The Recession is Over

julieq

No, it's not over, definitely not, it's a false dawn in my opinion.

I'm looking (in my day job) at numbers that are showing a slight uplift from last month. But it's growth from a very reduced level.

In a sense what we are seeing is that it's not actually as bad as we were expecting, a little bit of confidence is returning and some low level investment is coming in. Cost cutting measures in the West are feeding growth in the emerging economies, that's boosting demand for oil which is in turn providing a pull for engineering expertise.

But there are things left to hit. Redundancy does take a while to filter through, not least because people can live on their pay offs for a while and redundancy takes a while. I think we have 2 years of stagnation and marginal recession followed by a slow 5 year recovery back to some degree of "normal" growth. I think you're looking for 7 years before house prices start growing from the current level, and I'd expect falls during that, so further declines for a couple of years, slow recovery over the next 5.

For the person who is scared of the Tories coming back, can they please find an outgoing Conservative government that has managed to massively expand the public sector for no obvious benefit and left the country trillions of pounds in debt, and instead of being honest about dealing with that is claiming they will increase spending? Gordon Brown's first instinct is to make policy to counter anything that makes him look bad, he claimed credit for the good years and refuses to accept responsibility for the bad. He lies and deflects and he is clinging onto power not because it's good for the country but because he wants the top job personally.

matthewcb

I think people are forgetting that we will *all* be paying for this for decades (and I mean decades) to come.

Whilst things may be improving - and frankly given the vast sums of money piled into the system they damn well should - things are nowhere near 'normal'.

Whilst Brown and Labour are indulging in petty points scoring over 'Tory cuts' it's worth remembering that whoever is in charge after the next GE will have to make swingeing, long term, cuts. Whilst we might move out of recession with other nations, the recovery period will be much longer because instead of investing, we will be paying all the billions back...

If people fall for this over simplistic message of 'recession over' then honestly they deserve the government they've got (and will get).

Davesnave

I see Britain recovering like a patient in intensive care 'recovers.' With all the resources being thrown at the problems, it's no wonder things appear to have improved.

The real test will come when the life support of QE is switched off and the patient has to cope unaided. Not only that, but there'll then be the daunting task of paying for the expensive treatment.

StevieJ

It is strange that people were saying that 'all these resources thrown at' would not work not so long ago, now 'it is not surprising' check the polls for when the recession would end The real ace in the pack has been NO EURO :beer:

Davesnave

MORPH3US wrote: »

Seems like some people on here want the UK to be in recession and actually enjoy it....

Are these bitter / jealous non home owners perhaps? Have people struggled in this recession so far or lost their jobs and now they are bitter that things *might* be starting to look just slightly positive again?

It's not surprising Martin was berating contributors to this forum, earlier this week.

Forget suppositions about why other people might think differently from you or casting aspersions on their motives. Leave that to the politicians. Human beings are far too complex to be placed in boxes like this and, frankly, I'm surprised you haven't noticed.

StevieJ

Davesnave wrote: »

It's not surprising Martin was berating contributors to this forum, earlier this week.

Forget suppositions about why other people might think differently from you or casting aspersions on their motives. Leave that to the politicians. Human beings are far too complex to be placed in boxes like this and, frankly, I'm surprised you haven't noticed.

It is valid to question why some people have extreme views and what their V.I. is.

thegibdog

StevieJ wrote: »

It is valid to question why some people have extreme views and what their V.I. is.

It's not valid to say everyone who has a certain point of view must have a vested interest though.

julieq

Bear in mind that the resources applied were to fix one problem, which was the collapse of the banking system due to bad debt. That has more or less been fixed in my opinion.

The other half of this is what was going to happen anyway because of uncontrolled consumer credit, a boom due to inflated house prices, outflow of capital eastwards, and oil price inflation. Even had there not been a banking crisis, something bad would have happened, and probably that would have been founded on high interest rates to cool down the inflation in house prices with stagnation or moderate drops.

You essentially now have two big perturbations slightly out of phase with each other. The bank crisis was a short sharp deep shock which has been addressed essentially by increasing public debt massively, the corrective action being equally quickly applied to the rate the problem developed at.

Underlying all of this is the other perturbation. This is being affected by the original problem and attempted solution in many ways, many of the things that might have been done to counter that have been reversed so instead of high interest rates we have low rates. The result is a highly volatile and complex situation which frankly no-one can predict except on a very high level basis. It's like two waves adding together and producing interference patterns. We may well overheat the economy because of what's being done to fix banking.

Fundamentally though, we have to get back to sustainable public debt. That means cuts. Cuts mean redundancies and less money in the economy (bear in mind that the public sector buys things and its staff spend money). That will work to tend to cool the economy. So I think we'll be bumping along the bottom for years to come.

I never believed, and don't believe, the apocalpyse scenarios for house prices and I've explained why many times - essentially I see arguments from the doommongers in the US being extrapolated here in a way I can't see working. But that doesn't mean that things are going to recover any time soon. I think the banking crisis is over more or less, but I do think that was a complication factor, not the only cause, for a recession that was on the way anyway.

Graham_Devon

Joeskeppi wrote: »

It's a sad, worthless, pathetic existence some people must find themselves in when they want a recession to continue for their own benefit.

How are first time buyers greedy?

And how can you say that coming from someone who wants prices to rise again so they have more wealth?

Harry_Powell

julieq wrote: »

You essentially now have two big perturbations slightly out of phase with each other. The bank crisis was a short sharp deep shock which has been addressed essentially by increasing public debt massively, the corrective action being equally quickly applied to the rate the problem developed at.

Underlying all of this is the other perturbation. This is being affected by the original problem and attempted solution in many ways, many of the things that might have been done to counter that have been reversed so instead of high interest rates we have low rates. The result is a highly volatile and complex situation which frankly no-one can predict except on a very high level basis. It's like two waves adding together and producing interference patterns. We may well overheat the economy because of what's being done to fix banking.

Please don't take this the wrong way julie, and I'm sure it's my lack of knowledge showing, but I've read the above text five times now and haven't got a clue what you're talking about about, especially in the second paragraph. What's the 'other preturbation' ?