Thursday, July 27, 2006

Worried about the day of reckoning?

Worried about the day of reckoning? Calm down – it has passed already

Why am I so optimistic? There are two broad reasons. First, the long-term structural underpinnings of the British economic miracle that began in the mid-1990s are still mostly in place. And while everyone recognises some of these structural advantages — the deregulation and privatisation of the Thatcher period and the monetary policy framework created by Mr Brown — the most important one is still not fully appreciated by the business community, the media and the financial markets. This underappreciated strength is Britain’s comparative advantage in finance and business services

Posted by jake the muss @ 08:10 AM (661 views)
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14 thoughts on “Worried about the day of reckoning?

  • Enjoyed this one. Kaletsky is normally bearish but he has taken a serious dose of happy pills for this one. For the true bears who buy into Kaletsky his comments on house prices and his optimism on the fact that any trigger to cause a HPC has already passed is a concern. Personally I don’t buy Kaletsky’s optimism but neither do I subscribe to the view that House Prices will collapse under their own weight as other commentators on this blog whose opinion I respect do.

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  • Why am I so optimistic Anatole Kaletsky asks his readers? Because you are a permanent optimist Anatole, thats way, always have been, always will be.

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  • “As a result, there is much less reason to worry about sharply increasing interest rates in Britain than in the US. ”

    OK, so go and slap a couple of % on the base rate and we’ll put this to test shall we?

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  • I’m not sure were leading America, rather that more of our population are so gullible, in beleiving the papers & continuing to feed the credit mountain.
    In the end, property, goods & services have to be paid with real money.

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  • ‘Why am I so optimistic? There are two broad reasons. First, the long-term structural underpinnings of the British economic miracle that began in the mid-1990s are still mostly in place’. – I thought that it was consumer spending as a result of consmer borrowing and a massive expansion of public sector employment which underpinned the economic miracle – both of which are unsustainable and beginning to go into reverse – all roads for the goverment lead to declining economic growth, its just a questoin of when.

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  • Eh? His logic is completely mixed up – cause and effect are obviously not his strong point.

    “The clearest example of this cyclical divergence between America and Britain can be seen in the housing market, which is pulling out of its two-year slowdown in Britain just as the US market declines. And the earlier downturn in the British cycle has kept inflation subdued, while it has steadily risen in the US. As a result, there is much less reason to worry about sharply increasing interest rates in Britain than in the US.”

    In other words, the downturn in the housing market is keeping inflation low in the UK, so rates won’t go up. But there’s also an upturn in the housing market. But don’t worry.

    ???

    Also the title says “Worried about the day of reckoning? Calm down – it has passed already” but then he concludes with “the dreaded “day of reckoning” for the British economy may be over already, before it even began.”

    So which is it? We’re dealing here with past fact not future speculation. So is his conclusion that the day of reckoning HAS passed or that it HASN’T?

    Or is he just flip-flopping about and making noise without saying anything – dressing up speculation in the cloak of analysis like every bad journalist?

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  • I wrote the below to ‘have your say’ under the article – they didn’t post it! Shock and bewilderment!

    Why don’t you stop and think who is benefiting from this “great economy”, and more importantly, who isn’t? People under 40 are now dealing with ridiculously high house prices on top of student debt and low wages. House prices constitute a definite bubble; why you would put “bubble” in quotes is beyond me – oh wait, I forgot it’s the media’s job to continue hyeping an already gluttonously overvalued property market to benefit Mr and Ms Middle Britain, to whom your paper along with the ever faithful Daily Express continues to kowtow. An economy cannot continue to ‘thrive’ under ‘prosperous conditions’ that are straining the lives of at least a third of the population, and for example forcing young couples to delay or altogether abandon having children or getting married, or even leave the country. Shamefully, the older people who buy your market-propping tripe don’t realise how prohibitively expensive this country has become for those not ‘fortunate’ enough to be in their generation.

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  • Anatole is probably the only journalist I read and say “Uh?” at the end.

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  • I’m not convinced it will be a day of reckoning, rather a decade of reckoning?

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  • There are two broad reasons. First, the long-term structural underpinnings of the British economic miracle that began in the mid-1990s are still mostly in place’.

    Eh!!, I thought this was a global boom!!!, it would have been more of a miracle if we had not been part of it?
    Please Anatole, let somebody take you to the bottom of the garden and be done with it, your making a fool of yourself.

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  • Damm, please HPC webadmin. Can you make it so the the Admin Password is persistent?

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  • bidin'matime says:

    I’m not sure why we bother to get all hot under the collar over half-wits like this. Logical reasoning is clearly not his strong point. Nor economics- yet another observer who believes that zero HPI is the down-turn and now that HPI appears to be back on the up, this is the recovery.

    Kaletsky – the danger has not passed – the upswing just paused – we aint ahead of the yanks, we’re behind them (as usual) and we shall soon be following them down the hill. Fool.

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  • “the housing market, which is pulling out of its two-year slowdown in Britain”

    Really? I hadn’t spotted that one.

    ” As long as world trade keeps growing …”

    Strange comment to make just days after world trade talks have collapsed.

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  • Always one to be wise after the event, this piece shows just how little grasp Kaletsky really has.

    The notion that the city currency dealers will compensate for all the economy’s shortfalls is utterly risible

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