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GREEN SHOOTS OF RECOVERY!

By ATWadmin On January 14th, 2009 at 8:51 pm

Talk about living in a bubble! Labour business minister Baroness Vadera has denied she is out of touch after claiming she could see “a few green shoots” of economic recovery. The Conservatives said the comments, made to ITV News, had been “unbelievably insensitive”. The remarks came on a day when UK firms announced large-scale job losses and share prices slumped by almost 5%. The Baroness is typical of the political class, insulated from reality and in her case elevated to the House of Lords by her socialist Nulabour pals in 2007. I wonder if all those folks losing their jobs on a daily basis will join with the Baroness in cheering these emerging shoots of recovery. Is that a light at the end of the tunnel or a train coming? 

NO ECONOMY BETTER PLACED?

By ATWadmin On January 13th, 2009 at 8:56 am

I wonder can you help me? I see that British business leaders have painted a bleak picture of the UK economy, with a survey suggesting a “frightening deterioration” towards the end of 2008. The British Chambers of Commerce (BCC) said its survey results were “awful” and the worst since it began in 1989. Elsewhere, a separate report suggested it had been the worst December for UK retail sales in at least 14 years. On 23 January, official figures are set to confirm the UK is in recession with six months of negative growth. Yet, our blessed Gordon, he whom the Gods smile upon, insists that the UK is better-placed than most to weather the economic storm. Seems UK business disagrees, so who is right? 

SPANISH BLUES…

By ATWadmin On January 13th, 2009 at 8:36 am

Tough times for Spain – it’s an economic basket-case and that’s official!

“Spain today became the third euro zone country since Friday to be warned by Standard & Poor’s rating agency that its credit rating is under threat from the global credit crisis that continues to wreak havoc in Europe. Just as in the case of Ireland and Greece last Friday, S&P said Spain faces a painful rebalancing of its economy and a marked deterioration of its public finances. The gloomy news further extended the euro’s losses against the US dollar and the yen today, and Fitch Ratings also weighed in by saying Ireland’s debt grades could be hurt by the country’s ballooning budget deficit. Spain, like Ireland, haa both been hit hard by the collapse its property boom, contributing to burgeoning unemployment and shrinking government revenues.”

One more euro-economy headed south and what will the socialists in power actually DO about this? Well, here’s a glimpse of the future for all those other European economies…

“Spain was the first large European economy to launch an economic stimulus package last year as the collapse of its decade-long housing boom coincided with the global credit crunch.  Despite over €60 billion euros in tax breaks and emergency credit, Spanish unemployment soared by one million in 2008 to reach the highest rate in the European Union at 13.4 per cent in November.”

GOLDEN HELLOS?

By ATWadmin On January 12th, 2009 at 8:40 am

So, UK PM Gordon Brown and other ministers will announce “golden hellos” worth up to £2,500 for employers to recruit and train the long-term unemployed; there will be 75,000 training places for people out of work for six months.

Big deal. For starters, train them to do what, precisely?  Then there is the small matter of that £2500 incentive to hire someone unemployed for six months or more. Won’t that simply mean that employers will ignore all those who are unemployed for LESS than six months? The answer lies not in golden hellos – it lies in allowing people to retain more of the money they do earn, it lies in cutting tax on business, and it lies in reducing the scale of the State. None of this appeals to Brown and his socialists crew and so they will continue to fiddle whilst the economy burns. Bourbons.

DEALING WITH RECESSION…

By On January 10th, 2009 at 8:57 pm

It is interesting to read of alleged tensions between Irish PM Brian “Biffo” Cowen and his Finance Minister Brian Lenihan over how to cope with the severe economic crisis in which the Republic of Ireland now finds itself engulfed.

