The Myth of UK Economic Strength
With a week to go before the budget it is worth reflecting on where we are economically. Exactly ten years ago the FTSE 100 stood at 5,782. Last night the stock market closed at 5,767. Investors have seen the stock market and the value of their pensions decline during the ten years of New Labour's economic management under Gordon Brown. A lower stock market after ten years of Labour government is an incredible indictment.By comparison the Dow was at 8,569 on March 6, 1998 and last night it closed at 12,213. Up 42% over the same period.
Remember that next time Gordon or Alastair claim that "Britain is stronger placed to weather the coming global financial turbulence". Complete fantasy.
UPDATE 09.05 :
Given some are suggesting it is currency related, broadening the comparison:
| The Great British Economic Miracle: | The Land of George Bush's Tax Cuts: | Workshy Cheese Eating Surrender Monkeys: | Merkel's Tax Cutting Social Market Economy: | Chinese "Communists" with 16% Income Tax: |
| FTSE 100 on 6 March 1998: 5782 | Dow Jones on 6 March 1998: 8569 | CAC 40 on 6 March 1998: 3875 | DAX on 6 March 1998: 5097 | Hang Seng on 6 March 1998: 11519 |
| FTSE 100 on 5 March 2008: 5767 | Dow Jones on 5 March 2008: 12213 | CAC 40 on 5 March 2008: 4676 | DAX on 5 March 2008: 6545 | Hang Seng on 5 March 2008: 23120 |
| Growth: -0.26% | Growth: +42.53% | Growth: +20.67% | Growth: 28.41% | Growth: 100.71% |
Hat-tip : Free Britannia and table courtesy of Spokey in the comments
69 comments:
and dont forget that the Dow figure includes the dot.com crash of 2000 , plus another crash in the wake of 911.
Bollocks. We ARE doomed, aren't we?
Indeed,
Even before you've factored in inflation...
but house prices are now three times the price in 1997 but mortgage rates are the same and earnings up only 50%......looks as if house prices are some 100% to high ......
so this is how affordable housing arrives under Yvette Cooper
What we are going to experience, whatever spin is put on it, will not be a bust exactly, although for some it may feel very much like one.
It is going to be far more like a slow painful continual seemingly unstoppable decline in general standards of living and quality of life for the vast majority of ordinary people. This will go on for at least ten years. Only this relatively short amount of time, if we start doing what needs to be done by lunchtime tomorrow.
Busts slow or otherwise tend to do at least some people some good, divorce lawyers for example. However this particular type of slow bleeding to death will do virtually no ordinary people any good at all.
Any fool on the street who actualy shops can see inflation is a lot higher than the comedy CPI figure,Gas and electric bills soar council tax seems to increase in exponentially and still CPI heads down(can you eat plasma tvs).House sale signs go mouldy for lack of buyers and as you point out the stock market is dead.
One more time...Gordon is just shit!.
Nulab ten years of increasing tractor production but no food.
I was eight the last time the socialists trashed the economy and turned the lights out its gonna happen again.
Matches the myth about hospital waiting times.
NuLiebor - New Lies.
Still they have got away with repeating both lies for over ten years now. Long enough to have funded gold-plated retirements - for them.
Peter Grimes
Can people not see that Labour have over spent with both hands. Labour will always ruin the economy with their spending. They then need more money for their stupid ideas, so increase tax, and spend more,and increase tax and....
so it goes on and on. Just wait for the budget it will grab even more thats how strong the economy is.
How do they compare if be-based to common currency?
The worse is still to come. The USA is slipping into recession and we may well follow.
The B of E has little room to lower interest rates further as inflation is rising and if it reduces rates by 25 basis points on Thursday(and the monetary committee is pretty equal for and against)rates are unlikely to fall lower anytime soon. Mortgage defaults will rise;so will re-possessions and personal bankruptcies.
Brown and Darling are in denial
Fiddlesticks. Stockmarkets go up and down.
If you chose a five year period
the rise is approximately 2000 points! Just depends when you invested and how.
Maybe you should advise your readers to invest in America and live here (best of both worlds?)
ten year FTSE period
http://tinyurl.com/26oegp
five year FTSE period
http://tinyurl.com/27gwxu
Nice one Guido. The only way to win at the moment is to have faith in the uselessness of this clown and short the market.
