Rolling UK Economy Into The Shitbin Thread

even the head of the bank of england is saying it. depends on your definition of 'shitbin' i suppose.

I meant he was right about the title being indicative of its content.

I think also that 'shitbin' offends me. It reminds me of all the HYS posts that start "This country has now officially gone to the dogs".

would you prefer "the dumper"?

dunno about 3 years, most other times its really been more like 5 (though the periods of 'technical recession' are often around 2 if you don't count below inflation growth, which is still pretty poor). i think it will be worse this time as the credit expansion period has been longer and fuller, but whether this means a heavy short(ish) recession, or a longer less immediately sharp one, only time will tell

No, what's going to happen is that everyone in the UK is going to be starved in order to subsidise the lifestyles of hedge fund managers and shareholder pension fund subscribers and then made to eat rats in the workhouse. Jehovah.

I think also that 'shitbin' offends me.

merely copying the US title. i wouldn't have chosen that word either, otherwise

Will they be eating these rats on their holidays?

'Rats abandon failing Britain'

Quipped Geldof at Gatwick: "Too much f***ing tax!"

but if anyone doesn't like it, i think maybe we should start a list of things that are good about the uk economy

1. Whiskey Distilleries

i'm going to need your help for the others:/

or, if we can't manage good things...how about 'things that are more promising here than in the USA'? i'm stumped

Where do they distill whiskey in the UK? Norn Ireland?

Biosciences and shit will probably be okay.

i think we kind of are in the shitbin; HYS talks about symptoms mostly, but it's a country with a now very wide gap between rich and poor, a middle-class living on credit based on their overvalued houses, and with a public sector now insanely in hock (enron style, off the books) to its private-sector 'partners' and consultants.

What is HYS?

Technology sector will probably be hit less hard as well, especially if not too reliant on the consumer or individual big business customers.

(xpost - BBC Comments Box mentalists innit)

have your say -----> I think also that 'shitbin' offends me. It reminds me of all the HYS posts that start "This country has now officially gone to the dogs".

-- Ned Trifle II, Thursday, February 14, 2008 11:46 AM (9 minutes ago) Bookmark Link

Where do they distill whiskey in the UK? Norn Ireland?

scotland? ok i was clutching at a straw

Whisky!!!!!!!!!!

oops!

"Shitbin" was first used to bash the Bush administration = it is an liberal word. Official right-wing parlance is "hell in a handcart".

Since most of HYS is written by a curious alliance of ILxors and bored BBC staffers I don't think we need to pay it too much serious attention.

Have Dolcis gone under? Or are they being taken over?

Are they one of those companies that are to pricey to be budget, but too cheap to have cachet? Would think such a store should do ok in middle england though, all the same.

Into administration: "the first big high street casualty of the credit crunch".

http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article3228324.ece

"The writing was on the wall when the foreign rubbish started to flood in and shoes gave way to trainers, it all seems like "LIFE ON MARS " now the end of another British era.

Steve, coventry, uk"

That Poles Depart story (do you see what I did there?)

http://www.metro.co.uk/news/article.html?in_article_id=98895&in_page_id=34

There was a time when East European migrants looking to boost their finances felt Britain's streets were paved with gold.

But now it seems these shores have lost their economic lustre and the Poles are going back home.

Our weak pound and failing economy combined with a boom in Poland is tempting many to head East, say Polish economists.

The news came as the Bank of England predicted a tough year ahead with growth slowing dramatically and inflation remaining high.

'Many Poles left for Britain when British salaries were four times higher than Polish ones. But now they are only twice as high,' said Alfred Adamiec at Poland's Noble Bank.

A mass exodus was unlikely, but the Poles are going rather than coming, said Dr Jan Mokrzycki, head of the Federation of Poles in Great Britain.

Those who failed to save up money in Britain can now return home without the 'stigma of failure', said migration expert Pawel Kaczmarczyk.

But it's not all about the money, reckons Adam Pniewski, 28, who returned to West Poland, this month.

He said: 'I've had enough of doing nothing but earning money. It's more important to live among people that love you.'

An estimated one million Poles have come to Britain or Ireland since 2004.

http://img.metro.co.uk/i/pix/2008/02/PolesAN_175x125.jpg
Fewwer(sic) Poles now check the small ads

Sales of M&Ms and Coke remain strong.

Credit crunch not really all that relevant here - Dolcis has been struggling for years and had zero brand equity anyway. People don't want shit mid-market when they can go to Primark, or whatever the equivalent for shoes is.

Meanwhile house prices are sliding, with Scotland experiencing its first quarterly fall in seven years:
http://ukpress.google.com/article/ALeqM5gWVCOTd8BfjnQDBi3R79JqWL0yrw

Average Scottish house price falling £60 a day:
http://www.eveningtimes.co.uk/news/display.var.2047526.0.house_prices_fall_by_60_a_day.php

Number of unsold properties in England highest since 1999, ratio of agents reporting falling prices vs rising price at highest since the 1992 crash:
http://www.eveningtimes.co.uk/news/display.var.2047526.0.house_prices_fall_by_60_a_day.php

oops, final link should be
http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article3361789.ece

Yes I was kind of wondering if Dolcis had just finally reached the end of the line. Wouldn't normally expect a midrange shoe shop to be one of the first casualties

in say 2 years time what will the impact of the recession be on rent prices on a flat in a city centre? in the city where i live, apparently 45% of flats are unoccupied at any one time, admittedly this includes all the nasty rougher places on the outskirts but is this normal and can it be sustained?

