UK: BofE Forecasts Suggests Recession is Over
Submitted by
CalculatedRisk on Wed, 08/19/2009 - 8:21pm (122 comments)
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Shouldn't that headline read:
"Now that the recession is over, BofE Forecasts Suggests Recession is Over"
oy....talk about stupid statistics. Germany....cash for clunkers. USA, cash for clunkers. Japan, super stim. UK? ....sigh....cant possibly be sustainable. but whatever. Enjoy.
maybe im crazy, but what i see happening now is bubble #3. Everyone keeps asking, what can the next bubble be? Well, when you think about it in terms of specific things, it's hard to figure out. But when you step back (outside the box?) it's clear. The bubble we are blowing now is called the status quo. Im convinced now that we'll paper over just about everything, long enough to get oil prices back up, stock prices back up, commodity prices back up, home prices back up, and just about everything back to the way it was before. But most importantly, income and wealth inequality, yup, even greater bubble. We'll get back to just the same kind of happy days for the WSJ, and their ilk, even as unemployment goes to a new higher structural level, deficits go still higher, etc. In the end, we are back where we were, but on and even weaker basis.
So what does this mean? I think it means that the next time a crisis comes, we're pretty much guaranteed the Depression that we think we avoided this time. Is it two years, 5 years, Heck I dunno. But it's coming.
sweet! just in time to start the next one
jolly good, carry on then, chaps.
er, kcoop - don't want to be a bother or anything, but can we have some bubbly icons now,
none of the colonial crap either, real french sparkly, if you'd be a good chap
we'll need them now
When was the last time a recession was declared over by one advance reading of GDP at sub 1%?
You can pick any country in the world.
I think we are seeing the power of govt to reflate. We may not all like it, and it may not produce good long term results, but they do have the power to reflate, at least for a while. Maybe for longer than you expect.
Is it two years, 5 years, Heck I dunno. But it's coming.
Given that in the long run we're all dead, in the short run I think I'll have another glass of
and hope 5 years is the right answer.
H8R...
God save the Queen and all the British teeth!
british tooth paste commercial SPOOF!
YouTube - british tooth paste commercial SPOOF!
So I guess there'll be no need to extend the unemployment benefits again, then.
Well, Initial Claims tomorrow AM. Any guesses?
Steinly, I put one up this morning:
I spent a few minutes tonight watching the streaming Bloomberg TV headlines and was struck by the fact that wholly half involved the words "may" or "might" or "could". "Nikkei may rise 20% by 2011." "Recession may be over." "Existing home sales may have risen in July." "Unemployment claims may have fallen last week," etc.
Ah, reading too fast - you mean the other kind of bubbly...
MLM
There is extra-credit for finding how many quarters of positive growth there are recorded during the fallouts from a financial/credit led recession.
Yalt,
They may be full of crap!
I think we are seeing the power of govt to reflate.
Hmm. What I've seen so far this week is a very soft and supposedly unexpected -0.9% PPI reading and a deflationary reading on prices received on the Empire Manufacturing report.
Hey Yalt, like, uh, what's your problem dude? I mean, what's with this "facts" business? Are you some kind of rabble rouser? Recession's over man. Start buying. Ya know, you're the moron who's gonna be priced out forever.
Get in line son. Get in line...
"I think we are seeing the power of govt to reflate. We may not all like it, and it may not produce good long term results, but they do have the power to reflate, at least for a while."
I don't believe it. Not in the way they are going about it. They are juggling too many shoes and one is bound to drop sooner, rather than later. I suspect that the next crisis will be sparked externally, i.e. Hungary, Latvia or some other E. European entity going bust causing UBS or some German bank to call in some CDS that a US bank or AIG will be on the hook for, or a Treasury auction to pay for it blows up. It is my view that too many bets were made on housing never going down and the vig that the Bankers --> Treasury --> Fed are using to hide the debt has to matter at some point.
OK, I'll bite. Initial claims an unexpectedly high 565K or thereabouts, but all the media focus will be on the surprisingly low number for continuing claims as another large batch falls over the 26 week barrier and moves onto extended benefits.