I may be unemployed soon but Brown is making me money by being true to form and being a complete cunt.
Well, he did say he would end boom and bust, shame that steady growth went out with the bath water.
Guido, A year ago the pound was worth 0.66 euros and has fallen by 12.5% to 0.75 euros, and yet I have not read a single comment about this. That the pound is converging on the euro is probably a sign that the time when we adopt the European currency is fast approaching.
If your pension is an index-linked final salary scheme guaranteed by the taxpayer, FTSE performance is largely irrelevant.
I was once told by an American insurer that he would only write reinsurance for clients "that kept some skin in the game" (i.e. shared with him in the original business risk themselves). Sensible chap - after all, how else could he be sure his clients would stay focussed if there was little mutual financial interest?
How can we in turn expect MPs and civil servants to behave as fellow travellers on the good ship UK, when they are, to all intents an purposes, sofa-dwelling chavs and chavettes idly flicking about with the economic channels via the remote?
Have you got a graph of how the stock market has changed over the years? I'd be curious to see when the highs and lows were and how much damage has been done in the last six months.
I fear the real reason the Dow is so high is everyone over there is doing the old one more bet to win back all our loses throw of the dice.
So I wouldn't exactly put too much faith in where the Dow is now, consult the Sage of Omaha first.
Guido I'm so glad you are now covering economic issues, because it's actually the only issue. Everything else, all the Frankfurt school cultural marxism comes from it. On CNN they have finally admitted that the US faces a hyper-inflationary depression not unlike that faced by the Western Roman Empire before its fall. Like then the west will be destoyed by massive devaluation of our currencies worldwide. The sale of the crisis is much worse now; it is historically unprecedented. Imagine the Weimar republic on a global scale. The question is who is behind it? What is their endgame? I advise all of your readers to buy gold and silver fast; tell friends and family to do likewise.
It makes I mad it does.
All that Effort Mrs T put into sorting out the basket case economy that Labour and the Trades Unions had created, has All gone to waste.
We may have had a closet Conservative Prime Minister for the last 10 Years but Socialist Brown was busy beavering away totally unchecked squandering all that Mrs T had left him.
Now we have an openly socialist Prime Minister who has total control over the Treasury Kow Towing to the Unions and we are reverting back to the basket case 70's.
If only we had an oposition Leader who was a real Conservative then it would not be too late to pick up where Thatcher left off.
Frankly,it is even worse.Since 1997 many overseas mining companies have listed in London and joined the footsie.These have thrived and are holding up the index.Most of our old "safe" companies have been in comparative decline.The successful ones have been bought by overseas companies taking advantage of our weak markets.
Wake up guys and plug that wanker Osborne into the National Grid (half a million volts should at least bring him back to semi comatose)
Labour get away with this because the Tories are incapable of fixing the true narrative in the mind of the electorate whilst Georgey boy and the Upper Remove slumbers on.Right now there's a vacuum in the public's sense of their economic well being but unbelievably Labour looks like filling it first (worldwide problem....Alistair Darling...hard choices etc etc )
Hague on "Today" this morning un-fucking -believable;what a twat.All the wiity lightweight elegant debating points that make him feel so clever when what was neede was some genuine anger followed by smashing Milliband with a coal hammer.
Fucking hopeless says Colonel Madd
Inflation up? Bollox. I just bought a digital camera, an electric drill from Aldi and a 12-pack of "Ooja Finkya Lookinat" cider. Oh, and I also renewed the road tax on my 400cc hybrid 2x2 runaround.
All much cheaper than 10 years ago. So cheap, in fact, that I will eat nothing else in future.
Told you guys all along - McClown is a disaster and, for all the shit in between, his government will fall on one thing - the economy. It's a shambles, exactly the same as the 70's except this time there was a decent Tory economy in place when he took charge as Chancellor.
It will take decades to sort out the mess - but, unfortunately no one with Thatcher's balls to force it through.
A few people on here trying to paper over the cracks of Labour's economic failings I see. The fact that the FTSE100 has reverted to where it was 10 years ago means that any optimism about profitability has now evaporated and currently investors expect company profits to be no better than they were 10 years ago despite a 50% increase in prices over that period.