Which city do you live in?

Conventional logic says if people stop buying completely and consider themselves longer term renters, and investors sell flats off, this would increase number of renters and decrease numbers of places to rent, and finally push prices up

But:

-The huge oversupply of city centre flats available to rent isn't going to disappear overnight (and, incredibly, they're still building them!

-In a recession, numbers of people renting might actually fall, partly immigrants returning home, but also people returning to live with parents as job market implodes

Personally I think large numbers of those city centre flats may never be occupied. may well end up functioning as social housing in the end, but the govt will probably have to build more people to put in them

Also the appeal of living in them is going to pall, for renters now as well as buyers, most are as you say half-empty at best, questionably built, and will probably function as social housing in the nearish future. They were always going to be the slums of the future, but that future might be a lot nearer than imagined

or, to put it another way, can you think of even one reason why the rent on one of those would be more expensive in 2010 than today?

"slums of the future" has become my phrase of the day.

(I'm in Manchester, where I notice new building work for apartment complexes pretty much every month.)

had a feeling it might be Manchester!

Is this social housing of the future thing a realistic prospect? How would it work? ie. would the govt pay a decent price to landlords to buy it off them?

Are rent prices artificially high right now, like house prices?

I don't know how it will work. I don't think the landlords are in a position to ask for a decent price (but it might be that they buy directly from developers) - this is pure speculation, i actually really don't know how they are going to fill those places, they may well just be left, but empty blocks is not good for crime etc

Are rent prices artificially high? No, i wouldn't say that exactly, after all they are lower than house prices, but i guess they are also a consequence of years of flooding the economy with cheap debt

I think the ASKING prices for these particular places is probably too high, im sure you get most of them a LOT cheaper. and perhaps the actual rents on these particular glass fronted city centre flats is too high (do they really look like 'luxury 21st century living' to anyone?), but i'd say its a jump from that to saying that rent prices are too high

It'll be interesting to see what happens to rent prices in general in the recession, but these city centre flats aren't indicative of much, other than enormous folly

(sorry, i mean i think its a jump to saying that rent prices - in general, for regular places - is too high)

for regular places, i think rents will probably stay around the same, depending how bad the recession pans out (but its been distorted so much its very difficult to tell)

Thoughts on the nationalisation of Northern Rock anyone? I'm not really sure I know what I think of this.

If it was going to happen, should have happened last September. Interesting that no one ever talked about bailing out, or nationalizing, Dolcis tho;)

I think they have changed the rules so that any other banks in same boats can now be bailed out in secret? Bradford & Bingley and Alliance & Leicester obviously both in similar waters to NR over the last year or so. All 3 of these are still relatively small fry though (I guess the interesting one is RBS/Natwest). Banks, more than anything else, really can't be permitted to go under - but at the moment it can still be painted that NR is a one-off situation

The thing is, aren't NR still dishing out crazy mortgages? Which means, the govt, and by extension we the public, are now sub-prime lenders!

If you have savings, could think about moving them to NR, their rates aren't bad, and its the safest bank in town now

The other thing is..if NR were the dodgiest of the subprime lenders, this means they will surely have the highest repossession figures once they start really rising

Which means the government will be the ones repossessing peoples houses?

When NR initially got into difficulties we were repeatedly told that their "mortgage book" was one of the best about, i.e. they specifically weren't a dodgy subprime lender. The problem, we were told, was their method of raising the cash to fund these good mortgages (i.e. loan finance) which was going to the money markets, which had crunched up bigstyle.

Is that wrong?

No, Northern Rock got into shit because their business model was over-reliant on being able to access credit, which suddenly dried up. It wasn't because they were particularly dodgy subprime lenders themselves.

(xpost yes, Tim is correct)

They did source a larger amount of their finance from money markets than any of the others, correct

But NR were one of the ones that were lending out the very high salary multiples, and while its true that outfits like B&B are probably more active in subprime than NR, i think they all have been to some extent (read recently that Derbyshire Building Society have a high % of non-prime, and they're a mutual, with supposedly some sense!)

http://www.northernrock.co.uk/mortgages/together.asp

together is different to a normal mortgage. It works by combining your secured mortgage with an unsecured loan at a single interest rate with one monthly payment. This combination can be worth up to 125% of your home’s value.

I'm not really sure what your point is. If your point is that Northern Rock are worse/more mental mortgage lenders than any of the others, I don't really know but it seems doubtful and certainly wasn't the main reason for what went wrong.

If you mean the government will be the ones repossessing homes then yes, by extension, some, and there could be an enormous furore about this if Northern Rock repossessions do appear disproportionate to other banks later down the line. I've no idea whether they will. Presumably the government will look to get Northern Rock off its hands as quickly as possible?

My point is that NR were a subprime lender (even though, yes, the trigger for their collapse, was a model over-reliant on money markets for financing - which i'm not disputing. However the reasons they were reliant on that sourcing were partly because of how they leant out)

And that this therefore means a significant proportion of forthcoming repossessions will be by NR/govt

we were repeatedly told that their "mortgage book" was one of the best about

Yes, we were. But, considering no one has been persuaded to take on this profitable 'mortgage book', even with many incentives to do so, then...do we believe it?