Rolling UK Economy Into The Shitbin Thread

Crivens.

Can't wait for the minutes of this meeting in a couple of weeks. How the hell did they make this cut about inflation?

Help ma Bob.

Somebody just murdered the £

Don't worry. The savings won't be passed on to us customers and will instead continue to be used to subsidise world cruises and golf club fees for elderly shareholders.

As a saver I have no doubt it will be passed on to me immediately

The reduced interest will certainly be passed to all savers.

http://uk.ichart.yahoo.com/z?s=USDGBP=X&t=2y&l=on&z=m&q=l

House rents fall as unsold properties flood market

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5176440.ece

And still no apology from Kirsty Allsop.

Great, I should really look for a new flat

http://news.bbc.co.uk/1/hi/business/7751064.stm

Heaven needed some shears, a sandwich toaster and a bag of cola bottles.

Woolie's went bust in the US about a decade ago, I figured it was only a matter of time. How were they expected to compete with a chain of shopfronts filled with catalogs and sullen conveyor belt jockeys?

Peston at the BBC has an interesting angle: Woolworths is an obvious candidate for going pop, since the have no definite identity, but what they do have right now is a lot of stock that liquidators will want to get rid of, so this really hasn't done their competitors any favours. Sure, a lot of their stuff is something no-one would go to them first for, but this Christmas people will be wanting bargains more than That One Perfect Present.

This will be a one-year-only return to the traditional "get all your presents in Woolies in one hit" Christmas.

http://news.bbc.co.uk/1/hi/business/7796751.stm

Heaven needed bergamot

lol deflation

http://business.timesonline.co.uk/tol/business/economics/article5549629.ece

BBC now have a mini-site: http://bbc.co.uk/downturn

Why are bank shares collapsing quite so spectacularly? RBS's problems are fairly distinct - ie ABN Amro purchase - so I don't quite get why all the others are affected by their HUGE losses so much.

Are people building in the risk of them being nationalised completely or something?

Seems a bit crazy to me, but hey, crazy times.

"downturn"

A personal note: never make a banking decision based on the fact that your bank manager likes cricket and heavy metal, ha, oh well.

Telegraph headline this morning was "BLUE MONDAY", and since then I've been walking around going "dundundundundundundundundun dun dun dundundundundundundundundun dun dun"

I'm interested in how long it'll take the daytime TV schedule to catch up with the downturn - it's all property, antiques, and new life down under still.

I was wondering that last time I tried to find something to watch that wasn't full of people looking to supplement their flat in Kensington with a £600k Tudor farmhouse in a small remote country village, and then being surprised that small remote country villages are often a bit small and remote, and that Tudor farmhouses may have wonky floors, low ceilings and no chic modern interior design.

Rolling Don't-Call-Them-British Isles Economy Into The Shitbin Question: if Ireland is substantially more fucked sooner than many other countries with which it shares a currency, which seems to be the case, well... then what?

(Sorry if this question only makes sense in my head; I can't explain what I'm getting at any further, which is often a sign that it doesn't make any sense)

Ireland would ideally like much lower (zero) interest rates, I would guess, but the ECB sets rates for the whole EU, which isn't doing as badly, so they are 2%. Tough luck, Ireland. It would also like a much weaker currency, to make its exports more competitive, but as it's stuck in the euro, it can't devalue.

I know nothing about Ireland, but those are the issues you would expect.

Interest rates were too low for them in the boom times, as Germany was having a torrid time, and are now too high.

Good (non-nationalistic) argument for keeping out of the euro, really.

On the other hand, you're not going to get a run on your currency like Iceland did, so maybe it's a good job that they and other smaller economies are euro-fied.

What do the Irish ilxors reckon?

http://www.guardian.co.uk/politics/2009/jan/19/economy-banking

Privately, something close to desperation is starting to develop inside government. After watching the slide in bank shares on Friday, one cabinet minister did not altogether joke when he said: "The banks are fucked, we're fucked, the country's fucked."

"I'm not going to say to you I think we've now at least reached a set of measures and actions that almost for sure are going to work."

Can anyone explain what this means?

the fact that the irish govt's guarantees were backed by the euro probably saved their banking industry

George Monbiot bringing the LOLs yesterday

In Russell Hoban's novel Riddley Walker, the descendants of nuclear holocaust survivors seek amid the rubble the key to recovering their lost civilisation. They end up believing that the answer is to re-invent the atom bomb. I was reminded of this when I read the government's new plans to save us from the credit crunch.

Privately, something close to desperation is starting to develop inside government. After watching the slide in bank shares on Friday, one cabinet minister did not altogether joke when he said: "The banks are fucked, we're fucked, the country's fucked."