Reinhart & Rogoff never met the crew we've got on the job this time -- positive growth is always possible with the electronic equivalent of a printing press. Edit - As in "Hey, we may be starving to death, but at least we've got positive growth".
You go MLM - party! Those wankers don't know the power...Bernanke and Geithner baby!! Wonder twin powers, activate! Form of a printing press..shape of the Amazon hardwood!
I'm too young to know, can anyone tell me when journalism stopped involving limited research and education on the topics discussed?
How many Ben Steins has our society produced?
`
If I have to reap crap headlines, and don't get a 10% bounce in global equity markets to finish going short from... well I'm going to be upset
kcoop........don't know if you "got" my last request.......I'll be glad to resend it....
Continuing on the theme from last thread:
GDP is analogous to cash flow. We are now positive cash flow.
Naturally this is because we just inflated the bejesus out of the liabilities side of the balance sheet.
If this were a stock, it'd be screaming "sell".
Sorry BSR, although perfectly reasonable, your list was too long. I believe that kcoop has chosen to instead take on the job of creating a printing press, or its electronic equivalent. Next stop
for everyone!
ah, entirely the wrong sort of bubble for the occasion, bit of a downer really,
though I supposed if one squints it looks like a glass of bubbly viewed from above
I was thinking of the bubbly
variety, but not this california red,
a more sparkly french champagne style
we'll need lots of those, since the recession is over, or will be soon, they say
But wait, this video says that things are not all that nice: August 12, 2009
Slow recovery for 'fragile' economy
Recovery from the recession will be slow and protracted according to the governor of the Bank of England.
YouTube -
OK, as long as I'm making a fool of myself with predictions, the S&P top will be next Tuesday a.m. and I am indeed in line to buy before I get priced out forever.
There will not be a national bank holiday next week, nor will the Amero be introduced. Tall, angelic humanoid aliens will not swamp the earth with wealth and bring us peace and prosperity as they prepare their true program of cannibalism, murder and forced community service.
How am I doing so far?
Yep, GDD......."but what i see happening now is bubble #3"
......#3 is stupid people being talked into spending more money than they can scrape together one last time for more garages full of crap, new cars they might want but don't need, expensive vacations to everywhere, and EVERYTHING made on the face of the planet now available for only $19.95 plus shipping and handling......
You get the most improved award for that Yalt. Bravo. I'll send you a plaque in the mail.
Thanx MLM for the update..........
How many Ben Steins has our society produced?
As far as I can tell, our society is basically splitting into (a) the grifters and (b) the unemployed.
A lucky few will have the choice of which group they want to belong to.
Pretty good thread going over at JtR site:
http://www.bubbleinfo.com/2009/08/stay-within-budget/
Search in progress for angelic humanoid aliens
steady on BSR - kcoop is far too busy dealing with my most urgent requests...
Woot - govt rules! Employ me baby, yeh!
Government Jobs Have Grown Since Recession's Start, Study Finds - NY Times
Oh, wait. The game's over? Hmm. Well, can I get a job in construction then? Finance? Uh, education? Ummm, manufacturing? No? Uh, temp help? Um.
Journalism?
Got it:
David Bowie the man who fell to earth part 4
YouTube -
There's a starman, waiting in the sky....
No, that's not what isn't going to happen next week.
Sorry Yalt, I didn't watch the whole thing but at the time it seemed like a possibility; I'm ashamed!
In other matters.... What form of accounting does Bank Of England engage in?
For Cap'n Ned (and others):
Vermont, Texas, and Subprime Loans « The Baseline Scenario
Bowie? Even long ago, I was thinking "Pretty Things"
patientrenter,
excellent point.
Report of the Independent Auditor
http://www.bankofengland.co.uk/publications/annualreport/2008/reportindependentauditor2008.pdf
We conducted our audit having regard to International Standards on Auditing (United Kingdom and Ireland) issued by the
Auditing Practices Board.
KPMG Audit Plc
London
Chartered Accountants
Registered Auditor
3 July 2008
Oh never mind...goodnight!
