oil
29 Aug 2008 [0 Comments | 65 views]
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ftse
29 Aug 2008 [0 Comments | 57 views]
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US finds the economic gas, and reaches for the end of crisis
29 Aug 2008 [0 Comments | 81 views]
Did you hear that? Was that the sound of the fat lady singing? Is it over? Has the great economic crisis of the late noughties turned out to be nothing more than the mild blip of 2008? Yesterday saw the release of revised official data on US economic growth. And the data says the US expanded at an annualised rate of 3.3 per cent in the second quarter. This compares with the original estimate of 1.9 per cent expansion. And the markets loved it; the Dow soared 212 points and at close of play yesterday stood 500 points up on the August low. To put these latest figures in perspective, anything between 2.5 and 3.5 per cent is considered to be on par with the historical trend – so actually it appears that the second quarter saw growth at the upper end of what is considered to be sustainable.
So the bulls come out to play, and the optimists look smug and say “told you” everything was fine really, but maybe the real lesson from this announcement and the way it was so warmly received is that the markets still haven’t got it. Their heads remained buried in the sand, oblivious to the deeper forces at work.
Wishful thinking, weights on shoulders, and heads in sand
29 Aug 2008 [1 Comment | 87 views]
Spare a thought for poor old David (Danny) Blanchflower, arch dove at the Bank of England Monetary Policy Committee. "I feel a weight on my shoulders," he said when talking to Reuters, yesterday. Poor old Danny Boy, he reckons he has failed to convince the rest of his interest rate-setting chums how serious things are and is rather taking it all personally, as if somehow the economic crisis is all his fault.
And while you are in the mood for being sympathetic, spare a thought for Britain’s retailers. They would rather forget the summer just gone, said the CBI yesterday. The employers' organization released its latest survey on the state of the High Street on Thursday, and boy, it was really awful.
But then again, maybe it is the Office for National Statistics who should be getting our sympathy. It is receiving no end of flak. Recently the ONS reported another set of healthy figures for the High Street. "This can not be," said our retailers and those who apply common sense to their economic reckoning. The CBI report just gave these critics of the ONS even more ammunition.
Come to think of it, maybe the ONS doesn’t deserve our sympathy after all. Don’t forget, its data has been used by the optimists to help them avoid the vision of reality.
Mr Blanchflower is worried. "I feel that things I have been fearful about have come to pass and I have actually been pretty accurate in what's coming and I have failed to convince the others of what is appropriate.
European inflation may have peaked – is it in time?
29 Aug 2008 [0 Comments | 76 views]
The Eurozone and its neighbours seem to have caught a nasty dollop of US misery. Economic woe is spreading, but at last good news, real good news, seems to have emerged on inflation. Maybe the Eurozone can shake off the jitters of mid-2008, and get back on track?
The circle rotates – Japan prepares to spend its way forward
29 Aug 2008 [0 Comments | 82 views]
It’s funny how these things work. The US and UK economies expanded rapidly on debt – it was unsustainable – but years of good times was the result. In Japan, misery was the order of the day – the economy lurched from one crisis to another – it became known as the lost decade. Yet, in some ways, Japanese businesses and consumers were doing what many argue US and UK businesses and consumers should have been doing. They were saving.
But now, everything seems to have flipped. While the UK, US, Australia, Spain and several Scandinavian economies seem hamstrung by a legacy of too much spending, Japan is sitting pretty.
According to Bloomberg, Japanese companies now have cash equating to 11 per cent of their assets...
Keynes famously argued that in times of a recession, the last thing you should do is save – it may make sense for individuals, but for the economy as a whole this is a disaster.
The snag is, though, there is a danger that Keynesian economics can lead to an ever growing mountain of debt, as each crisis is avoided by getting people spending.
oil
28 Aug 2008 [0 Comments | 56 views]
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ftse
28 Aug 2008 [0 Comments | 55 views]
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UK to contract next year, warns economics group
28 Aug 2008 [0 Comments | 70 views]
The most damning assessment yet was published on the prospects for the UK economy by the economics consultancy Capital Economics this morning. Their central projection is for the UK economy to contract modestly next year – and recover only very gradually in 2010. But their report also hints at the possibility of a much more serious economic slowdown than that.
House prices down again, says Nationwide – it’s the biggest fall ever recorded
28 Aug 2008 [0 Comments | 57 views]
Can anyone be surprised to learn house prices fell again in August? The fall may have been entirely predictable, but it is still worth looking taking a closer look, if only so that we can tut-tut and nod sagaciously with a little more gusto.
Average price was down 1.9 per cent in August, according to the latest report from the Nationwide. That was the second biggest monthly fall announced so far in this year of big drops. But how does this compare with big falls seen in the past?