The Great International Depression of 2008 & Beyond /

expat girl wrote:

The 8c levy did push the price up, however, a month ago at my local station, the price was down at 94c again. However, it has since gone back up to 103c. No levies that I can think of in the 4 weeks and the price rise has been gradual; a cent every few days.

Since the price per barrel hasn't changed, why are we being stiffed for this??

It's probably the exchange rate that's kicking in, as I understand it this takes about a month to show through.

Which currency tonys - STG? Well spotted old chap. Do we import most of the stuff from abroad ?

Below: Audi's apprentice projection for US gas prices for the next 3 years based on the trend over the last 3 years.

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tonys wrote:

It's probably the exchange rate that's kicking in, as I understand it this takes about a month to show through.

Do you mean that Sterling went up a bit after hitting the 1.03 lows just before Xmas?? I think most of our oil is north sea

expat girl wrote:

tonys wrote:

It's probably the exchange rate that's kicking in, as I understand it this takes about a month to show through.

Do you mean that Sterling went up a bit after hitting the 1.03 lows just before Xmas?? I think most of our oil is north sea

No. I mean the Dollar.

Is it the season for chasing moving statues now? Are too many people looking at the internet too much too often too late at night and doing too little else? Is this one of the internets biggest moving statues?

This was spotted in the Telegraph last night - mention of a $16.3 trillion black hole in European banks balance sheets. When internetters got up this morning there was no mention of the 16 trillion of writedowns

Before:
European Commission officials have estimated that impaired assets may amount to 44pc of EU bank balance sheets. The Commission estimates that so-called financial instruments in the trading book total £12.3 trillion (13.7 trillion euros), equivalent to about 33pc of EU bank balance sheets.

In addition, so-called 'available for sale instruments' worth £4trillion (4.5 trillion euros), or 11pc of balance sheets, are also added by the Commission to arrive at the headline figure of £16.3 trillion.

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After:
“Estimates of total expected asset write-downs suggest that the budgetary costs – actual and contingent - of asset relief could be very large both in absolute terms and relative to GDP in member states,” the EC document, seen by The Daily Telegraph, cautioned.

"It is essential that government support through asset relief should not be on a scale that raises concern about over-indebtedness or financing problems.”

The secret 17-page paper was discussed by finance ministers, including the Chancellor Alistair Darling on Tuesday.

National leaders and EU officials share fears that a second bank bail-out in Europe will raise government borrowing at a time when investors - particularly those who lend money to European governments - have growing doubts over the ability of countries such as Spain, Greece, Portugal, Ireland, Italy and Britain to pay it back.
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- no mention of 16 trillion

As you can see however, the figure is still left into the URL ......

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4590512/European-banks-may-need-16.3-trillion-bail-out-EC-dcoument-warns.html

HG Wells O'Clock, innocent typing error, mass hysteria ... ??

tonys wrote:

expat girl wrote:

tonys wrote:

It's probably the exchange rate that's kicking in, as I understand it this takes about a month to show through.

Do you mean that Sterling went up a bit after hitting the 1.03 lows just before Xmas?? I think most of our oil is north sea

No. I mean the Dollar.

Gaah, dohh, of course I knew oil was traded in dollars

btw, though.... how does that work for domestic consumers in places such as the UK; is the oil sold in Stg locally, or does it get traded in dollars for everyone?? Could be interesting exchange rate effects there!

Re the Torygraph thing.... I wonder which of their journos currently has the whole ECB jumping up and down on their head??

It is interesting that the TORYGRAPH is now listing Britain along with the PIIGS

That seems like a seriously large amount of impaired balance sheet.

Why are 33% of Euro banking's balance sheets impaired if only a few of the more peripheral countries actually had a property boom??

If our banks are telling the truth about their lack of subprime, we might be in better comparative shape than we think!

The ECB is gonna have to start "monetising debt"...I think this is the new term for quantitative easing now us armchair economists have figured out what that means.

expat girl wrote:

tonys wrote:

expat girl wrote:

tonys wrote:

It's probably the exchange rate that's kicking in, as I understand it this takes about a month to show through.

Do you mean that Sterling went up a bit after hitting the 1.03 lows just before Xmas?? I think most of our oil is north sea

No. I mean the Dollar.

Gaah, dohh, of course I knew oil was traded in dollars

btw, though.... how does that work for domestic consumers in places such as the UK; is the oil sold in Stg locally, or does it get traded in dollars for everyone?? Could be interesting exchange rate effects there!

That petrodollar thing ...