Some might say that the Dow is due for a fall. Almost certainly true. The only thing propping it up is the hope that the Fed can haul the US economy's ass out of the fire in the nick of time (or at least delay the financial apocalypse for another year or two). Once it becomes apparent that the Fed has failed then the Dow will crash - but it will take the FTSE100 and all our savings and pension funds with it. The only place that all the money squeezed out of the stock market will have to go is into commodities - like wheat for instance. Commodities are the only investment on the march right now so they are already attracting speculators in droves. Get ready to pay a lot more for your daily bread.
I wish I was Swiss. Switzerland has a constitution that forbids the banks printing excessive amounts of funny money and backs the Swiss franc 40% with gold. There are good reasons why that funny little country has survived so well for so long and is the richest country in Europe. It doesn't suffer from periodic bouts of high-level economic corruption because the constitution doesn't allow it.
"On CNN they have finally admitted that the US faces a hyper-inflationary depression not unlike that faced by the Western Roman Empire before its fall."
The US will be fine. One of the commodities rising really fast right now is wheat. And the US produces a lot of wheat. The world consumes a lot of food, and more each year. Look at your household bills - how much do you spend on food and how much on petrol? Food is the commodity to go for, you can't eat petrol and you can't eat gold. The US produces vastly more food than it needs itself so it will always be a hugely wealthy nation.
Wouldn't surprise me if the US had worked out the whole scenario - industrialise China to produce enormous amounts of goods desired by Americans and pay for it using debt, then sell them wheat at vastly inflated prices to pay for the debt, whilst suddenly cutting back on consumption. Net result is China sees its industry collapse just at the moment it becomes hugely dependent on US food imports. Stands a good chance of bringing down the Chinese Communist Party I would say. Food inflation already rampant in China.
Problem is that old Blighty will get caught in the cross-fire. Can't compete with the Chinese on industrial production and can't produce enough food to feed more than half its own people. Probably end up like Italy after the Great Depression with people eating their own kiddies to survive.
Better hope that oil isn't running out too or we will be in an even worse state....
Why am I not surprised by any of this. Look, all, but all, socialist governments are fiscally and economically useless. Since cl4.4 was abondoned they cna do nothing else but tax and spend. They ahve nothing but nothing else to offer. They do this under the guise of making society 'fairer' (i.e. take away my money to give it to someone else). This crap.
For example:-
Ruth Kelly is marginally more attractive than me, and she is cleverer than me. So to make it fair I should hit in the face with a baseball bat and lobotomise her.
There, that's better. It all 'fair' now. She is about as handsome as me and about as clever.
I have said before that I thought long and hrd before voting in 1997 and finally I went Tory - on the least worst choice basis - purely becasue I knew this lot would fuck up the economy. I have been voting since 1970 and I well remember the last Wilson goverment which nearly as deceitful as this one.
gordon is a fool.a man who has never rally had a job until being in politics( can we class that as having a job)?
the economic miracle is a smokescreen.his 100 stealth taxes,his golden rules,his 5 year plans are all a charade...oh yes and the gold sale........there are still 1.6 million on the dole,2m on the sick and 1m that dont claim...he is destroying hte country on purpose to create a bizarre soviet state where the government has it all and we are just fodder...add to this the lack of investment in the uk and we are all donald ducked.?did anyone see the c4 program re china the other night?Burberry has closed its factories in the uk where it paid workers £375 a week..now the goods are made in china where the workers get £15 per week.......
the bosses get rich ,the workers re shafted and those jobs will never be replaced...yet gordon wants to talk about plastic bags!!!!
bofl
Within the last 12 months the FTSE has been at 6,700. As with all comparisons like this, the key thing is to choose the right time periods. You can often support a number of different stories just by tweaking your time period a bit. Caution advised!
But yes, we are fucked.
"That the pound is converging on the euro is probably a sign that the time when we adopt the European currency is fast approaching."
It is not converging on the Euro. "Convergence" doesn't mean that £1=1Euro, it means that when the Euro changes its exchange rate with respect to the dollar then the pound does too, and by the same amount. This definitely isn't happening now.
However, there is another reason why the government might want to go for the Euro. A run on the pound as investors exit the UK could be halted by swapping to the Euro. The EU might appreciate the UK joining with a weak currency because it might help mitigate an appreciating Euro as the dollar falls. But most of all because they are all so fucking corrupt and they are obsessed with creating a European socialist super-state without reference to the aspirations of the people. It wouldn't surprise me if the EU and Gorgon have happily sat back and allowed a economic disaster to happen specifically because they want to force anti-democratic Marxism down the throats of Europe, and particularly the UK.
