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" The Federal Reserve's Rescue Has Failed "

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http://www.telegraph.co.uk/money/main.jhtm...3/ccview103.xml

The Federal Reserve's rescue has failed

By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 2:15am GMT
07/03/2008
Page 1 of 2
The verdict is in. The Fed's emergency rate cuts in January have failed to halt the downward spiral towards a full-blown debt deflation. Much more drastic action will be needed...../
Why won't it end? Because US house prices are in free fall. The Case-Shiller index for the 20 biggest cities dropped 9.1pc year-on-year in December. The annualised rate of fall was 18pc in the fourth quarter, and gathering speed.
..../
Try $1trillion, says New York professor Nouriel Roubin. Contagion is moving up the ladder to prime mortgages, commercial property, home equity loans, car loans, credit cards and student loans.
We have not even begun Wave Two: the British, Club Med, East European, and Antipodean house busts.
As the once unthinkable unfolds, the leaders of global finance dither. The Europeans are frozen in the headlights: trembling before a
false inflation
*; cowed by an atavistic Bundesbank; waiting passively for the Atlantic storm to hit.
Half the eurozone is grinding to a halt. Italy is slipping into recession. Property prices are flat or falling in Ireland, Spain, France, southern Italy and now Germany. French consumer moral is the lowest in 20 years.
The euro fetches $1.52 (from $0.82 in 2000), beyond the pain threshold for aircraft, cars, luxury goods and textiles.
...../

On that note, I am soon off to the seaside this weekend and will (hopefully) not have access to a computer for a couple of days. Recession must now be a given. What does anyone think of the chances of a depression?**

_____________________

* Commodity and metal investors beware.

** A severe or long recession is referred to as an economic depression. A devastating breakdown of an economy (essentially, a severe depression, or a hyperinflation, depending on the circumstances) is called economic collapse. Newspaper columnist Sidney J. Harris distinguished terms this way:

A recession is when your neighbor loses his job; a depression is when you lose your job.

(Wiki)

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Guest Steve Cook
....What does anyone think of the chances of a depression?....

A near certainty...But I don't think it will follow the trajectory of the one we had in the 30s. That was almost entirely due to economic mismanagement. This time we have major resource and energy supply depletion to contend with aswell.

I think it will essentially be a stagflationary depression. However, it will be at a level that will make the 70s look like a bouncy castle party by comparison.

Edited by Steve Cook

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Isn't it all very exciting?!

I'm still waiting to see evidence of house price reductions in Beaconsfield, Buckinghamshire. No sign of a HPC there yet, unfortunately :(

Wealthy area--not affected as much as BTL type locations where the only way to sell is by knock-down auction prices. The City is seeing a lot of job losses with some saying 10,000 more this year. That will hit London and the suburbs hard by early summer. The storm is still off in the Atlantic with just early signs being felt here.

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Wealthy area--not affected as much as BTL type locations where the only way to sell is by knock-down auction prices. The City is seeing a lot of job losses with some saying 10,000 more this year. That will hit London and the suburbs hard by early summer. The storm is still off in the Atlantic with just early signs being felt here.

I expect a lot more than that by the end of this year. And by the end of 2009 I expect over a 100,000 jobs will have been shed by the UK financial sector (about 10% of current total). Huge job losses in other parts of the economy as well of course. Not a very rosy future! :(

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Isn't it all very exciting?!

I'm still waiting to see evidence of house price reductions in Beaconsfield, Buckinghamshire. No sign of a HPC there yet, unfortunately :(

:rolleyes::rolleyes:<_<:unsure:;) well said

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Can someone simply explain the difference between a recession and a depression please?

I think a depression is just a worse degree of nastiness. A recession that ruins more people, and lasts for longer, than a recession would.

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How will people from this generation survive a depression ?. When I was younger my grandad used to talk about the early 30's the fact their was no work and if there was only one person from a family was allowed to work. He spend a few years without a regular job doing bits and bobs when he could, him and a few palls had access to a sailing boat and they travelled to Ireland which was in a worse state than over here, luckily he still lived at home as did his brother who was a carpenter and he had a job through out which kept the family going

Can the benefits agencies stand a depression with so little coffers in reserve to pay dole and other benefits ? There was no such thing in the 1930's the government had to pay out

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http://www.telegraph.co.uk/money/main.jhtm...3/ccview103.xml

