State of the nation
"The shortlist for the Mercury Prize is a reliable indicator of the national mood. This year Britain sounds like a lonely place fixated with bygone glories".
MPC dove Blanchflower to vote for rate cut
Blanchflower is an enemy of the people.
Standard and Poor’s warns of UK’s greater recession risk
These jokers are normally the last to know; so the recession must have started.
Deepening recession may throw Britain into full-year GDP fall
Yes, it will be deep and dirty.
Indecision on Stamp Duty impacting property market: NAEA
Darling's incompetent attempt to revive the housing market has probably helped prices fall faster. Perhaps, I have judged Darling too harshly. He seems more friend than foe. So, lets hope he keeps screwing up.
UK retail sales 'at record low'
I could believe that.
Credit Crunch Good For Relationships, cahoot Reveals
This, I do not believe....
US economy grew at 3.3 percent in q2
I couldn't help laughing when I read this post. Most of the US growth improvement comes from a lower price deflator. In other words, the inflation rate of US output was very low, but when this output was put before consumers in the shopping malls, the corresponding inflation rate shot up a couple of percentage points. It is all the more strange, when we consider that US input prices are rising at double digit rates.
The implications are hilarious. If the US economy is indeed growing at 3.3 percent with an inflation rate approaching 6 percent, wouldn't it be sensible to push interest rates a little higher than 2 percent?
In reality, this growth rate stretches credibility. All the problems appear to be in the measurement of inflation.
Lehman Said to Be Poised to Eliminate as Many as 1,000 Jobs
I don't understand; isn't the US economy booming?
Nikkei: EU, Japan, US Discussed Coordinated Intervention to Support Dollar
Does this explain the dollar rally?
Fears over Spanish market prompt security link-up
Here is an example of some really lazy journalism. To me, it looks like a cut and paste job from a company press release.
11 comments:
blanchflower should not be on the mpc - the man is dangerous
Hi Alice,
Actually, most of the revision to growth came from US exports and US imports, where prices rose significantly. The deflators for these two variables were 7.4% y/y and 15% y/y, respectively. It seems to me that most of the GDP deflator boost to growth would have likely shown up in investment component coming from the the depressed housing component; where the investment deflator grew just 0.3% on the year.
I do agree, though, the revisions did seem extreme. But it is a trade balance story, and not a shopping mall story.
Love this quote: "These jokers are normally the last to know; so the recession must have started."
Thanks, R
The question that vexes me is what can we do to make house price falls seem positive?
On the US low economy: I think an engineer would understand this better than an economist.
A negatively damped oscillating system has been set up. When the swing goes down, the interest rate reduction is so excessive that it sets everything up for another excessive upswing. When that collapses, the same excessive upward force will be applied again - and so on and on.
In engineering, the bridge or the car suspension system that that isn't damped properly can shake itself apart. I wonder what that would look like for the world economy. The 1930's, I suppose.
Blanchflower wants to do this in the UK, though everyone knows the US problems emerged from interest rates that were way, way too low last time around.
It's convenient for such begging City money to wipe out debt and their own misdoings with inflation, so they can start all over again.
If the independence of the BofE means anything, they will protect the currency it issues. If not, then they are as dishonest and unworthy of running a cenrtal bank as the purveyors of cheap sub-prime credit with whom Blanchflower wants them to conspire.
B. in C.
"If not, then they are as dishonest and unworthy of running a cenrtal bank"
Dude, the whole purpose of a central bank is to destroy the currency at a slow enough rate that no-one acts to stop them
Nick
NIck,
Post-WWII Germany did better by its population than that while it had the Deutschmark. It produced a society with very high levels of education, employment, opportunity, health care, and foreign aid, an economy so successful that it could take in 17,000,000 East Germans from a decrepit economy and survive, despite the UK's Schadenfreude.
All done with a very hard money policy and a fairly centralist government.
What was wrong with that?
Brian.
Does the recent fall in sterling mean that interest rates cannot be cut? Did the Bank of England factor in $1.83 to £1 in their last inlfation report? Is Blanchflower actually making things worse/better by heightening expectations for a rate cut and weakening the £?
Brian
"All done with a very hard money policy and a fairly centralist government."
You don't need a central bank for a hard money policy, just a currency board.
It was the hard work of the population that built that country up. The government just skimmed off the top and claimed the credit.
Sure Germany is a far better managed country than the UK, but that's really not saying anything about the merits of statism. It just shows how resilient capitalism is to government interfering.
Nick
Nick - OK - But who issues the currency and regulates the banking system? B. in C.
What's wrong with competing currencies and self-regulating banks?
If people actually pay attention to where they store their money, and there's no FSCS insurance, then the banks will HAVE to increase lending standards or face runs. FSCS doesn't remove the risk, it just gives it to the taxpayer and creates moral hazard.
If the government allows other currencies to exist domestically(as they do internationally)then supply and demand will set prices and soon settle. Hard money enthusiasts will be able to keep gold and do debit card transactions at the spot rate (like goldmoney.com is moving towards). There's no compelling reason against it, unless you like the idea of inflation.
Nick
In spite of the whole money system as we know it with its unproductiveness and its compound interest rip-off is ill, I totally agree to my pre commentator.
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