More Great News, Sectors Growing, Job Losses Slowing

[HAMISH_MCTAVISH]

The UK service sector grew unexpectedly in May, a survey has said, indicating the economic outlook may be improving.

The PMI services index hit 51.7 in May, up from 48.7 in April. A measure above 50 indicates growth, and this was the first reading over 50 since April 2008.

The Chartered Institute of Purchasing and Supply, which helps compile the data, said the trend could lead to overall economic growth next quarter.

Separate data suggested signs of improvement in the UK jobs market.

A survey by KPMG showed an index reading of 41.7 for permanent placements last month, up from April's reading of 37.3.

While it remained below 50, indicating the number of jobs available is still decreasing, the rate if decrease was the slowest for 10 months.

Also on Wednesday, a survey from Nationwide for May suggested UK consumers were feeling more optimistic about the future than they had been for six months.

The building society's index hit a reading of 53 in May, up from 51 the month before and representing the highest reading since November.

'Good news'

"If sustained, the rise in the PMI surveys into June would indicate an increase in GDP as early as Q2, albeit an extremely modest rise," said Chris Williamson, the chief economist for Markit which helps research the PMI survey.

http://news.bbc.co.uk/1/hi/business/8081248.stm

Green, green shoots.

Edited June 3, 2009 by HAMISH_MCTAVISH

[interestrateripoff]

Better get buying property before prices go up due to unemployed getting mortgages.

Things can only get better from here on in.

[Giordano Bruno]

http://news.bbc.co.uk/1/hi/business/8081248.stm

Green, green shoots.

'The UK service sector grew unexpectedly in May, a survey has said, indicating the economic outlook may be improving.

The PMI services index hit 51.7 in May, up from 48.7 in April. A measure above 50 indicates growth, and this was the first reading over 50 since April 2008.

The Chartered Institute of Purchasing and Supply, which helps compile the data, said the trend could lead to overall economic growth next quarter. '

The trend? One month's statistic is now called a trend?

I guess that settles it then!

[Farcical]

OK so why as a redundancy careers adviser am I busier than ever then??????

[Laura]

That's it! - the shouting goon has convinced me.

I've just bought two houses on the Old Kent Rd.

Another in Mayfair,

but is a railway station worth the hassle?

I know I'll have a sneak preview of Community chest & hope I don't get caught ..... again

zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

[interestrateripoff]

OK so why as a redundancy careers adviser am I busier than ever then??????

Because you have poor time management skills and aren't very good at your job?

[Pearshape]

Sorry Hamish - but im on the front line of construction - its bad really bad - and the figures just don t show it. So you c an wave any figures you like, but deflation is occuring on a massive scale.

Strangly, our only hope is going to the imf getting a bailout, and getting social construction underway - the construction industry is deader than a dead thing.

Edited June 3, 2009 by Pearshape

[Pindar]

I spoke to a recruitment consultant today who said that the market was dire (IT and engineering) and that "in this climate" you are lucky to get offered £10K less than during the good times. This also includes benefits like pensions, relocation etc. Hardly signs of recovery and how, when service sector jobs are haemorrhaging faster to India than a slaughtered cow, can there possibly be any "green shoots". The article is clutching at straws.

[OnlyMe]

"Services sector" = gangster bankster bailout sector. They should be feeling chipper having had hundreds of billions thrown at them.

In the rest of the economy the rot continues and being held hostage to banks is going to continue to drag the rest down.

[lowrentyieldmakessense(honest!)]

http://news.bbc.co.uk/1/hi/business/8081248.stm

Green, green shoots.

read some history

http://mises.org/books/inflationinfrance.pdf

And, first, in the economic department. From the early

reluctant and careful issues of paper we saw, as an immediate

result, improvement and activity in business. Then

arose the clamor for more paper money. At first, new issues

were made with great difficulty; but, the dyke once broken,

the current of irredeemable currency poured through; and,

the breach thus enlarging, this currency was soon swollen

beyond control. It was urged on by speculators for a rise

in values; by demagogues who persuaded the mob that a

nation, by its simple fiat, could stamp real value to any

amount upon valueless objects. As a natural consequence a

great debtor class grew rapidly, and this class gave its influence

to depreciate more and more the currency in which

its debts were to be paid.

The government now began, and continued by spasms to

grind out still more paper; commerce was at first stimulated

by the difference in exchange; but this cause soon ceased

to operate, and commerce, having been stimulated unhealthfully,

wasted away.