Give it a couple of years and we will find out. Could be in the midst of a civil war by Christmas.
When McBean stuffed the priavte pensions, Anthony of Mesopatamia said it didn't matter 'cos the stock market was booming and pension funds were better off.
What do those pair of thieving, lying twats say now?
On the theme of the Snot Gobbler: the Telegraph "reports" as its lead story the notion that McBean wants to investigate the Barnett formula, as Scotland gets too much dosh.
Hah! Are Telegraph hacks the only people in the UK not to realise that nothing ever comes of these spin exercises. McBean used to spread jot at the Daily Mail 'cos casinos and boozing were being reviewed. Nothing came of it. How many times have we been told school playing fields would be protected? Once every two years?
McBean is a weirdo with a sense of entitlement and no new ideas. He cannot think beyond the next day's headlines. The Telegraph should reflect on the difference between a broadsheet on one hand and a quality newspaper on the other.
If anon 8.48 is correct Bollockless Brown's gold sale was even more incompetent.
b.t.w.why does Brown get off berating everyones proposals as unfunded when his own efforts amount to more borrowing...doh.Whats the difference?
an earlier comment asked about the 'oil' running out........
i can inform you that as of next year the uk will become a net importer of oil as it starts to run out........the norwegians that share our oil have a state fund with $380 BILLION saved.what have we got? sweet f/a.so much for economic prudence.
bofl
Re the FTSE 100. Don't forget that the companies that make up this top 100 club are regularly changed. So many of the companies included in FTSE 100 now are not the same as those in it 10 years ago. That is, we are not comparing 'like with like'.
Gordon, though, is still a charlatan.
Yep, the Tories are fucked too. They've gone for their very own version of Tony "nice but dim" Blair because that was what the middle ground wanted just at the moment when this bunch of feckless twats known as "Floating voters" will decide that they would prefer Adolf "I know a thing or two about firm government" Hitler.
Gordon Brown has been asked to appear on a new ITV version of the popular BBC television program
"WHO DO YOU THINK YOU ARE"
It is to be called
"WHAT THE FUCK DO YOU THINK YOU'RE
DOING"
Anonymous 11.00am - there are a few key differences between the UK and Norwegian oil industries; UK fields are smaller and have a higher proportion of gas fields:oil fields. Also the Norwegian population is much smaller and the Government was able to save the money instead of paying to restructure an industrialised basket case economy like we did during the Eighties.
Er....it's called g-l-o-b-a-l-i-s-a-t-i-o-n.
The 'miracle' is that in all this, we more nurses, more police, higher health spending..etc etc etc..
knobs morons.
Gary
"many of the companies included in FTSE 100 now are not the same as those in it 10 years ago. That is, we are not comparing 'like with like'."
Except that the FTSE all share is just as bad.
This chart over the last 10 years shows that share prices growth has been shit:-
http://uk.moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=%24GB%3aUKX&CP=0&PT=10
You can also see that those tossers claiming that if you look at share prices over 5 years you get a different story are technically correct - but only because that was right at the end of a 2year share price crash created by Gordon Brown when he screwed over the technology sector in 2001. Obviously the cunts that are saying that are Labour party apparatchiks because no-one else would defend the indefensible like they do.
Our pension funds rely on share prices rising to pay us a decent pension in our old age. Fuck all chance of that under Labour. We will be paying for their ten years in power for the rest of our lives.
I have been trying to find out what exactly is in the CPI 'shopping basket'. Admittedly I didn't try too hard - just used Google and got about 200,000 pages of bollocks. But I'm guessing that the 'basket' contains a plasma screen TV, a mobile phone, a laptop and a small bag of salted peanuts to represent spending on food.
Just like everything else this fucking government touches, the inflation statistics have been corrupted for political purposes - in this case the need to hold down wage demands in the massively expanded public sector. Labour are afraid of ending up with a rerun of 1978-9, but with worse pop music.
