Bank warns of 'deep recession'

Cannon_Fodder

I just posted the graph as it had been added to the BBC link, since first posting, and it may not have been seen by everyone.

Assuming Ed Balls has advisors who know an awful lot more than we are told/comprehend, I guess his "100 years" statement suggests this could be at the "long" end of the options on likely recovery time.

Dithering_Dad

This from the Telegraph:

"Most forecasters, excluding the Chancellor, are predicting the economy will shrink for at least six successive quarters this time around, starting with the third quarter of 2008. That would make it longer than the recessions in both the early 1980s and the early 1990s, when GDP fell for five consecutive quarters. "

http://www.telegraph.co.uk/finance/financetopics/recession/4317739/UK-recession-How-bad-will-this-one-be.html

It seems to suggest the recessions in the 80's and 90's lasted 5 quarters (one and a quarter years), while the current recession will last 6 quarters (one and a half years).

Given that we have already had 2 negative quarters, we have 4 more to go, which fits in with most financial pundit's forecasts of 2009 being a nightmare year with the recovery occurring in 2010.

mbga9pgf

Yeah, and I guarantee the nobheads have simply gone off the average.

They have NO data to tell them how long this one will last. One thing is apparent. Every estimate they have made has been a downward revision since 2007.
http://www.marketoracle.co.uk/Article394.html

http://www.usatoday.com/money/economy/2007-03-06-greenspan_N.htm

http://seekingalpha.com/article/46295-merrill-cuts-estimates-on-banks-says-60-chance-of-recession

http://online.wsj.com/article/SB119990867859778525.html?mod=hpp_us_whats_news


when is someone going to tell us what they really think?

Dithering, want a go at answering this:

not due to peter out of the write downs till mid 2012. Tme to batten down the hatches. Unless you can cure people unable to pay for mortgages seeing as they are unemployed. Any solutions?

(from above)

Dithering_Dad

mbga9pgf wrote: »

Yeah, and I guarantee the nobheads have simply gone off the average.

They have NO data to tell them how long this one will last. One thing is apparent. Every estimate they have made has been a downward revision since 2007.
http://www.marketoracle.co.uk/Article394.html

http://www.usatoday.com/money/economy/2007-03-06-greenspan_N.htm

http://seekingalpha.com/article/46295-merrill-cuts-estimates-on-banks-says-60-chance-of-recession

http://online.wsj.com/article/SB119990867859778525.html?mod=hpp_us_whats_news


when is someone going to tell us what they really think?

Dithering, want a go at answering this:



(from above)

Which link is that from, I'll give it a go..

p.s. you seem quite aggressive towards me, apologies if I am wrong, could you explain what I have done to irk you so?

mbga9pgf

Dithering_Dad wrote: »

Which link is that from, I'll give it a go..

p.s. you seem quite aggressive towards me, apologies if I am wrong, could you explain what I have done to irk you so?

Sorry, not aggressive, its the typical tone of my posts. I assure you if we were face to face, I would have a cheeky grin and be putting across a challenge, not a swipe across the face!

My point (feel free to try and disprove). Mortgage resets are not supposed to be finishing until 2011. Many of these mortgages on teaser rates have much higher rates once they lapse. Bearing in mind much of the write-downs have occurred as a result of this, how do you reckon the banks will get themselves out of trouble before this stops, and thus unfreeze the credit crunch? The BOE can bail out the UK banks all they want, until this is solved globally, it will not stop. My point is that the recession will carry on until then.

There is nothing to suggest that the recession will stop around the typical length of a recession as there is no mode of recovery yet discovered or feasible.

Really2

mbga9pgf wrote: »

. Many of these mortgages on teaser rates have much higher rates once they lapse. .

Sorry to butt in. But I would say even those that took on mortgages at the very hight would now be off teaser rates. We are talking 2006 when prices started to fall in america (the actual start of the crunch).

