Wayward DP
Well-known member
H87, the pound is already down ~20%, and they haven't even left yet.
How is this a good thing?
How is this a good thing?
OT: The News Thread
- Thread starter MindzEye
- Start date
Altair
Well-known member
Pound is down, sure, currency traders are a skittish bunch. If you haven't noticed, a place called canada has a dollar worth 3 American quarters, are you freaking out about that?
It's not a "good" thing, but it's a manageable thing. Also, 3rd strongest GDP growth in the G7, arguably second strongest, you tell me how that's a bad thing eh?
Altair
Well-known member
Exports are rising, housing starts are encouraging, employment numbers are steady, GDP growth is impressive compared to any G7 nation except the USA, the sky is not falling.
MindzEye
Wayward Ditch Pig
Of course they are. Their biggest trading partner just saw their exports get a shit ton cheaper due to currency devaluation, while having no tariffs attached. Let's revisit this when what passes for a trade deal is figured out between the two.
Wait until manufacturers burn through their inventory of parts and supplies purchased with a healthier Pound as well. There will be upward price pressure on UK exports before they sort themselves out with Brussels
Why? Do you understand why anyone cares about housing starts as an economic indicator?
Why wouldn't they be right now?
You keep repeating it, but I really wonder if you understand what GDP growth is exactly. When the BoE fires a cannon full of money at the economy, what exactly do you expect to happen? When you make money significantly cheaper to borrow, what exactly do you think is going to happen?
You really think that the UK's tepid growth is "impressive" in any context given the epic ****load of borrowed money being used to drive said growth?
The sky is being held up temporarily by Mark Carney, but it's a fair bit closer to the ground today than it was last July.
worm
Well-known member
all for immigrants though.
Altair
Well-known member
So good news isn't good news? You really are pessimistic here.
If employment is steady and wages are steady or rising people feel they are in a financially secure enough position to be buying new homes. It's a good snapshot of consumer confidence. It also provides jobs for for those in the construction industry. Not to mention money for the raw materials needed for homes. So even with this uncertainty a mic of lower interest rates , steady wages and employment has the brits feeling that things are good enough to be investing in homes. As for low interest rates being a magic bullet for economic growth, I think you are being a little naive here. If that was the case, the 0 percent interest rate in Japan should have that economy humming. Stimulus in Japan should also have them surging. It's not working.
Every economic indicator is pointing towards the British economy being in a healthy state. It cost a boatload of public money but it's having the desired results. It's not like the UK is at a dangerous level of Debt to GDP either so they can afford to make this move. It's no more troubling than what canada is spending now.
Again, I think this is a unfair assessment of the British economy right now.
Look at France, look at Germany, look at Italy and come back to me and say British growth is tepid.
JohnnyHolmes
Banned
The people that were wrong about everything up to this point, are going to be right about everything going forward.
Wayward DP
Well-known member
That's a little harsh, you were right about Trump winning, even if you hedged on that.
lecoqsportif
Well-known member
Housing starts are an important cyclical indicator.
Look, Brexit is a long-term play. GDP in 2016? Who cares! We have to see what the deal is 2018, when the terms of the new trade and economic arrangement are clearer.
Look, Brexit is a long-term play. GDP in 2016? Who cares! We have to see what the deal is 2018, when the terms of the new trade and economic arrangement are clearer.
JohnnyHolmes
Banned
How did I hedge on that? I didn't bet on it.
Also, I do believe I called the Brexit as well.
JohnnyHolmes
Banned
lecoqsportif
Well-known member
Yes, Carney had to take fairly robust measures, but he can only move the needle so far. In part, he had to demonstrate that the BoE is the adult in the room, especially when the likes of Boris the Baboon are shooting their mouths off.
Forecasters, largely due to bias or foreshadowing, were too enthusiastic in their doom and gloom forecasts. Economies have a certain amount of momentum within a cycle, so a long term structural shock like Brexit won't show in short-term indicators (though I'd watch futures for the GBP). Anyway, short-term indicators don't necessarily indicate anything, one way or another.
But let's be clear about this. Brexit is an enormous risk for the UK on many levels.
Forecasters, largely due to bias or foreshadowing, were too enthusiastic in their doom and gloom forecasts. Economies have a certain amount of momentum within a cycle, so a long term structural shock like Brexit won't show in short-term indicators (though I'd watch futures for the GBP). Anyway, short-term indicators don't necessarily indicate anything, one way or another.
But let's be clear about this. Brexit is an enormous risk for the UK on many levels.
MindzEye
Wayward Ditch Pig
It's not too stupid, it's simply uneducated in economics. It's why I do my best to actually explain my points, I get that most people did decide to pick up economics books for the **** of it and learn what the ****s on TV were talking about.
I'm clearly not going to convince H87 at this point and I'm cool with that, he'll see in time. Like Lecoq said, this is a long term issue...****, I've said that. We won't really start to see the proper negative effects of this until the negotiations are done and the business relationship between the two entities becomes known to industry.
If he wants to analyze current facts on the ground in a positive fashion, that's up to him. To do so you have to ignore, or be unaware of some basic tenets of economics, but whatever, I tried.
Altair
Well-known member
I take issue with statements like that.
We, right now, today, don't even know the results of negotiations. We have no idea what kind of deal the UK will get. It can be a deal that allows for the free movement of goods across borders for all we know.
But again, with no idea what the future holds, you have already assumed the deal to be poor for British industry.
Stop trying to predict the future, it's not working.
Altair
Well-known member
I take issue with statements like that.
We, right now, today, don't even know the results of negotiations. We have no idea what kind of deal the UK will get. It can be a deal that allows for the free movement of goods across borders for all we know.
But again, with no idea what the future holds, you have already assumed the deal to be poor for British industry.
Stop trying to predict the future, it's not working.
Economics is not a pure science with entirely predictable outcomes. Different and conflicting schools of economics will predict different results based on the same data. Unexpected results and re-analysis of the reasons for those results are the norm in this field.
Anyone acting like they can say with complete certainty how this will play out is fooling themselves. Not suggesting the exercise is fruitless, just that arbitrary stances ignore reality.
Anyone acting like they can say with complete certainty how this will play out is fooling themselves. Not suggesting the exercise is fruitless, just that arbitrary stances ignore reality.
MindzEye
Wayward Ditch Pig
True, but we know a few things here
1) Brussels has a ton of incentive to turn the screws on the UK
2) Though it's one of the largest economies in the world, the UK is the minnow in this negotiation. If the EU are willing to cut off their nose to spite their face (which there's a lot of talk of, if for no other reason than to scare off future exits), they'll barely notice it.
Because Brussels' intent is to make it poor for UK business as a warning. I mean, they don't even need to come to terms on a free trade deal and just let them exit.
Making this an easy process would set a horrible precedent for the future, if your goal is to keep the EU together. Give the UK a good deal and you may as well start tearing the whole thing down. Every time there's a isolationist/populist movement in an EU country, there will be a push for said country to leave the Union. Kind of defeats the purpose of the whole endeavour.
Meh, you wouldn't know an accurate prediction if it teabagged you.