PDA

View Full Version : /!\ Double-dip recession /!\


KAG
6th Sep 2011, 10:29
The western world is heading towards a new recession.


1- Yuan (renminbi) exchange rate artificially too low steals part of the west growth
2- Debts to reimburse is killing huge investments that we need
3- Oil above $100 for sometime now that is increasing inflation and decreases individual/companies purchase power
4- Money retained by all kind of investors taken from low salaries makes the economy and purchase capacities to slow down

will lead us to a new recession. We haven't learnt from 2008. Recession? here we go again.

stuckgear
6th Sep 2011, 10:38
Hey KAG!

the hard reality is that it's not heading for a double dip recession, it's still in one, perhaps more depression rather than recession, and the UK itself is in stagflation.

http://static8.businessinsider.com/image/4e612453eab8ea1528000035/chart-of-the-day-scariest-jobs-chat-ever-sept-2011.jpg

OFSO
6th Sep 2011, 10:53
Hey c'mon now, only heard yesterday that:

The euro is a stable and credible currency, European Central Bank President Jean-Claude Trichet said.

He also went on to say the moon is made of green cheese, the Pope is 'probably' Jewish, and bears prefer not to defecate in the arboral regions.

Firestorm
6th Sep 2011, 11:13
Apparently The Greeks are going to sell humous and taramasalata in a combination package at a reduced price: it's a double dip recession.

Hat, coat, door, no taxi (austerity measures: I'll walk)!

mixture
6th Sep 2011, 11:24
Oh no, not another hamsterwheel thread.

I do think the exclamation marks in your header were a bit over the top.

dead_pan
6th Sep 2011, 11:27
What are all of the kids around the world going to do now? They've already kicked out a few despots in the Middle East & north Africa. Still no work for 'em though.

Only bad things happen in September...

MagnusP
6th Sep 2011, 11:39
Got it in one, dead pan. Wedding anniversary on the 18th . . . ;)

Storminnorm
6th Sep 2011, 11:44
Birthday (again) on the 25th.

KAG
6th Sep 2011, 11:56
Double-dip recession fears see £49bn wiped off shares | Business | The Guardian (http://www.guardian.co.uk/business/2011/sep/05/double-dip-recession-fears-49bn-shares)


Stuckgear: yes, that's what it looks like.
Same problems still unsolved. And we still don't realize. Our world is changing while we seem to pretend nothing is going on.

stuckgear
6th Sep 2011, 12:17
Stuckgear: yes, that's what it looks like.
Same problems still unsolved. And we still don't realize. Our world is changing while we seem to pretend nothing is going on.


Well, yes and no. The average man (or woman or trans-gender) on the street is very aware of the economic situation. and is aware of the insecurity of their job, the fact that the money left at the end of the month is less and less and the cost of living goes up and up.

The problem is that those in political circles, particularly that wonderful edifice and black hole of money that is the EU are more connected to their own bureaucratic empires and the denial of true reality.

Meanwhile, as the EU runs around in its ever decreasing circles China is is actively out buying up large swathes of the world. They are buying up oilfields and piplines in Africa as well as mines and agricultural land by the sackload.

In the interim, the UK, as an example, has sold off its mineral extractive reserves and its growing population and diminishing agricultural base leave a cuurent requirement to import some 60% of staple foods, Russia being a large supplier of grain to the UK and the EU. And as we saw, when the grain harvest was down in Russia, grain exports from Russia to the EU slowed and basic prices went up.

It's not the cause, just an illustrative point, that while recessions continue, our eleved fools continue to ignore the hard facts.

We'd be a lot better of exiling them to Elba and letting them play their empire building games between themselves and leave the majority out of it.

KAG
6th Sep 2011, 12:31
Speaking about black hole of money, in Uk there is a serious problem of personal debts. A weakness that is going to hurt sooner or later.
Any chance to change your personal loan habit?

corsair
6th Sep 2011, 15:20
The problem is that those in political circles, particularly that wonderful edifice and black hole of money that is the EU are more connected to their own bureaucratic empires and the denial of true reality.
Not just the EU, all politicians seem to suffer from a lack of reality. Maybe they are hoping it will all work out. They just don't know how.

The ordinary people are often ahead of the politicians. Because we're the first to be hit. When you're cushioned by big salaries and guaranteed pensions. It's hard to maintain a grasp of reality.