The Federal Reserve's rescue has failed

By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 2:15am GMT
07/03/2008
Page 1 of 2
The verdict is in. The Fed's emergency rate cuts in January have failed to halt the downward spiral towards a full-blown debt deflation. Much more drastic action will be needed...../
Why won't it end? Because US house prices are in free fall. The Case-Shiller index for the 20 biggest cities dropped 9.1pc year-on-year in December. The annualised rate of fall was 18pc in the fourth quarter, and gathering speed.
..../
Try $1trillion, says New York professor Nouriel Roubin. Contagion is moving up the ladder to prime mortgages, commercial property, home equity loans, car loans, credit cards and student loans.
We have not even begun Wave Two: the British, Club Med, East European, and Antipodean house busts.
As the once unthinkable unfolds, the leaders of global finance dither. The Europeans are frozen in the headlights: trembling before a
false inflation
*; cowed by an atavistic Bundesbank; waiting passively for the Atlantic storm to hit.
Half the eurozone is grinding to a halt. Italy is slipping into recession. Property prices are flat or falling in Ireland, Spain, France, southern Italy and now Germany. French consumer moral is the lowest in 20 years.
The euro fetches $1.52 (from $0.82 in 2000), beyond the pain threshold for aircraft, cars, luxury goods and textiles.
...../

On that note, I am soon off to the seaside this weekend and will (hopefully) not have access to a computer for a couple of days. Recession must now be a given. What does anyone think of the chances of a depression?**

_____________________

* Commodity and metal investors beware.

** A severe or long recession is referred to as an economic depression. A devastating breakdown of an economy (essentially, a severe depression, or a hyperinflation, depending on the circumstances) is called economic collapse. Newspaper columnist Sidney J. Harris distinguished terms this way:

A recession is when your neighbor loses his job; a depression is when you lose your job.

(Wiki)

None of this is a surprise,pumping good money after bad has NEVER worked. It's time we all took our medicine.

Edited by Rich1965

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Isn't it all very exciting?!

I'm still waiting to see evidence of house price reductions in Beaconsfield, Buckinghamshire. No sign of a HPC there yet, unfortunately :(

Same here in Pinner/Northwood/Ruislip :(

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How will people from this generation survive a depression ?. When I was younger my grandad used to talk about the early 30's the fact their was no work and if there was only one person from a family was allowed to work. He spend a few years without a regular job doing bits and bobs when he could, him and a few palls had access to a sailing boat and they travelled to Ireland which was in a worse state than over here, luckily he still lived at home as did his brother who was a carpenter and he had a job through out which kept the family going

Can the benefits agencies stand a depression with so little coffers in reserve to pay dole and other benefits ? There was no such thing in the 1930's the government had to pay out

Is this decline as deep as what our parents or grandparents experienced in the Great Depression? Probably not. But ...

In the Depression, the cost of living was going down, helping to ease the burden for many homeowners. Today, it's going up.

In the Depression, a much smaller percentage of families borrowed money to buy a home. Today, it's the purchase of a home without debt that's the rarity.

If you walked into a bank in the 1930s, it's absolutely certain that the mere mention of mortgages with no down payments, no documented income or no principal payments would have been universally greeted with ridicule. Today, these wacky new loans have been created by over 10,000 banks, thrifts and mortgage lenders in 3,000 counties and 25,000 towns across the U.S.

From everything we know, it's quite certain that adjustable-rate mortgages (ARMs) did not exist. Today, so many ARMs are resetting at higher rates, they are threatening to help trigger up to two million foreclosures.

Back then, very few home owners were upside-down β€” with more debt than home value β€” and it was unheard of for Americans to abandon their homes for that reason alone. Today, this situation is so widespread, a half dozen government agencies and thousands of lending institutions are desperately scrambling to find ways to reverse the trend.

What's next

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A near certainty...But I don't think it will follow the trajectory of the one we had in the 30s. That was almost entirely due to economic mismanagement. This time we have major resource and energy supply depletion to contend with aswell.

I think it will essentially be a stagflationary depression. However, it will be at a level that will make the 70s look like a bouncy castle party by comparison.

yes thats right folks. A major resource shortage.

All those new cars and chinese goods you are buying are imaginary resources.

The oil you are buying that was $25 in 2001 and is now $105 is because of PEAK OIL. Not the iraq and afganistan wars and sanctions on iran. no siree. no way...deffo peak oil. And if you dont believe it you are a right wing bigot and probably and anti semite too.

And when recession hits us and our demand for imported goods falls...hence so will chinese demand for commodities. So that means oil and metals will dry up...See makes sence now eh.

What IS going to happen is we will have a severe recession with high unemployment.

And then guess what ? When the recession eventually hits bottom we will still have no jobs to recover with as we sent it all to china and india. So we will be poor and commodities will be expensive still.

(oops sorry its because there is a shortage and we have run out not because we have no industry)

So keep on buying the

"immigration is good for the economy" and

"outsourcing is good for the knowledge based economy"

lines.

We (the british) are permanently fooked until we have a major change.

We will have massive asset deflation and commodities will rise and then fall back to a level that is still far higher than today (cos its running out obviously..not because we are a poor nation)

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Can someone simply explain the difference between a recession and a depression please?

β€œIt's a recession when your neighbor loses his job; it's a depression when you lose yours.”

Harry S. Truman

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  • 294 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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