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

Tefal · 16 Dec 2008 at 00:30

daz said:
It's a recession, it's part of the natural economic cycle.

It is not the end of the world.

Booo!

Don;t you know how much we like predicting the end of the world.

clv101 · 16 Dec 2008 at 00:33

The recent round the government borrowing was based on the recession ending in the 2nd half of 2009 and the economy growing around 4% in 2010. This is ridiculous.

To those who think the media are hyping this - I don't see it. I think the media have been and are continuing to be too conservative. The situation is worse now than any mainstream broadcaster was suggesting 12 or even 6 months ago and I expect the situation 12 months from now will be a lot worse than today's media is suggesting.

Red Porsche · 16 Dec 2008 at 00:34

clv101 said:
The recent round the government borrowing was based on the recession ending in the 2nd half of 2009 and the economy growing around 4% in 2010. This is ridiculous.

To those who think the media are hyping this - I don't see it. I think the media have been and are continuing to be too conservative. The situation is worse now than any mainstream broadcaster was suggesting 12 or even 6 months ago and I expect the situation 12 months from now will be a lot worse than today's media is suggesting.

Is this more than a hunch?

The Halk · 16 Dec 2008 at 00:43

clv101 said:
The recent round the government borrowing was based on the recession ending in the 2nd half of 2009 and the economy growing around 4% in 2010. This is ridiculous.

To those who think the media are hyping this - I don't see it. I think the media have been and are continuing to be too conservative. The situation is worse now than any mainstream broadcaster was suggesting 12 or even 6 months ago and I expect the situation 12 months from now will be a lot worse than today's media is suggesting.

The government is lying to us. They are bankrupting the country in order to put a bit of tinsel on a very bad situation.

With an election due any time in the next 2 years they will try anything to win, and worry about the consequences in the next term.

daz · 16 Dec 2008 at 00:45

Government borrowing is not at ridiculous levels by any means. Sure it's high, but it's nothing we can't handle.

Energize · 16 Dec 2008 at 00:52

Anyone seen those gold buying adverts on tv? Shops buying gold off people because the pound is becoming worthless, when you see that advertised on tv you know things are bad!

Tefal · 16 Dec 2008 at 00:56

Energize said:
Anyone seen those gold buying adverts on tv? Shops buying gold off people because the pound is becoming worthless, when you see that advertised on tv you know things are bad!

err it's not worthless though, it;s the 3rd best performing currency in the world apparently

Strife212 · 16 Dec 2008 at 00:58

The other currencies must be shocking then as the pound has had loads wiped off ;/

The Halk · 16 Dec 2008 at 01:00

Energize said:
Anyone seen those gold buying adverts on tv? Shops buying gold off people because the pound is becoming worthless, when you see that advertised on tv you know things are bad!

Panic predators. People have this impression that gold will hold it's value and it won't fluctuate. It's just another commodity.

Tefal · 16 Dec 2008 at 01:01

Strife212 said:
The other currencies must be shocking then as the pound has had loads wiped off ;/

Not really, mos other currencies have gone down too. So it hasn't lost that much over all, only in comparison to a few currencies.

clv101 · 16 Dec 2008 at 01:08

The Halk said:
Panic predators. People have this impression that gold will hold it's value and it won't fluctuate. It's just another commodity.

It's very different from other commodities, it doesn't tend to get used up in the same way as oil, coffee, wheat, coal, cotton etc... A couple of thousand years of history suggests that goal is a relatively stable store of value.

[TW]Fox · 16 Dec 2008 at 01:11

redporshe said:
Is this more than a hunch?

No, I suspect not. clv is clearly very educated but also very much enjoys revelling in doom to the extent that I suspect a lot of his opinions are heavily biased and should be trusted no more than we'd trust somebody who came bounding in saying 'We'll get positive growth in Q1 2009'.

It was only a year ago he was predicting imminent $200 oil by the end of the 2008 - if this was the 1930's he'd be stood on a street corner with a sandwich board saying 'The end of the world is nigh'

Which is a shame, as this rather erodes his otherwise sound opinions.