I find myself in broad agreement with Lenihan who appears to want to make savage but necessary cuts right now to the state sector in order to avert a deepening financial crisis. Cowen, by contrast, is supposed to be favouring a more conservative stance, waiting until every argument is exhausted to gain wider approval from the trade union movement before finalising any cost-cutting plan. A spokesman said Mr Cowen “hopes to have a deal by the end of January, but there is no firm deadline set”. Fiddling while Rome burns!

The worsening state of the public finances means the budget deficit for 2009 will be €20bn, with €11bn of this borrowed to pay for current spending and €9bn borrowed to pay for capital spending. Overall, 20pc of Government day-to-day current spending will have to be paid for by borrowing.

I think that Lenihan is on the right track and Cowen’s hesitation at this time may make a bad situation even worse in the future. This is not the time for courting trade unions, it is a time for drastic action which means reducing the scale and costs of the State!

Would that Brown and Darling had the same wit!!!

THE WORST SINCE WW2…

By ATWadmin On January 9th, 2009 at 8:49 am

Parts of the European economy are in meltdown and we must await the consequences as the news come in that German exports and industrial orders have both plunged at the steepest rate since modern records began and Spain’s unemployment has surged above three million, capping one of the most disastrous days for Europe’s economy since the Second World War.

Joaquin Almunia, the European economics commissioner, warned that the picture would turn “dramatically worse” this year. The eurozone’s confidence index collapsed from 74.9 to 67.1, the lowest since Brussels started collecting the data in 1985. “It makes truly dismal reading,” said Julian Callow, Europe economist at Barclays Capital. “Industrial sentiment has never experienced such a rapid slump. There is an implosion of demand.”

Spain lost almost 140,000 jobs in December, pushing unemployment to 3.1m or 13.4pc. The Labour Office said the country had shed a million in jobs in 2008 as the building boom collapsed. This is equivalent to 7m job losses in the United States. The Labour Secretary Maravillas Rojo said she could not rule out a rise in unemployment to 4m this year. “We are in an unprecedented situation, and 2009 is going to be very difficult,” she said. Madrid now has its hands tied under the constraints of monetary union. It cannot slash interest rates or devalue, and it has already exhausted its scope for fiscal stimulus under the EU’s Stability Pact.

Spain is now in company with Germany, where exports plummeted 10.6pc in November. The German economy is highly-geared to the global industrial cycle and is suddenly facing a vicious downturn as demand for machinery slumps in China, Russia, the Mid-East, and equally important as car sales crash in Italy, Spain, and Britain. The country’s trade surplus has shrivelled by a third in one month.

The fantasy that all these diverse economies can manage the strains of national economic depression via a central monetary policy is being relentlessly exposed by the day. Thank God Britain has remained outside this Union of economic disaster!

Interestingly, the European Central Bank appears to be in open conflict with the International Monetary Fund, which has slashed its eurozone growth forecast to 1.4pc this year and 1.2pc in 2009. The fund said Italy will be trapped near recession levels for the next two years, while Spain’s property boom is deflating fast. “In the context of an increasingly negative outlook for activity, the ECB can afford some easing of the policy stance,” it said, dismissing the inflation scare as a one-off spike from food and oil – likely to subside. The IMF warned that Europe’s banks are in as much trouble as their US counterparts, facing losses of at least $120bn (£60bn) from asset-backed securities, structured investment vehicles, and other arcana from the credit bubble. The ECB denies this.

Time will tell and I trust neither the ECB or the IMF!


THE ZIMBABWE OPTION..

By ATWadmin On January 8th, 2009 at 8:29 am

It is highly likely that around lunchtime today, the Bank of England will cut UK interest rates once again, this time bringing them down to an all time low. However this is pointless. It’s golfer with one club syndrome as far as I can see. Many economists and other experts warn that rate cuts are ineffective as the major problem now facing the British economy is the availability of credit not the cost of loans. I agree. It is also lack of business confidence. So what is the great guru Gordon Brown considering doing?

Printing money.

“The Bank of England is being urged to consider injecting money directly into the economy by printing more money, a process known as “quantitative easing”.

