The doomiest doom of all doomdom

[Fred Bloggs]

What I find frightening abnout the current situation is that my working life spans recessions in the 70's 80's and 90's but I've never seen anything deflate so quickly both in the UK and the rest of the world. Businesses that withstood the other recessions are going to the wall. Manufacturing in the UK is now less than 12% of national GDP and shrinking. What was left was fit and lean (mainly) but it has crashed just like all the other sectors. Manufacturing capacity that is lost in the UK will never come back, spare capacity will be utilised first or new plant will be erected in lower cost countries. The illusion that financial services can support the entire economy has been blown away. Probably for good. Where does the UK now turn to generate wealth? The UK is effectively bankrupt and I find the prospect pretty scary.

[SantaClaus]

According to Mervyn King we are not there yet! Though I don't believe him for some reason....

http://business.timesonline.co.uk/to...cle5556024.ece

The Bank of England's Governor paved the way last night to unleash the weapon of “printing money” in a last-ditch drive to combat the rapidly deepening recession.

Mervyn King is the last person (maybe apart from Gordon Brown) who I would ask "are we in a disastrous recession?"

The £ is heading to the 2001 lows as we speak. Thats the real indicator of how bad things are.

[rootsnall]

The £ is heading to the 2001 lows as we speak. Thats the real indicator of how bad things are.

I'll stick to my earlier prediction that interest rates will be going back up quite sharply at some stage to protect the pound. It'll probably be timed perfectly to coincide with the peak unemployment and work wonders for the housing market.

My biggest problem is the idiots who presided over getting us in this mess are still in charge and trying to save their necks with even more reckless behaviour. We need a big clear out of Nuliebour, Mervyn King and his cronies and the people at the head of the major banks.

[SantaClaus]

I'll stick to my earlier prediction that interest rates will be going back up quite sharply at some stage to protect the pound. It'll probably be timed perfectly to coincide with the peak unemployment and work wonders for the housing market.

My biggest problem is the idiots who presided over getting us in this mess are still in charge and trying to save their necks with even more reckless behaviour. We need a big clear out of Nuliebour, Mervyn King and his cronies and the people at the head of the major banks.

Gordon's hands are tied. I dont think rates can go up for these reasons:

He needs to free up credit, so cant raise rates. However, the banks are greedy pigs with their snouts in the trough, so just keep on lapping up his bailouts without sharing (i.e. cheaper mortgages)

He wont want to hurt the consumer any more than he has, another reason not to raise rates.

We also have a long way to go to match the low interest rate in the US.

Meanwhile, the UK and pound have lost investor confidence because El Gordo has started the printing presses to magic some more money as no-one will lend him any. This has diluted the value of the £. Rates usually drive a currencies value. Wonder if the opposite is true

[GreenerGrass]

What I find frightening abnout the current situation is that my working life spans recessions in the 70's 80's and 90's but I've never seen anything deflate so quickly both in the UK and the rest of the world. Businesses that withstood the other recessions are going to the wall. Manufacturing in the UK is now less than 12% of national GDP and shrinking. What was left was fit and lean (mainly) but it has crashed just like all the other sectors. Manufacturing capacity that is lost in the UK will never come back, spare capacity will be utilised first or new plant will be erected in lower cost countries. The illusion that financial services can support the entire economy has been blown away. Probably for good. Where does the UK now turn to generate wealth? The UK is effectively bankrupt and I find the prospect pretty scary.

Another great post here from cynicus which summarises some of his earlier stuff
http://cynicuseconomicus.blogspot.com/

In the newspapers we can read endless reports about the 'financial crisis', which is of itself a misnomer. This is not a financial crisis, but an economic crisis, of which the banking system failures are just one symptom. Throughout this blog I have kept in mind very simple principles and applied them to the state of the world economy. I realised that the key to all of the problems is that the world had entered a period of hyper-competition. The world had changed, and countries like the UK and US complacently stood still, resting on their laurels, with no real attempt to adapt to the changes in the world.

Instead of adaptation, instead of confronting change, we have seen ever greater attempts to bury the reality that underlies this crisis. The reality is that many of the countries in the West, and I refer in particular to the US and UK, are unfit for the competition. Putting it in both simple and accurate terms - we do not produce enough value of goods and services to support our current lifestyles.

I wonder how long before gilts lose AAA grading?
Events in Ireland could prove to be a catalyst that spreads to the UK.

[TimberWolf]

Putting it in both simple and accurate terms - we do not produce enough value of goods and services to support our current lifestyles

True. But a deeper reality is that everything we do is ultimately linked to energy use. And we don't own or produce that for ourselves either.

[ThomasSoerensen]

Frightened?

As I have said on other threads, the downward forces on the dollar and the euro are just as strong as those on the pound, if not stronger. Wait for the run on those two currencies to kick off - you'll feel much brighter.

incorrect.

USD and EUR are reserve currencies in many places GBP is not.

[thelace]

OK We're in the midst of a Recession and heading towards a Severe Recession.

There will be people that lose their jobs, there will be business's that go bust.

But, the prediction is a loss of 5% maximum GDP. This will not affect all of us, infact it won't affect the majority of us on a day to day basis. Some of us are actually better off than we were before from a reduction in our mortgages rate and a smidgen off products through a reduction in VAT.

My point being, the thing most likely to hurry along every new economic downturn is a lack of confidence.

The more we discuss every piece of bad news, every drop of 0.01% in exchange rate, every 0.1p drop in share price, the less confident we will all feel, thereby talking ourselves into a deeper recession.

[DimPrawn]

OK We're in the midst of a Recession and heading towards a Severe Recession.

There will be people that lose their jobs, there will be business's that go bust.

But, the prediction is a loss of 5% maximum GDP. This will not affect all of us, infact it won't affect the majority of us on a day to day basis. Some of us are actually better off than we were before from a reduction in our mortgages rate and a smidgen off products through a reduction in VAT.

My point being, the thing most likely to hurry along every new economic downturn is a lack of confidence.

The more we discuss every piece of bad news, every drop of 0.01% in exchange rate, every 0.1p drop in share price, the less confident we will all feel, thereby talking ourselves into a deeper recession.

Yeah right, it's just a bit of negative gossip.

http://www.telegraph.co.uk/finance/c...ft-option.html

[AlfredJPruffock]

Interesting how the current news brings out the worst of vermin from the woodwork out there or even the deserters from this site - this is a comment from todays Guardian

This is a dream come true.

I can't wait to see Britain go under water.

All those atrocities committed in India.

How many bombs did UK supply Israel to kill so many palestinians,Lebanese,etc..

Next in the list is Spain,US,Germany,France then Korea,Japan,etc..

The western civilization is so arrogant that they thought they will never the dark nights. here it is folks.
Enjoy.
You will need a good blanket because you will be out in the streets with no heating gas at home since you didn't pay your bills because you don't have a job.
Run fast to WoolWorth...Oops. i just realized they went out of business.