Wednesday, June 11, 2008

The wheels have come off!

May Unemployment Claims Rise to Seven-Month High

U.K. unemployment rose to the highest in seven months in May as weakening economic growth prompted companies to cut more staff. Claims for jobless benefits increased for a fourth month, rising by 9,000 to 819,300, the Office for National Statistics said today in London. Economists predicted an increase of 8,000, the median of 33 forecasts in a Bloomberg News survey show.

Posted by tyrellcorporation @ 11:52 AM (1260 views)
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11 thoughts on “The wheels have come off!

  • Nobody was wheeled out to tell the reporter that unemployment and interest rates were much higher in the early 90s. Has the govt run out of volunteers for this job? Will they use parrots instead? Or have they just given up the ghost?

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  • … and with the Dept for Housing and Local Government talking about “sound fundamentals” in the house price predictions it just shows they don’t know what’s happening next and from where it’s coming. Unemployment will rise in the runup to the Autumn and keep going as long term decisions are put off by choice or by liquidators.

    So: the last remaining “strands” are coming off:
    – we heard how IR’s are not going to go down. Now they’re likely to increase by year-end
    – we heard how the rented sector is booming and property investment still makes sense. It isn’t and it doesn’t
    – we heard the credit crunch is now “over the worst”. It isn’t, not by a long way
    – we heard inflation would soon come back due to economic slowdown. It isn’t, and thats because the inflation isn’t home grown. We are so dependent on overseas raw materials, energy and food, we will have to pay the price regardless how slow the economy gets.
    – we heard unemployment is not an issue. And that’s changing as we speak to become a threat

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  • Unemployment? The stat should be non producing members of society of working age. That would include incapacity benefit. While we were lecturing our EU counterparts on economic (mis?)management, we via a slight of hand – moved the unemployment percentages by having an incapacity category. I am sure ive read somewhere that once you took that and some other “fudges” into account, we were broadly inline with other EU members.

    ….and now the (lagging in terms of recessionary / economic slowdown evidence) unemployment indicator is starting to go up…

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  • holding out says:

    Techie,

    Got any inside info on sterling. It seems to be holding up in spite of the glut of bad news. Normally when the stock market falls or when bad news strikes it is the first to take a hit. I know the prospect of IRs remaining firm (or rising) has kept some strength, but I am still surprised by it’s strength vs JPY for e.g. Its upto 210.

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  • Thats a bit off topic!

    inside info? thats illegal! I can give you my view – but its just that! I assume thats what you mean. Ok re JPY – dont trade that only v. $ and v. Euro. V Euro, i have Euros – cash (and have hedged some (approx 30%) and am looking to hedge the rest on a new high. Since the prior high of just under 8100 – i hedged a bit lower in the mid 80s – we have had a sideways – triangular formation. my view is we hit new highs (thats original!), and if im right we – being at the bottomish of the trend-line, look to turn back up anytime soon, but we could see a fall to the mid 7800 before that. After the new high (which could be spikey) then i think the Euro is pretty much exhausted. In any case i will be hedging 50% so i have a 20% exposure.

    Re USD – have been short since 2.03 and just holding that position. I realise the £s been up a cent today but theres alot of “noise” round here. a break of around 1.99 to the upside and i will have to contemplate the posibility i am wrong. However a break below 194 and we are looking “good” for a substantial further fall.

    Re the USD / EUR well thats another story, but you should be able to work it out from the cross rates on the above views. Sorry if that doesnt help too much.

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  • holding out says:

    TM, Thanks – I would never encourage illegal behaviour!

    I am just surprised at how resilient the £ has been of late, particularly as it seemed to follow the FTSE down against all currencies particularly CHF & JPY – that was a good earner but it seems to have stopped following it. Might keep my eye on USD in future.

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  • Holding…. yea i like the Swissy myself, but there seems to be some natural reluctance to push it below 2 – with any great venom. I personally think on the Swissy that we look like we are having or have had a “catching up” sideways / upward counter trend move waiting for another thrust down. At this time the trend followers get whipsawed and the range traders earn some cash.

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  • Back to unemployment stats – all I will say is “you ain’t seem nothing yet”

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  • When you take into account the increases in ‘economically inactive’ employment categories, UK employment level do not look so good after all. Add to that the increased levels of employment in the public sector (paid for by UK debt), and Gordon’s Miracle doesn’t look so great.

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  • I wonder how many of the newly unemployed were estate agents…..

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  • BBC latest – GlaxoSmithKline, the world’s second largest drug maker, is to cut 350 research staff as part of a plan to bolster productivity and cut costs. The company did not say where it planned to make the cuts, which represent 2% of its 17,000 research and development (R&D) staff.

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