The so called UK economic recovery

[AtW]

All sassy will have for his years of "hard work" is a bald head and a heart attack.

He's also got a Toyota x86 GT...

[BrilloPad]

He's also got a Toyota x86 GT...

Ah yes. And not forgetting the caravan in Portugal. Which will be worth about £1.50 once Portugal leaves the Euro.

[Zero Liability]

I don't believe there is much correlation between the stock market and economic recovery i.e. GDP growth, certainly not for the UK stock market where a big chunk of those listed companies' profits are made abroad.

The current 'recovery' would seem to be consumption led which may explain why personal debt is rising.

I can't remember where I read it this weekend but apparently UK companies' levels of investment are at the lowest since the 1950s. If we're to stage any long term recovery it has to be more investment led rather than consumer led but this often hasn't been the case in the UK historically.

It's no coincidence that the FTSE 100 companies have record amounts of cash on their balance sheets. Maybe it's lack of confidence but they don't want to invest and a lot of the surplus cash they are generating is being paid out to shareholders as 'special dividends.'

Meanwhile the illusory feel good factor of artificially stimulated rising house prices is lulling people into building up debt again. In the USA people have paid down a lot bigger percentage of their debts over the last few years than the UK for example.

The US isn't out of the woods, either. If anything, the pace of inflation there is even more staggering, and the Fed is/was trying to switch shorter term for longer term debt and push down interest rates all the way across. $1 trillion a year in Fed led asset purchases isn't indicative of a healthy economy, and neither is the S&P or DOW at current valuations. The US has had the benefit of low cost natural gas, however, which is shrinking its trade deficit, but like the UK its problems aren't confined to a trade deficit.

[Old Greg]

The US isn't out of the woods, either. If anything, the pace of inflation there is even more staggering, and the Fed is/was trying to switch shorter term for longer term debt and push down interest rates all the way across. $1 trillion a year in Fed led asset purchases isn't indicative of a healthy economy, and neither is the S&P or DOW at current valuations. The US has had the benefit of low cost natural gas, however, which is shrinking its trade deficit, but like the UK its problems aren't confined to a trade deficit.

Yes, the 1.0% is pretty terrifying.

[CoolCat]

yea but the "employment" figures include a shed load of Indian nationals here on uncapped ICT work visas being paid through a UK payroll for an Indian outsourcer (although with big tax dispensations so paying a lot less tax than a Brit would). so thats going up.

and "unemployed" figures dont include anyone with a few quid savings making it pointless to bother claiming benefits, including a lot of British IT pros out of work.

[Zero Liability]

Yes, the 1.0% is pretty terrifying.

Amusing snark but you're referring to what, exactly? CPI? I am referring to the pace at which they are expanding the money supply. I couldn't give a toss where the CPI currently resides.

If you're referring to the money supply, which can seep into a host of asset classes as well as the goods included in the CPI, and goods outside of it, I'd like to see where you are getting the 1% figure from.

[CheeseSlice]

Amusing snark but you're referring to what, exactly? CPI? I am referring to the pace at which they are expanding the money supply. I couldn't give a toss where the CPI currently resides.

If you're referring to the money supply, which can seep into a host of asset classes as well as the goods included in the CPI, and goods outside of it, I'd like to see where you are getting the 1% figure from.

Maybe not what you're referring to, but didn't BoE shut down QE early in summer?

US QE on the other hand still prints on, which I think has a lot more to do with the almost weekly 'all time high's of the S&P500 and DJIA, than the improving economy over there.

[xoggoth]

Never understand the economy but this seems to agree with BP:

Economy: Same Old Problems Drive Growth

It is depressing that so many major manufacturing companies ICI, Unilever, Blue Circle etc that were major British world leaders in my day have either disappeared or are now foreign owned. Even recent successes like Rolls Royce and BAe seem to be shrinking. The problem with services is that, as they require less investment, they can disappear even quicker. By outsourcing so much we are handing the expertise to India etc. They are not stupid unfortunately.

[Zero Liability]

Maybe not what you're referring to, but didn't BoE shut down QE early in summer?

US QE on the other hand still prints on, which I think has a lot more to do with the almost weekly 'all time high's of the S&P500 and DJIA, than the improving economy over there.

Yeah I am referring to the US, however it's worth noting this has a global spillover, and that US banks are still sitting on their reserves. Additionally, pretty much all major central banks are inflating at present, even if not at the same pace. The UK has been more focused on the mortgage lending market, and its own QE programme was tamer compared to the US', although hardly insubstantial. The US isn't alone in having a very pricey stock market, however; Germany and the UK also have stock markets based on their cyclically adjusted price-earnings ratios (although they look lower at first glance, particularly in the former's case, due to auto firms.) My optimism regarding a genuine recovery is pretty muted, but investment opportunities abound all the same.

[Old Greg]

Amusing snark but you're referring to what, exactly? CPI? I am referring to the pace at which they are expanding the money supply. I couldn't give a toss where the CPI currently resides.

If you're referring to the money supply, which can seep into a host of asset classes as well as the goods included in the CPI, and goods outside of it, I'd like to see where you are getting the 1% figure from.

I see. You meant money supply.