Another downgrade...

Is anyone surprised?

:rolleyes:

Well Dave and G should be as their number one priority was keeping our AAA and their plan was designed to do this! Our survey says wa waaaaaaa:thumbsdow
 
sharger said:
Well Dave and G should be as their number one priority was keeping our AAA and their plan was designed to do this! Our survey says wa waaaaaaa:thumbsdow

Of course 'your' sides solution to a debt problem is to increase debt. Hmmmm...
 
after the IMF rubbishing its pretty much par for the course.I can well see the people of this country demanding an election to get these clowns out
 
la gran siete said:
after the IMF rubbishing its pretty much par for the course.I can well see the people of this country demanding an election to get these clowns out

And bring back the 'clowns' that built up the debt in the first place???
:confused:
 
Another downgrade. Good.

The more downgrades we get, the more expensive (generally) it will get to borrow money.

Maybe then, the penny will drop and governments will think about balancing the books for real.
 
domtheone said:
Another downgrade. Good.

The more downgrades we get, the more expensive (generally) it will get to borrow money.

Maybe then, the penny will drop and governments will think about balancing the books for real.

I reckon Carney is going to get quite a shock when he begins work. Quickly realising that Canada is a great place after all and jacking it in.
 
domtheone said:
Another downgrade. Good.

The more downgrades we get, the more expensive (generally) it will get to borrow money.

Maybe then, the penny will drop and governments will think about balancing the books for real.

Unfortunately this has been 'known' for some time - no one that deals with Gilts on a professional basis will be surprised by the news and hence borrowing costs will barely be affected except at the margin.
:(
 
sidicks said:
Unfortunately this has been 'known' for some time - no one that deals with Gilts on a professional basis will be surprised by the news and hence borrowing costs will barely be affected except at the margin.
:(

Do you think we will see the gilt bubble burst ? Probably the stock market as well by the looks of the graphs.
 
sharger said:
IMF steps up call for Osborne to slow down austerity plans as row escalates - Telegraph

Conspiracy theorists may be forgiven for thinking G is deliberately #+*%ing up the economy knowing he won't have to sort it out after the next election:rolleyes:

Is this why Labour votes down every action to reduce public spending ? I think Labour are going to lose the next election so it won't be a problem. Absolutely no sign of any policies or helping to try and sort out the economy. All they are trying to do is bring down the coalition regardless of the cost to the country.
 
Is this why Labour votes down every action to reduce public spending ? I think Labour are going to lose the next election so it won't be a problem. Absolutely no sign of any policies or helping to try and sort out the economy. All they are trying to do is bring down the coalition regardless of the cost to the country.

once they have a clear idea of what they want to do the policies will come out,Government tend to lose elections anyway and the way this lot are going its a pretty much dead certainty- zero growth, low confidence ,investors have no desire to invest,hardly any exports, unemployment rising, people taken real hits on their living standards,all except the rich and well to do with their tax cut.Osbourne's austerity is just making things worse, even the IMF have warned against him pursuing it. He has been fed a pack of lies by so called experts about how no country cannot afford a debt which is 90% of annual output because growth will reduce to O.1% .In fact countries with that level of debt still manage 2%.The US has historically had massive debts but it still manages to grow.The answer simply is more stimulus because spending cuts are not delivering the promised surge in private investment
 
la gran siete said:
once they have a clear idea of what they want to do the policies will come out,Government tend to lose elections anyway and the way this lot are going its a pretty much dead certainty- zero growth, low confidence ,investors have no desire to invest,hardly any exports, unemployment rising, people taken real hits on their living standards,all except the rich and well to do with their tax cut.Osbourne's austerity is just making things worse, even the IMF have warned against him pursuing it. He has been fed a pack of lies by so called experts about how no country cannot afford a debt which is 90% of annual output because growth will reduce to O.1% .In fact countries with that level of debt still manage 2%.The US has historically had massive debts but it still manages to grow.The answer simply is more stimulus because spending cuts are not delivering the promised surge in private investment

Any government would, however, be unwise to think there are no limits on how much it can borrow and print. The UK economy is being held back by a public sector that is both too large for the tax capacity of the current economy, and by a public sector that has not matched the best of the private sector in delivering quality and efficiency. Government does need to work away at bringing tax capacity and spending more into line. It also needs to relieve the 5 year squeeze on the private sector. Next week I will look again at ways to do just that. Some tax rates are too high, the state banks are wrongly structured and regulated, energy prices are too high, and infrastructure investment is too slow and too dependent on state finance.

John Redwood.


As above, its important to understand where the austerity is being applied. Unlike Europe which is delivering fairly savage public sector cuts, the UK government has done little to nothing. Public sector spending is now romping away and so is the deficit. In other words, plenty of stimulus is/has being applied.the results have been static growth.

The IMF are wrong. They always have been.
 
