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Recession
Comments
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The construction industry is already completely knackered and is getting worse by the day.
Lots of firms are just grabbing as much as they can before they go bump so if we get a double dip its all over.
Def agree with that you have said.
Its strange I have quite a few friends in the building trade and when I have asked them about the economy they have been plowed with work.0 -
Do you think the manufacturing sector will suffer.0
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Rochdale_Pioneers wrote: »Brown ran a surplus for 4 years - big surpluses which he used to pay down debt. Remember the media storm over 49p pension rises? Then at the 2001 election Labour got elected on a platform of borrowing to invest and won by a landslide. So he borrowed, and prior to the start of the crash had committed the keynesian crime of reducing debt levels vs those he inherited in 1997.
So yes, he ran a deficit. Half the time. Which added up to less than he paid off. Incidentally for how many of the Tories 18 year rule did we run a deficit?
he didn't run big surpluses at all bar 2001 (and then only as a result of auctioning the 3g spectrum to the mobile companies).
Labour where in power for 13 years, and ran a surplus in 3 (not 4).
Even if we use your 4 years, this is not half of 13.
He only ran surpluses from 97-2000 because he had said he would stick to the Tory spending plans at the 97 election.
He doubled debt in nominal terms (closer to trebling it if we go to 2011 - which he really is responsible for).
As a % of GDP the UK's debt position was worse in 2010 than in was when Labour took power in 1997.
Most of Labours additional spending was on wages and transfer payments. This is not investment.
I voted Labour every year from 1987 to 2005, but will not be blind to their failings.
Their record on youth unemployment and education and training for the bottom 20% is also appalling - particularly so when the economy was booming.US housing: it's not a bubble - Moneyweek Dec 12, 20050 -
Kennyboy66 wrote: »he didn't run big surpluses at all bar 2001 (and then only as a result of auctioning the 3g spectrum to the mobile companies).
Labour where in power for 13 years, and ran a surplus in 3 (not 4).
Even if we use your 4 years, this is not half of 13.
He only ran surpluses from 97-2000 because he had said he would stick to the Tory spending plans at the 97 election.
He doubled debt in nominal terms (closer to trebling it if we go to 2011 - which he really is responsible for).
As a % of GDP the UK's debt position was worse in 2010 than in was when Labour took power in 1997.
Most of Labours additional spending was on wages and transfer payments. This is not investment.
I voted Labour every year from 1987 to 2005, but will not be blind to their failings.
Their record on youth unemployment and education and training for the bottom 20% is also appalling - particularly so when the economy was booming.
Three points:
1.) Gordon Brown and Tony Blair were New Labour not Labour.
2.) This country has been in debt since 1694 in one way or another. The national debt is nothing new, so running a surplus for 4 years seems to be quite an achievement in the grand scheme of things.
3.) Today the interest payments on Government debt is £120,000,000 per day or 3% of GDP. In 1981, under M Thatcher it was £174,000,000 per day or 5% of the then GDP. A govt. is at risk of defaulting when its debt reaches 12% of GDP. ie we are not in difficulty, it is all lies. Lies.0 -
What manufacturing sector? Everything is made in China now.Do you think the manufacturing sector will suffer.
Which was the cause of the trouble in the first place.
Things took a peculiar turn because of Greenspan's drastic interest-rate policy, designed to keep American industry running on empty until the politicians created new jobs.
Worked so well that Americans, always believing their own propaganda, didn't even notice their manufacturing sector was dead in the water. They just let the politicians give them their tax cuts and subprime mortgages and cheap imported consumer goods (which they didn't even notice were imported).
The roof fell in because - as in Ireland and Spain - the builders were out of control. Builders are economically dangerous because they, more than anybody else, create durable and valuable assets out of nothing, and then dump them into a market where demand is not infinitely elastic.
In fact the property market is a positive feedback loop, since prices are driven by expectations of future prices. So it doesn't take much oversupply to flip it from an upward spiral into a downward spiral.
The US mortgage market has never been scared of repossessions. Making money from foreclosures has always been part of its business plan. What screwed it was not foreseeing the prices it was going to get for repossessed property when the price spiral went the wrong way.
Surprises cause recessions. Instability causes recessions. Growth requires confidence requires stability.
