UK Economy 2017/18 - Flatline or Recession?

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Comments

  • rjsterry
    rjsterry Posts: 29,815
    Coopster the 1st wrote:
    Veronese68 wrote:
    Coopster the 1st wrote:
    And don't reply with the usual cr@p that we have not left yet. Markets are forward looking and after the initial shock of markets pricing Brexit wrong, they know it is going happen and they are not forecasting or pricing in negativity from Brexit.
    So do you believe the worst impact as a result of voting out has already happened and actually leaving won't have an effect?

    I cannot answer that as there are some scenarios e.g. labour getting into power, that I see putting the economy into recession. I am confident that Brexit will not be the cause of the next recession and do believe even reverting to WTO trade rules will not be the cause of a recession.

    Do you believe voting to remain would stop the next recession occurring?
    The next recession is due fairly soon regardless of who is in power, or whether we are in or out of the EU. With FS such a large chunk of our economy, we're going to cop it wherever we are. Stop sitting on the fence; do you think the main economic ripples of Brexit have already passed by or not? Qualify the answer if you want, but Corbyn and recessions have nothing to do with it.
    1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
    Pinnacle Monzonite

    Part of the anti-growth coalition
  • coopster_the_1st
    coopster_the_1st Posts: 5,158
    rjsterry wrote:
    Coopster the 1st wrote:
    Veronese68 wrote:
    Coopster the 1st wrote:
    And don't reply with the usual cr@p that we have not left yet. Markets are forward looking and after the initial shock of markets pricing Brexit wrong, they know it is going happen and they are not forecasting or pricing in negativity from Brexit.
    So do you believe the worst impact as a result of voting out has already happened and actually leaving won't have an effect?

    I cannot answer that as there are some scenarios e.g. labour getting into power, that I see putting the economy into recession. I am confident that Brexit will not be the cause of the next recession and do believe even reverting to WTO trade rules will not be the cause of a recession.

    Do you believe voting to remain would stop the next recession occurring?
    The next recession is due fairly soon regardless of who is in power, or whether we are in or out of the EU. With FS such a large chunk of our economy, we're going to cop it wherever we are. Stop sitting on the fence; do you think the main economic ripples of Brexit have already passed by or not? Qualify the answer if you want, but Corbyn and recessions have nothing to do with it.

    While on historical terms the next recession is due fairly soon, I think this is not certain. Politicians now know about QE and will make sure Bank Governors keep deploying it to kick the can down the road. Predicting the next recession needs you to predict the moves of politicians. Can anyone predict when politicians will stop kicking the QE can?

    Although for another thread, Yes I do believe the main economic ripples of the Brexit have passed. There are much bigger economic elephants in the room than Brexit, like but not limited to, the Bond Market, Unsecured Consumer Debt, PCP car purchases, China, Japan, Italian Banks, Greece, etc, etc.

    While the last recession was painful, we did not correct the excesses from it and some Bank Governors are still pumping huge amounts into the system to try to get growth going, 9 years after the crash. The numbers are huge. Who knows what exposures are hidden away for the next recession.
  • surrey_commuter
    surrey_commuter Posts: 18,867
    Coopster the 1st wrote:
    rjsterry wrote:
    Coopster the 1st wrote:
    Veronese68 wrote:
    Coopster the 1st wrote:
    And don't reply with the usual cr@p that we have not left yet. Markets are forward looking and after the initial shock of markets pricing Brexit wrong, they know it is going happen and they are not forecasting or pricing in negativity from Brexit.
    So do you believe the worst impact as a result of voting out has already happened and actually leaving won't have an effect?

    I cannot answer that as there are some scenarios e.g. labour getting into power, that I see putting the economy into recession. I am confident that Brexit will not be the cause of the next recession and do believe even reverting to WTO trade rules will not be the cause of a recession.

    Do you believe voting to remain would stop the next recession occurring?
    The next recession is due fairly soon regardless of who is in power, or whether we are in or out of the EU. With FS such a large chunk of our economy, we're going to cop it wherever we are. Stop sitting on the fence; do you think the main economic ripples of Brexit have already passed by or not? Qualify the answer if you want, but Corbyn and recessions have nothing to do with it.

