Brits may face DEPRESSION, say a few economists...

[chess9]

http://www.telegraph.co.uk/fin...ssion-say-experts.html

"Families must brace themselves for a slump of far greater severity and longevity than the recessions of the 1980s and 1990s, they warned. They said the current crisis will be of a scale to rival the biggest peace-time crisis in modern history ? the Great Depression.

The warning was delivered by economists and politicians after the Office for National Statistics revealed that the economy shrank by 1.5 per cent in the final three months of 2008 alone."

England is in a bit worse shape than the USA. Their home prices are continuing a near free fall and equities that are worth owning are few and far between. If you don't mind owning BP, Shell, pharms, and the tobacco companies, you will be doing fine.

I do not believe America is going into a depression, but hold onto your hats, because rougher times are ahead. The stock market is headed lower tomorrow as well. Meanwhile, my brother can't find a job, and my best friend has already lost 40% of his retirement account and is going to sell his pricey Florida home and move to Asheville to his cabin in the woods!

What do you guys think?

-Robert

 

[sandorski]

I told them, "Boy, don't be going up Shit Creek without one them paddles!", but do they listen?

That's about all I think now. None of this is a surprise, not one bit.

 

[chess9]

I spent two years in England and have many friends there. This is just too tragic for words, if it comes to pass. My closest friend lost her brother to the London bombings (he was 5) and she suffered through considerable privation as a child because of the war rationing and their financial straits. Now, in her old age, she may have to go through financial difficulties again. Very sad for her and her husband.

Let's hope for the best here...and there.

-Robert

 

[StageLeft]

People have talked about a depression in the US for months. Who knows. Iceland is about to have one, by the looks of it. They were uber-fvcked, though, and really, really running hot and overleveraged, quite a bit more severely than the US. Hangovers' severity is generally proportiational to the liqour you had the night before and in England they do like their drink both figuratively and literally. In this case, England is in worse shape than the US.

If various other Western nations get bitch slapped the US will be powerless to stop taking that beating itself. It may not be as severe but it will be painful nonetheless.

It is quite stunning how severely the pound has dropped in value.

The last time I visited in 2005 I still couldn't wrap my head around how the average family made it. I knew what the average home prices were and what salaries were and I'd see that a drink of coke in a corner store was such and such. It just didn't make sense to me. I didn't understand how it was possible. Seems that really it wasn't.

Your friend's retirement is down 40% but historically the recovery on stock prices will be quick (not including after the great depression--it took a couple of decades). By your last post I presume you're older than many of us here, though, and to lose 40% when nearing retirement is a hard pill to swallow.

 

[First]

Hard to see a depression coming when unemployment has been terrible for months and we're not close to cracking 10%. The height of the depression was over 25%, and 15% consistently throughout (though I don't know the exact average, it was in the teens).

More than likely, this lasts through the year, but if I had to make a wild guess I'd say things will be looking up within 8-12 months.

 

[StageLeft]

Originally posted by: Evan
Hard to see a depression coming when unemployment has been terrible for months and we're not close to cracking 10%. The height of the depression was over 25%, and 15% consistently throughout (though I don't know the exact average, it was in the teens).

More than likely, this lasts through the year, but if I had to make a wild guess I'd say things will be looking up within 8-12 months.

I know it grows quickly in January historically, but it's really going up right now fast. I think we'll be really lucky to not see 10% by the end of this.

 

[Atheus]

I think there are a lot of scare stories going around, and some loss of confidence in financial services, but I don't see people entering a depression mindset just yet. They're no more depressed than usual anyway. I know people who have lost their jobs but I don't know anyone who hasn't been able to get another one - business have realised they need to run a a tighter ship and now the shock is over most can deal with it. I have moved my money out of a bank but only into another bank not into a box under my bed. Everyone still goes out and has fun on the weekends just as much as they did before, etc, etc.

The devaluation of the pound worries me a bit though, I have to say...