Manufactures at first received a great impulse; but, ere

long, this overproduction and overstimulus proved as fatal

to them as to commerce. From time to time there was a

revival of hope caused by an apparent revival of business;

but this revival of business was at last seen to be caused

more and more by the desire of far-seeing and cunning men

of affairs to exchange paper money for objects of permanent

value. As to the people at large, the classes living on fixed

incomes and small salaries felt the pressure first, as soon

as the purchasing power of their fixed incomes was reduced.

Soon the great class living on wages felt it even more sadly.

Prices of the necessities of life increased: merchants were

obliged to increase them, not only to cover depreciation of

their merchandise, but also to cover their risk of loss from

fluctuation; and, while the prices of products thus rose,

wages, which had at first gone up, under the general stimulus,

lagged behind. Under the universal doubt and discouragement,

commerce and manufactures were checked or

destroyed. As a consequence the demand for labor was

diminished; laboring men were thrown out of employment,

and, under the operation of the simplest law of supply and

demand, the price of labor—the daily wages of the laboring

class—went down until, at a time when prices of food, clothing

and various articles of consumption were enormous,

wages were nearly as low as at the time preceding the first

issue of irredeemable currency.

[Bloo Loo]

Yet Eurozone reports massive GDP contraction:

LONDON -- The European Union's official statistics agency said Wednesday the euro zone's economy contracted more sharply in the first quarter than initially reported.

The combined gross domestic product of the 16 countries that use the euro was down 4.8% in the first three months of 2009 from a year earlier, Eurostat said. On May 15, the statistics agency estimated that first-quarter GDP had dropped 4.6%. The change was triggered by Eurostat's revision of fourth-quarter GDP, which it says declined by 1.8% rather than the previously calculated 1.6%.

WSJ

[the flying pig]

hamish

did it ever occur to you that it might be possible to have economic growth without a housing bubble? like, er, from about the mid 90s to about 2002, when you had the internet boom [and ensuing stock market bubble] but the halifax house price to wage multiple staying resolutely below 3.75... now that sounds like genuine prosperity, lots of money in people's pocket and that money going a long way because house prices are at a reasonable level...

it must be obvious that, even if we do have a recovereh, house prices simply cannot, even if they absolutely stop falling and indeed start to climb, start roaring northwards with double digit annual increases a la mid noughties, just because of the obvious affordability constraint

Edited June 3, 2009 by the flying pig

[Guest absolutezero]

That's it! - the shouting goon has convinced me.

I've just bought two houses on the Old Kent Rd.

Another in Mayfair,

but is a railway station worth the hassle?

I know I'll have a sneak preview of Community chest & hope I don't get caught ..... again

zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

That really tickled me. One of the funniest things I have read on here for ages.

Wouldn't want Hamish to monopolise on the conversation, would we?

[sammysnake]

The BBC........the bastion of of impartiality

[loginandtonic]

and i visit antique/collector fayres, car boots, charity shops - dismal, can't give the stuff away,

green shoots are just painted on imho, on the ground in the real economy in my patch - our survey says X

[Houses_Burning]

http://news.bbc.co.uk/1/hi/business/8081248.stm

Green, green shoots.

Is this meant to give a glimmer of hope to all the people losing jobs at the moment. This is basically saying the only jobs being created are burger flippers and shelf stackers. This is not good news if you have just lost a high paying job and have a big mortgage to pay.

[Valerius]

The BBC........the bastion of of impartiality

Same story on the Telegraph.

UK services sector shows surprise return to growth in May.

http://www.telegraph.co.uk/finance/economi...ise-in-May.html

Is that impartial enough?

[Lone_Twin]

Same story on the Telegraph.

UK services sector shows surprise return to growth in May.

http://www.telegraph.co.uk/finance/economi...ise-in-May.html

Is that impartial enough?

This is the trap the opposition parties walked into when they decried Capt Darlings overly opptomistic forecasts and why brown is so desperate to avoid an immediate election.

The interventions the govt is making in the markets and the economy may be enough to pump up a convincing but highly temporary recovereh to cover the election.

[HAMISH_MCTAVISH]

Same story on the Telegraph.

UK services sector shows surprise return to growth in May.

http://www.telegraph.co.uk/finance/economi...ise-in-May.html

Is that impartial enough?