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la gran siete said:
once they have a clear idea of what they want to do the policies will come out,Government tend to lose elections anyway and the way this lot are going its a pretty much dead certainty- zero growth, low confidence ,investors have no desire to invest,hardly any exports, unemployment rising, people taken real hits on their living standards,all except the rich and well to do with their tax cut.Osbourne's austerity is just making things worse, even the IMF have warned against him pursuing it. He has been fed a pack of lies by so called experts about how no country cannot afford a debt which is 90% of annual output because growth will reduce to O.1% .In fact countries with that level of debt still manage 2%.The US has historically had massive debts but it still manages to grow.The answer simply is more stimulus because spending cuts are not delivering the promised surge in private investment

Same old, same old....
:(
 
The intellectual justification for austerity lies in ruins. It turns out that Harvard economists Carmen Reinhart and Ken Rogoff, who originally framed the argument that too high a "debt-to-GDP ratio" will always, necessarily, lead to economic contraction – and who had aggressively promoted it during Rogoff's tenure as chief economist for the IMF –, had based their entire argument on a spreadsheet error. The premise behind the cuts turns out to be faulty. There is now no definite proof that high levels of debt necessarily lead to recession.
http://www.guardian.co.uk/commentisfree/2013/apr/21/no-need-for-economic-sadomasochism
 
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Who did you quote that from?
 
la gran siete said:
The intellectual justification for austerity lies in ruins. It turns out that Harvard economists Carmen Reinhart and Ken Rogoff, who originally framed the argument that too high a "debt-to-GDP ratio" will always, necessarily, lead to economic contraction – and who had aggressively promoted it during Rogoff's tenure as chief economist for the IMF –, had based their entire argument on a spreadsheet error. The premise behind the cuts turns out to be faulty. There is now no definite proof that high levels of debt necessarily lead to recession.
http://www.guardian.co.uk/commentisfree/2013/apr/21/no-need-for-economic-sadomasochism

Of course they don't. They are a symptom and not the cause. What causes the recession is the bubbles created by cheap money. These bubbles are the result of Government economic policies to keep interest rates as low as possible, for as long as possible. In an attempt to create strong economic growth, they do create growth but they also cause malinvestment.

Individuals invest badly because the market is signalling that money is plentiful. In fact money isn't plentiful, its fiat currency that is plentiful. Its like a farmer who goes into his field and reaps a bumper crop. He borrows money and buys a barn, builds a new house, takes a holiday. When he goes back to look at his bumper crop he sees that most of it was actually grass seed. He has no way to pay for the barn, the house or the holiday. It was all an illusion.

When that happens across a country, it effects the global economy. The bigger the GDP of the country that created it, the greater the inter connectivity, the greater will be the global effect.

This looks like debt, but it isn't. Its just bad investment that needs washing out of the economy. Once it has been removed, the economy will begin to grow again. The problem is that no one wants to accept this bad investment. They don't want to lose their businesses, houses, cars etc. the Government knows it won't be popular if it does that. Its only option then is to find a way of re inflating the economy through exactly the same mechanism which caused the problem and will subsequently kick the can down the road to another disaster in a few years time.

Meanwhile the state has made bad investments on behalf of its voters. It has also spent what it didn't really have. This high spending steals production and capital from the private sector. The private sector are meanwhile paying down their loans, selling off their bad investments, closing their businesses. What they don't need at that point is the state trying to get them to pay for its continuing excesses in order to satisfy public opinion. It needs the state to get off their backs because they are having a hard time anyway. When the state then tries to cut its own debt by raising tax through inflation, it makes things worse. When it tries taxing more heavily it adds to the burden. When it stifles the banks with wrong thinking regulations it dries up the one area in which capital for new growth can be obtained. When it keeps interest rates low it prevents the savings necessary to help banks build up a good deposit ration for healthy lending.

The Austerity is all in the private sector in the UK. The public sector remains largely untouched and is now killing the economy.
 
The 8,000 NHS staff on six figure salaries - Telegraph


Sensationalist headlines maybe, but the situation is seemingly repeated right across the public sector. Pay totally out of control over the last decade.

Public sector out of control and nobody has the balls to do anything about it.

The mrs trust currently has a consultant charging £4000 a week to sort her department out, trying to implement changes to make the department more efficient, yet none of the these changes have any impact and are wholly inappropriate..

Her boss who has no medical experience whatsoever used to manage a biscuit factory...The guy can't even come up with a workable shift rota, yet the clinical lead who obviously has direct medical training and understands the issues the staff face day in day out has had his shift rota rejected...

I could go on all day....
 
neilios said:
The mrs trust currently has a consultant charging £4000 a week to sort her department out, trying to implement changes to make the department more efficient, yet none of the these changes have any impact and are wholly inappropriate..

Her boss who has no medical experience whatsoever used to manage a biscuit factory...The guy can't even come up with a workable shift rota, yet the clinical lead who obviously has direct medical training and understands the issues the staff face day in day out has had his shift rota rejected...

I could go on all day....

Idiotic. You can't make changes to a system as rigid as the NHS. Waste of time bringing a private sector consultant into the operation. You may as well put a penny whistle player into a rock band.
 
The intellectual justification for austerity lies in ruins.

Ruins? Hardly.

BBC News - Doubt cast on research supporting austerity
Carmen Reinhart and Kenneth Rogoff, the economists behind the original research, said in a statement: "It is sobering that such an error slipped into one of our papers despite our best efforts to be consistently careful," but they added that the "central message" of their research was still valid.
 
Ruins? Hardly.

BBC News - Doubt cast on research supporting austerity
Carmen Reinhart and Kenneth Rogoff, the economists behind the original research, said in a statement: "It is sobering that such an error slipped into one of our papers despite our best efforts to be consistently careful," but they added that the "central message" of their research was still valid.

It's such a shame that people are so keen to believe headlines, they don't even bother to read and understand the related articles (or to consider how those articles might be flawed)..!!
:suicide:
 

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