Judging from the markets the recovery will be powered by new bubbles, just like the last recovery.
maybe. at least the last bubble created some jobs building houses and office buildings. the government bubble, so far, hasn't found its footing for job creation.
what are you going to do? sure beats depression I suppose.
now, why am I still working this late at night? have I not heard of stagflation?
If the recession has ended in Germany et al it would suggest we could get the best possible outcome -- something like the U.S. still has to face all of it's unfinished problems, but at least it would be able to export a little, have some income from tourism, etc.
Ok, that's the starry eyed hopeful view. My version of the more realistic view: a pause on the way down, like a sinking ship that pauses, and the outcome is unknown. Re Germany, for instance, it has temporarily stabilized at a much lower level of output than before. That...may mean massive layoffs in Germany or massive borrowing, one or both, are inevitable.
Don't count your chickens yet.
maybe. at least the last bubble created some jobs building houses and office buildings. the government bubble, so far, hasn't found its footing for job creation.
what are you going to do? sure beats depression I suppose.
Well, nearly all those jobs have been lost. This argument that "it's better than a depression" are what some people call the "Keynesian Fallcy", arguing that these bubbles and stimulus measures merely postpone the depression to some point in the future when it will be a far worse depression than it would be if we had it today.
Their arguments seem consistent with what we've seen so far -- the series of bubbles and stimulus measures use to "fix" the economy in 1998 and 2001 appears to have lead to vastly more severe economic consequences down the road.
Maybe this time it's different.
Perhaps the recession has "ended" in Germany because they have an election coming up in a few weeks and both major parties are part of the incumbent government?
ac - that is my point exactly. We're goin status quo, but worse.
Maybe Germany's ended because of Massive chinese stimulus, plus a car scrappage plan that lifted domestic spending. Maybe, uh, like, what's the encore?
WHEN the recession ends, somewhat by definition, interest rates will start to climb. What's the value of that national debt again?
Could we make a distinction here between (a) stimulus proper--government used as an alternative source of demand or, better, as a primer for private demand, and (b) the provision of cheap liquidity to the banks?
The former is Keynesian; I'd argue that the latter is not. Keynes was pretty clear on the danger of liquidity traps.
Unfortunately we've now done both and it's going to be damned hard to disentangle their consequences.
I didn't realize it had gotten that late. G'night, all....
Well.. that's the answer, the govt. just employs everyone ! Either directly in make-work bureaucracy or by 'stimulus' packages. Economics just got really easy !
Like the health care 'reform', this is an opportunity to create literally millions of new govt. funded jobs, this cannot be missed !
The recovery will be weak, and non existent but for the top 20 % or so. This was the bailout of all bailouts, and there's just not a lot of wealth or productivity left to extract from the masses to revive profitability. Eventually the elites among different countries will start arguing , as they realize someone is going to fall - and it won't be them.
This looks like good news.
Philadelphia's court system will face a "virtual shutdown" if the cash-strapped city does not get state approval for a sales tax increase and changes to how it makes its pension payments.
Mayor Nutter Warns The City Will Suffer If A Temporary Sales Tax Is Not Passed - cbs3.com
Last week they said:
The Governor also said that Britain remained firmly in the grip of a long-lasting downturn. Mr King said: “The recession appears to be deeper than the MPC thought likely at the time of the May report ...nominal indicators remain weak and the adjustment of balance sheets has a long way to run.”
Bank of England: recession deeper than feared - Times Online
purple (homepage, profile) wrote on Thu, 8/20/2009 - 12:26 am
Eventually the elites among different countries will start arguing , as they realize someone is going to fall - and it won't be them.
Oh yes, it will. Regression to the mean, and when there is nothing left to steal that will be enough to make any difference, they will have little choice but to go after each other's wealth. The maintenance of their position requires that they maintain a certain "worth" relative to everyone else (especially the peasants!) and they won't all be able to do that at the same time. And even if they do, some predator is bound to go after the most vulnerable of the predator class. That is when it will start to get interesting.
Is Obama's Tax Reform Panel Fizzling Out?