Dithering_Dad

mbga9pgf wrote: »

Sorry, not aggressive, its the typical tone of my posts. I assure you if we were face to face, I would have a cheeky grin and be putting across a challenge, not a swipe across the face!

My point (feel free to try and disprove). Mortgage resets are not supposed to be finishing until 2011. Many of these mortgages on teaser rates have much higher rates once they lapse. Bearing in mind much of the write-downs have occurred as a result of this, how do you reckon the banks will get themselves out of trouble before this stops, and thus unfreeze the credit crunch? The BOE can bail out the UK banks all they want, until this is solved globally, it will not stop. My point is that the recession will carry on until then.

There is nothing to suggest that the recession will stop around the typical length of a recession as there is no mode of recovery yet discovered or feasible.

Sorry, my fault, I'm a bit fragile today after being on the receiving end of 2 days of forum abuse.

The economy is about more than just the housing market, and while the HPC may continue well into 2012, I think the recession will be over with by the end of 2009, with recovery in 2010.

I know a lot of people on this forum are minutely interested in the Housing market, and so they should, it was formed from a HPC thread, they need to realise that there is more to UK PLC than just housing. It's hard at the moment because all the mainstream news is focussed on the housing crash, builders, banks, etc. but other sectors of industry are doing OK and many are in a much better shape than in the 70's and 80's to survive a downturn and then bounce back in the upturn.

I'm quite optimistic and have been buying shares like mad in companies that I think will survive and prosper in the future, but whose share price is on the floor right now. In a way, you could say I'm putting my money where my mouth is....

handful

Originally Posted by handful
Further evidence if it was needed that quantitive easing will commence probably after another 0.5% cut in IR in March. Rates have to be 0% - 0.5% for QE to commence, all that remains is for the decision to be taken as to how to inject this cash into the economy. Favourite seems to be by the buying of toxic debts with it but I prefer the 'dropping it out of a helicopter' method!

tuggy12 wrote: »

Could someone explain why that is so?

Because that is the point at which Mervyn King runs out of monetary 'ammunition' and has to resort to drastic measures such as QE. It would be irresponsible to let this animal out of the cage without exhausting the more contollable method of reducing IR.

BTW too many people in this thread seem to be confusing price inflation with monetary inflation, the latter which QE would lead to is basically just increasing the supply of money and will without doubt IMHO lead to strong price inflation. Price inflation doesn't just happen for no reason. Taking the money back out of circulation after the event isn't as easy as it sounds!!

Asheron

Cannon,

Your a crazy conspiracy theorist.

Depression? history never repeats itself. Go wear your tin foil hat

mbga9pgf

Dithering_Dad wrote: »

Sorry, my fault, I'm a bit fragile today after being on the receiving end of 2 days of forum abuse.

The economy is about more than just the housing market, and while the HPC may continue well into 2012, I think the recession will be over with by the end of 2009, with recovery in 2010.

I know a lot of people on this forum are minutely interested in the Housing market, and so they should, it was formed from a HPC thread, they need to realise that there is more to UK PLC than just housing. It's hard at the moment because all the mainstream news is focussed on the housing crash, builders, banks, etc. but other sectors of industry are doing OK and many are in a much better shape than in the 70's and 80's to survive a downturn and then bounce back in the upturn.

I'm quite optimistic and have been buying shares like mad in companies that I think will survive and prosper in the future, but whose share price is on the floor right now. In a way, you could say I'm putting my money where my mouth is....

Those resets I am talking abut are in the US, and form the basis of the RMB securities that are now making banks go bust. The resets in rates do not finish until 2011 as illustrated by credit suisse. In other words, there cannot be any recovery in the credit markets, and thus the global economy, until these writedowns finish and confidence is restored to the market place. I dont believe we are well placed. How can we be? we are trying to boost exports at a time there simply is no demand for exports. Te only good thing about the currency devaluation is the fact it minimises the losses on RMB securities that originated in the USA.

ITs all linked to the US market! RBS is going bust not off our mortgage market but the mortgage market of the USA!