Rolling UK Economy Into The Shitbin Thread

love that link

But it turned out the clock struck midnight and these assets turned into — pumpkins.

Best explanation yet.

It must be an interesting time to be a financial advisor: "Well, you could put your £1,000 under the mattress, but it will lose 5% of its value each year. Alternatively, you could put it in the bank and it will only lose 0.5% of its value each year, but the bank might well go bust. Property is looking like a sound investment: you could lose up to 15% a year that way. Or, for life in the fast lane, you could invest in the stockmarket, and you could lose up to 25% of your money in just one week. I suggest you buy lots of dairy products."

I imagine they are saying BUY SHARES now, no?

Also, the policy rate may be negative, but the savings rates offered by the banks aren't, cos they are desperate for cash (the flipside of them being unwilling to lend is that they are v keen to borrow). And no retail depositor has lost a penny as yet, and your savings are guaranteed up to £50,000, so not too diffcult to see that there's no problem with keeping it in the bank.

How about Iraq?

Baghdad’s property market has experienced a new breath of life in recent months after being stagnant for some time due to excessive violence. This was prompted by a dramatic fall in violence. While most real estate agents saw themselves jobless when sectarian killings raged in the city only last year, now they can’t seem to keep up with the new found demand.

Excessive violence.

Ironically (?) the photo accompanying that appears to be from 2003 and of the huge mosque started by Saddam.

Sorry still don't believe in forthcoming wage inflation (especially as public sector workers were cajoled into multiyear below inflation payrises). I see lots of job cuts though, if that helps

So can you have negative real interest rates in the absence of wage inflation?

Although devaluing the currency would certainly allow for wage inflation (albeit with consequences for commodity prices, esp fuel)

negative real interest rates

worked the last 6 years (unless you like official stats)

You can't have it both ways, you can't say there is no debt erosion without wage inflation and then say we have negative real interest rates without wage inflation.

we have had effective negative real interest rates without wage inflation.

Which sectors do you see the wage inflation occuring in?

we have had effective negative real interest rates without wage inflation.

how

real wages have fallen throughout the 2000s. interest rates may have been above official inflation stats, but looking at those statistics is rather like looking at unemployment figures to count the unemployed

But if wage inflation is to occur (via currency devaluation) it does rather suggest now is a good time to get out of the pound

So, has debt been eroded by inflation?

rather depends which currency you are paying it back in

But yes if wages go up I will be happy to agree that debt is being eroded by inflation

For those that still have wages anyway

Or personal circumstances, how did your basket of good rise in price, what pay settlement did you get.

Still doesn't why you think we have both negative real interest rates and no debt erosion.

pay went up less than the basket of goods. a larger proportion of pay went towards goods than it did pre-payrise, leaving less to go towards anything else

The Police have negotiated themselves 2.6% this year, 2.6% for 2009, and 2.6% for 2010

3%, blimey.

Jings

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?