The Tax Reform Task Force President Obama created in March has yet to schedule any public meetings but does not plan on asking for an extension of its early-December deadline for filing a report, according to an administration official.
The task force is led by Paul Volcker, chairman of the President's Economic Recovery Advisory Board, and Austan Goolsbee, a member of the White House Council of Economic Advisers and PERAB's staff director. Goolsbee recently told an Internal Revenue Service Research Conference that the task force members are still in the information-gathering stage.
Despite the panel's lack of public activity, interested parties around Washington, D.C., have recently expressed some strong thoughts about it, with congressional tax writers expressing skepticism and seeking to reassert their jurisdiction and lobbyists calling it unnecessary.
Everyone hear sounds like perma-bears who keep losing $$$ by shorting the market over and over and over again.
Close out your shorts and ride the hopium... if they can pump this thing up to S&P ~ 1035 and oil ~ $77/barrel; I'll have made some decent coin on trading the other way.
Even CNBC was split today on what is going to happen... it seems like there's sentiment there's going to be a crash; but I'm not sure these things would crash the same way twice, and if everything is as manipulated as we think... who knows.... they could hit S&P 1100 in a month....
no no no, YLSP. Not at all. You havent been paying attention (or you blocked me) Ive been taking litle steps in here and there, buying, holding for a wee bit, taking my gains. I dont believe for one minute in this rally, but that in no way means I wont profit from it. I just lose some of the upside due to caution. The economy right now is a fraud, so why shouldnt i take some fraudulent stock gains to make me feel better. Seriously, my man, just put the hopium in the pipe in small pinches, and smoke it up. The high is incredible.!
"Seriously, my man, just put the hopium in the pipe in small pinches, and smoke it up. The high is incredible."
....or get a REAL gig..........LOL
....anyone hear anything about BoA about to offer all Taylor Bean mortgage customers refi's for all mortgages - reduced to market value.?
FT.com / Companies / Banks - Spain’s BBVA leads the race for Guaranty
FT
BBVA, the Spanish bank, on Wednesday emerged as the frontrunner in the auction for Guaranty Financial, a struggling Texas bank with $14bn in assets that US regulators have been working to sell for the past six weeks.
BBVA was thought to have been offered loss-sharing protection from the Federal Deposit Insurance Corporation as part of the deal, said people who were involved in the process. In some past rescue deals, the FDIC has agreed to absorb 80 per cent of losses up to a certain level and 95 per cent of losses beyond that point.
BSR- You're a Taylor-Bean customer, n'est ce pas?
These aren't BOE forecast's these are " growth figures have been extrapolated by economists from data published by the Bank in the wake of last week’s Inflation Report"
When the Bank published the mentioned report, the BOE said .“The recession appears to be deeper than the MPC thought likely at the time of the May report ...nominal indicators remain weak and the adjustment of balance sheets has a long way to run.”
These are sell side economists extrapolating the data to please their minders. CR's headline is misleading.
FT.com / Companies / Banks - US banks deepen credit lines cuts
FT
US banks deepen credit lines cuts
Banks reduced access to revolving loans such as credit cards and home equity lines of credit for about one in five US borrowers in the six months to April, according to a new study from Fico, the credit scoring group.
The study shows that as banks cut credit lines for a larger share of US consumers than they had in the previous six months, they also became more aggressive in their cuts. The average decrease to a consumer’s credit line was $5,100, or 15 per cent of average total revolving credit, more than double the $2,200 average reduction in the six months to October 2008.... ... ... . . .
The recession is dead. Long live the recession!
FFDIC,
“Our study suggests that lenders are using a scalpel and not a hatchet to trim their revolving credit exposure and meet their requirements for regulatory capital,” said Mark Greene, chief executive of Fico.
...
Fico’s study shows that thus far banks have carefully chosen which credit lines to cut for fear of pushing struggling borrowers into default. “It appears that lenders are continuing to target inactive and low-balance cardholders for line decreases or account closures,” the study said.