 

[MovingTarget]

Originally posted by: Skoorb

Originally posted by: Evan
Hard to see a depression coming when unemployment has been terrible for months and we're not close to cracking 10%. The height of the depression was over 25%, and 15% consistently throughout (though I don't know the exact average, it was in the teens).

More than likely, this lasts through the year, but if I had to make a wild guess I'd say things will be looking up within 8-12 months.

I know it grows quickly in January historically, but it's really going up right now fast. I think we'll be really lucky to not see 10% by the end of this.

I often question the historical unemployment data. Back during the depression, those numbers weren't as rigorously kept as they are today. Personally, I don't consider even the current "numbers" on unemployment to be accurate. Too many discouraged and underemployed workers around. The U6 data is probably a better representation of where we are today.

 

[chess9]

Yes, I'm 65 and retired, but my brother is 56 and does want to work. What I see happening is a lot of older workers being shut out of the job market. So, if you are younger, you may not have seen this problem...yet.

Regarding the possibility of a depression, I'd say it's possible, but not likely at this point unless we have a continued liquidity crisis and the housing market doesn't rebound. Pent up demand for housing should lead the nation slowly out of this recession starting in the third quarter, if history is any guide. Prices must stabilize first, however. I wouldn't buy a house now out of fear the value would drop significantly in the next 6 months. In Florida, it will take 2-3 years for this housing market to rebound fully. Contractors, carpenters, masons, plumbers, electricians, are all hurting badly. Home values have contracted about 30% since 2005 and new construction is almost non-existent. One of my neighbors allegedly set fire to his $600,000+ house when it wouldn't sell, and the police still haven't arrested him. (He was seen running from the burning house!)

Some of the stories I'm hearing are very worrisome.

-Robert

 

[First]

Originally posted by: MovingTarget

Originally posted by: Skoorb

Originally posted by: Evan
Hard to see a depression coming when unemployment has been terrible for months and we're not close to cracking 10%. The height of the depression was over 25%, and 15% consistently throughout (though I don't know the exact average, it was in the teens).

More than likely, this lasts through the year, but if I had to make a wild guess I'd say things will be looking up within 8-12 months.

I know it grows quickly in January historically, but it's really going up right now fast. I think we'll be really lucky to not see 10% by the end of this.

I often question the historical unemployment data. Back during the depression, those numbers weren't as rigorously kept as they are today. Personally, I don't consider even the current "numbers" on unemployment to be accurate. Too many discouraged and underemployed workers around. The U6 data is probably a better representation of where we are today.

Even if you were to accept U6 data and say that unemployment numbers are flawed, using those same methods to calculate 1930's unemployment still leaves you with a vast difference in severity between then and now.

But I do expect 10% or thereabouts. 15%+ is out of the question.

 

[SSSnail]

California unemployment rate is about 10% now, I'm sure other states are not too far behind. Hold on to your seats boys and girls, we're in for a rough ride.

 

[StageLeft]

Originally posted by: MovingTarget

Originally posted by: Skoorb

Originally posted by: Evan
Hard to see a depression coming when unemployment has been terrible for months and we're not close to cracking 10%. The height of the depression was over 25%, and 15% consistently throughout (though I don't know the exact average, it was in the teens).

More than likely, this lasts through the year, but if I had to make a wild guess I'd say things will be looking up within 8-12 months.

I know it grows quickly in January historically, but it's really going up right now fast. I think we'll be really lucky to not see 10% by the end of this.

I often question the historical unemployment data. Back during the depression, those numbers weren't as rigorously kept as they are today. Personally, I don't consider even the current "numbers" on unemployment to be accurate. Too many discouraged and underemployed workers around. The U6 data is probably a better representation of where we are today.

They are probably incomporable but as long sa the scale we use now hasn't moved markedly from, say, 10 years ago, I think we have a good idea where we are.

I personally actually know only one person who's recently lost his job. I know others who are scared or one who's had his hours cut a little, though.

One of my neighbors allegedly set fire to his $600,000+ house when it wouldn't sell, and the police still haven't arrested him. (He was seen running from the burning house!)