Is it that .... despite the squillions of dollars cooked up for bailouts there are actually less dollars in circulation because of the writedowns, debt destruction,reduced level of new debt creation .... less dollars floating around, harder to get them ... harder to buy oil with them ... ???

Feckin bizarre. Why isn't everyone trading electronically ? How is oil-trading linked like this to the dollar ?

Could this be the start of the end of this thread ????


China Economy Shows Signs of Recovery on Stimulus

Feb. 13 (Bloomberg) -- China’s economy is showing signs that a 4 trillion yuan ($585 billion) stimulus package is taking effect.

The world’s third-biggest economy may expand 6.6 percent in the second quarter after slowing to 6.3 percent in the three months to March 31, the weakest pace since 1999, according to the median estimates of 14 economists surveyed by Bloomberg News.

China is trying to reverse an economic slide that has already cost 20 million jobs, raising the risk of social unrest as exports plunge and the property market sags. Spending on roads railways and housing has increased prices for iron ore, put a floor under industrial output and helped to drive a record $237 billion of new loans in January.

“China looks set to be the first major economy to recover from the current global meltdown,” said Lu Ting, an economist with Merrill Lynch & Co. in Hong Kong. “China is the only economy in the world to see significant growth in credit to corporate and household sectors after September 2008, when the financial crisis worsened to a near collapse.”
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Lu Ting is your man's name - good name for a banker type.

The article says the banks are responding to the stimulus package by doing plenty of lending of their own so along with the injection by the Govt. of 1.2 trillion Yuan there should be a fair bit of money hanging around in their economy which is a very well balanced machine it appears, their debt to GDP ratio being very low - 18% and reserves of nearly 2 trillion dollars.

Here's the juicy bit:

Iron Ore, Steel

China’s imported iron ore has climbed 28 percent to 690 yuan per metric ton since the end of October. Hot-rolled steel has surged 41 percent from Nov. 13 to 4,027 yuan per metric ton. The Baltic Dry Index, a measure of shipping costs for commodities, has more than doubled since Jan. 28.


Whatever happens, they'll be calling a good few shots in a few years... if they aren't already
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5BC4xOWQhR8&refer=home

Audi

It is interesting to note that the Banks in China are not clogged with toxic as in the West so money going in can be leveraged up. In the West it is disappearing and instead of stimulating is deflating the economy especially if you consider longer term repayments.

Also China recovering really only improves the lot of those mining and producing materials that China needs. It is a difficult market to import into. As Chinas need for materials such as steel, copper and lead increases this will increase costs world wide.

Would you say there wlll be skewed global growth and demand now, Squire - China might be growing but the rest of the place like Europe won't be ... Global growth could become like an inflating football with the bladder coming through one side while the other side stays as it is (in reality the other side is deflating).

Given the deflation in the West then these metals and commodities should become more costly for us to get at. Wouldn't inflation here and elsewhere help this then - if some business and industrial activity were to begin here again in the West (e.g. renewable infrastructure) then it needs to be widespread enough so that there is a level of inflation in the bloc itself - Europe or North America. So growth in China alone mightn't help - growth might need to extend to the other BRIC countries and become more global in order to lift us.

Of course it all depends what resources are available. In the event of global growth for which there isn't a lot of room, we could see plunder of Africa yet for their stuff.

China is growing at 6%, so what they are worried about is a reduction in growth not recession or depression. They have money and plenty to do in their own country. Strictly speaking they do not need to produce goods for the west. However so much of their manufacturing is dependant on the west that it is bound to cause them problems. You can build roads and railways but that does not necessarily create work for those that now make shirts for us. It is very, very difficult to get wealth to spread in any country and unless that happens the Chinese peasants won't be buying the shirts! It will take decades. I think China will run into problems, but it will mitigate by spending reserves. Its growth compared to the West is increasing and our day of eclipse is close.

As China spends its reserves at home it will mean that less money is in the West. Bonds etc may be systematically sold.

We in the West need to get away from the nonsense economics of the Thatcher and Regan period. You need a balance of trade, there is no such thing as economic growth through retail, countries and individuals cannot live for ever on debt etc. What we need to learn from China is that to compete in this day and age Governments need to directly support indigenous industry. The idea that there is free and open markets is utter nonsense. Those doubting this should try importing into China and Japan.

Sorry double post


EDIT

Just to add that we should never underestimate the importance of economic strength in maintaining political independence and freedom. We need to wake up.

Squire wrote:

Just to add that we should never underestimate the importance of economic strength in maintaining political independence and freedom. We need to wake up.

