Rolling UK Economy Into The Shitbin Thread

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?

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.)