    While on historical terms the next recession is due fairly soon, I think this is not certain. Politicians now know about QE and will make sure Bank Governors keep deploying it to kick the can down the road. Predicting the next recession needs you to predict the moves of politicians. Can anyone predict when politicians will stop kicking the QE can?

    Although for another thread, Yes I do believe the main economic ripples of the Brexit have passed. There are much bigger economic elephants in the room than Brexit, like but not limited to, the Bond Market, Unsecured Consumer Debt, PCP car purchases, China, Japan, Italian Banks, Greece, etc, etc.

    While the last recession was painful, we did not correct the excesses from it and some Bank Governors are still pumping huge amounts into the system to try to get growth going, 9 years after the crash. The numbers are huge. Who knows what exposures are hidden away for the next recession.[/quote

    I could see why QE was the solution to the GFC as the credit markets had dried up. I genuinely do not get what good it is currently doing or will in the future if a slowdown (not necessarily recession) is driven by falling consumer demand. I am happy to have it explained to me - analogies are my preferred medium.

    From past comments you seem to gauge effects of Brexit through the markets. For me the bigger (for all of us) effect will be in the real economy and as Brexit has not happened yet we have seen minimal impact.
  • coopster_the_1st
    coopster_the_1st Posts: 5,158
    Surrey Commuter wrote:
    Coopster the 1st wrote:
    rjsterry wrote:
    Coopster the 1st wrote:
    Veronese68 wrote:
    Coopster the 1st wrote:
    And don't reply with the usual cr@p that we have not left yet. Markets are forward looking and after the initial shock of markets pricing Brexit wrong, they know it is going happen and they are not forecasting or pricing in negativity from Brexit.
    So do you believe the worst impact as a result of voting out has already happened and actually leaving won't have an effect?

    I cannot answer that as there are some scenarios e.g. labour getting into power, that I see putting the economy into recession. I am confident that Brexit will not be the cause of the next recession and do believe even reverting to WTO trade rules will not be the cause of a recession.

    Do you believe voting to remain would stop the next recession occurring?
    The next recession is due fairly soon regardless of who is in power, or whether we are in or out of the EU. With FS such a large chunk of our economy, we're going to cop it wherever we are. Stop sitting on the fence; do you think the main economic ripples of Brexit have already passed by or not? Qualify the answer if you want, but Corbyn and recessions have nothing to do with it.

    While on historical terms the next recession is due fairly soon, I think this is not certain. Politicians now know about QE and will make sure Bank Governors keep deploying it to kick the can down the road. Predicting the next recession needs you to predict the moves of politicians. Can anyone predict when politicians will stop kicking the QE can?

    Although for another thread, Yes I do believe the main economic ripples of the Brexit have passed. There are much bigger economic elephants in the room than Brexit, like but not limited to, the Bond Market, Unsecured Consumer Debt, PCP car purchases, China, Japan, Italian Banks, Greece, etc, etc.

    While the last recession was painful, we did not correct the excesses from it and some Bank Governors are still pumping huge amounts into the system to try to get growth going, 9 years after the crash. The numbers are huge. Who knows what exposures are hidden away for the next recession.

    I could see why QE was the solution to the GFC as the credit markets had dried up. I genuinely do not get what good it is currently doing or will in the future if a slowdown (not necessarily recession) is driven by falling consumer demand. I am happy to have it explained to me - analogies are my preferred medium.[/quote]

    Japan and the Eurozone are still pumping in huge amounts of QE to try to stimulate growth. There must be some feed down into consumer spending otherwise where is the money going? QE worked for the GFC so that means politicians will keep trying it.

    Surrey Commuter wrote:
    From past comments you seem to gauge effects of Brexit through the markets. For me the bigger (for all of us) effect will be in the real economy and as Brexit has not happened yet we have seen minimal impact.

    Markets are forward looking. If Brexit was the train wreck some would have us believe the markets would be pricing this in. Debt led consumer spending does look to be reaching saturation point, this would have happened with either vote result. Increased wages is needed for further consumer spending. Wage increases were stagnant pre vote (oversupply of labour?). I cannot see how that would have changed by voting remain. Short term, wages will not increase from voting to leave however longer term I see wage increases from a slightly tightening labour supply. There are many 'self employed' people that will re-enter the labour market that will stop the *labour supply running out.