KAG
6th Sep 2011, 15:25
What I recommend:

1- Pressure on China
2- Lower the rate of interest of the public and private debts, meanwhile freeze the possibility to make new debts
3- Invest in green energy
4- Share the profit between employees (basic workers/low salaries) and the investors a bit more fairly.


It could be said much more simply: politics has to regulate the finance world that is becoming crazy when on its own.

stuckgear
6th Sep 2011, 16:02
KAG, I applaud your utopian view, but reality is a somewhat different animal.

1- Pressure on China - How is the EU going to pressure China? Trade ? It would be trade war that shoots the EU in both feet. Economic pressure ? The EU doesnt have a collective pot to p1ss in. Aggression ? The Eu could collectively amass its military assets, move them all the way around the other side of the world and still be vastly out gunned. Sun Tsu, makes a valid point about moving armies to fight in distant lands that supply chain logistics and costs demands. so that round would go to errrr China.


2- Lower the rate of interest of the public and private debts, meanwhile freeze the possibility to make new debts Debts are generated through borrowing which is done at risk to the lender for monetary gain. It's not done as a social service. Removing any reward for undertaking risk would therefore stop lending overnight and the economy would go pop. And besides much lending comes from errrrr.. China!

3- Invest in green energy Which is pointless and a waste of public investment. Littering the countryside with windmills, which are only cost effective by the levy placed on other forms of energy to pay for them, other forms of energy which when the wind doesnt blow are needed. In the UK's cold snap last year, when energy demand was at its highest demand, 95% of wind turbines were not functioning due to the lack of errrr. wind. Which would in turn push manufacturing and business to countries that have more reliable energy supplies, where the use of coal/nuclear energy generation provides a more stable platrom for energy delivery, places that are growing/developing manufacturing bases like errrr. China.

4- Share the profit between employees (basic workers/low salaries) and the investors a bit more fairly. Again, investors invest for financial return, it is not a social service they provide. They invest funds in order to see an ROI, if that is reduced or removed, investors will look elsewhere for an ROI, which would see investment being driven to developing/growing economies like errrr.... China.

KAG
6th Sep 2011, 16:10
You ruined it all stuckgear ;) . Alright we are done now, straight to the recession and the definitive unbalance of power between west-east that will follow...


So what do you propose?

KAG
6th Sep 2011, 16:25
"The U.S. could very well be on the brink of its second recession in three years."



10 Signs a Double-Dip Recession Is Around the Corner - 24/7 Wall St. - Business - The Atlantic (http://www.theatlantic.com/business/archive/2011/08/10-signs-a-double-dip-recession-is-around-the-corner/242888/)

stuckgear
6th Sep 2011, 17:09
You ruined it all stuckgear http://images.ibsrv.net/ibsrv/res/src:www.pprune.org/get/images/smilies/wink2.gif . Alright we are done now, straight to the recession and the definitive unbalance of power between west-east that will follow...


Well KAG, the collective arrogance of the EU Bureaucrats could possibly push us toward a trade war. The EU-ETS is being challenged by not only Russia, the Americas - North Central and South, India and of course China which the EU is refuses to climb down off of, potentially pushing the EU into a trade war with not only China, but the rest of the world a trade war that it couldnt win with any single challenge let alone a collective..

What could be done to recover financially ? well i KNOW you wont like the possible alternative and that is a cessation of the EU single currency, allow individual states to take control of their economies individually in order that they can deal with their own economic problems on a national basis and take what measures they need as individual ststes to recover. But like i said I KNOW you wont like that possibility! :E

The thing is the EU bureaucrats wont let that happen they would rather sink every EU country economically rather than admit the Meisterplan is flawed and is failing.

So what do you propose?

I'm a cynic.. The best proposal.. Start shopping here Guns & Ammo - The World (http://www.gunsandammo.com/) and let the citizens of the EU take back their own lives and futures, from the EU Bureaucrat morons that live in state of perpetual denial, by devolving economic authority from a central EU point.

...oh and while we're at it, shove the EU FTL's up their collective backside.

KAG
7th Sep 2011, 04:19
I'm a cynic.. The best proposal.. Start shopping here Guns & Ammo - The World and let the citizens of the EU take back their own lives and futures, from the EU Bureaucrat morons that live in state of perpetual denial, by devolving economic authority from a central EU point.