When The Great Snotgobbler embarked on his massive public spending wankfest I don't think he realised how weird the economy was at the time. The Chinese industrial revolution was picking up fast, and most of the stuff they were making was the stuff that Britain stopped making some time in the early 1980s (tools, electrical goods etc). So we got to buy a lot of goods very cheap (which kept inflation low) and the people who felt the pain from job losses were mainly our European friends.
Gordon, the party's over. The Chinese middle class is growing fast, and they all want plasma screen TVs of their own. That means fewer for the rest of us. China has sucked in so much raw material that commodity prices are rising out of sight, and prices for manufactured goods are only going to go one way. The buggers are eating more than they used to as well.
Strip out the imported deflation from Chinese electronic tat and Barbie dolls, and we'll soon see what the inflation rate really looks like. The only thing that might hold it down is that ordinary people in this country (like this humble sheetie) are so fucking poor that they can't afford to buy anything unless it's half price in the sales. But keeping inflation down by taxing the fuck out of the voters is not exactly the way to win hearts and minds.
As many, many others have said, Labour governments always screw up the economy in the end. This lot got lucky, but I think their luck just ran out.
I'm off out now to stock up on canned goods, red diesel and shotgun cartridges. Be happy.
Anon 1.52 - "a 2year share price crash created by Gordon Brown when he screwed over the technology sector in 2001. "
Idiot. The collapse of the technology bubble and the consequent share-price crash had nothing to do with Brown. It started in the U.S. and was world-wide.
"Idiot. The collapse of the technology bubble and the consequent share-price crash had nothing to do with Brown. It started in the U.S. and was world-wide."
Wrong. It was caused by Tony "nice but dim" Blair deciding to pay off the national debt with £35bn in 3G mobile phone licences. This idea then caught on with his socialist friends in Germany and elsewhere and before you know it the 3G tax in Europe was £250bn.
One of our finest companies, a shining new light in the technolgy firmament called Vodafone, was then hobbled by debt it struggled to pay back as it tried to cling on to its market share, whilst Marconi found that its customers were so strapped for cash that no more business was forthcoming. Labour claimed it was all due to the dot.com bubble of course, as if Amazon and Google were UK companies, and with the BBC cheering them on they got away with it. Truth is the only UK company affected by the dot.com bubble was lastminute.com. Brings tears to my eyes to think how Labour fucked up the greatest industry we have created since the war. I'd like to beat them all to death with sticks, lying treacherous cunts. I think they did it on purpose. They are out to destroy the UK and all of us. They hate us, because we hate them.
They are all lying cunts but now the lies have come back to eat them alive. The lot of them. I hope things get so bad that all those mistreated and lied to by Labour and the BBC rise up and set fire to the bastards in the street while petrol is still cheap enough to make it a viable proposition.
Bitter? I'll say I'm fucking bitter. I watched the bastards take my industry apart and now I want my revenge.
anon @ 1:52
I wouldn't disagree with your FTSE all share point, but the topic under discussion was the FTSE 100.
anon @ 12:52
Norwegian Oilfields? Eh? I was not talking about oilfields.
Er
So you’re advice would be to either try and elect a George Bush clone or if you really want success, join a Communist regime.
Your data clearly show that we should cut income tax and go communist.
There is no alternative.
Guido should have shown the graph over a 20 year period. It would have shown stellar growth in share prices during the previous 10 Tory years followed by a broadly flat performance over the last 10 years of Labour. With the crash still to come of course.....
For some reason the FT seems to quite like Gordon, along with the CBI, but I'm fucked if I know why. He's a disaster.
"Your data clearly show that we should cut income tax and go communist.
There is no alternative."
China has never actually exhibited sufficient Marxism to be described as "Communist". No universal free health care and no universal free schooling either. Still, these days it believes in free market economics and is doing rather well. Shame our government prefers a statist economy or perhaps we might be able to compete with them.
Dickie the sheet etc...
Browns continuing claim for creating the low inflation stable environment is just lies. Make a graph of RPI from 1947 to 2007 and you will see that after having peaked in about 1976/78 it declines with various abberations until about 1993/95 - in other words Mrs. T's supply side reforms and the victory over totalitarian socialism in 1989 - cured inflation, not Mcfuckingbean. We have been importing deflation since 1989.