The Halk · 16 Dec 2008 at 01:12

Over very long periods of time, yes. However not in the short term.
http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/commodities/11632/twelve_month.stm

Edit : These adverts for gold on the telly are aimed at people with small amounts of savings in cash. Small in financial terms as in 10-50K. Generally they're retired, and they've been worked up by all the financial sector carnage that's gone on.

[TW]Fox · 16 Dec 2008 at 01:16

The Halk said:
Over very long periods of time, yes. However not in the short term.
http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/commodities/11632/twelve_month.stm

That graph shows Gold at just 4% more than it was a year ago. Seems pretty stable to me.

clv101 · 16 Dec 2008 at 01:26

[TW]Fox;13095970 said:
It was only a year ago he was predicting imminent $200 oil by the end of the 2008 - if this was the 1930's he'd be stood on a street corner with a sandwich board saying 'The end of the world is nigh'

That isn't actually right Fox. I don't tend to predict prices - you may be referring to my +30% per year chart, but you're notice there wasn't really a predictive aspect to that, it was a description of past performance. In fact the identified trend then was for ~$120 at year end. In my presentations I always said that high oil prices could not be supported for long - people like Matt Simons kept going on about ever increasing prices, and Goldman Sachs talked of $200.

In May 2008 I covered a report about how high oil prices would result in recession.

Energize · 16 Dec 2008 at 01:28

The Halk said:
Panic predators. People have this impression that gold will hold it's value and it won't fluctuate. It's just another commodity.

When a currency falls in value the price of gold increases in that currency, by investing in gold you protect against that loss.

Notice how gold prices have increased so much in sterling (over 20%), but remained fairly stable in $.

Tefal · 16 Dec 2008 at 01:38

Energize said:
When a currency falls in value the price of gold increases in that currency, by investing in gold you protect against that loss.

Notice how gold prices have increased so much in sterling (over 20%), but remained fairly stable in $.

isn;t the $ falling far faster than the £ globally though?

scorza · 16 Dec 2008 at 08:18

[TW]Fox;13095987 said:
That graph shows Gold at just 4% more than it was a year ago. Seems pretty stable to me.

What about those who bought gold at $1000 an ounce? What about when the government sold gold at $200 an ounce only a few years ago? Seems to me that gold prices fluctuate massively, plus you have to pay to store it safely.

Rich_L · 16 Dec 2008 at 09:36

It's fascinating what's going on in the US at the moment, Obama seems to have a massive focus on finding alternatives to fossil fuel etc. Makes you wonder what could be possible if the resources which were, say, devoted to the Space Race etc were focused on development of alternative fuels instead.

EffBee · 16 Dec 2008 at 09:45

The Halk said:
Unemployment will rise, jobs will become more difficult to get.

Companies, in general, will tighten their purse strings. New buildings, expansions etc will be put on hold.

Companies now have a good excuse to have a general cut of the workforce, redundancies will be more wide spread.

Consumers in general will tighten the purse strings for some products, but not all, and not most.

People who have mortgages they can't afford will inexplicably blame the recession, despite not being directly impacted.

Retailers will lower prices and run lower margins. They will hold less stock, and offer incentives like free delivery.

The government will borrow from tomorrow, to **** it up the wall today. They will claim this is "prudent" and the "only way". They will ignore everybody and claim growth will happen when it's all but impossible. In an attempt to win the election they will give money away.

Most people you know will bleat on about the recession, even if they are not affected.

Companies will foolishly ban overtime, cut peoples hours etc without thinking it through properly.

To add to this...

People in work and with a little surplus cash will actually do quite well with lots of retail bargains around.

Crime and social unrest will increase - caused by angry desperate people not hard core criminals.

Companies will implement overtime freezes.

Companies will implement recruitment freezes. They will also shed temps and contractors.

Due to recruitment freezes and a lack of contrect staff, companies will become short staffed and work will pile up. After a while as a workaround they will use more temps and contractors since their cost comes out of a different corporate budget usually and can be hiddden.

Companies will re-organize, downsize, and generally get rid of dead wood. People will have to work harder for their money for fear of being released from their contract of work.

Public sector employees will continue to live their overpaid cushioned existence until the tories get in when there will be a orgy of blood letting.