In your world we are all moons turning around the EU problem which is the source of everything called a problem.

Your hatress makes you blind.

It's not a EU thread by the way. But it all comes back to that with you right?

KAG
7th Sep 2011, 04:53
Technically, a country is in recession when its national income declines for two consecutive quarters. The last recession, which ran from April 2008 to October 2009, was worse than its two predecessors in the early 1990s and 1980s. Over this 18-month period output slumped by 6%. After a recovery last year, the growth rate has declined worryingly. In the six months around Christmas there was no growth and it was a measly 0.2% between April and June this year. All the current surveys of business health and confidence show the economy is contracting again. There is an expectation this will show up in the official figures for July to the end of September. A second quarter of contraction up until the end of December will mean we have tumbled back into recession.

Why a double-dip recession looms | Phillip Inman | Comment is free | guardian.co.uk (http://www.guardian.co.uk/commentisfree/2011/sep/06/double-dip-recession)

KAG
7th Sep 2011, 04:56
Raising fresh concerns that the UK is slipping towards a double-dip recession, the chancellor said Britain's broken economic model meant there could be no return to "business as usual" and signalled that he would resist growing domestic and international pressure to boost activity by cutting taxes or slowing the pace of public spending cuts.

Finance ministers and central bank governors from the G7 group of countries are likely to call for fresh measures to stimulate growth when they meet in Marseilles this weekend following warnings this week from the International Monetary Fund and the World Bank of the dangers of seeking to cut budget deficits too hard.

George Osborne to stick to austerity plans despite double-dip fears | Politics | The Guardian (http://www.guardian.co.uk/politics/2011/sep/06/george-osborne-austerity-double-dip)

Slasher
7th Sep 2011, 07:36
I and my cohorts in crime predict the Spanish and Italian economies would collapse in the next six months and the euro would collapse in the second half of this year. It appears we aren't far off…

The problems in Europe have been brewing for a long time. (As I've been warning you over in the US Hamsterwheel thread.) But yesterday for the first time the world is finally acknowledging the severity of these problems and the likelihood of massive government intervention.

"It is an open secret that numerous European banks would not survive having to revalue sovereign debt held on the banking book at market levels" said Deutsche Bank CEO Josef Ackermann at the Frankfurt conference yesterday. (Please note the speech was in German. I used the Google Translator thingy). His comments were just one of many negative Euro developments.

Ackermann continued "In recent weeks the distrust of the financial markets has spread to the banks because they are now suffering from the debt crisis in Europe and have a lot of exposure to, for example, Greek bonds… Since the financial crisis, some European banks have lost a third or more of their market capitalisation - most institutions have a rating of 'below book value.'"

Despite his bearishness Ackermann says dissolving the EU isn't the answer - "The costs of supporting weak member States, particularly from the German perspective, are less than the costs of disintegration. Its a dangerous illusion to believe that a country could do better should it reclaim the sovereignty it has delegated to the EU."

We interpreted what Ackermann really meant is that supporting the weaker member States is cheaper than disintegrating the EU for his bank (aided by massive capital injections from world governments). If the European banks are bailed out via direct cash injections or government bond-purchasing programs they can maintain the toxic Euro debt on their books at inflated levels - and hopefully continue operating until the next bloody crisis.

UniCredit, Italy's largest bank (and our favorite European indicator) fell 4.5% on the news to less than US 80c.

While Ackermann says he wants the EU to remain, UBS now says the Euro should have never been created (only took 'em 12 years to wake up to that!). In a report entitled "Euro Break Up – The Consequences" the Swiss bank says "Under the current structure and with the current membership, the Euro does not work. Either the current structure will have to change, or the current membership will have to change." The report (http://www.zerohedge.com/news/bring-out-your-dead-ubs-quantifies-costs-euro-break-warns-collapse-banking-system-and-civil-war) outlines the huge costs Europe would incur should a weak and/or strong country leave the Euro.

While Deutsche Bank and UBS are addressing the Euro's problems, the top executive of Dexia (Belgium's largest bank, simply gave up) Today I read that Stefaan Decraene, the CEO of Dexia Bank Belgium, quit. Dexia is one of the European banks that only wrote its Greek debt down 21%. According to this "creative" valuation Dexia lost 338 million Euros.

