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Realistbear

Times: " Uk Economy Heads For ‘horror Movie’ "

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http://business.timesonline.co.uk/tol/busi...icle4363962.ece

The Sunday Times
July 20, 2008
UK economy heads for ‘horror movie’
David Smith and Dominic O’Connell
BRITAIN is facing an “economic horror movie” because of a “toxic mixture” of a moribund credit market and volatile oil prices, according to a leading forecasting group.
The Ernst & Young Item club, which uses the Treasury’s economic model, will argue in a report tomorrow that the economy will struggle to avoid recession. This comes as a survey by the Institute of Directors shows that
business confidence has slumped to the lowest level ever recorded
, with company chiefs increasingly gloomy about the investment climate.
These reports follow an interview with Alistair Darling in which the chancellor admitted the downturn would be more “profound” and last longer than he had expected.
Also, Sir Win Bischoff, chairman of Citigroup, the American financial giant, believes that house prices in Britain and America will keep falling for another two years.

The empty promise of everlasting prosperity on the back of perpetual HPI is decidedly over. Will Glasgow East be the final page in Gordon's economic novel "HPI driven prosperity." ???

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BRITAIN is facing an “economic horror movie” because of a “toxic mixture” of a moribund credit market and volatile oil prices, according to a leading forecasting group.

The money supply (M4) increased by 11.5 percent over the year to June, growing faster than May. This is hardly a sign of a "moribund credit market", although there are certainly areas where the banks are reluctant to lend - i.e. mortgages and some corporate lending.

However, household borrowing remains robust - no doubt people are gorging themselves on unsecured loans and credit card debt now MEW is not usually an option.

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The money supply (M4) increased by 11.5 percent over the year to June, growing faster than May. This is hardly a sign of a "moribund credit market", although there are certainly areas where the banks are reluctant to lend - i.e. mortgages and some corporate lending.

However, household borrowing remains robust - no doubt people are gorging themselves on unsecured loans and credit card debt now MEW is not usually an option.

Has household debt been increasing at a similar amount?

I'm sure that the lowest ever tag will only last until the next survey.

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The money supply (M4) increased by 11.5 percent over the year to June, growing faster than May.

But sooner or later this money will hit the market and too me that would indicate that inflation must be running into double digits.

Something is very wrong when you can borrow money at a rate that is below inflation.

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http://business.timesonline.co.uk/tol/busi...icle4363962.ece
The Sunday Times
July 20, 2008
UK economy heads for ‘horror movie’
David Smith and Dominic O’Connell
BRITAIN is facing an “economic horror movie” because of a “toxic mixture” of a moribund credit market and volatile oil prices, according to a leading forecasting group.
Question, which horror movie. I vote for the following as we will see a lot of people under water:

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The money supply (M4) increased by 11.5 percent over the year to June, growing faster than May. This is hardly a sign of a "moribund credit market", although there are certainly areas where the banks are reluctant to lend - i.e. mortgages and some corporate lending.

However, household borrowing remains robust - no doubt people are gorging themselves on unsecured loans and credit card debt now MEW is not usually an option.

And where are these unsecured loans coming from? Does M4 include loan-shark lending?

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The money supply (M4) increased by 11.5 percent over the year to June, growing faster than May. This is hardly a sign of a "moribund credit market", although there are certainly areas where the banks are reluctant to lend - i.e. mortgages and some corporate lending.

However, household borrowing remains robust - no doubt people are gorging themselves on unsecured loans and credit card debt now MEW is not usually an option.

you obviously haven't read the BoE credit conditions survey this quarter....

M4 is misleading anyway it has all sorts of crap in it... take a look at the chart of theday thread ...

I prefer M1 thats money people can spend ( and not some obscure abcp conduit being moved from one balance sheet to another).... Its contracting you know

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you obviously haven't read the BoE credit conditions survey this quarter....

M4 is misleading anyway it has all sorts of crap in it... take a look at the chart of theday thread ...

I prefer M1 thats money people can spend ( and not some obscure abcp conduit being moved from one balance sheet to another).... Its contracting you know

M1, M4, they all have problems, but your point about M1 seems to reflect more of reality on the ground which is that people are finding the going tough. An obsession with M3 in the early 1980s made the recession longer and deeper than it should have been and destroyed much of our manufacturing base.

I think money supply figures ought to be viewed in the same light as "One for sorrow, two for joy, three for a girl and four for a boy" etc

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you obviously haven't read the BoE credit conditions survey this quarter....

M4 is misleading anyway it has all sorts of crap in it... take a look at the chart of theday thread ...

I prefer M1 thats money people can spend ( and not some obscure abcp conduit being moved from one balance sheet to another).... Its contracting you know

m1 is a pretty poor tool to judge the money supply buy, though it does have it's uses.

just don't bet your savings on any conclusion you draw from it going own.

m0 contracting would be a lot more significant.

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Money supply figures are only useful when used in conjunction with other data.

The data seems to reflect what we are presently seeing - lots of for sale signs everywhere, but very few sold (mortgage tightening). Shopping centres full of people with bags in their hands (my guess- unsecured borrowing, credit cards etc. I will have to wait a few months to find out whether this is correct). High commodity prices - clearly financial institutions engaged in speculation are having no problem borrowing, the data certainly indicates that this has been the case.

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M1, M4, they all have problems, but your point about M1 seems to reflect more of reality on the ground which is that people are finding the going tough. An obsession with M3 in the early 1980s made the recession longer and deeper than it should have been and destroyed much of our manufacturing base.

Yes that lane widening on the m1 made it tough going for a long time, the m4 around maidenhead can be a nightmare. M3s a bit better but around the m25 suffers greatly.

:)

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http://business.timesonline.co.uk/tol/busi...icle4363962.ece

The Sunday Times

July 20, 2008

UK economy heads for ‘horror movie’

David Smith and Dominic O’Connell

BRITAIN is facing an “economic horror movie” because of a “toxic mixture” of a moribund credit market and volatile oil prices, according to a leading forecasting group.

SNIP

Oh, this is just the beginning.

There are rumours in the middle east that oil will reach 175 dollars a barrel by the end of August 2008. If you want to drive around, do it now.

175 - remember where you heard it
Edited by renterbob

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m0 contracting would be a lot more significant.

I find that the amount of notes and coins I have about my person is not particulaly represtative of my own supply of money ...

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The money supply (M4) increased by 11.5 percent over the year to June, growing faster than May. This is hardly a sign of a "moribund credit market", although there are certainly areas where the banks are reluctant to lend - i.e. mortgages and some corporate lending.

However, household borrowing remains robust - no doubt people are gorging themselves on unsecured loans and credit card debt now MEW is not usually an option.

I dont know how they measure, but maybe the increase in M4 relates to the "cash" exchanged for MBS stocks at the central banks.

This extra M4 will not enter the real economy, it just protects insolvent banks' balance sheets.

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I find that the amount of notes and coins I have about my person is not particulaly represtative of my own supply of money ...

You may have a different opinion of your wealth if the Balances you hold at banks cannot be met when you come to spend them!

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  • 395 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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