Is this good news or bad news?

macaque_2

The UK is back in recession as we know, but in an exceptionally grim annual Mansion House speech last night the Bank of England governor warned that conditions have deteriorated even further since the inflation report only four weeks ago, with ‘weakening business surveys, a downward revision to measured output and further slowing in economies overseas’.

The rise in banking costs since the crisis intensified last year highlights the exposure of our major banks to periphery economies, King warned.

http://www.citywire.co.uk/money/the-friday-five-why-banks-are-causing-a-panic/a596551/2

I believe it is good news in the same way that a crisis is often needed to get an alcoholic to mend his/her ways.

Several decades ago, the banks started losing their way as the quality of their basic services started declining whilst their costs became ever more expensive. They turned their attention to churning and skimming the markets and as time went on, they found ever more destructive ways to make money. This included mergers and demergers which were nothing more than asset stripping, misselling of financial products and gambling with depositors money (and goverment support). They also stitched up their shareholders whilst paying themselves wildly inflated salaries.

The latest government stimulus is nothing more than another bank bail out. The banks get money for nothing which lend out at 4-10%. It is probably a necessary move but, giving that we are yet again bailing out the banks, I hope they will have the grace to forego their bonuses.

DiggerUK

macaque wrote: »

......I hope they will have the grace to forego their bonuses.

Dream on, this stimulus will provide a sugar rush to the markets, and put them in line for even bigger bonuses.
Providing it doesn't all go Argentinian of course.
..._

homelessskilledworker

The UK went into a technical unofficial recessision five years ago and we have not come out, the only reason we have not felt it as bad as we should of is because we used the state credit card and priniting a third of a trillion pounds.
There is a reluctance in the UK/Europe/western world to take your medicine after borrowing for what you wanted earlier.

We may borrow another 100 billion here and 100 billion there(and the Euro zone might do the same), but D day is surely creeping up on us fast.

lvader

I get the feeling some people are bitter that the economy wasn't left to rot and they feel cheated that they never got the chance to buy a house in the half prices sales that never heppenend. They then complain that the BOE isn't interested in price control.

homelessskilledworker

I get the feeling some people are bitter that the economy wasn't left to rot

...................

Really, why is that then?

moneyinmypocket

They are bitter and v selfish - wishing misery on others just so they can pick up a house on the cheap

Graham_Devon

lvader wrote: »

I get the feeling some people are bitter that the economy wasn't left to rot and they feel cheated that they never got the chance to buy a house in the half prices sales that never heppenend. They then complain that the BOE isn't interested in price control.

Don't think it's bitterness.

Just a case that none of this meddling actually works. We can see that by all the meddling done so far.

All it appears to be doing is adding to debt for future generations.

If any of it actually worked, then that would be a different matter. But all everything appears to be doing is delaying things and dampening confidence as business and households cut back.

All we have seen so far in reality is that all the stimulus and interventions has simply made the cost of living higher, but not solved the immediate problems for families and business, infact it's made some worse due to an increase in cost of living at time of recession (unless you benefit directly, for example in investment).

So as the cost of living keeps increasing thanks to stimulus and nothing appears to work, people will keep retrenching.

It's not just this forum you will see these views on. Take a look at the BBC comments on the new stimulus package. It's attracted nearly 2000 comments. Stick it in order or ratings and you'll see about four fifths of them are from people describing the above. Yer, theres a few BTL investors and share holders stating it's a good thing, and you'll find all them in the 20% of negative rated comments.

Don't think you can really get a fairer picture of how the public in general view these things. You can call it bitterness if you like, but that simply suggests 80% (approximately) of the BBC comments are all bitter because they couldn't buy a cheap house?

lvader

The economy is stable, the GBP is stable, inflation is falling, we have ultra low interest government borrowing What isn't working?

Thrugelmir

lvader wrote: »

The economy is stable, the GBP is stable, inflation is falling, we have ultra low interest government borrowing What isn't working?

Nothing. People just haven't acclimalitized themselves to the new era. That's all. Still expecting the clocks to be turned back.

homelessskilledworker

lvader wrote: »

The economy is stable, the GBP is stable, inflation is falling, we have ultra low interest government borrowing What isn't working?

You just cannot warn some people:)

Ok turn on me, or the dog, whoever you like. But if you truely believe we have a stable economy EVEN when the actual Government that would hope to gain advatage from a stable Government tells you themselves that we are on the brink of a the worst financial crisis EVER. then it is quite clear you are going to remain in fairy land until it bites you on the backside.

lvader

homelessskilledworker wrote: »

You just cannot warn some people:)

Ok turn on me, or the dog, whoever you like. But if you truely believe we have a stable economy EVEN when the actual Government that would hope to gain advatage from a stable Government tells you themselves that we are on the brink of a the worst financial crisis EVER. then it is quite clear you are going to remain in fairy land until it bites you on the backside.

The UK economy is doing OK, not great just OK. I can see the risks, so can the BoE and the government that is why they are acting. People complian it's not working when it fact it very probably is. You only have to look at Europe to see what happens when you don't act in the right way.

I'm hedged against pretty much any outcome so I'm unlikely to greatly profit or lose whatever happens.