BTW this is an in-joke ministers like to quote, making a reference to supposed unruffled elite mandarin civil servant Dick Mottram and his "You're fucked, I'm fucked, We're all fucked. The whole department is fucked. It's the biggest cock-up ever. We're all completely fucked" crisis management quote when he was locked into battle with Byer's special adviser.

yeah.

hey, you gotta laugh.

Gallows humour - helping to getting through grim times

it'd be funnier if it wasn't someone who was partly to blame, but yeah lol rofl etc.

[brief Dick Mottram diversion:

there's an anecdote in John Prescott's autobiog where he recounts how he blames (erroneously, I am sure) Dick Mottram for having the furniture removed from a 'Grace and Favour' Whitehall apartment shortly before Prescott took it over.

In revenge, some time later - when Dick Mottram joined Prescott's jumbo-Department, Prescott proudly recounts that in revenge he showed Mottram to a completely unfurnished Perm Sec's office. He was disappointed that Mottram took it completely in his stride and was completely unfazed (though he must have thought Prescott quite mad).]

For this generation to think about what it was like before the Great Crash of 2008 will take the same mental wrench as the 30s generation needed to see back before the Great Crash of 1929.

errrr, no.

http://www.guardian.co.uk/politics/2009/jan/25/creditcrunch

God, that article is awful.

Sanctimonious grandstanding journo plugs forthcoming book- full of great insights such as:

The best answer is also the simplest: Britain crashed because Britain did not have a Plan B.

Fortunately the Guardian still has some journalists that write more more balanced informative articles:

http://www.guardian.co.uk/business/2009/jan/25/uk-recession

Godalmighty, Nick Cohen...is there any more to be said about him? That article is all the things Bob says + confusing.

Only yesterday, City dealers in nightclubs threw handfuls of notes in the air for giggling girls to catch as waitresses marching to the theme tune from Rocky brought £500 bottles of vodka and methuselahs of champagne to their tables.

I thought that was the 80s? And the 90s?

Incidentally this, the 4th recession I've lived through, is the weirdest one I can remember. Huge queues to get into a out of town shopping centre yesterday (after the sales, in January) and I had to stand in a queue in Next this morning (on a sunday!). Someone is making a fortune out of this doom and gloom (and it's not just the short sellers).

this is only my second recession, and the odd thing is recognizing that the baseline of expectations/wealth is that much higher each time. (lord knows how this will all play out in the medium term, of course.)

Haha, yeah, I've already heard someone complaining that they're cutting down on the number of holidays they're taking abroad this year. Cutting down from 3 to 2. Shocking depravation.

Ooops, I meant deprivation. Or did I.

muggins 'ere hasn't had a holiday of any kind since 2005 :/

Someone is making a fortune out of this doom and gloom

It's early days still. The psychology will change before this year ends. But even in the Great Depression there were some people with good jobs and other people with plenty of money to spend.

I'm interested to know how many people were in this bracket back then. When you say some people, what do you mean percentage wise? Is there any way of knowing that I wonder. Personally I refuse to join in the doomsayers. What's the point? I have no savings, a crappy pension, if I lose my job (or worse if Mrs T loses hers) I'm fucked anyway, what difference will it make if I worry about it now? Serious question.

Serious answer. If there is anything you can think of that would strengthen your position, even a meager increase in your savings, then even though "worry" won't do you any good, such small actions as you may choose to take should do you some correspondingly small amount of good.

I wish you luck and I hope you both keep your jobs. That is really the most important factor. But you are right that worry is not a help.

Europe's economic slump deeper than expected
By Eric Pfanner

Friday, February 13, 2009
PARIS: Europe sank even deeper into recession than the United States in the closing months of last year, according to figures published Friday, as finance ministers of leading industrialized nations gathered in one of the worst-affected countries, Italy, for discussions on the crisis.

In the fourth quarter, the economy of the countries sharing the euro declined by 1.5 percent, according to the European Union's statistics office. That is even worse than the 1 percent decline in the U.S. economy during that period, compared with the previous quarter.

"Today's data wipes out any illusion that the euro zone is getting off lightly in this global downturn," said Jörg Radeke, an economist at the Center for Economics and Business Research in London.

Until recently, some economists had thought that Europe might suffer less from the recession, which started in the United States before spreading to most of the rest of the world. While some European economies, including Britain, Ireland and Spain, have seen U.S.-style plunges in home prices, housing markets have held up better elsewhere in Europe. Consumers have also cut back less on their spending in Europe than in the United States.

