png

Edited by sikejsudjek

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Snip:

Mr Roubini said that the UK was more like the US, and therefore able to afford the final bill for rescuing the banking sector.

Turning his attention to the recent falls in the value of the pound, Mr Roubini said some decline was inevitable, as sterling had previously been overvalued.

Jeez, but this sort of arrogant patronising statement really annoys me....Sterling overvalued by whom?, why?.....and if it was so durn obvious then why didn't you interject at some useful point.

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BBC Linky

Pretty upbeat, especially about the potential (or not) for the banks to overwhelm us.

What a sign of the times i read this bit at work today

The UK's recession will last between one and a half and two years

and actually thought it was quite good news (especially as it comes from someone i respect).

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Snip:

Mr Roubini said that the UK was more like the US, and therefore able to afford the final bill for rescuing the banking sector.

Turning his attention to the recent falls in the value of the pound, Mr Roubini said some decline was inevitable, as sterling had previously been overvalued.

Jeez, but this sort of arrogant patronising statement really annoys me....Sterling overvalued by whom?, why?.....and if it was so durn obvious then why didn't you interject at some useful point.

On things such as purchasing power parity ie

http://en.wikipedia.org/wiki/Purchasing_power_parity

ie if you you find a basket of goods consumed in multiple countries and see how much it buys you ,

big macs is popular so is coke as they contain ingredients labour and energy.

When I went out to HK in March 2008 , 10 quid was worth close to 175 dollars , which bought me 5.46875 big mac meals , wheras 10 here only buys 3 big mac meals. and such.

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Unfortunately it won't.

The business cycle is approximately 18 years in length,and rampant consumerism started in about Y2K,coinciding with the interest rate cuts after the dotcom crash.

By that reckoning we have about another decade of SHTF to come.

Unless we have a serious productivity drive by cutting all unnecesary public sector non-jobs,funding chavvy lifestyles and getting some manufaturing and engineering of products in-house,that people around the world need,then the only solution is feudalism to reduce the number of dependents in society.

Government is parasitic by nature,so must be pruned back.

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Keynesian who wants government intervention gets to see his ideas implemented

for the first time, takes it badly when they don't play out.

Love the sig.

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On things such as purchasing power parity ie

http://en.wikipedia.org/wiki/Purchasing_power_parity

ie if you you find a basket of goods consumed in multiple countries and see how much it buys you ,

big macs is popular so is coke as they contain ingredients labour and energy.

When I went out to HK in March 2008 , 10 quid was worth close to 175 dollars , which bought me 5.46875 big mac meals , wheras 10 here only buys 3 big mac meals. and such.

Thanks for the 101, I am sure that it was well intentioned :lol: ...but why should people such as Roubini benefit from stating what is now obvious?

Why was ...as he says..the £ overvalued? anyone care to ask him to qualify this glib retrospective statement?

Overvalued against what...exactly?

Again...if this was so apparent to him then why did he (or others of a similar view) not do something human/appropriate/ constructive to possibly warn of the impending mess.

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Overvalued against what...exactly?

Other currencies.

All of em except about three.

Again...if this was so apparent to him then why did he (or others of a similar view) not do something human/appropriate/ constructive to possibly warn of the impending mess.

S'not his job. Many people on here were saying the same things, some even took financial positions based on it.

Not me i'm a lazy sod.

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But the debt of the UK relative to GDP IS NOT SMALL.

Aye the debt of the UK if we bail the banks out in full is un-imaginable to any normal human, we are talking 10's of

£1000,000,000 of pounds, the UK tax payer could be in the hole for the lot.

No doubt in my mind though, the BOE are engineering the transfer of bad assets from "Worthy" banks to banks that have CDS agreements with other non UK parties. And once complete will allow to said "Bad Bank" to fail.

Black holes that size, must be spread around, although expect them to head towards the (small populated and excessively wealthy) middle east oil cartel countries.

Edited by Yoss

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But the debt of the UK relative to GDP IS NOT SMALL. Its only small if you believe the crap Gordon pushes out. When you factor in the true debt, including public sector pensions, PFI, bank bailouts, bank liabilities etc etc it is simply massive.

Roubini has based his assessment on figures drafted by Hans Christian Anderson. It is therefore invalid.

Some of these debts are more amenable to default than others. It's the core debt that would count as sovereign default that's important IMO.

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Jeez, but this sort of arrogant patronising statement really annoys me....Sterling overvalued by whom?, why?.....and if it was so durn obvious then why didn't you interject at some useful point.

If he had (and he might well have, if asked) what difference would it have made?

Sterling overvaluation was plain for all to see, you just had to look at the way sterling's purchasing power was pumping up the trade deficit.

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If he had (and he might well have, if asked) what difference would it have made?

Sterling overvaluation was plain for all to see, you just had to look at the way sterling's purchasing power was pumping up the trade deficit.

but even with the recent drubbing the pound has had the trade deficit WIDENED, meh might as well jack interest rates up to 15% and enjoy some cheap goodies for a while than to get raped even harder.

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Other currencies.

All of em except about three.

S'not his job. Many people on here were saying the same things, some even took financial positions based on it.

Not me i'm a lazy sod.

Okeedokee...agreed, it was not his job to flag up distress signals.. the point that that I am attempting to make is why should someone so obviously able to do so ...well...not do so?

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Okeedokee...agreed, it was not his job to flag up distress signals.. the point that that I am attempting to make is why should someone so obviously able to do so ...well...not do so?

Well in the article it doesn't say he knew in advance so he like a lot of people could have been looking in the rear view mirror, although i think it's more likely he suspected.

Soooo if we assume that he did have the idea then he might have said something to close colleagues but he's not a govt advisor, a uk citizen and being an economist might have been cautious in anything he was saying.

Theres many things i see as wrong in the UK but i don't flag them to the appropriate people and that's as a UK citizen.

I doubt his opinions on currency even carry weight tbh it seems he was busy studying other things ;) .

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Well in the article it doesn't say he knew in advance so he like a lot of people could have been looking in the rear view mirror, although i think it's more likely he suspected.

Soooo if we assume that he did have the idea then he might have said something to close colleagues but he's not a govt advisor, a uk citizen and being an economist might have been cautious in anything he was saying.

Theres many things i see as wrong in the UK but i don't flag them to the appropriate people and that's as a UK citizen.

I doubt his opinions on currency even carry weight tbh it seems he was busy studying other things ;) .

Cheers slurms, you paint a valid picture.

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But the debt of the UK relative to GDP IS NOT SMALL. Its only small if you believe the crap Gordon pushes out. When you factor in the true debt, including public sector pensions, PFI, bank bailouts, bank liabilities etc etc it is simply massive.

spot-on

Roubini has based his assessment on figures drafted by Hans Christian Anderson. It is therefore invalid.

:lol::lol:

it also p1sses me off when people tell me that IR's are low so it's different to the 90's. fookw1ts.

they really have no idea just how much debt people/businesses have.

Then remember that most people nowadays have a foreign holiday let (even the window cleaner ffs), bought by MEWing the UK house, which now has a huge mortgage on it. The property abroad has a mortgage though, which they are paying in Euros whilst earning it's now twin brother, sterling. :lol:

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A pleasure to be able to do so, all valid questions, and of course i could be wrong the git could have just been making money out of fx trades ;)

Well, there is a thought :P

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Now that the doom mongers have succeeded in getting Bush out they will all become a lot more positive, supporting Obamaman.

He is not quite as positive as you think. A weak recovery in 2010 is more likely than not, but he still gives great weight to the possibility of a much longer lasting L-shaped recession, along Japanese lines.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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