Thursday, Oct 29, 2009

We did not want to make houses affordable therefore we are still in recession...

Timesonline: Britain out in the cold as US exits recession

America joins Japan, China, Germany and France as the world’s leading economies that have emerged from recession.
However, shock figures, released last week, showed that the UK economy contracted between July and September, leaving the country battling the longest recession on record.

Posted by mander @ 02:02 PM (2239 views)
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1. str 2007 said...

Odd, Gordon Brown told us we were the best positioned country to face the downturn.

We even devalued our currency to aid us by 30% against most others.

How is it possible we're not out f recession yet, particularly withh all the QE and 0.5% interest rates and various other get out of jail free cards for the over indebted.

Oh well at least house prices are holding up well.

Thursday, October 29, 2009 02:11PM Report Comment

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3. timmy t said...

No more boom and bust... well, no more boom anyway...

Thursday, October 29, 2009 02:24PM Report Comment

4. crunchy said...

Perhaps in Browns heroic attempts to "Save the World" he forgot about the British people he is really meant to serve.

That busted pig adorned with "our" Union Jack was once a hungry fighting Bull Dog.

Less pigs, more bull dogs please Gordon! Paradoxically I dont believe Uncle Sam's is out of rehab just yet by a long shot!

David Smiths on holiday it seems!

Thursday, October 29, 2009 02:25PM Report Comment

5. brickormortis said...

Just for the record I have been told three times this week that "now is the time to buy property in UK" by work colleagues. F**k off!

This is exactly why interest rates need to rise, to stop people like this being able to take out a mortgage and sending us all to the economic knackers.

Thursday, October 29, 2009 02:27PM Report Comment

6. will said...

The US has had a massive house price crash, but the UK is still in denial. All part of Gordon's 'boom and bust" policy IMO.

Thursday, October 29, 2009 02:34PM Report Comment

7. wiltshire said...

Timmy, I think GB has been constantly misquoted. What he actually said was "No! More boom and bust!"

Thursday, October 29, 2009 02:34PM Report Comment

8. brickormortis said...

@7: Very funny! hahahahahah!

Thursday, October 29, 2009 02:48PM Report Comment

9. mark wadsworth said...

the real reason why the UK is dragging out the recession like this is because of Home-Owner-Ism.

The most important economic variable, the one that most voters (and most MPs, as it happens) in the UK care about, is house prices. So they have to keep that inflated as long as possible by increasing the number of superfluous public sector workers, bailing out banks, preventing repossessions and generally borrowing and borrowing, promising to "freeze" council tax, clamping down on new supply (while waffling on about "affordable housing"). All of this slows down the "clear out" that is necessary for economy to bottom out and pick up again.

Stuff like GDP growth, unemployment, trade or government deficits, exchange rates don't matter any more. Not even the total tax burden matters. Interest rates only matter to the extent they can be used to transfer wealth from savers to borrowers.

France and Germany don't have to worry about this - far fewer home-owners and no property price bubble (they used to be disgustingly expensive compared to England but we overtook them while their prices have been flat for about twenty years). Spain and Ireland and other bubble countries are presumably in the same mess as we are.

Thursday, October 29, 2009 02:51PM Report Comment

10. need-a-crash said...

@9: Seems about right Mark, except of course Spain and Ireland are getting on with taking the pain with house price falls as they don't have their own currency to manipulate like we do and perhaps don't have our home-ownerism interests either.

Thursday, October 29, 2009 03:00PM Report Comment

11. crunchy said...

9. mark wadsworth

Looks like they throw the sitting tenant law out to make way for the BTL boom. A subject rarely mentioned here, but worthwhile.


Germany is much nicer to it's population. How times change!

Thursday, October 29, 2009 03:09PM Report Comment

12. jack c said...

UK won't be coming out of recession anytime soon IMO - Crash Gordon spouted a load of bulls**t when he said the UK was better placed to cope with any downturn - we were always worse placed than other nations because of Gordon's stewardship as Chancellor which whilst often referred to as the "miracle economy" was infact a mirage economy built on unsustainable personal debt and rising house prices. Once the true extent of the UK's debts are disclosed after the next election it's off to hell in a handcart.