Could you expand ? - Politics and economics are very different ! Didn't the thing start out as 'Political Economy' with the likes of John Stuart Mill and all them lads?

Politics influencing economics is seen as socialistic but I think that's what we have to learn from China as you say in your last post - there has to be some effort to command the economy.

I keep saying education has been neglected - I don't mean pour money into it willy-nilly but it needs to be overhauled radically for one State area.

I'm firmly convinced that, up to a point, some things are worth printing money for.

Politics and economics go hand in hand everywhere. That is reality. It may be a Soviet Socialist style 5 year plan catastrophe. More likely it is politicians serving the interests of economic pressure groups. In China it is the state achieving objectives through economic growth and having the sense and clout to get on with it. It also had cheap labour and this represents a major resource. China has more to do with naked capitalism than any socialist model that I can think of. The state is China PLC.

We need to accept that there is not a free market in the wider world and stop perpetuating a lie. We can in the likes of the EU have free trade or with agreement with other countries, but in the wider world it does not and will never exist. Protectionism and rigging the markets is everywhere and we are approaching a stage where our economic control is slipping and systems that we set up, to our benifit could turn against us.

On independence and freedom it is an observation that the poorer the country the greater the possibility of invasion, outside interference, civil unrest, blatant corruption and conflict. Think of the World's hell holes and not too many of them are economically powerful.


Whoever holds the purse strings controls.

Do you think there needs to be a more international effort to get some structures of ... protectionism etc. ? That's if you are saying that the WTO set up is eroding... or should be eroded. Are you thinking that Ireland and the UK for example should organise more regional trading or that the EU at that level try to rationalise its internal systems ?

What's the worst thing that could happen anyway? Even in the event of a worldwide food crisis Europe would perhaps be best insulated against it as we've enough of a food production capacity anyway.

Standards of living could fall but would they fall little in the more basic economies as China rises - where there are few luxuries beyond the basics sourceable in the country or bloc. In that case we're knackered for oil unless we could get enough biofuel from algae going. But is there enough raw materials to keep our manufacturing industries going? If raw materials rise in cost and price in a stagflating environment .... it will be interesting to say the least anyhow.

We (EU or US) need to screw up all non essential imports. The plastic Santa rubbish. We can tax it to oblivion and/or introduce import controls that would make anyone weep. Tax non essential goods and not labour.

Get the cost of imported semi essentials up, Cheap T shirts etc.

Keep the cost of essentials down, minerals, machine parts etc.

We also need to take a hard look at some of the costs in our own societies and ditch them. Came across one a few day ago. Someone had to install a lift for a disable person total cost say £30,000 to a roof space that is used as a temporary store. This was in a business that recycles waste and there is absolutely no possibility of there EVER being an employee in a wheelchair. (Health and Safety) The lift is in addition to the disabled shower and toilet! This sort of politically correct madness needs to end.

We also need to ensure energy independence and look long term at strategic materials such as timber, copper, lead, steel. The population of the world is increasing and our ability to purchase will decrease if we are not careful.

I think we need to look at the cost of raising finance for businesses, the short term nature of many investments, fairer access to resources, easier direct investment by many individuals circumventing institutions. etc. We need a system where a lad from Mayo with a good idea but no money has a fair chance of success or a group can set up a co operative to operate a saw mill. We need to crack this problem and stop concentrating on inward investment. We need a much more dynamic and diverse economy.

Anyway land on the Humber to occupy my mind and inspiration low.

I have having a nice Guinness in a pub in the Docklands at lunchtime on Wednesday when I saw the barman stuffing a load of stuffed Santa Claus's into a black bin bag and then into the bin. I presume you are talking about this kind of thing, Squire? :P

I don't know why people buy that kind of stuff. A nice wood carved figurine from Germany is much nicer and will last you longer too.

That is the sort of thing but it is everywhere. Was recently in a warehouse that was full of the junk, everything from nodding dogs for the back window of cars to horrendous plastic toy guns and Valentines day under garments of an impractical kind. Millions of pounds worth of utter junk. Then there is the semi useful, that does not last. Take a look at the thickness of the finish on laminate floors! Or furniture that falls apart. Utter junk.

What was wrong with a bit of Holly and a few simple decorations? Some of the Christmas stuff is about as tasteful as the decoration in a Hindu Temple.

There is a tragic delusion that we for some reason need to consume to be happy. Often the happiest days are the simple uncluttered ones, a walk in the mountains or along a shore, or a sunny evening and a herbaceous border.

