The credit crunch...Debt and the federal reserve

[jay66uk]

Glad you've got some work sorted, KBS. Hope it works out.

 

[Joycee Banercheck]

I'm in financial division mate (ironically!) Not brokers etc though. It's for Purchase/Sales Ledger Clerks and Credit Controllers and that. They are more important than ever in times like this! The departments doing really well.

Reckon you can find about 5 decent credit controllers for where I work? God knows we need better than teh ones we've got at the moment.

It is crazy in the finance and accounts depts where I work at the minute though. Money is being chased more than it was before year-end. It's not physically coming in, but by fuck are they hounding for it.

 

[Kinkys Blue Socks]

I'm in financial division mate (ironically!) Not brokers etc though. It's for Purchase/Sales Ledger Clerks and Credit Controllers and that. They are more important than ever in times like this! The departments doing really well.

Reckon you can find about 5 decent credit controllers for where I work? God knows we need better than teh ones we've got at the moment.

It is crazy in the finance and accounts depts where I work at the minute though. Money is being chased more than it was before year-end. It's not physically coming in, but by fuck are they hounding for it.

If you're recruiting let me know! Depending which area your business is in.

 

[Danish Blue]

Knight1979 PMs

 

[Tom_mcfc]

its killed me, im a jcb driver and its just gone dead no work at all really struggeling.

 

[The Pink Panther]

We may have to live on Jam Butties for a year or two, but after so much steak over the last 10 years or so, at least it might help tackle obesity.

I work in the discount food sector and believe me you wont be eating jam butties. A jar of raspberry jam in a month went from our wholesale price of 37.5p to 60p. All the other flavours went from 37.5p to 50p.
Meat prices in some cases doubled in a month. Stewed steak went from 75p to £1.60 and corned beef from 73p to £1.20.
Tuna is another commodity that's rocketed, as have any milk based products, Marvel powder, rice pudding, custard etc

 

[jay66uk]

http://www.economist.com/world/britain/ ... d=11750900

Ignore the politicking and look at the economics behind it.

FIVE years ago Mervyn King, the newly appointed governor of the Bank of England, gave warning that the “nice” decade would be followed by something less wholesome. Now starting his second term of office this month, Britain’s leading central banker looks more prescient than ever. But even he surely did not expect that the “non-inflationary consistently expansionary” era would turn quite this sour.

As the film “Mamma Mia!” evokes nostalgia for the 1970s, more ominous echoes of that stagflationary decade are ringing louder and louder. The economy looks set to slip into a recession as the housing market slides and the banking trauma refuses to end. Yet at the same time inflation is rising inexorably higher. This toxic combination has been described as “stagflation-lite”; the “lite” seems ever less appropriate.



The scale of the oil-price shock now hitting the British economy is clearly similar to that of the 1970s. Indeed the prices paid by manufacturers for their fuel and materials soared by 30.3% in the year to June, the biggest jump since November 1974. This suggests that the prices those firms in turn charge retailers will rise even higher than the 10% annual increase in June, which was the highest rate of factory-gate inflation since early 1982.

Unless retailers absorb the cost increases coming down their supply chain by cutting their margins, this will bring more pain for already hard-pressed households. Consumer-price inflation is moving even farther away from the government’s 2% target. In just two months, it has climbed almost a percentage point, from 3.0% in the year to April, to 3.3% in May and then 3.8% in June—the highest for 16 years.

As far as most shoppers are concerned, the consumer-prices index (CPI) is merely starting to catch up with their daily experience. The CPI may be used for the inflation target, but it commands little confidence because it excludes owner-occupier housing costs. The broader and longer-established retail-prices index (RPI) increased by 4.6% in the year to June. RPI inflation excluding mortgage interest payments—the measure used for the target from 1992 until the end of 2003—rose by 4.8%, also the highest for 16 years (see chart).

Whatever index is used tends to understate people’s inflationary alarm, which is coloured by the fact that the prices of everyday essentials are rising so fast. Road-fuel costs, for example, leapt by 24% in the year to June. Annual food-price inflation accelerated from 8.7% in May to 10.6% in June, according to the CPI; on the RPI measure, which stretches back much longer, it is a little lower (9.7%) but still the highest since 1982. Shoppers are keenly aware of these increases and pay little attention to the fact that less frequent purchases like cameras are getting much cheaper.

The labour market has remained one bright spot amid the enveloping gloom, but this is now clouding over. Figures based on the labour-force survey released on July 16th showed that employment continued to grow and that the jobless rate remained steady at 5.2%. Little comfort can be drawn from this, however, not least since the data extend only to May. The more timely figures for people claiming unemployment benefit showed a rise of 15,500 in June, the biggest monthly increase since 1992. Since then a number of homebuilders have announced big lay-offs. In the months ahead unemployment, which lags the economic cycle, looks set to rise, although this may be tempered by migrants returning to eastern Europe as jobs in Britain become scarce.