Thursday, October 29, 2009 03:14PM Report Comment

13. crunchy said...

You automatically have an assured shorthold tenancy if you moved in on or after 28 February 1997.

Nice timing. Cause or effect?

I love the assured bit. lol

Thursday, October 29, 2009 03:16PM Report Comment

14. crunchy said...

BRING BACK THE SITTING TENANT and see what happens. : )

Thursday, October 29, 2009 03:19PM Report Comment

15. letthemfall said...

mark w: " increasing the number of superfluous public sector workers"

Reading an article earlier (forget which paper now) that said productivity was dropping despite job cuts, suggesting the reason for this was companies hanging on to workers with nothing to do. So it would seems the number of superfluous private sector workers is increasing.

Thursday, October 29, 2009 03:20PM Report Comment

16. mark wadsworth said...

The main change to tenants' "rights" was 1988 Housing Act, which was a good thing, taken in isolation. Changes since then have been very minor.

Thursday, October 29, 2009 03:22PM Report Comment

17. jack c said...

@mark wadsworth - off topic but have heard any rumours on the following ?

Government could hike capital gains tax (CGT) to 30%, raise top rate stamp duty and VAT in a ‘disorderly tax grab’, the Association of Chartered Certified Accountants (ACCA) has warned. The government needs to take drastic action to fill the large ‘black hole’ in its spending plans, said Chas Roy Chowdhury, head of taxation at the ACCA.

Source todays Citywire

Thursday, October 29, 2009 03:27PM Report Comment

18. crunchy said...

16. mark wadsworth

A sitting tenant makes property investment far less attractive. Need I say more.

Thursday, October 29, 2009 03:29PM Report Comment

19. mark wadsworth said...

@ Jack, we tax chaps always expect the unexpected. That may happen, it may not, but we've not heard of any of that where I work.

@ Crunchy, I am a free marketeer. I want the free markets to get house prices down, so why would I complain about a level-ish playing field between landlord and tenant? There's no evidence to suggest that rents rise any faster than wages rise, there was no "bubble" in rents. Landlord-Ism is nowhere near as bad for the economy as Home-Owner-Ism.

Thursday, October 29, 2009 03:38PM Report Comment

20. Carol said...

What silliness! The only way you could say the US is out of the recession is by saying it's now in a depression.

I've been following the American situation extensively, and it's all smoke and mirrors. The next stage in the crash is just around the corner. Look at blogs like Financial Armageddon, Max Keiser, Mish's Global Economic Trend Analysis, The Market Ticker and Baseline Scenario, and you'll see the US situation is horrendous. The MSM is living on another planet.

Thursday, October 29, 2009 03:41PM Report Comment

21. shining wit said...

Mark Wadsworth @ 9.

Very well put.

Mark Wadsworth @ 16.

Mostly right. But please don't forget that it got rid of the "fair rent act", the only legislation I know of that tried to temper the rentable values of property. They have simlar laws over Europe to try and reign back rent. Unfortunately "market force" within a huge property bubble take no account of ability to keep up with rent increases. The tories also radicalised the "shorthold tenency" laws within the act to scupper the tenant even more, unfortunately. If the fair rent act had remained intact, the whole buy-to-let scam would have had a modicum of restraint built in!

Unfortunately the 1988 housing act was as good as it was bad. Does anyone else remember the shocking stories about private landlords inthe 40s, 50s and 60s?

Thursday, October 29, 2009 03:52PM Report Comment

22. crunchy said...

19. mark wadsworth said "I am a free marketeer. I want the free markets to get house prices down."

good luck with that one mark. It seems that an effective law that helped to keep houses from being looked upon as a buy/sell or flip stock

was changed. Free market? I would like to see what would happen if that law was reinstated/unchanged. That's free market to me!

Less tinkering.

Thursday, October 29, 2009 03:57PM Report Comment

23. mark wadsworth said...