Squire wrote:

We (EU or US) need to screw up all non essential imports. The plastic Santa rubbish. We can tax it to oblivion and/or introduce import controls that would make anyone weep. Tax non essential goods and not labour.

Get the cost of imported semi essentials up, Cheap T shirts etc.

Keep the cost of essentials down, minerals, machine parts etc.

We also need to take a hard look at some of the costs in our own societies and ditch them. Came across one a few day ago. Someone had to install a lift for a disable person total cost say £30,000 to a roof space that is used as a temporary store. This was in a business that recycles waste and there is absolutely no possibility of there EVER being an employee in a wheelchair. (Health and Safety) The lift is in addition to the disabled shower and toilet! This sort of politically correct madness needs to end.

We also need to ensure energy independence and look long term at strategic materials such as timber, copper, lead, steel. The population of the world is increasing and our ability to purchase will decrease if we are not careful.

I think we need to look at the cost of raising finance for businesses, the short term nature of many investments, fairer access to resources, easier direct investment by many individuals circumventing institutions. etc. We need a system where a lad from Mayo with a good idea but no money has a fair chance of success or a group can set up a co operative to operate a saw mill. We need to crack this problem and stop concentrating on inward investment. We need a much more dynamic and diverse economy.

Anyway land on the Humber to occupy my mind and inspiration low.

Have to agree with you on keeping some costs down and others up and reducing wasteful crap - this is why I like the idea of a carbon-type tax because it acts as some kind of limit. Should certain frivolities and madness be eliminated or taxed then and other more equitable and reasonable structures be subsidised? Like the insulation of old houses funded by taxing Hummers or junk?

However, is there an intermediate step to go through with the likes of foreign markets where that junk needs to flow around for a while but it will eventually get auto-eliminated as people go for quality.

You might have argued years ago that there were too many Toyotas and not enough Rovers .... Couldn't there be an intermediate step in consumptionbefore consumers move to quality ? Do you not believe in shopping therapy? Frivolous use of time and surplus money on sweet fanny adams just because people can. Maybe not while people elsewhere are starving but there will come a time when they don't be starving then what'll they do with their extended leisure time?

just to continue the great love affair we are having with the banks (on this site at least).... more meltdown in the UK, at least according to More 4 news.... 28 bn hole noir dans les accounts de HBOS, they are now wondering if the regulator (James Crosby?? since resigned, used to run HBOS, I think, had something to do with 'em anyway) was seriously out to lunch (or worse) when pushing the merger with Lloyds....destroy 2 banks for the price of one.

Meanwhile, todays Grauniad has a centerfold spread suggesting that the peculiar resistance of Lloyds when faced with nationalisation might have had SOMETHING to do with the fact that they were claiming tax relief from both the US and UK for the same stuff.... and there was an office (or should that be orifice??) in the Caymans as well..

Jaysis, do yis still think we've the worst banking sector in the universe?? There's really stiff competition out there....

expat girl wrote:

just to continue the great love affair we are having with the banks (on this site at least).... more meltdown in the UK, at least according to More 4 news.... 28 bn hole noir dans les accounts de HBOS, they are now wondering if the regulator (James Crosby?? since resigned, used to run HBOS, I think, had something to do with 'em anyway) was seriously out to lunch (or worse) when pushing the merger with Lloyds....destroy 2 banks for the price of one.

Meanwhile, todays Grauniad has a centerfold spread suggesting that the peculiar resistance of Lloyds when faced with nationalisation might have had SOMETHING to do with the fact that they were claiming tax relief from both the US and UK for the same stuff.... and there was an office (or should that be orifice??) in the Caymans as well..

Jaysis, do yis still think we've the worst banking sector in the universe?? There's really stiff competition out there....

You've just reminded me to turn on Pat Kenny - could be something there about the Financial Collapse on that.

The German economy contracted by 2% I heard too earlier on the radio. Great for the saving of the CO2s.

I suspect the magnitude of the collapse is currently masking the decline in the oil supply. I wonder how long it will take for this to become apparent. Someone had posted up something about the Chinese economy increasing its rate of growth again.... and the baltic dry index rising once more. Canada and Australia will be the places to go to if that's the case...

I know someone (qualified professional) who went down to Australia in search of work. No work down there either so they came back, easier to be unemployed at home than down there.

Yes, I'd heard they'd begun to feel it, but if the price of commodities goes back up again quickly......I suspect, however, that we in Ireland would be better off if they didn't, since we have to import them!