The return of stagflation has put the Bank of England in a bind. On the one hand, the fierce upsurge in inflation threatens to rekindle an inflationary mentality, in which both firms and workers expect prices to carry on rising rapidly. Although the annual growth of average earnings remains subdued, rising by only 3.8%, unions are flexing their muscles (see article). That calls for a pre-emptive rise in interest rates to show that the central bank means business about restoring price stability. On the other hand, a rapidly weakening economy should bring down inflation in due course. There is an increasing risk that the downturn could be severe, not least because of the fragility of Britain’s mortgage lenders as the housing market subsides. That calls for lower interest rates.

Caught in this quandary, the central bank’s rate-setters decided for the third consecutive month to keep interest rates on hold at 5.0% when they met on July 10th. They seem likely to maintain this do-nothing stance for some time. As long as inflation is accelerating, the monetary-policy committee will be loth to lower the base rate for fear that this may undermine the Bank of England’s credibility.

What this suggests is that the economic malaise will stretch well into next year, and maybe into 2010. This should not come as a surprise. Banking and housing crises tend to drag economies down in their wake for several years. And if there was one lesson that policymakers learnt in the 1970s, it is that there is no easy cure for stagflation. After the nice years, a hard slog lies ahead.

That casts a long shadow over Gordon Brown’s chances at the next election, which must be held by June 2010. Labour swept into office in 1997 with the catchy slogan “Things can only get better”. During the “nice” years, that turned out to be the case. Voters rewarded economic success at the polls in 2001 and 2005. They are unlikely to forgive more recent failure when they next have the opportunity to pass judgment on Labour’s record.

 

[Danish Blue]

Due to hurricane dolly causing minimal diruption to the gulf oil production oil prices have fallen back 14 per cent from the high

with western economies struggling and people looking to economise on fuel (even the americans are driving less and looking to buy more efficient cars it seems) it seems there may be some respite in commodity prices.

Lehmans are forecasting an average price of usd 110 Q$ falling to usd 90 q1 2009 if that proves to be correct the present inflationary pressures will reduce considerably and there could be room for the BOE to cut rates by next spring hopefully enabling a soft landing

Light at the end of the tunnel or merely an oncoming train?

I guess a lot depends on the middle eastern situation.

 

[Knight1979]

Due to hurricane dolly causing minimal diruption to the gulf oil production oil prices have fallen back 14 per cent from the high

with western economies struggling and people looking to economise on fuel (even the americans are driving less and looking to buy more efficient cars it seems) it seems there may be some respite in commodity prices.

Lehmans are forecasting an average price of usd 110 Q$ falling to usd 90 q1 2009 if that proves to be correct the present inflationary pressures will reduce considerably and there could be room for the BOE to cut rates by next spring hopefully enabling a soft landing

Light at the end of the tunnel or merely an oncoming train?

I guess a lot depends on the middle eastern situation.

Its somewhat remarkable what's happening here in the states. People trying to trade in their SUV's are realizing they are worth nothing. Hybrids can't stay on the lots.

With the housing crisis and gas costs high many are re-thinking their lifestyles and considering moving back to the city. I think the days of far-flung fringe suburban development fueled by new freeway projects might be over. I have read a couple of articles predicting that the far out suburbs could be the slums of the future as more affluent residents migrate back in.

I live in Dallas and we have had a light rail system in place since the mid 90's they are expanding it as fast as they can now. For years no one rode it now the trains are packed, standing room only.

 

[blumoon]

Re:

Due to hurricane dolly causing minimal diruption to the gulf oil production oil prices have fallen back 14 per cent from the high

with western economies struggling and people looking to economise on fuel (even the americans are driving less and looking to buy more efficient cars it seems) it seems there may be some respite in commodity prices.

Lehmans are forecasting an average price of usd 110 Q$ falling to usd 90 q1 2009 if that proves to be correct the present inflationary pressures will reduce considerably and there could be room for the BOE to cut rates by next spring hopefully enabling a soft landing

Light at the end of the tunnel or merely an oncoming train?

I guess a lot depends on the middle eastern situation.

Its somewhat remarkable what's happening here in the states. People trying to trade in their SUV's are realizing they are worth nothing. Hybrids can't stay on the lots.

With the housing crisis and gas costs high many are re-thinking their lifestyles and considering moving back to the city. I think the days of far-flung fringe suburban development fueled by new freeway projects might be over. I have read a couple of articles predicting that the far out suburbs could be the slums of the future as more affluent residents migrate back in.

I live in Dallas and we have had a light rail system in place since the mid 90's they are expanding it as fast as they can now. For years no one rode it now the trains are packed, standing room only.

Lehmans forcasting is no more.