OK, but I don't do easy targets and one-sided economics like slagging off landlords as a group.

This is yet another problem that land value tax would solve - instead of forcing landlords to let properties at below market rents (a recipe for further problems down the line) why not let them charge market rents and use the tax system to collect the unearned element (the location rent) and divvy that back to all as a Citizen's Dividend, it comes to the same thing for the tenant and prevents BTL-fuelled property price bubbles.

Thursday, October 29, 2009 03:59PM Report Comment

24. crunchy said...

22. mark wadsworth, LVT is a great idea. OK!

I hope what I have said may be thought provoking to someone else.

Less tinkering, more divvying.

Thursday, October 29, 2009 04:07PM Report Comment

25. shining wit said...

Mark Wadsworth @ 9 again.

I would go so faras to say that your point about home ownership is as succint an interpretation of the british psyche relating to our economy as anything i've read.

Home ownership in this country is an obsession. And now half the population utilise their own homes as collateral for living crass lifestyles based more on the x factor and the cult of celebrity, than worrying about their envirnoment (not only the ecological one, but their immediate vicinties, their streat, villages and towns) or their childrens welfare and educations.

Like all obsessives, unless controlled by a greater force (moderation perhaps!) the obsessive will over focus on their obsession resulting in the next step, the obsessive/complusive step, whereby they are compelled to buy a home or buy a bigger/better home as the only way to satisfy their obsession......

In France recently, I was asked buy a very well spoken frenchmen, who although having great english (better than my french), haviong never visited britain until last year, having met english friends on holiday in france, why is it that "all english homes are off-white or beige inside?" . I nearly laughed myself of my chair (very nearly spilt my wine).

This country needs home ownership therapy.......Now where's Dr Phil ?

Thursday, October 29, 2009 04:14PM Report Comment

26. crunchy said...

22. mark wadsworth said...OK, but I don't do easy targets and one-sided economics like slagging off landlords as a group.

I don't. Never mentioned it!

Thursday, October 29, 2009 04:23PM Report Comment

27. bystander said...

Interesting how even good news is really just polishing a turd - as has been written on another blog site - $780Bln is about 5.6% of US GDP, but the growth rate annualised for the US has just risen, due mainly to cash for clunkers, homebuyers tax credits etc (and now Obama wants to give everyone a $250 cheque to spend at Christmas), to 3.5%. Surely this actually equates to a 2.1% drop in GDP. Also these are government figures, so highly dubious. The markets have taken back some of their loses from yesterday, so obviously love and in this case greed are truly blind. How is this ever going to turn out well, at least for the average Joe in main street?

Thursday, October 29, 2009 04:28PM Report Comment

28. bystander said...

I meant: '$780Bln already given to the US economy and financials through the stimulus package......'

Thursday, October 29, 2009 04:29PM Report Comment

29. sneaker said...


"The Commerce Department reported its estimate for 3rd quarter 2009 GDP Wednesday, up 3.5 percent. The Central Planners moved fast to declare the Recession from 2008 over. This was the first reported rise in GDP since the second quarter 2008.

However, about half the growth came from the expired Cash for Clunkers government subsidized vehicle purchase plan where they provided significant cash rebates in exchange for consumers buying the cars the Central Planners wanted folks to buy. Most of the rest of the GDP growth came from increased government expenditures, which were up 7.9 percent. This is a great number for socialists, however for households, which account for 70 percent of GDP in a capitalist economy, not so great. Households remain stuck in a sinking economic quagmire. Economic policy is about the givernment, not the household, and 3rd quarter GDP brings the point home in spades. For the American Household, the deep recession/ possible depression remains firmly intact. Present and future cash needs remain a fearful proposition.

Initial Jobless Claims, new folks collecting unemployment because of a job loss, came in at 530,000 in the latest reporting week, and continuing claims were 5.8 million.

80 years ago today, to the day, the stock market crashed, the kickoff to the Great Depression of the 1930s."

Thursday, October 29, 2009 07:13PM Report Comment

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