Don't be silly, thats the Torygraph. Clearly not impartial. And the Grauniad is a Labour mouthpiece, and The Times is just Murdoch ramping up the markets for his cronies, and...... well, you get the idea.

In fact, every single news source is to be attacked and discredited, whenever it's a positive story.

Fallacy ad hominem. The last great act of defiance in the face of the coming storm of recovery

[lowrentyieldmakessense(honest!)]

This is the trap the opposition parties walked into when they decried Capt Darlings overly opptomistic forecasts and why brown is so desperate to avoid an immediate election.

The interventions the govt is making in the markets and the economy may be enough to pump up a convincing but highly temporary recovereh to cover the election.

Possibly

http://www.marketoracle.co.uk/Article10990.html

The Debt Fueled Scorched Earth UK Economy

Inline with the new policy of a scorched earth economy, the Chancellor Alistair Darling in his recent budget statement started to come clean on the huge amount of debt that the country will need to borrow on just its visible official balance sheet as illustrated by the below graph.

Alistair Darling's forecast for government net borrowing for 2009 and 2010 in November 2008 totaled just £70 billion. However now the amount of borrowing has mushroomed to £350 billion, which is set against my November forecast of £405 billion for 2009 and 2010 alone, with continuing large budget deficits thereafter.

Alistair Darling also surprised many analysts by forecasting that the UK Economy would grow by 1.25% in 2010 and 3.5% in 2011. However we need to consider the following in that 1.25% growth on the annual GDP of £1.2 trillion equates to growth of just £15 billion and for 2011; 3.5% growth equates to just £42 billion. Therefore the government is borrowing a net £175 billion for 2009 and £175 billion for 2010 to generate £15 billion of growth, and then a further £140 billion for 2011 for £42 billion of growth. Thus total net borrowing of £490 billion to grow the economy by just £67 billion, (£595 billion my forecast) which shows the magnitude of the scorched earth economic policy now implemented that literally aims to hand the next Conservative government a bankrupted economy that will be lumbered with the consequences of continuing huge budget deficits throughout the life time of the next parliament and therefore sow the seeds for a strong Labour victory at the 2014-2015 General Election.

Bankrupt Banks Bankrupting Britain

Whilst some £500 - £600 billion of net borrowing over the next 3 years might sound alarming, however it literally marks the tip of the debt iceberg when it comes to Britians total liabilities that are set to grow from £1.75 billion at the end of 2007 to £3.9 trillion by the end of 2010 as a consequence of the £2 trillion of liabilities of the bankrupt banking sector being ceremoniously dumped onto the tax payers in addition to the deficit spending of £600 billion.

The consequences of all this deficit spending and growth in liabilities is highly inflationary as printing money eventually leads to hyperinflation as 1920's Weimar Germany found out, so Britain IS sowing the seeds of much higher inflation, maybe not this year and for the first half of 2010 as recent inflation analysis illustrated, but there will be a deficit spending and quantitative easing day of reckoning in terms of economic stagnation coupled with high inflation that will land on David Cameron's lap.

In conclusion, the Labour government's primary objective now is to deliver David Cameron's Conservative government a scorched earth economy whilst at the same time engineering a debt fueled economic bounce to maximise the number of seats the party will be able to muster in opposition, therefore current opinion polls and projections of seats at the next election grossly under-estimate the actual number of seats Labour will win.

[Valerius]

Don't be silly, thats the Torygraph. Clearly not impartial. And the Grauniad is a Labour mouthpiece, and The Times is just Murdoch ramping up the markets for his cronies, and...... well, you get the idea.

In fact, every single news source is to be attacked and discredited, whenever it's a positive story.

Fallacy ad hominem. The last great act of defiance in the face of the coming storm of recovery

Incredible is it not?

Every single source of information is rubbished as soon as there is some sort of "recovery" story.

Inverserly, and I won't name anyone, many copy/paste merchants of doom-mongering stories are all discussing the information ad nauseum without even questioning its source

It makes these people really look daft..

[HAMISH_MCTAVISH]

Incredible is it not?

Every single source of information is rubbished as soon as there is some sort of "recovery" story.

Inverserly, and I won't name anyone, many copy/paste merchants of doom-mongering stories are all discussing the information ad nauseum without even questioning its source

It makes these people really look daft..

Entertainment at it's finest.