    *Completely ignoring automation which is another huge variable to labour supply
  • surrey_commuter
    surrey_commuter Posts: 18,867
    Coopster the 1st wrote:
    Surrey Commuter wrote:
    Coopster the 1st wrote:
    rjsterry wrote:
    Coopster the 1st wrote:
    Veronese68 wrote:
    Coopster the 1st wrote:
    And don't reply with the usual cr@p that we have not left yet. Markets are forward looking and after the initial shock of markets pricing Brexit wrong, they know it is going happen and they are not forecasting or pricing in negativity from Brexit.
    So do you believe the worst impact as a result of voting out has already happened and actually leaving won't have an effect?

    I cannot answer that as there are some scenarios e.g. labour getting into power, that I see putting the economy into recession. I am confident that Brexit will not be the cause of the next recession and do believe even reverting to WTO trade rules will not be the cause of a recession.

    Do you believe voting to remain would stop the next recession occurring?
    The next recession is due fairly soon regardless of who is in power, or whether we are in or out of the EU. With FS such a large chunk of our economy, we're going to cop it wherever we are. Stop sitting on the fence; do you think the main economic ripples of Brexit have already passed by or not? Qualify the answer if you want, but Corbyn and recessions have nothing to do with it.

    While on historical terms the next recession is due fairly soon, I think this is not certain. Politicians now know about QE and will make sure Bank Governors keep deploying it to kick the can down the road. Predicting the next recession needs you to predict the moves of politicians. Can anyone predict when politicians will stop kicking the QE can?

    Although for another thread, Yes I do believe the main economic ripples of the Brexit have passed. There are much bigger economic elephants in the room than Brexit, like but not limited to, the Bond Market, Unsecured Consumer Debt, PCP car purchases, China, Japan, Italian Banks, Greece, etc, etc.

    While the last recession was painful, we did not correct the excesses from it and some Bank Governors are still pumping huge amounts into the system to try to get growth going, 9 years after the crash. The numbers are huge. Who knows what exposures are hidden away for the next recession.

    I could see why QE was the solution to the GFC as the credit markets had dried up. I genuinely do not get what good it is currently doing or will in the future if a slowdown (not necessarily recession) is driven by falling consumer demand. I am happy to have it explained to me - analogies are my preferred medium.

    Japan and the Eurozone are still pumping in huge amounts of QE to try to stimulate growth. There must be some feed down into consumer spending otherwise where is the money going? QE worked for the GFC so that means politicians will keep trying it.

    Surrey Commuter wrote:
    From past comments you seem to gauge effects of Brexit through the markets. For me the bigger (for all of us) effect will be in the real economy and as Brexit has not happened yet we have seen minimal impact.

    Markets are forward looking. If Brexit was the train wreck some would have us believe the markets would be pricing this in. Debt led consumer spending does look to be reaching saturation point, this would have happened with either vote result. Increased wages is needed for further consumer spending. Wage increases were stagnant pre vote (oversupply of labour?). I cannot see how that would have changed by voting remain. Short term, wages will not increase from voting to leave however longer term I see wage increases from a slightly tightening labour supply. There are many 'self employed' people that will re-enter the labour market that will stop the *labour supply running out.

    *Completely ignoring automation which is another huge variable to labour supply[/quote]

    Why must QE trickle down to the consumer?

    You need to see Brexit as a reduction (think 0.5%) in the long term rate of growth. The cumulative effect of this is what you call project fear. Train wrecks tend not to happen in economics.

    If you wanted to know what the markets thought of Brexit you would have to unpick sectors.
  • kingstongraham
    kingstongraham Posts: 28,228
    The markets may already be pricing in a slowdown. Which markets are we talking about?
  • rick_chasey
    rick_chasey Posts: 75,660
    House prices have started to fall too, nationally, in both March & April.

    It's a bad sign for the macro view, but from my own personal perspective, it's quite welcome, assuming that the same thing knocking prices down doesn't knock chunks out of my pay.
    _
  • coopster_the_1st
    coopster_the_1st Posts: 5,158
    KingstonGraham wrote:
    The markets may already be pricing in a slowdown. Which markets are we talking about?

    These should be easy to find with the number of economists and media looking to Brexit bash at every opportunity. Perhaps you can link to one of the many articles?
  • Stevo_666
    Stevo_666 Posts: 61,820
    Rick Chasey wrote:
    House prices have started to fall too, nationally, in both March & April.