That’s a lovely euphemism, isn’t it? Quantitative easing.

George Osborne, the shadow Chancellor, is 100% right when he says:

“The very fact that the Treasury is speculating about printing money shows that Gordon Brown has led Britain to the brink of bankruptcy. Printing money is the last resort of desperate governments when all other policies have failed. It can’t be ruled out as a last resort in the fight against deflation, but in the end printing money risks losing control of inflation and all the economic problems that high inflation brings.”

It hasn’t worked out too well for Robert Mugabe in Zimbabwe, has it? It’s not the recession that frightens me, it is the stupifying reactions of this government of knaves and fools. They seem intent on making a bad thing much much worse.

GHOST TOWN…

By ATWadmin On January 6th, 2009 at 9:09 am

UK Prime Minister Gordon Brown boasted last year that our economy, under his management, was amongst the best placed to weather the global economic storm.

Today, the Woolworth chain finally closes and 27,000 people will be unemployed.

Yesterday, the Waterford Wedgewood announced it was on the edge of bankruptcy, with the likely loss of almost 2000 jobs.

Last week, the Adams childrenswear chain went into a form of bankruptcy, with the loss of 850 jobs, and a further 2300 under threat.

The Music chain Zavvi went bust just after Christmas, with the loss of 3200 jobs.

There is speculation this morning that even Marks and Spencers may have to cut 1000 jobs.

Yes, we are truly best placed thanks to Gordon.

I forecast that by the end of this month there will tens of thousands of other job losses as the real impact of the credit crunch bites.  Remember also, for every  big name company that collapses, there are many smaller companies that will also suffer, with fewer numbers of lost jobs but still very meaningful to those who find themselves out of work. 

The unravelling of the British economy continues but meanwhile I hear that tractor production is at an all-time high.  This town, is coming like a ghost town…

100,000 NEW JOBS ON THE WAY…

By ATWadmin On January 4th, 2009 at 10:58 am

Gordon BrownWorried about the economic downturn? Relax – Gordon has it sorted. Having saved the world, he now plans to create 100,000 new jobs. This wonderful new scheme revolves around public works, digital technology and environmental projects! Apparently school repairs alone will create 30,000 new jobs! Hurrah for Gordon. I also believe that wheat production will hit a new high this year and tractor output will exceed all expectations.

Trust Gordon – he is the man with experience. After all, he got us into this mess so who is more suitably qualified to get us out of it?

Hat-tip to the wonderful Tractor Stats for the great image.

DARLING ON THE BRINK?

By ATWadmin On January 3rd, 2009 at 10:59 am

Did you see that it is being speculated upon that Gordon Brown’s puppet Chancellor Alistair Darling has been forced to consider a second bailout for banks as the lending drought worsens? Oh no – and I thought that we had been told decisive action had ALREADY been taken and it was soooo good that the whole world was following this example?

“The Chancellor will decide within weeks whether to pump billions more into the economy as evidence mounts that the £37 billion part-nationalisation last year has failed to keep credit flowing. Options include cash injections, offering banks cheaper state guarantees to raise money privately or buying up “toxic assets”, The Bank of England revealed yesterday that, despite intense pressure, the banks curbed lending in the final quarter of last year and plan even tighter restrictions in the coming months. Its findings will alarm the Treasury.”

This way madness lies and none of it is necessary if Government could bring itself to do the unthinkable – slash taxes both personal and corporate, slash the Public Sector Borrowing Requirement, boost business by cutting the insane bureaucracy which is strangling it, and encourage banks to lend sensibly on sound financial criteria. The cutting Interest Rate mechanism is doing nothing, temporary VAT reductions has done nothing, and borrowing EVEN more money to lend to Banks will do nothing unless the fundamentals are right.  But Labour cannot accept, as a matter of ideology, that a low tax regime is best for jobs and for business confidence and so instead it fiddles at the edges, wastes £££Billions, and achieves nothing.