Duncan’s Economic Blog

Credit (UK and Daily Mail Edition)

Posted in Uncategorized by duncanseconomicblog on April 24, 2009

So the Telegraph is running a horror story to the effect that the UK debt will be downgraded from triple A.

FT Alphaville is more realistic.

They also have this great chart, from the Japanese finance ministry.

debt
Best of all though is the news that the Daily Mail is now officially junk.

11 Responses

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  1. Labourboy said, on April 24, 2009 at 12:59 pm

    Duncan, excellent blog post.

    I wondered if you could explain to me amid a week of mostly-universal horror stories on the economy the stock markets seem to have either stayed stable or within a margin of 1% (up or down) or have risen. Today they’re currently up nearly 2.5%. I remember on budget day you said that it’s only 30%of the stocks affected by the government, so what else is happening to make the stocks rise?

    • duncanseconomicblog said, on April 24, 2009 at 1:13 pm

      Labourboy,

      Thanks.

      I wish I Knew, would make the job much easier!

      More seriously. We have had a large rally in stock prices globally since March 9th. There is a lot of debate raging as to whether this is a ‘bear market rally’, i.e. a move up with an overall down trend, or not. Bear market rallies are not uncommon – even of this magnitude. It’s all to do with percentages. A stock could fall from £1 to 50p, a 50% drop. It could then rise 50% (to 75p) and still be down 25% from peak.

      The current ‘bull’ argument is that the rate of decline of the world economy has slowed as measured thorugh various monthly indicators – so idustrial production rather than falling, say 10%, is ‘only’ falling by , say, 5%. This is taken to be a sign that the worst is over, and has stocks have generally fallen by around 50% – they could be viewed as cheap.

      The ‘bear’ case is that the rate of decline might or might not be slowing, but that stocks can’t really grow much until the economy is actually growing – rather than falling less than before. Bears argue that the current rally will run out of steam and stocks will start falling again soon.

  2. […] And let’s finish off with the news that the Daily Mail is now officially junk (Hat Tip: Duncan). […]

  3. thelocalgovernmentofficer said, on April 24, 2009 at 2:11 pm

    I have always wondered: When people who are generally in favour of the world becoming a better place donate money to various causes, or give up lucrative careers to stand for election, whether more value for money could not be obtained by purchasing the Daily Mail and changing its editorial line – pushing it in a, shall we say more ‘factual’ direction.

    I say that not because I disagree overwhelmingly with some of the DM’s base case about what’s wrong with society, but because every individual story on which they have ever reported where I have had first or second hand knowledge, their journalism has been of a woefully low standard – treating it as a serious newspaper would be a bit like treating Northern Rock’s 2006 annual accounts as a good indicator of the health of the UK financial sector.

    Would the readers desert en masse for the (even worse) Express, if the stories were less distorted and hateful, or could they be retained as long as there was enough showbiz gossip, sudoku, property porn, and so on? It must at least be worth a try. How much do we need?

    • duncanseconomicblog said, on April 24, 2009 at 2:20 pm

      Current market capitalisation of Daily Mail & General: £1.2bn.

      It’s going to have to be a big whip round.

      • thelocalgovernmentofficer said, on April 24, 2009 at 2:45 pm

        The Merseyside Local Government Pension Fund has more than twice that under management…

  4. newmania said, on April 24, 2009 at 11:30 pm

    The Daily Mail is pretty good on its facts . On crime immigration and the extent of debt for example it has been far more reliable than the Brown administration ,also on Europe and their intention over the referendum and appeasement of Islamic terrorists …I could go on . I suppose its not setting the bar high exactly but much the same sort of statistical tricks are employed by the Guardian and there they are presented as balanced comment . \The Mail has a view and sells far better , than the aforesaid Guardian which could not exists at all without the Public Sector Appointment bung with which New labour in effect uses Public money for a non stop propaganda machine not to say a warp to the media.
    I `d like my money back ? Please.

    Duncan are you still trying to pretend that we are in a position to borrow as much as Japan ? Come on , that’s…well not to be taken seriously let us say . You will note by the way that your attempt to muddle the view of the IFS has been squashed by Robert Chote and not for the first time
    I take a worms eyes view that we are far closer to a precipice than may appear and I am grateful for Charlie for clarifying a little . We now know , as everyone except Duncan already did , that there are no significant amounts to be got from the wealthy . The fact that when Brown removed the higher top rate the take increased might have given some teeny clue We also know that the projections on growth are universally despised and derided , even by Duncan !

    Given that the Brown plan is light years form the truth and the IFS identify a gulf even on his fantasy projections we know that there is a new level of pain to come we have not begun to suffer . D sketched out the maths to devastating effect himself the other day .

    I see default as far more closely connected to political break down than maths and we are not far off . I think the taxes that will have to be levied on people who never went to the Party will start a tax payers revolt and the Conservative administration will have no choice but to cut deep into the muscle and tissue of the parasitic state . Strikes will soon follow ,we are close to them already and the only finger in the dyke is a lingering fond hope that there is a spontaneous outbreak of insanity across the Nation and Dunc`s big mate Gordon the bankrupter gets another go . The Polls have become ultra sensitive to tax raises over the last two years and there is already a massive resentment about the waste of pilfer. Brown and Labour remember were already deeply unpopular and initially benefited from the bust
    Perhaps its alarmist but it seems entirely possible to me that the country may become ungovernable , we cam close to mob rule with the Miners strikes and the Conservatives lead us back from the brink

    One thing you have to remember is that the years of “Boom” did not deliver higher disposable income to anyone but the Public Sector and bankers . Everyone lese just spent the extra on the higher mortgage

    • John said, on April 25, 2009 at 8:00 am

      “Everyone lese just spent the extra on the higher mortgage”

      What about people who had already taken out a mortgage before the boom, or lived in rented accommodation – the former didn’t have to pay more, and the latter may have missed out on a spectacular growth in the value of their assets, but rents didn’t go up the way mortgages did.

      In any case Duncan has put the case in favour of lower house prices already!

  5. newmania said, on April 24, 2009 at 11:41 pm

    Duncan on the stock markets isn’t just becassue this is all in the mix already . Even a lowly nerk like me was suprised at the suprise . I thought it would look worse and it obviously soon will.

  6. Thomas said, on April 25, 2009 at 8:21 am

    “The Daily Mail is pretty good on its facts .”

    Are you serious Newmania? They just pull numbers out of thin air. And their record of simply making up stories elsewhere really does not fill me with confidence.

  7. labourboy said, on April 25, 2009 at 8:23 am

    Obviously!


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