[news] Britain faces worst recession in history, Cabinet minister Tessa Jowell admits

[somabc]

Britain faces worst recession in history, Cabinet minister Tessa Jowell admits - Telegraph

 

LET THE PANIC BEGIN!!

[User3204]

But don't you understand ? The SKY is falling.

[srochford]

Think we should probably have started panicking quite a while ago. In a Guardian interview during the summer, Alistair Darling said [The economic times we are facing] "are arguably the worst they've been in 60 years," he says bluntly. "And I think it's going to be more profound and long-lasting than people thought."

 

At the time he was criticised for being too gloomy; looks like he was just being honest. It's a rare quality in a politician but it looks as if some of them can do it :-)

[somabc]

[ame=http://uk.youtube.com/watch?v=UhtITYmL9a0]YouTube - South Park Parody of "The Happening"[/ame]

 

"We are predicting a death toll of over 600 billion people! WE DIDN'T LISTEN!!!"

Edited December 15, 2008 by somabc

[ICT_GUY]

I'm OUTRAGED!!!!111

[torledo]

Think we should probably have started panicking quite a while ago. In a Guardian interview during the summer, Alistair Darling said [The economic times we are facing] "are arguably the worst they've been in 60 years," he says bluntly. "And I think it's going to be more profound and long-lasting than people thought."

 

At the time he was criticised for being too gloomy; looks like he was just being honest. It's a rare quality in a politician but it looks as if some of them can do it :-)

 

IT's one thing using 'honesty' as a strategy to save your own skin, it's another to toady out and backtrack as spectacularly as he did after it appeared his comments turned out to create considerable consternation in nulabour. Not to mention provide vital ammo for the opposition [and let's not forget the tories didn't need any encouragement at that time].

 

Also his comments were what ? how many months after the northern rock crisis ? Some of us not reliant on the mainstream media knew well before northern rock that we were in the shit, as the uk was even more over-leveraged as a nation than the americans and the europeans. And so we were particulatly ill-equipped for the economic turbulence coming from over the pond. We were just 18 months behind the US, that was all. All the top economists could see what was happening a mile off. Well before Darling poured his heart out. I wouldn't be suprised if Darlings comments were just a variation on nouriel roubinis messages of doom and gloom i.e worst economic conditions since the depression.

 

Up until that point and even AFTER it Darling and co. were taking potshots at people for 'talking down the economy'. So yeah, at the time Darling may have come across as being brave and honest.....but when you've got no chance of hiding the scale of the problem, and when your job is on the line, at some point you've got to pre-empt the backlash from those looking for someone to blame.

 

Let's not forget the govt. [including darling] gave osbourne a bashing for talking down the pound, and now as the pound achieves parity with the euro they say the strength of the pound is not a concern of the economic policy makers.

 

These guys are masters at moving the goalposts.....but they have the benefit of an electorate with the memory capacity of a goldfish.

Except when it comes to 15% interest rates.....nobody forgets that. We could have 40% house price falls and 3million unemployed [we will have both in all likelihood], but those figures will mean as nothing compared to 15% rates.

[somabc]

Take the example of two IT Workers doing the same job-

 

A - Works in London earning £40k

B - Works in Dublin earning €40k

 

When the exchange rate was ~€1.5->£ as it was for most of the last 8 years

 

Then A earned €60k (on average more than his colleagues in Europe), now A earns €40k, quite a large drop?

 

Do you think we will see more people trying to find work in the Euro Zone, plus more Europeans buying 'cheap' property for investment in say London?

[beeswax]

there's a good piece in the New York Review of Books

The Crisis & What to Do About It - The New York Review of Books

[somabc]

I think the US is now out of ideas as interest rates approach 0%.

 

FRB: Press Release--FOMC statement--December 16, 2008

US Interest Rate Slashed To Zero

Fed slashes rates as economic woes snowball

FT.com / Columnists / John Authers - Short View: Historic rate cut

 

With Tuesday’s truly shocking announcement that the Federal Reserve would let its central Fed Funds rate drop to zero, the US has officially turned Japanese. For the first time since 1993, the Fed’s rates are lower than those of the Bank of Japan (currently at 0.3 per cent).

 

Japan’s rates, which were zero for years, went so low as part of the country’s long and painful war on deflation. The Fed made clear that it also expects to be in the trenches battling deflation for a long time. It also intends to use other weapons from the BoJ arsenal, including buying Treasury bonds to reduce yields that are already at half-century lows, in an attempt to jolt life into the economy.

 

The announcement was as historic as it was shocking. The market response was more predictable. Bonds, with a big new buyer in the offing, saw yields drop to new record lows. The dollar, totally undercut by its central bank, slumped. The rise of the euro was explosive, up a record 5.9 per cent in two days.

Edited December 16, 2008 by somabc

[ICT_GUY]

I have visions of tens of thousands of Bankers and city types running away with pockets full of tax payers money, shouting see you laters suckers! And laughing all the way to the tax haven.

 

I have yet to hear where all these billions of pounds have actually gone, someone has to be making a mint somewhere along the line.

[Geoff]

The dollar, totally undercut by its central bank, slumped. The rise of the euro was explosive, up a record 5.9 per cent in two days.

 

The thing is they aren't Japan. The interest rate cut to 0% and the destruction of the value of the USD will cause other problems. For example, if I was OPEC, I'd be switching to sell barrels of oil in Euros rather than USD rather sharpish.

[beeswax]

I heard the oil price slump had gone from $140 a barrel in June to less than $40 yesterday.

[TechMonkey]

But OPEC want to slash production to bump up the price. Although the change to euro from dollar has been talked about before.

 

I think the critisim of Darling previously was that yes he was being honest but all that did was create panic and more problems, which was then compounded by him back tracking.

[Geoff]

That won't be allowed. Look up 'petrodollar'.

 

That deal Nixon did with the Saudis in 1971 is rather worthless now that the US is in the situation it promised never to be in.

[Geoff]

They've slashed production already.

 

BBC NEWS | Business | Opec agrees record oil output cut

 

Good luck with that one lads. Gordons getting worried though.

 

http://news.bbc.co.uk/1/hi/uk_politics/7791269.stm

 

Anyone want to take bets on how long it is before someone important suggests using euros for oil?

[somabc]

You know what happens when you start selling oil in euros instead of dollars, 'regime change' (see Iraq).

 

Iranian President Mahmoud Ahmadinejad called the depreciating dollar a "worthless piece of paper" at a rare summit last year in Saudi Arabia attended by state leaders from the Organization of Petroleum Exporting Countries.

 

Iran put pressure on other OPEC countries at the meeting to price oil in a basket of currencies, but it has not been able to generate support from fellow members — many of whom, including Saudi Arabia, are staunch U.S. allies.

 

The U.S. briefly had two aircraft carriers in the Gulf on Tuesday amid a rotation of forces. Defense Secretary Robert Gates said the deployment serves as a "reminder" to Iran, though he said it was not an escalation of force.

 

U.S. banks are prohibited from conducting business directly with Iran, and many European banks have curbed their dealings with the country over the past year under pressure from Washington.

 

CNN.com - U.N. to let Iraq sell oil for euros, not dollars - October 30, 2000

Iran stops conducting oil transactions in U.S. dollars - International Herald Tribune

UN Office of the Iraq Program - Oil for Food: About the Program

Edited December 19, 2008 by somabc