"Fico’s study shows that thus far banks have carefully chosen which credit lines to cut for fear of pushing struggling borrowers into default"
Bullshit. The banks are going to keep someone's credit line intact for fear of cutting their credit line would push borrowers into default? That makes as much sense as the BOE saying the recession is deeper than thought and then a week later private economists take the BOE's data and calls the recession over.
Damn it, Phil Gramm was right. The recession is in my head,..and it just won't leave.
YouTube - Jethro Tull - Thick As A Brick (Live)
Really don't mind if you sit this one out.
My words but a whisper -- your deafness a SHOUT.
I may make you feel but I can't make you think.
Your sperm's in the gutter -- your love's in the sink.
So you ride yourselves over the fields and
you make all your animal deals and
your wise men don't know how it feels to be thick as a brick.
Then you have this headline just out:
"King Changes Tune as Deeper U.K. Recession Prompts `Activist' Bond Stance "
King Changes Tune as Slump Prompts ‘Activist’ Stance (Update1) - Bloomberg.com
Countrywide may have to make some mortgage investors whole
"Countrywide Loses Ruling in Loan Suit"
Countrywide Loses Ruling In Loan Suit - NY Times
steinly, here you go:
. Guess we can all start popping corks now.
"Countrywide may have to make some mortgage investors whole"
This ruling just says that investors can sue Countrywide in state court for their losses on loans C'wide services.
But maybe it would help to have some of this first...
But maybe it would help to have some of this first...
I thought that is what the
was?
Very cool work, Ken.
The King is dead. Long live the king.
Damn, James Fitz beat me to it!
Ken will have CR running perfectly just as the recession ends and it's no longer needed.
Well, the recession has been over for about three hours now, and it looks like we're on track for a full and complete recovery--smooth sailing all the way. Barring any bad news of course.
"IRS Tax Probe Targets Lawyers, Banks as UBS Data Shred Secrecy"
I wager this will eventually lead somewhere unexpected. I wonder if Timmy has a UBS account to go with his underwater house?
IRS Tax Probe Targets Lawyers, Banks as UBS Data Shred Secrecy - Bloomberg.com
So here we sit. Bow beneath the waves. But she's stopped sinking, they say, and the lights are still on.
Morning all. I trust your BS detectors are all in fully functioning order, because there's going to be some tonnage coming pre-market, and around the scheduled announcements today.
FFDIC - nice to see you back; the BBVA thread last night might be worth you reading if you have time.
C
Right on cue, from bloomie, look at the phrasing around the China uptick ("briefly fell to bear market levels" etc,) and MSCI regional aggregate:
Asian Stocks Advance as Chinese Shares Rebound; Brambles Gains - Bloomberg.com
"The MSCI Asia Pacific Index gained 1.2 percent to 111.67 as of 7:24 p.m. in Tokyo. The gauge has rallied 58 percent from a more than five-year low on March 9 amid growing confidence government stimulus measures and lower borrowing costs will lift the world out of recession."
Wow, that does sound impressive. "Amid" really explains a lot. So let's look at MXAP and rebase over a year or three. Looks like it's still tanked 50%+ off 31 Oct 08 highs to me...
Bloomberg.com:
Personal Finance
Way to polish a turd guys.
C
Sears had a horrible quarter. Lets see how much its stock goes up today.
Sears closes all stores, lays off all employees, issues executive bonuses to all management.
Stock goes through the stratosphere.
The market will continue to go up. Its good for pensions and the feel good factor. Bernanke referenced the market several times in his last testimony - its important to him and he keeps track. I think from his perch the world looks better with an S&P at 1050 than an S&P at 650. "Beating expectations" mantra is working.
"Given that in the long run we're all dead, in the short run I think I'll have another glass of In Vino Veritas and hope 5 years is the right answer."
I've just been thinking more or less along those lines.
What will the doomers here do if financial Armageddon postpones an appearance?
Just say no to
kids!
You'll think there are
s everywhere, but they're really 
s. Beware. Could lose an arm and a leg in this market.
Pavel - same as we did last year, and the year before... There were some very funny posts last fall, not sure who was doing it, from Capitulation. Would show up ever now and then and politely ask if he could come in.
C
Just undereport inflation and what do you get... GDP growth!