If you ever see me running from my house and it's burning, rest assured I did NOT start it. I'm surprised he couldn't have had some delayed-burn going, but that's a huge digression. I had to say it, though!

 

[Lalakai]

though it's painful, there are upsides to this mess.

- people are reducing their credit debts
- people are learning how to actually budget themselves
- housing market is getting a realistic adjustment
- extended families more acceptible (my two oldest kids are back home, and we're mentally preparing for the possibility of having our parents with us when they start reaching that
age when they can't care for themselves)
- people are realizing the differences between necessities versus luxuries.

- people are getting pissed and might even find the spines to stand up and make sure this doesn't happen again.

enough blame to go around, but we elected people we had hoped would lead us in a good direction. People have to get past the beauty pagent mentality of the elections and elect capable individuals who will what they were elected to do, and hopefully we elected them with reasonable goals in mind (don't get me started on that one). Remember folks, they are supposed to be working for us!!!

 

[LegendKiller]

Originally posted by: MovingTarget

Originally posted by: Skoorb

Originally posted by: Evan
Hard to see a depression coming when unemployment has been terrible for months and we're not close to cracking 10%. The height of the depression was over 25%, and 15% consistently throughout (though I don't know the exact average, it was in the teens).

More than likely, this lasts through the year, but if I had to make a wild guess I'd say things will be looking up within 8-12 months.

I know it grows quickly in January historically, but it's really going up right now fast. I think we'll be really lucky to not see 10% by the end of this.

I often question the historical unemployment data. Back during the depression, those numbers weren't as rigorously kept as they are today. Personally, I don't consider even the current "numbers" on unemployment to be accurate. Too many discouraged and underemployed workers around. The U6 data is probably a better representation of where we are today.

What's your reasoning for doubting U3?

I personally think everybody's all over U6 only because it paints a darker picture, not a more accurate one.

 

[Jaskalas]

2009 will be worse than 2008. It appears that in 2010 the government?s new bailout bubble will take effect, or at least I hope so. To burst that bubble would lead to a complete collapse.

 

[chess9]

Originally posted by: Jaskalas
2009 will be worse than 2008. It appears that in 2010 the government?s new bailout bubble will take effect, or at least I hope so. To burst that bubble would lead to a complete collapse.

Well, I hope you are right. If you are wrong about the effects of the bailout, this country will be in big trouble. Right now, it appears that the bank bailouts only helped the officers of the banks help themselves. There are few signs of an uptick in lending for example. Sears may well go under this year, in part because it cannot get financing for a variety of projects, including inventory financing.

-Robert

 

[Ozoned]

Originally posted by: chess9
http://www.telegraph.co.uk/fin...ssion-say-experts.html

"Families must brace themselves for a slump of far greater severity and longevity than the recessions of the 1980s and 1990s, they warned. They said the current crisis will be of a scale to rival the biggest peace-time crisis in modern history ? the Great Depression.

The warning was delivered by economists and politicians after the Office for National Statistics revealed that the economy shrank by 1.5 per cent in the final three months of 2008 alone."

England is in a bit worse shape than the USA. Their home prices are continuing a near free fall and equities that are worth owning are few and far between. If you don't mind owning BP, Shell, pharms, and the tobacco companies, you will be doing fine.

I do not believe America is going into a depression, but hold onto your hats, because rougher times are ahead. The stock market is headed lower tomorrow as well. Meanwhile, my brother can't find a job, and my best friend has already lost 40% of his retirement account and is going to sell his pricey Florida home and move to Asheville to his cabin in the woods!

What do you guys think?

-Robert

Dow +38.47 today. I think you worry too much. BTW I DID loose money today on your thoughts. :|

 

[chess9]

Originally posted by: Ozoned

Originally posted by: chess9
http://www.telegraph.co.uk/fin...ssion-say-experts.html

"Families must brace themselves for a slump of far greater severity and longevity than the recessions of the 1980s and 1990s, they warned. They said the current crisis will be of a scale to rival the biggest peace-time crisis in modern history ? the Great Depression.