An unexpected hike in the price of oil can cause a recession, but is unlikely unless serious war breaks out in the Middle East (not that we haven't tried). Merkel and Sarkozy could cause a recession if they mismanage things even beyond the markets' worst expectations. But it takes some sort of skill to make a recession out of nothing. Mulishness, anyway.
We should probably worry about the firms to which public services are outsourced. Southern Cross could be the first of many - firms whose business models depend on a volume of trade that won't materialise when government departments and agencies and local authorities cut back.
We should worry about all consumer-facing businesses in areas where the public sector is the major employer. Whoever boards up closed shops in Wootton Bassett, try to buy some shares.
We should worry about the businesses we need to get back on our feet. The farmer who sells the tractor might get through the winter without an overdraft, but then he's sunk. The farmer who keeps the tractor and lives on the overdraft can at least grow a crop. Maybe he can get the other guy's land for a song and grow two crops.
Ironically, commoditised public services is a field of expertise that we could export if we were less intent on bankrupting it at home.
High-volume manufacturing, we don't do it any more. More specialised manufacturing, not so much dependent on UK demand, but will suffer if sterling strengthens."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
What manufacturing sector? Everything is made in China now.
Which was the cause of the trouble in the first place.
Things took a peculiar turn because of Greenspan's drastic interest-rate policy, designed to keep American industry running on empty until the politicians created new jobs.
Worked so well that Americans, always believing their own propaganda, didn't even notice their manufacturing sector was dead in the water. They just let the politicians give them their tax cuts and subprime mortgages and cheap imported consumer goods (which they didn't even notice were imported).
The roof fell in because - as in Ireland and Spain - the builders were out of control. Builders are economically dangerous because they, more than anybody else, create durable and valuable assets out of nothing, and then dump them into a market where demand is not infinitely elastic.
In fact the property market is a positive feedback loop, since prices are driven by expectations of future prices. So it doesn't take much oversupply to flip it from an upward spiral into a downward spiral.
The US mortgage market has never been scared of repossessions. Making money from foreclosures has always been part of its business plan. What screwed it was not foreseeing the prices it was going to get for repossessed property when the price spiral went the wrong way.
Surprises cause recessions. Instability causes recessions. Growth requires confidence requires stability.
An unexpected hike in the price of oil can cause a recession, but is unlikely unless serious war breaks out in the Middle East (not that we haven't tried). Merkel and Sarkozy could cause a recession if they mismanage things even beyond the markets' worst expectations. But it takes some sort of skill to make a recession out of nothing. Mulishness, anyway.
We should probably worry about the firms to which public services are outsourced. Southern Cross could be the first of many - firms whose business models depend on a volume of trade that won't materialise when government departments and agencies and local authorities cut back.
We should worry about all consumer-facing businesses in areas where the public sector is the major employer. Whoever boards up closed shops in Wootton Bassett, try to buy some shares.
We should worry about the businesses we need to get back on our feet. The farmer who sells the tractor might get through the winter without an overdraft, but then he's sunk. The farmer who keeps the tractor and lives on the overdraft can at least grow a crop. Maybe he can get the other guy's land for a song and grow two crops.
Ironically, commoditised public services is a field of expertise that we could export if we were less intent on bankrupting it at home.
High-volume manufacturing, we don't do it any more. More specialised manufacturing, not so much dependent on UK demand, but will suffer if sterling strengthens.
Great post.
When I was talking about manufacturing metal I was reffering to metal exports.
Do you think the specialized exports markets will survive...?0 -
No offense, but is there a history of autism in your family?
No offence but are you a Yank?'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Nothing to do with the Eurozone or Global economy. We were heading for a recession on our own with or without the external factors. All labour did was borrow their way out of the recession in time for the election.WOW - A summary of the how we got into recession with no mention of a Global recession and the banks.
Thats right the Global eccomony, Eurozone, inflation, oil rises were all caused by Brown and Downing.
Unbelievable.
Any political bias in this review
:rotfl::rotfl::rotfl::rotfl:
GDP = private consumption + gross investment + government spending + (exports - imports)
That £186billion a year from labour plus £200billion from QE was simply borrowing our way out of a recession0 -
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