    It's a bad sign for the macro view, but from my own personal perspective, it's quite welcome, assuming that the same thing knocking prices down doesn't knock chunks out of my pay.
    Good. I'm looking to trade up in a few years.
    "I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]
  • kingstongraham
    kingstongraham Posts: 28,228
    Coopster the 1st wrote:
    KingstonGraham wrote:
    The markets may already be pricing in a slowdown. Which markets are we talking about?

    These should be easy to find with the number of economists and media looking to Brexit bash at every opportunity. Perhaps you can link to one of the many articles?

    Which markets are we talking about?
  • kingstongraham
    kingstongraham Posts: 28,228
    Coopster the 1st wrote:
    KingstonGraham wrote:
    The markets may already be pricing in a slowdown. Which markets are we talking about?

    These should be easy to find with the number of economists and media looking to Brexit bash at every opportunity. Perhaps you can link to one of the many articles?

    Sure you can do it yourself - just look for any article that has predictions for long term growth with and without Brexit. when the one that is with Brexit is lower, that's probably what will be priced in.
  • coopster_the_1st
    coopster_the_1st Posts: 5,158
    KingstonGraham wrote:
    Coopster the 1st wrote:
    KingstonGraham wrote:
    The markets may already be pricing in a slowdown. Which markets are we talking about?

    These should be easy to find with the number of economists and media looking to Brexit bash at every opportunity. Perhaps you can link to one of the many articles?

    Sure you can do it yourself - just look for any article that has predictions for long term growth with and without Brexit. when the one that is with Brexit is lower, that's probably what will be priced in.

    But all the markets are at or near all time highs(FTSE250, etc). As they are forward looking they are pricing that brexit is not damaging. In fact they are well up on June...
  • rick_chasey
    rick_chasey Posts: 75,660
    I guess the nuance of the constituents of those indexes being dollar earners and the subsequent impact of Sterling movements on those indexes haven't been considered by you Coopster?
    _
  • surrey_commuter
    surrey_commuter Posts: 18,867
    Rick Chasey wrote:
    I guess the nuance of the constituents of those indexes being dollar earners and the subsequent impact of Sterling movements on those indexes haven't been considered by you Coopster?

    But all the markets are at or near all time highs(FTSE250, etc). As they are forward looking they are pricing that brexit is not damaging. In fact they are well up on June...

    But if Sterling is at or near an all time high (due to Brexit expectations) how does that benefit dollar earners?
  • rick_chasey
    rick_chasey Posts: 75,660
    Surrey Commuter wrote:
    Rick Chasey wrote:
    I guess the nuance of the constituents of those indexes being dollar earners and the subsequent impact of Sterling movements on those indexes haven't been considered by you Coopster?

    But all the markets are at or near all time highs(FTSE250, etc). As they are forward looking they are pricing that brexit is not damaging. In fact they are well up on June...

    But if Sterling is at or near an all time high (due to Brexit expectations) how does that benefit dollar earners?

    True, true.

    Sterling isn't at an all time high. Sterling's still substantially down on what it was pre brexit, so that still filters through, regardless.

    It may have risen a little with UK firms since the election was called, and my assumption and the market commentators assumption was that it decreased the chance of a hard Brexit.
    _
  • kingstongraham
    kingstongraham Posts: 28,228
    Coopster the 1st wrote:
    KingstonGraham wrote:
    Coopster the 1st wrote:
    KingstonGraham wrote:
    The markets may already be pricing in a slowdown. Which markets are we talking about?

    These should be easy to find with the number of economists and media looking to Brexit bash at every opportunity. Perhaps you can link to one of the many articles?

    Sure you can do it yourself - just look for any article that has predictions for long term growth with and without Brexit. when the one that is with Brexit is lower, that's probably what will be priced in.

    But all the markets are at or near all time highs(FTSE250, etc). As they are forward looking they are pricing that brexit is not damaging. In fact they are well up on June...

    But we're dealing in hypotheticals - what would it have been without the vote? I don't know, but the change in forecasts is by definition what is priced in.

    (Also, the FTSE 100 is lower than it was 2 years ago, if you look at it converted into USD.)

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