Pavel:
What will happen if things actually improve?
The present plan is still to sit tight through September and then - if still happening - start to shift by portions back into the market.
And I'll actually be happy.
Ding Dong the Recessions dead, Recessions dead, Recessions dead, Ding Dong the wicked Recessions dead!!!!!!
They act as if it's a Holiday that just comes and goes.
What they don't realize is that there are a lot of companies that won't survive at this new lower level because their business plans were based on stupidly low interest rates and a bubble economy.
bullocks !
All the rosey pronouncements sound like we've stopped falling, we're at the bottom of a canyon
and some how this is good? Rejoice!
bollocks
Recessions over! Hey Joe six pint, Whats in your wallet?
UK recession obviously over. New bubble in deficit. Brown asks G20 to do the same so his numbers don't look so horrific.
U.K. Has Record July Deficit as Recession Curbs Taxes (Update3) - Bloomberg.com
Good thing they don't use accrual accounting...
C
Blowout jobs number, SPX --> 1,100.... all coming in 8 minutes.
from that last bloomie link -
Aug. 20 (Bloomberg) -- Britain had an 8 billion-pound ($13.2 billion) budget deficit in July, the largest for the month since records began in 1993 . . .
The records begin in 1993? Speechless.
Pavel,
Don't worry about the doomers, they're a hard headed resourceful bunch. It is more a way of life, personal philosophy. See when one glass turns out to be half-full after all, you just switch glasses. Plenty of doom left in the world. Remember that box Pandora opened was almost empty before she found what was left in the bottom.
My cousin will be glad to hear that the bad times have passed. Now he should be able to sell that spec house he built last year.
hmm spoos don't like that number
576k green shoots
Eric - futures should be interesting... Loading pages, standing by.
3, 2, 1...
C
pavel.chichikov (homepage, profile) wrote on Wed, 8/19/2009 - 6:01 pm
"believe they're Celts, some of the few outside the British Isles. The passion of the Latins, and the disposition of the Irish; not a particularly good mix Wink"
No sir, you may be thinking of Gallegos - Galicians. Basques are Basques - unique unto themselves. They are not Indo-European and neither is their language. At their festivals they perform feats of strength, such as hoisting boulders weighing hundreds of pounds. Don't mess about with sheep jokes.
Pavel,
, and the feats of strength sound reminiscent of the highland games:
Yes; I confused the Basques and the Galacians- Sorry about that. As for sheep jokes, I'll tell them if I want
Highland games - Wikipedia, the free encyclopedia
good morning everybody
are they suggesting that we peoples shut up about it and get busy spending!
got
and from the ajc
Synovus unloading repo homes to clear bad loans | ajc.com
+15,000 to 576,000
Eric - futures should be interesting...
Yeah, I have a realtime datafeed, but no longer have CNBC in my office.
Probably for the best, that.
Just get the quick drop out of the way, so they can leak news later and get all kermitty after lunch.
"The earlier you fall behind, the longer you have to catch up".
Reuters - unexpected jobless rise to 576k.
Kaboom!
C
All priced in, everything is better.
The Countdown To The Implosion Of The Dollar
The Countdown To The Implosion Of The Dollar : Welcome To Jim Sinclair’s MineSet
kcoop
i think that we need a "hell in a handbasket" icon
Headlines in the local paper - 2008 population fell 1.1% here. It's an estimate. Florida said to have gone negative last year as well, though not so badly.
Our maintenance guy - unofficial J6P rep - says hardworking people aren't buying recovery.
burnside
thats what i been saying jo6pack is doing some belt tighten' and tptb are talking for themselves.
burnside (profile) wrote on Thu, 8/20/2009 - 8:41 am
says hardworking people aren't buying recovery.
And lazy folks can't afford it-
gabyjan - Eddie says tptb are talking TO themselves. heh.
Goldman and Bank of Amerika run the markets along with Geithner, and beagle boy Ben. There is no free markets, only welfare capitalism and socialism for capitalism.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
why does the market keep going up even though the fundamentals aren't that great? Every day, week, month the market keeps going higher.