The Guardian – Recession has bottomed out, say business leaders…
The mood among UK business leaders has hit its highest level for a year, with a small majority believing that the bottom of the business cycle has been …
http://www.guardian.co.uk/business/2009/jun/21/business-confidence-survey-kpmg
A survey of UK business leaders advised The Guardian they see signs the recession is leveling off if not any time soon coming to an end. The Guardian reports that one in three firms are experiencing financial difficulties. Many are likely to fail if global and domestic demand continues to fall, and demand will fall unless employment increases.
The survey reported that “one in four businesses have seen their banking relationship worsen”. Bankers have had to tighten credit criteria, increase reserves for loan losses and deal with continuing increases in defaults and foreclosures.
Recently, the UK’s National Institute of Economic and Social Research (NIESR) reported that the UK economy resumed growth in April and May. And, Martin Weale, director of NIESR, reported that GDP figures should indicate the downturn has ended “or that it is close to over”.
One problem with government forecasts based on GDP (Gross Domestic Product) is that what goes into the GDP figure has little to do with measurement of real economic growth. Virtually every amount spent by the government goes into the GDP calculation, regardless of what the money is spent or whether raised by taxation, borrowing or monetary expansion.
Popularity: 86% [?]
So now is an ideal opportunity, Fred, to reiterate how and why you disagree – especially if the officially-stated GDP figures over the next few months show an improvement…
We await eagerly…!
As always, please keep up the excellent work on this site
Tony B
The initial public gut reaction went for controls, but nobody calls for reform, yet.
Talking the public into a recession is to be avoided, but for their safety, the people need to face reality.
Public discussion about tightening controls and other tinkerings – caps on mortgage loans to income ratios, and loan to value; breaking up big banks; curbing bonuses was alive six months ago, but even these have been eclipsed recently by financial PR and lobbying that give oxygen to ill-informed wishful thinking – that green shoots of recovery are showing etc – to divert attention from the underlying malfunctions of dysfunctional government, and the tax and banking reform needed; so that the self interest, the bail outs, the bonuses, and the current Rent, Insurance and Financial system that destroys the real economy may continue in the confusion.
PR will not get us out of this profound crisis; it’s vested interest just distracts reasonable people.
The media do need to sharpen up – how amazingly gullible they are just now.
Well, as I suspected in the earlier comment, the mainstream in the UK is now gearing up to follow France, Germany and Japan by rejoicing in a positive GDP figure…
So, Fred…for some time to come, it will be to unravel what lies underneath? For instance, the motive components of GDP, the financing of government spending in GDP, the bringing-forward of consumption spending (’cash for clunkers’ etc) in GDP, the sustainability of any statistical bounce and so on…
The implications, if any, for the land/housing market…
http://business.timesonline.co.uk/tol/business/economics/article6802722.ece
All ther best
Tony B.