For real inflation look at the public sector where the inflation rate since 1997 has been about 9% p.a., especially in health care. In other words the value achieved for the cash spent has been declining year on year. 9% p.a. over 11 years is a reduction in value of about 62%. So each state employee is now less than half the value of the the 1997 one.
Or look at it this way. The inflation rate is a measure of declining efficiency. Declining efficiency must mean less efficient use of all aspects of employment, including energy. It is therefore reasonable to look on McFuckingBean as an increasing producer of greenhouse gases (if you believe in such things of course).
The man is a deceitful cunt. There is no other descrtiption for him.
However, does Cameron (the only viable alternative - not necessarily any good) get it? If he, Cameron, made plegdes as to giving independence to the staticians, so that we could judge properly what was going on, would he get the backing from us the voters? I think he would.
Would quite agree that the UK economy is a pyramid investment scheme that already had its blow off top.
However, the US is the same, only worse.
The 'mighty DOW' needs a few exchange rate changes factoring in. Given the dollar is down 50% against the euro, and even 30% on the dollar index over the same period, the DOW in reality has done nothing. Moreover, you will find plenty of US based investment professionals advising their clients to invest in foreign companies/foreign markets at this moment.
The DOW had two consecutive days of PPT late-day intervention this week (they care so little that they more or less do it openly nowadays). Today is apparently the 'AMBAC' bounce, except we already had that once, and the deal still ain't done.
Basically, it's a mafia operation. A shark-infested swimming pool. US stocks are toxic, like the people running the companies. I'm not saying things are perfect elsewhere, but if you go and put more of your money into the land of money printing and debt monetization, don't say you weren't warned.
This might be the single worst piece of financial analysis I've seen. Aside the questionable belief that a share index is a good measure of economic prosperity (it might just mean monopoly profits), it ignores dividends, which you'd think are rather important to pensioners, and currency movements.
Over 10 years an investor in the Ft-se 100 would have received 35%, one in the S&P 500 48%. In terms of dollars that would be 63% in the ft-se 100 and and 48% in the S&P 500.
Pensions rely on capital growth and income - there has been no capital growth for UK pensioners.
You will find that US, French, German and Hong Kong shares pay dividends as well.
You are mad if you think a flat stock market is indicative of a healthy economy.
I think we are getting confused between the price and value of the various indices and the underlying stocks.
There are stocks in each index that are probably good value right now. However the indices as a whole may be over or undervalued. Similarly I do not think it is relevant to Guidos argument to factor in currencies. These are discreet market performances and are being used as a proxy for the underlying economies. Why the Dow has outperformed the FTSE 100 is relevant is to do with the more business savvy environment in the USofA - Sarbanes Oxley, Enron etc excepted. Also the sub-prime and associated banking woes need not reflect badly on the DOW or FTSE as a whole. Many companies have rebuilt their balance sheets over the last few years in the expectation of this current problem. After all it was pretty clear that consumer debt was unsupportable at current levels as is UK government debt.
More of issue is the very unbalanced nature of the UK economy. By feather bedding unemployment and inventing poverty that needs 'curing' our Governemnt as created a very high cost labour force that will not get out of bed, or benefits, unless it is for internationally silly money. This makes it all but impossible to manufacture here unless huge governemnt subsidies are paid the employer (e.g Renault in France - which has the same problem. BTW why did Nissan buy it?).
The FTSE has underperformed internationally because all investors very quickly realised that nuliebour was useless.
In addition the removal of the ACT rebate for pensions schemes (about 60% of the owners of the FTSE) effectively increased the cost of capital so that a lower P/E ratio is necessary. That is, the divident rate has to be higher as re-invested dividends are the biggest contribution to the long term growth of investments - and pensions are long term investments.
In any event more people are employed by small business (70% in my area) of five employees or less and I can tell you from personal experience it is vastly more expensive to do business in Browns England than it was in 1997.
lola said...I can tell you from personal experience it is vastly more expensive to do business in Browns England than it was in 1997.
And about to get more expensive Lola as the minimum wage is to rise by Inflation.
It seems that as we now have a two tier inflation economy, the minimum wage is rising by the higher rate.
3.8 %
The lower rate [ or Gordon's private public sector special fantasy rate 2.5% ]is only to be used when the government is paying or are trying to hide something.
If private companies , individual shop keepers , small businesses are paying then the higher or ACTUAL rate must be used..
What a hopeless cretin. He can't even pick a story to stick to.