The warning was delivered by economists and politicians after the Office for National Statistics revealed that the economy shrank by 1.5 per cent in the final three months of 2008 alone."

England is in a bit worse shape than the USA. Their home prices are continuing a near free fall and equities that are worth owning are few and far between. If you don't mind owning BP, Shell, pharms, and the tobacco companies, you will be doing fine.

I do not believe America is going into a depression, but hold onto your hats, because rougher times are ahead. The stock market is headed lower tomorrow as well. Meanwhile, my brother can't find a job, and my best friend has already lost 40% of his retirement account and is going to sell his pricey Florida home and move to Asheville to his cabin in the woods!

What do you guys think?

-Robert

Dow +38.47 today. I think you worry too much. BTW I DID loose money today on your thoughts. :|

Don't 'loose' too much money my man. In this economy one can never be too 'tight'.

I was parroting a story in the Communist News Network. One should never try to predict the stock market's response. Admittedly, a fool's errand on my part.

-Robert

 

[Ozoned]

Originally posted by: chess9

Originally posted by: Ozoned

Originally posted by: chess9
http://www.telegraph.co.uk/fin...ssion-say-experts.html

"Families must brace themselves for a slump of far greater severity and longevity than the recessions of the 1980s and 1990s, they warned. They said the current crisis will be of a scale to rival the biggest peace-time crisis in modern history ? the Great Depression.

The warning was delivered by economists and politicians after the Office for National Statistics revealed that the economy shrank by 1.5 per cent in the final three months of 2008 alone."

England is in a bit worse shape than the USA. Their home prices are continuing a near free fall and equities that are worth owning are few and far between. If you don't mind owning BP, Shell, pharms, and the tobacco companies, you will be doing fine.

I do not believe America is going into a depression, but hold onto your hats, because rougher times are ahead. The stock market is headed lower tomorrow as well. Meanwhile, my brother can't find a job, and my best friend has already lost 40% of his retirement account and is going to sell his pricey Florida home and move to Asheville to his cabin in the woods!

What do you guys think?

-Robert

Dow +38.47 today. I think you worry too much. BTW I DID loose money today on your thoughts. :|

Don't 'loose' too much money my man. In this economy one can never be too 'tight'.

I was parroting a story in the Communist News Network. One should never try to predict the stock market's response. Admittedly, a fool's errand on my part.

-Robert

 

[nullzero]

UK has no real economic backbone to support its self. Its north sea oil fields are getting depleted rapidly. The majority of their economy was based around banks, finance, and real estate... Whatever manufacturing they do have it has come to a halt and demand has fallen off a cliff. UK has lacking agriculture and bad climate for growing... UK is in dire straits now and I would not be surprised to see a Iceland in the making. If it gets bad I am sure we will be exporting large amounts of food aid to them.

 

[StageLeft]

Originally posted by: nullzero
UK has no real economic backbone to support its self. Its north sea oil fields are getting depleted rapidly. The majority of their economy was based around banks, finance, and real estate... Whatever manufacturing they do have it has come to a halt and demand has fallen off a cliff. UK has lacking agriculture and bad climate for growing... UK is in dire straits now and I would not be surprised to see a Iceland in the making. If it gets bad I am sure we will be exporting large amounts of food aid to them.

UK is a first world nation. It has infrastructure. It will be a damn long fall beore it has to have food aid shipped to it.

 

[nullzero]

I tried to get some concrete numbers on how much food UK imports. I found this "About half the food on sale in the UK comes from abroad, and a new Agency booklet for local authorities on imported food regulation shows"
http://www.fsascience.net/2007/10/17/imported_food

I could easily see food shortages in the UK especially with a population over 60million. The UK depends on global trade and the world economy to keep it running. I would be very worried here in the U.S. if around 50% of our food was from abroad. If the rest of the world does not want your items to trade for food... (sterling pounds, manufactured goods, etc... you are screwed). I guess the UK government could trade weapons for food though... They have tough competition in that field with the U.S., China, and Russia though.

The UK is not the only one who may be needed food aid though. Iceland, Ukraine, Lativia, and a couple other northern european nations may soon have to get food aid.