You can almost see their desperation levels increasing daily as price levels recover. 17% down LR stats last month, probably be 12% by end of summer. Attack the sources, attack the posters, hell, they've even started attacking themselves.

I'd hate to imagine how miserable they'll be when the recession ends, unemployment reverses, etc. What will they do for the following 15 years of boom? Hibernate?

[lowrentyieldmakessense(honest!)]

eye of the storm methinks

http://dailyreckoning.com/the-unstoppable-...ortgage-crisis/

Here’s the good news: the subprime meltdown has about run its course. These loans were resetting en masse in 2007 and the first eight months of ’08. Now they’re pretty much done.

And the bad news? No one in the mainstream media seems to be asking what should be a pretty obvious question: What about loans other than subprime? Truth is, the banks didn’t just trick up their subprime loans. ARMs were the order of the day – across the board.

Now, here’s that frightening graph we referred to earlier.

Take a good, long look. You can see that from the beginning of 2007 through September of 2008, subprime loans (the gray bars above) were resetting like crazy. Those are the ones people were walking away from, sending a shockwave from defaults and foreclosures smack into the middle of the economy. Now they’re gone.

The ARM market got very quiet between December 2008 and March 2009, hitting a low that won’t be seen again until November of 2011. Small wonder a few “green shoots†have poked their heads above ground. But in April, resets began to increase and will reach an intermediate peak in June. After that, they tail off a little, going basically flat for the next ten months.

It’s not until May of 2010 that the next wave really hits. From there to October of 2011, the resets will be coming fast and furious. That’s 18 months of further turmoil in the housing market, and the beginning is still nearly a year away! (Although the months in between are likely to be no picnic, either.)

While it isn’t subprime ARMs that are resetting this time, neither are they prime loans. Those eligible for prime loans wisely tended to stay away from ARMs in the first place, as indicated by the relatively small space they take up on each bar.

No, the next to go are Alt-A’s (the white bars), Option ARMs (green) and Unsecuritized ARMs (blue). Alt-A’s are loans to the folks who are a small step up from subprime. Unsecuritized loans are a 50-50 proposition; either the borrowers were good enough that they weren’t thrown into the CDS pool, or they were so risky no one would insure them.

Those two are bad enough. But Option ARMs are the real black sheep, loans with choices on how large a payment the borrower will make. The options include interest-only or, worse, a minimum payment that is less than interest-only, leading to “negative amortizationâ€â€”a loan balance that continually gets bigger, not smaller. Imagine what happens with those when the piper calls.

Once the carnage begins, will it be as bad as the subprime crisis? That’s the $64K question. Perhaps not. For one thing, subprime loans were a much larger chunk of the market when they started going south. For another, there’s been a lot of refinancing as interest rates dropped; that should help ease the default rate. And the government has massively intervened, with measures designed to prop up those who would otherwise lose their homes.

On the other hand, we’re in a severe recession, which wasn’t the case when the subprime crisis started. More people will be unable to meet payments. And the housing market has continued to decline, pressuring both marginal homeowners and banks that can’t sell foreclosed properties.

Is the stock market’s next 10/9/07 on the way? Yes. Which day will it be? That’s unknowable. It could be in a week, or not for another year.

But make no mistake about it, the second crash is coming. It can’t be prevented, no matter what desperate measures Obama and his hapless financial advisors come up with. All we can hope for is that, with a little luck, it won’t be as severe as the first one. But it will last longer. We aren’t even in the middle of the woods yet, much less on the way out.

Edited June 3, 2009 by lowrentyieldmakessense(honest!)

[Number79]

Incredible is it not?

Every single source of information is rubbished as soon as there is some sort of "recovery" story.

Inverserly, and I won't name anyone, many copy/paste merchants of doom-mongering stories are all discussing the information ad nauseum without even questioning its source

It makes these people really look daft..

To be honest I believe there are far fewer here that simply rubbish positive news/figures than there are who accept them as the current trend but do not see it becoming a recovery.

The trend for now is upward but there are no guarentees that it will remain that way indefinately or even past the summer.

Time will tell but it is not hard to understand why almost anything in the msm or from the government is regarded with deep suspicion and distrust is it?

[ccc]

eye of the storm methinks

http://dailyreckoning.com/the-unstoppable-...ortgage-crisis/

Very interesting graph. The US Housing market is not going to improve until 2012 - is it ?

And if we are 18 months behind - which we are....then.....................