Panorama- tonight BBC 1 10-15 pm

FaTB

Deemy 2004 & Ian W

Can't quite believe what i'm reading here !

I think the fact that France, Germany, USA, Italy, Australia, and no doubt many more are in similar situations, with record debt, and property bubbles is just going to make it worse.

Why should we escape it we've had a massive boom in the last 10 years, partly down to luck, and partly down to Gordon/BOE lowering interest rates when they should be going up, and the massive tax & spend regime so typical of every past Labour government.

A recession was put off in 2001 by lowering IR's post 9/11 it just means its gonna hurt more when it does happen.

meanmachine_2

When you're doing well in life, you put money away for the "bad times".

You don't fritter it away thinking that the good times can never end.

Well the good times have ended - for many Western countries - and we've got nothing put away to see us through.

Yes, we should have gone into a recession in 2001. The fact that we didn't isn't a cause for celebration. It's a reason to fear what's coming round the corner, surely?

gizmoleeds

Can I just say it seems like Deemy is the only person on this board talking any sense. I know people love rubbishing the government of the day and the media like to believe everyone who runs the country is incompetant and every other country in the world is better than we are (grass is always greener on the other side). But, the truth is the UK is doing fantastically at the moment; most other European counrties compare themselves to us and weep - "the British mircale" is the phrase used by most foreign newspapers to describe our current economic performance.

Recessions are inevitable, they are a natural part of the economic cycle - if we have one this does not mean the government is starting to fail. The fact they have managed not to have one for such a long period is unprecedented (literally, since records began in 1700-odd we have not gone this long without a recession).

It is also ironic that most of the people sat here moaning about the economy will probably be reaping the benefits of it.

meanmachine_2

So you're saying that an attempt to buck the natural cycle of an economy is a good thing or a bad thing? I'm confused...

No one is denying that, up until the last few years, the government was balancing the books. But you do know Gordy's just gone and cooked 'em in the last few weeks, don't you? And you do realise that taxes are going to have to go up by 3p in the pound soon, don't you?

nelly_2

The only reason this country isnt already in recesion is the fact that banks will lend money to anyone virtually. 100/120% mortgages meant people went and bought what they couldnt really afford , house prices went up and everybody pulled equity out to add to it all.

1.1 trillions worth.

And guess what people have started to pay it back now, which is why high street spending is on its @rse, one of, if not the biggest EA's has reported a profit drop of 90%.

We cant keep borrowing like this.

Rave

gizmoleeds wrote:

and the media like to believe everyone who runs the country is incompetant and every other country in the world is better than we are (grass is always greener on the other side).

Erm....have you actually picked up many papers in the last 8 years? Because I can't recall the last time I read a major paper seriously accusing the government of fiscal imprudence. They like to moan about crime, drugs, immigration and the rest of it but they're surely not moaning about the economic boom. At the end of the day, their profits are tied in to the profits of the manufacturers/retailers who advertise with them, so they've no intention of upsetting the applecart.

But, the truth is the UK is doing fantastically at the moment;

No, the truth is that we're sitting on a massive debt timebomb.

most other European counrties compare themselves to us and weep - "the British mircale" is the phrase used by most foreign newspapers to describe our current economic performance.

Proof of this?

Recessions are inevitable, they are a natural part of the economic cycle - if we have one this does not mean the government is starting to fail.

If it's a very serious one as a result of the government recklessly overinflating the economy, then they will have. We shall see I guess.

It is also ironic that most of the people sat here moaning about the economy will probably be reaping the benefits of it.

Not me to be honest. Gershon and Lyons have put me out of my (low paying but otherwise pretty cushty) civil service job, and my redundancy payment will almost exactly wipe out my overdraft. I have no assets to my name beyond a couple of grand's worth of consumer goods (the resale values of which will tank in a recession anyway;)). I've hardly benefitted from the boom at all- but equally I have nothing to lose in the bust either.

FaTB

gizmoleeds wrote:

Can I just say it seems like Deemy is the only person on this board talking any sense. I know people love rubbishing the government of the day and the media like to believe everyone who runs the country is incompetant and every other country in the world is better than we are (grass is always greener on the other side). But, the truth is the UK is doing fantastically at the moment; most other European counrties compare themselves to us and weep - "the British mircale" is the phrase used by most foreign newspapers to describe our current economic performance.

Recessions are inevitable, they are a natural part of the economic cycle - if we have one this does not mean the government is starting to fail. The fact they have managed not to have one for such a long period is unprecedented (literally, since records began in 1700-odd we have not gone this long without a recession).

It is also ironic that most of the people sat here moaning about the economy will probably be reaping the benefits of it.

This economy is built on personal debt, and government borrowing, and a housing bubble, and its all coming to a grinding halt.

As a country we produce less of any value now than ever before.

We will be in a situation very soon where tax revenues need to be increased even further, because of money Gordon has already spent, whilst more companies are struggling and unemployment is going up, so tax revenues will actually be going down.

What benefits have I reaped from this boom ?

I'm paying more tax

I've been priced out of the housing market

I'm getting !!!!!! all interest on my savings.

and I may well be made redundant in the coming recession.


It was all an illusion, all be it a pretty good one as some people still believe in it !!

deemy2004

People seem very polarised..

The truth is we have had an unprecidented period of economic growth.

And yes the economy is now SLOWING.. note slowing its not in a recession, as we are still growing.

Who knows what will happen in 12 months time. maybe we will have a recession, but the stock market does not think so.... Well off course the stock market could be wrong and the market may plunge.. but for now its showing remarkable strength in the face of bad news.

Which suggests strong economic growth in the future ?

Yes we have record debt, both personal and otherwise. But no more so then the likes of France, Germany and USA.

A lot of things can go wrong - A lot of scenerios are out there such as a credit crunch ...

Just at this point in time all we can say on the negative view point is government borrowing is rising, so taxes will have to rise. The housing bubble is popping and personal debt is at record levels.

But underlying the above is that the economy is STILL growing, and the stock market is implying that the economy will strengthen in a year or so's time to imply above trend growth will be back after a period of below trend growth. Thus the tax coffers will fillup.

At this point in time that appears to be the most likely scenerio for the next year or two anyway, as the stock market looks set to take over from the property market as it once was in the 90's i.e. where the excess money flows into, and giving the consumers that feel good factor.

meanmachine_2

Deemy I bow to your greater knowledge on all things stock markety, but isn't its recent rise due to two things: oil price rises boosting oil company stocks, thereby lifting the FTSE, and investors shifting from housing to shares?

And if so, isn't that more of a short term effect?

After all, there's so much money sloshing around that it has to go somewhere...

And all that'll happen is that it'll bubble up somewhere else.

John_M_Business

meanmachine wrote:

Deemy I bow to your greater knowledge on all things stock markety, but isn't its recent rise due to two things: oil price rises boosting oil company stocks, thereby lifting the FTSE, and investors shifting from housing to shares?

Firstly, the oil price rise will ONLY barely benefit the oil companies (as they are feeling the heat from the consumers about raising their own prices, but are having to pay more for supply in any case) and Gordon Brown in the short term - until more people are made redundant as a result. All other companies relying on Oil (transport, travel, retail, motor trade etc.) will suffer as a result of higher oil prices. Therefore the impact on the FTSE should have been negative.

The reason why it isn't is because although high-street retail is doing poorly at the moment, many other FTSE businesses are posting better than expected results - meaning that there is underlying confidence in the future.

Secondly, no people are not 'selling out' of property and investing in shares... in fact the reason why the housing market is not dropping is that fewer people are looking to sell their property.