Officially in recession

pqrdef

Conrad wrote: »

Why, because thier debt and public sectors are too large to be supported by thier wealth creating private secotrs.

I'm interested in this idea that the private sector creates wealth. Do mortgage salesmen create wealth?

chucky

michaels wrote: »

And the reason the current economic policies have been persued is that given the starting poing following the last election the choice was sustained rebalancing or an immediate big bang meltdown.

Ok, so Georgie has made all of the right decisions then because the last time I looked nearly every major economy that has economic issues has the same problem as the UK.

You can't deny it's a generic issue. Something which I hope the current government take responsibility for but then again the easy option is blaming the last government. I guess that's politics.

StevieJ

Let you out have they Chucky good to see you back.

michaels

So comparing against other countries that went in to 2007/8 with a huge imbalance between income and expenditure (public+private deficit) like Greece, Spain, Portugal and Ireland (GDP down 23% from peak) are we doing a lot worse? Or should we only compare against countries like Germany and China who were in a completely different position in 2007?

To me 4% down is painful but a lot less painful than 23% down but I guess we may have to agree to differ on that?

chucky wrote: »

Ok, so Georgie has made all of the right decisions then because the last time I looked nearly every major economy that has economic issues has the same problem as the UK.

You can't deny it's a generic issue. Something which I hope the current government take responsibility for but then again the easy option is blaming the last government. I guess that's politics.

DaddyBear

HAMISH_MCTAVISH wrote: »

You can't have a sustainable recovery in the UK economy without a sustainable recovery in the UK housing market.

When house prices are still down markedly from peak people don't feel comfortable spending money ( the "wealth effect"), when house sales transactions are down massively from normal levels (even pre boom levels) there is a knock on effect into associated services such as home goods retail, etc, and when there is little mortgage or development finance available and we build only a fraction of the houses we need, then the construction industry is stuffed as well, unemployment is higher, etc etc etc.

How many times have I mentioned this....

Wrong wrong wrong. We had ten years of 'growth' based on debt taken out against property. The growth wasn't real. What we are now seeing is the economy slowly catching up and in the process detaching itself from the housing market. It will take time, but we will all be better for it.

If you aren't wrong, then we're all screwed because we will never get back to the loose lending and rediculous HPI of the noughties.

chucky

michaels wrote: »

To me 4% down is painful but a lot less painful than 23% down but I guess we may have to agree to differ on that?

That's the point, the government is too involved in the political game instead of really dealing with real the fundamental issues. Comparitavely speaking who is getting hurt more, the man on the street or the top earners? The answer is obvious.

We may have to disagree on the point of being allowed to criticise the current government.

HAMISH_MCTAVISH

DaddyBear wrote: »

We had ten years of 'growth' based on debt taken out against property. The growth wasn't real.

Rubbish.

Growth is growth, and economic activity is real no matter where it comes from.

Only a complete fool would argue that a significant proportion of GDP should not come from products and services associated with the housing market.

Houses constitute by far the single biggest asset class in ordinary peoples hands, and indeed the biggest component of wealth for most families. It is obvious that a fall in wealth reduces peoples willingness to spend, which is why the "wealth effect" is such a well known economic phenomena.

Moving house generates business in multiple sectors, from advertising, to furniture sales and manufacture, transaction costs are significant and provide employment for solicitors, brokers, advertisers, etc. And houses require constant care, attention and updating, providing yet more economic activity. All of this quite rightly provides employment to certainly many hundreds of thousands, perhaps even a million or more, people across multiple industries.

And quite rightly contributes a significant percentage of GDP.

What we are now seeing is the economy slowly catching up and in the process detaching itself from the housing market. It will take time, but we will all be better for it.

If you aren't wrong, then we're all screwed because we will never get back to the loose lending and rediculous HPI of the noughties.

Nonsense.

When the housing market is crippled, so is the wider economy.

Housing transactions are not of course the whole economy, but they quite obviously drive enough business in multiple sectors of the economy that a significant percentage of GDP is reliant on them.

Graham_Devon

Maybe if we all moved house, we'd be saved then?

We can't actually afford it, but hey, it would fix things.

What happens after we have all moved? Do it again when the figures inevitably drop?

HAMISH_MCTAVISH

Graham_Devon wrote: »

Maybe if we all moved house, we'd be saved then?

We can't actually afford it, but hey, it would fix things.

As always Graham, you miss the point.

Housing and associated services are a significant percentage of the economy.

We quite clearly do not have a healthy housing market at the moment.

Therefore we quite clearly cannot have a healthy economy at the moment.

MrRee_2

Graham_Devon wrote: »

Fallen 0.2%.

We are now officially in a double dip recession.

Worse than expected. Noted as a "surprise".

I have never known you to post anything positive, EVER.

Your life must be so empty ...... I feel sorry for you.