But instead, European industry has been walloped as businesses around the world, and particularly in the United States, cut back on new orders to bring down their inventories. That has hit euro-zone countries hard, particularly Germany, which relies on exports to fuel economic growth.

In Germany, the biggest economy in Europe, the economy shrank by 2.1 percent in the final three months of 2008, compared with the third quarter, when it had already contracted by 0.5 percent, according to the federal statistics office. In an effort to arrest the plunge, the lower house of the German Parliament, the Bundestag, on Friday approved a €50 billion stimulus plan that includes new spending measures and tax cuts.

Germany was not the only European economy to do worse than analysts had expected in the period. In France, output declined by 1.2 percent, while Italy contracted by 1.8 percent.

The data "confirm that the recession in the region is deepening at an alarming rate," said Jennifer McKeown, an economist at Capital Economics in London.

For the euro-zone economy, it was by far the worst quarter since the euro was introduced in 1999, and economists said they would have to go significantly further back in time to find a comparable period.

"For Europe, as for the rest of the industrialized world, this is surely the worst downturn since the Second World War," Radeke said.

Drawing precise historical comparisons for the entire euro zone is challenging because of currency fluctuations before the single currency was introduced and because of incomplete or incompatible data from euro-zone members like Slovenia, which was not an independent country until 1991.

But McKeown said she had run the numbers for the major euro-zone economies back to 1970 and found only one other quarter that was even close to as bad as the latest one: the fourth quarter of 1974, when the economy was reeling from the oil shock and a plunge in stock prices. In that quarter, the main euro-zone economies fell by a combined 1.2 percent.

The 1.5 percent decline in the euro-zone economy matches the rate of contraction during the period in Britain, which has been additionally battered by the crisis in the financial sector, on which much of its economy depends.

The report from Germany on Friday showed a sharp rise in inventories - indicating more bad news for the first quarter, economists said.

That will give finance ministers of the Group of 7, including the U.S. Treasury secretary, Timothy Geithner, plenty to discuss this weekend during meetings in Rome. Among other things, the officials were expected to look at proposals for new financial market regulations and concerns about rising protectionist sentiment in some countries.

As the G-7 representatives arrived on Friday, tens of thousands of workers marched through the streets of the Italian capital, snarling traffic and demanding action to ameliorate the crisis. With three straight quarters of declining output, Italy has been in a slump longer than some of its neighbors, like France, where the economy actually eked out a small gain in the third quarter.

"Compared to other countries, not enough has been done," Mauro Bianchi, a representative of the CGIL union, told The Associated Press. "They are trying to cure a serious illness with aspirin."

While Italy is in particularly bad shape, the severity of the downturn across the euro zone was driven home by the report Friday. On an annualized basis, economists said, the 1.5 percent decline in output would amount to a roughly 6 percent drop - a significantly bigger fall than the 3.8 percent annual rate of contraction in the United States during the fourth quarter.

On a year-over-year basis, Europe also performed more poorly than the United States in the fourth quarter, with gross domestic product falling by 1.2 percent from the fourth quarter of 2007, compared with a comparable decline of 0.2 percent in the United States.

Europe typically lags behind the United States in recovering from recessions, McKeown said, so any return to growth in the euro zone is probably at least a year away.

"We had hoped that the euro zone might not do as badly as the U.S.," she said. "As it turned out, the slump in the industrial sector has completely turned things around."

UK banking giant HSBC has said it is to cut 1,700 jobs in the UK.

The job losses will come from retail banking, but will come from support services rather than branches, an HSBC spokesman told the BBC.

The company also said it would create "several hundred" new roles next year.

LLOYDS BANKING GROUP is being kept afloat with £165 billion of loans and guarantees from the Bank of England and other central banks around the world, The Sunday Times can reveal.

The bank’s reliance on state funding, detailed in a document released last week in connection with a separate £21 billion fundraising, gives the first insight into the huge scale of aid extended to banks during the financial crisis.

in lieu of the guardian's left-wing writers getting into it, simon jenkins is otm here:

http://www.guardian.co.uk/commentisfree/2010/mar/11/banks-lied-darling-puppet-city

He may be otm re: there should be questions asked/ inquiries held, but it's not a great article. In fact it dishes out the same kind of generalities (a trilion pounds spent! one in four shops might close!) that he usually criticises elsewhere.

idk ned, i think we have jizzed about a trilli on saving the bankers? give or take. the basic analysis, that we'll be paying for this, big-time, over the next few years, is true. a number not unlike one in four shops on my street have closed, and i live in a reasonably off area. and we've only just begun because the cuts to pay off the enormous deficit haven't arrived yet.