 

[StageLeft]

Originally posted by: nullzero
I tried to get some concrete numbers on how much food UK imports. I found this "About half the food on sale in the UK comes from abroad, and a new Agency booklet for local authorities on imported food regulation shows"
http://www.fsascience.net/2007/10/17/imported_food

I could easily see food shortages in the UK especially with a population over 60million. The UK depends on global trade and the world economy to keep it running. I would be very worried here in the U.S. if around 50% of our food was from abroad. If the rest of the world does not want your items to trade for food... (sterling pounds, manufactured goods, etc... you are screwed). I guess the UK government could trade weapons for food though... They have tough competition in that field with the U.S., China, and Russia though.

The UK is not the only one who may be needed food aid though. Iceland, Ukraine, Lativia, and a couple other northern european nations may soon have to get food aid.

Food aid from who? They may import plenty of food but food aid goes to nations that cannot feed its people and the UK won't have that problem. If it did, who would be in such a great position to spare them food? The UK's climate isn't great but it has fed itself throughout history and has a first world infrastructure, so even if it falls down a great deal it will still be rich by world standards.

 

[Jhhnn]

I'm not sure that the brits are the only ones who may end up in a depression. A big part of their problem is that they took on a lot of risk in the US mortgage market, following the financial example of the good ol' USA... Bankers and investment houses worldwide were basically forced to follow the American model to attract capital in a competitive global economy...

In many respects, the Japanese economy has been "depressed" for quite awhile... and it all depends on how the term is defined. Where do we draw the line between a deep prolonged recession and depression, anyway? Yeh, sure, the 30's were obviously a depression, but are less extreme depressions possible?

How do we account for the changes in the workforce, for example? In the 30's, the Ag sector included a lot more people, and the rest of the economy didn't have dual income families that predominate today. Back then, when the male householder wasn't working, most family income basically went to zero, whereas today that won't happen unless both breadwinners are unemployed. Unemployment numbers basically reflected male unemployment, but they're not gender specific today...

Given the huge shift in income to the very top of the pile in this country, we've already seen GDP grow even as median purchasing power actually fell- the fruits of supply-side economic policy... and we've had a tendency to measure how well America is doing by how well the wealthy are doing...

Which is rambling, I'll admit, but maybe we need to redefine a lot of things, and in order to do that we'll need to establish a different perspective, one not framed by the usual thinktanks and pundits...

 

[nullzero]

Originally posted by: Skoorb

Originally posted by: nullzero
I tried to get some concrete numbers on how much food UK imports. I found this "About half the food on sale in the UK comes from abroad, and a new Agency booklet for local authorities on imported food regulation shows"
http://www.fsascience.net/2007/10/17/imported_food

I could easily see food shortages in the UK especially with a population over 60million. The UK depends on global trade and the world economy to keep it running. I would be very worried here in the U.S. if around 50% of our food was from abroad. If the rest of the world does not want your items to trade for food... (sterling pounds, manufactured goods, etc... you are screwed). I guess the UK government could trade weapons for food though... They have tough competition in that field with the U.S., China, and Russia though.

The UK is not the only one who may be needed food aid though. Iceland, Ukraine, Lativia, and a couple other northern european nations may soon have to get food aid.

Food aid from who? They may import plenty of food but food aid goes to nations that cannot feed its people and the UK won't have that problem. If it did, who would be in such a great position to spare them food? The UK's climate isn't great but it has fed itself throughout history and has a first world infrastructure, so even if it falls down a great deal it will still be rich by world standards.

The U.S. maybe the one giving food aid. Just like the U.S. was the one that gave them aid and saved them from WW2. Infrastructure is aging rapidly in the U.K. most of it was built after WW2 and during the 50s.

Historically you are right the U.K. fed most of its population but this has changed with ravaging of the country side for real estate. It use to only import 20% of its food but now that number is closer to 50%. So the U.K. has a major problem on its hands if the sterling pound continues to rapidly devalue and the economy falls further down the cliff.