But that's what happens when you rush an announcement forward from next weeks Budget because you are afraid of adverse Euro Treaty press stories in the morning.
"Pensions rely on capital growth and income - there has been no capital growth for UK pensioners.
You will find that US, French, German and Hong Kong shares pay dividends as well"
But US shares pay lower dividends, so to only give one side of the returns you are giving a misleading picture. That's why the Total Return figures I give are much closer.
Incredible;a lively knowledgeable debate about what's actually going on in the U.K economy.
Any one of those particpating would make a better job of explaining what's going on than DC's "Treasury" team.
Why has the idiot wallpaper fancier NEVER been on anything more demanding than "Newsbeat"???
Why's he always surrounded by media minders????
Can he count to eleven without taking his shoes and socks off???
I know Ken Clarke is hugely divisive but by now he would have been sauteing Brown & Darlings pancreases with soy sauce and chinese leaves on a wok on the Speaker's desk
The mong Osborne spent the entire Northern Rock debate doing an impersonation of Bertie Wooster as portrayed by Mr Hugh Laurie.
It's long past time for a three way interview with David Cameron and the captive bolt gun says Colonel Madd
Anon 2:42 - the Norwegian sovereign fund is generated using tax revenues from oil fields; large fields are generally more profitable than small ones and oil fields more profitable than gas fields. They also have a far smaller population to support with welfare payments of various sorts.
maybe the bank of england should concentrate on looking after the well being of the economy rather than wasteing time on Common Purpose networking events
(hint : look at the email address at the bottom..)
"2:38 PM, March 05, 2008"
you left out IR35 -introduced of course by the one eyed snot eating cunt - which seriously fucked up the I.T. contracting market.
never mind the bollocks these are very bad numbers.
gordon brown is a total spastic.
just look at the numbers.
after ducking out of dealing with the unfunded public sector pensions budget problem his only option now is to increase the tax take.
despite the already high taxation levels it imposes, the government has no apparant understanding of the word value and so it offers very little value to the taxpayer.
new labour have trapped us in a vicious circle of taxation, the ever decreasing type.
economically, the icing on the cake is that the american banks knowingly passed off bad loans to offload their risk and by executing this deception they triggered the banking crisis.
fucking idiots!
captains of industry?
fucking pirates more like.
Retail Banks still have 20% to fall.
The Chinese are investing in Western debt rather than Western equities. It's a form of economic war - they can take an attrition rate of 20-30% the West can't.
Those that argue the Chinese don't understand money ... don't understand money.
You forgot about inflation -
If inflation was at 2% (then multiple 5792 by 0.98 10 times) you get 4724.
If inflation was at 4% (then multiple 5792 by 0.96 10 times) you get 3844.
If inflation was at 6% (then multiple 5792 by 0.94 10 times) you get 3119.
If inflation was at 8% (then multiple 5792 by 0.92 10 times) you get 2515.
A bloody miracle !!
So how does one go about starting a Civil War .... I think us English have lost the knack, shouldn't we get some advice from the Spics or Kenyans ?
Dear Comrade Anonymong @ 4:52 PM,
I am sorry to hear that the Chinese are not communist enough for you,
My comment hinted that although stock market values are obviously a measure of something, I am not sure they are as definitive a guide to prosperity as Mr Fawkes suggests.
The US economy, for example, in spite of its wonderful Dow Jones performance, is currently entering recession.
Give me economic prudence any day.
Coming late to the fray, one thing that distinguishes the UK from the other markets is that if you examined the FTSE 100 list in 1997 and today, you will see that most of the companies in the list 10 years ago are no longer there, having been taken over, often at substantial gains, by foreign companies and private equity. This does not happen as much elsewhere, esp France where foreign takeovers of large companies are almost unheard of. The index level does not reflect the distribution of such gains to shareholders. However, I am no apologist for Broon's so-called economic miracle, and if you need a more accurate picture of UK plc, look not at the FTSE 100 but at the wider FTSE 250 or FTSE all share, where the performance is piss poor.
trotsky said...
The US economy, for example, in spite of its wonderful Dow Jones performance, is currently entering recession.
And you think the British economy isn't?
geordie scoot...