But the biggest shock to the Euro yesterday came from the Swiss National Bank which imposed a ceiling on the Swiss franc. The bank is "aiming for a substantial and sustained weakening of the franc" according to the tatement. "With immediate effect, it will no longer tolerate a Euro-Franc exchange rate below the minimum rate of 1.20 Francs" and "is prepared to buy foreign currency in unlimited quantities." In other words, Switzerland pegged its currency to the Euro. The Franc dropped as much as 8.7% on the news, its biggest drop against the Euro ever. The strongest fiat currency in the world, which is partially gold-backed, is no longer. Which leads me to the following question -

Why isn't gold soaring today? It hit an all-time high of $1,923.70 an ounce yesterday morning, but fell to $1,875 by midday EST. We guess there's an asset-wide rush to liquidity. Don't worry - the drop to less than $1,900 will be short-lived. In US Hamsterwheel I mentioned it would trade in the $1800-1900 range for a while, and its now approaching the time for it to break out about $1900 soon.

SpringHeeledJack
7th Sep 2011, 07:50
The expression "Between a rock and a hard place" comes to mind when considering the position of most of the 'developed' countries' economies. Although it can be said that most of them haven't been out of recession despite official data to the contrary :rolleyes: the professions having aided the mess have continued to provide profits and wealth to their members. The game is up, but who will blink first ?



SHJ

stuckgear
7th Sep 2011, 08:03
KAG,

The thing is, with the EU the significant problem is something that slasher mentions ^^

The two words are 'Toxic Debt'.

And like the banks found out, it's an anchor around the neck.

KAG
8th Sep 2011, 14:29
Britain's fragile economy will remain close to stalling speed for the rest of the year, as the world slips perilously close to double-dip recession, according to a new forecast by Paris-based thinktank the Organisation of Economic Co-operation and Development.


UK economy set to remain weak, OECD warns | Business | guardian.co.uk (http://www.guardian.co.uk/business/2011/sep/08/uk-economy-oecd)

Slasher
9th Sep 2011, 16:44
As I mentioned in the US Hamsterwheel some time ago, I did
warn everyone they should stay away from CNBC because it
will make you poor. A few JBers PM'd wanting to know why I
feel that way. Well I'll explain here CNBC's real racket…

CNBC exists for the primary purpose of pretending to know
why various markets and securities just went up or down by
a few points. Of course the hosts have no idea why this or
that stock or index just moved a few points - no one does.
These events are random and attempts to assign meaning
to them are futile.

But that's ok. CNBC's business isn't knowing - it's pretending
to know. It can be in that business because its audience doesn't
realise investing isn't about the movements of prices, but rather
changes in value.

Looking good and speaking in a clear voice are important for
CNBC personnel too. But looking good isn't nearly as important
as making sure you say something that amounts to nothing.
Yes Melissa Lee looks great, but if she kept her bra open and
her mouth shut she'd be even better.

That's all great though. You don't get rich in the stock market
by watching indexes go up and down and pretending to know
why. One can seize upon that knowledge and use it to one's
advantage.

One more thing - meaningless statistics are a big part of the
illusion of saying something that appears clever. For example
yesterday's meaningless statistic was that the DJIA has moved
100 points or more in 17 of the last 22 sessions. Who the fcuk
cares? What I want to know is, did the values of the Dow 30
change much each day? If not, it sure looks like there's a great
opportunity in there somewhere.

This up-and-down motion is great fodder for the silly cult of
meaninglessness at CNBC. The favorite buzzword is "volatility".
Volatility is how much stock prices go up and down. What you'll
never hear about volatility on CNBC is that business values don't
change as rapidly as market prices do. And you'll never hear
anyone complain as loudly about upside volatility as they do
about downside volatility - even though the huge upside moves
into overvalued territory set the stage for the big downside moves
in undervalued territory.

In short - continue staying away from CNBC if you want to continue
protecting your wealth!

PS - yeh ok you can watch Suze Orman on the weekends - probably
the only bloody CNBC show that makes any good sense.

fitliker
9th Sep 2011, 18:37
The last recovery was a " Jobless recovery"
The next recovery may be a " Less jobs recovery" sold to the masses as austerity and efficiency measure to ensure a lasting prosperity.
Keep calm and carry on.
I am sure that those familiar with newspeak will word it so those converts of political correctness will agree to any of the news releases from the ministry of lies.