Nonsense. The French use a form of mercantilism to frustrate foreign buyers of 'national champions'. This embeds the innefficient allocation of capital wjich is adressed in the UK by a lively trade in companies. Private equity etc is a Good Thing.
PE has been around for ages. What has made it headline news recently is that, as money was for to cheap (thank youMcfuckingbean) they were able to create heavily geared deals that actually looked likely to work because the cost of their capital was so low.
If PE the comes along and offers a shareholder a big dollop of cash, ata prive that he thinks is fair or generous for his stake then he can choose to sell. And why not? It his the shareholders company.
You can argue about long or short termism around this. I am not going to.
For evidence of French mercantilism look at outfits like Renault or their banks.
And if you analyise the french economy it is evedn more fucked thna ours. They have a pensions deficit greater than their GDP.
IMHO the EU is al about the Fenchg leveraging the Germans with guilt to enbable the ruin of the UK by dragging us down to their level of statist inneffiency.
French Great food and (mostly) great people (read the 'average bloke theory). France - statist corporatist arrogant cheese eating surrender monkeys.
"The Chinese are investing in Western debt rather than Western equities. It's a form of economic war - they can take an attrition rate of 20-30% the West can't."
It's not economic war. The Chinese can't feed themselves now and they are adding 130million people to their population every ten years. They know that the only place that can feed their growing population is the US, a vast exporter of food products. Thus they are selling stuff to the US in order to build up their dollar savings so they can guarantee their ability to buy US food in the future. Only problem is that the UK is also dependent on food imports and can no longer compete with the Chinese. China has enormous problems with a growing and ageing population, but they have found a solution. Only problem is that their solution might starve us Brits to death.
Apart from apologising about the atrocious typos in my prevois post, I think that Guidos figures and the comments on here open up another problem, which the increasing strangulation of 'free trade'.
It seems that every serious and sensible pundit now accepts that genuine free trade is a Good Thing. However it is being attacked by politicians, by vested interests, by bureaucrats and by other interst groups like greens and 'fairtraders'.
In the US I understand that both Clinton and Obama have attacked NAFTA because it is 'free trade' that is 'losing jobs' in the US. Clearly this is politically expedient.
Bureaucrats hate free trade as it deny's them a constituency, so the archetypal bureaucracy the EU seeks to apply more rules to ensure that free trade is fair. Hmmm. Nuff said.
Vested interest predominantly big businesses don't rea;y want free trade. Much better to agree with local governemnts that they are 'national champions' and restrict comeptition.
In regards to other groups the classic is the 'fairtrade' lobby. Even before the recent ASI paper I considerd that 'fairtrade' was justa marketing gimmick and another attempt at monopolisation. After all ree trade must be fair trade.
This creeping agenda plus the over regulation and overtaxation of the public will lead to decreasing returns on invetsments epsecially equities as enterprise is strangled and populations impoverished.
Governments lie about risk all the time. Risk, in investment terms, is your friend. You need risk to make a return. Free trade is risky. Indigenous enterprises are challenged by incomers. The risk is that you will lose your job if your employer cannot or will not compete. But unless you allow this challenge everyone else loses out by having to buy your innefficiently produced goods. This truth is beyond the ability of politicians to handle in a democracy where voters are largely ignorant of the working so free trade.
By the way, free trade does not permit dumping and I would not accept that state supported industries that export to others are in fact engaged in free trade. In these cases some form of protecctionism may be required. What about levying an import tax?
I know that this is an inadequate analysis, but the free trade argument is fundamental to the success of stock returns.
One of your anonymi said "Wouldn't surprise me if the US had worked out the whole scenario".
In 1995 a group of UK Parliamentarian was given a presentation of a US study, funded by IBM, AT&T and others and published in 1993, which showed that China would inherit the manufacturing world and the future for the United States was to sell them food, top level research and entertainment.
Therefore they wanted strong copywright and patent laws to protect genetically modified crops and technology know-how and investment in the Internet so that it would flourish under United States control in support of US-centric R&D and IPR licensing.
Some people think ahead.
Interestingly one of the MPs to be so briefed was also the first person to suggest I read an electronic scuttlebut service run by one Guido Fawkes.
So, are we done talking about meaningless share price figures yet? Because if you look at GDP, which measures the ACTUAL ECONOMY, you'll see it has gone up by an average of 2.8% a year - which isn't bad at all.
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