UK RECESSION: Gipsy Merv foresees a recovery….

….but next week sees the Spanish Bailout.

See Mervyn stare at glass globe. Hear Mervyn say things are recovering. And adding “albeit very slowly”. See Mervyn use the eurozone as a caveat. He should wear a tie like normal people. See a black cloud hanging over Merv’s parade.

Sorry about that, but after reading the BBC’s Dick & Jane piece about Merv’s foreseen recovery last night, I did try to get a mental picture of the affirmatively promoted berk who’d written it. Third Year Infants was about it.

Meanwhile, see that black cloud over Spain where it rains on the plains. See Madrid, Brussels and Frankfurt organise a bailout. See it appear next week. See Stavros read the terms and weep. See Angela read the terms and scream. See Weidmann read the terms and resign:

‘….unlimited bond buying by the European Central Bank. One senior European official said negotiations have been taking place with Spanish Finance Minister Luis de Guindos surrounding structural reforms to the economy, but not new taxes or cuts. Next Friday, the Spanish government is expected to announce results of a review of its banking system, which will also include how much the European Stability Mechanism needs to recapitalize those banks…’

See no limits, see no strings, see the ESM start emptying before it exists. See them taking me away, to the funny farm where life is beautiful all the time.

 

44 thoughts on “UK RECESSION: Gipsy Merv foresees a recovery….

  1. Its the iphone 5 stupid!!!
    I’m reading that the iphone 5 is going to save the Chinese economy, rescue the US economy and probably we can assume there’ll be a bit for UK too.
    Fantastic isn’t it.

    • It’s also curing world hunger and taking me away for a dirty weekend as well.

      Is there anything that slightly-larger-than-before phone can’t do?!

    • Apparently its mapping / navigation software is a bit, well, naff.

      Perhaps this is deliberate so when the Troika set off with iPhones in hand to Athens, they end up in Athens, Texas. Or maybe it will just lead them up the garden path?

    • mike,

      Zeohedge has curious article by a JP Morgan bod who speculates that Apple might sell 8Million units of iphone 5 in the next quarter and this he claims could boost the US economy GDP by one third of a percent.

      The curious part is his maths, I will allow him to multiply 8 M by $ 600 (gross price rather than more realistic $400 to take out manufacturing costs and let him ‘assume’ full price for every phone) to get $ 4.8 Billion but on an annualised basis I make that $ 19.2 Billion against a GDP of, I thought was, circa $15 Trillion ie one percent is by my maths $ 150 Billion. On the first page of comments no one objects to the maths, hey I know I’m a pedant, but a $ 30.8 Billion here or there soon we might be talking real money and this guy has a job with JP Morgan!

      Or maybe I have just not massaged the figures by the magic of the Hedonic Index

      • So a third of a percent would be $50 billion as compared with your $19.2. Still way off the mark unless the man at Morgan is figuring in all the extra sales of data plans, accessories, apps and so on that will ensue. If that doubles your figure the estimate is nearly good. Minimum data plans per smartphone in the US are ~ $100 per month, so there is a lot of money to be tossed around those phone purchases. But all that is giving the journalist the benefit of the doubt, and it’s getting late in the month for that.

  2. See me opening a training school for hungry and cold British pensioners.

    My ethos is that we British are not Greek.

    When we have been pushed into the gutter by high taxation and eco-taxes, non of “My” pensioners will ever blow their own brains out in Parliament Square.

    They will be reminded that should things get so bad that they feel the only way out is to end it, and they find themselves in the possession of a handgun and a bullet, then they put that bullet squarely between the eye’s of one of those who put them there.

    The list is loooooooong.

  3. I love the term structural reforms.
    IMF speak for austerity, reduction in wages, removal of employment rights, dismantling of social protection, sell-off of state utilities & assets to privatisation, etc.
    In other words make more rentier income available for the rapacious banking vultures.
    As cowboy Clint Eastwood said,” I usually get kissed before I get screwed “.

  4. Hmm. It may not be the financials that do for Spain. The situation with Catalonia appears to have all the makings of a severe shitstorm, even civil war or at least huge civil disturbance again:
    “‘ A serving army officer, Colonel Francisco Alaman, has fuelled the flames by comparing the crisis with 1936 – when Gen Francisco Franco seized power – and by vowing to crush Catalan nationalists, described as “vultures”.

    “Independence for Catalunya? Over my dead body. Spain is not Yugoslavia or Belgium. Even if the lion is sleeping, don’t provoke the lion, because he will show the ferocity proven over centuries,” he said. ‘

    Ambrose in the DT:

    http://www.telegraph.co.uk/finance/financialcrisis/9556803/Spain-risks-break-up-as-Mariano-Rajoy-stirs-Catalan-fury.html

    • But those in Brussels will positively support any such ‘break-ups’ – remember they are committed to ‘regionalisation’ in order to emasculate the nation states. With hundreds of dependent ‘regions’, the Brussels centre will hold more power than it ever can against 20 or 30 substantial national economies.

      Catalonia is only one – Scottish independence, followed later by Wales, Belgian re-partition, etc, they’re all part of the long-term process.

      • Entirely agree Mudplugger – all the ancient divisions will be relished by Brussels and play right into their hand. God help us all.

      • Exactly right, Mudplugger.

        The EU is backstage now, knowing full well that Spain will use its veto.
        Catalunya imagines itself as a new sovereign nation? Hah! It will be an ‘EU autonomous region’, toothless and in debt.

        At least the Quebecois figured out that their optimum position was blackmailing Canada from INSIDE.

  5. “Next Friday, the Spanish government is expected to announce results of a review of its banking system, which will also include how much the European Stability Mechanism needs to recapitalize those banks…”

    Why do I expect that figure is going to be surprisingly low ?

    Why do I think that the all the half finished Spanish Properties, are going to be valued at a price to reflect them being finished off after the crisis is over and sold on at a price close to pre 2008 ?

    Why do I think that the book value of all the Concrete Ghosts that inhabit the Spanish Coastline should really reflect that good goat grazing land has now been made very poor by large concrete structures that now allow much less grass to grow there ?

    Why do I think that any of the EUR 100 Billion promised Bale Out money NOT needed to ‘Bale Out’ Zombie Spanish Banks, should be retained by the EU taxpayers that are being robbed, rather than seen by Rajoy as “money left over to bale out the Spanish State?”

    Why do I think that in less than 6 months time, once all of that EUR100B has disappeared into a large untracable Iberian Black Hole, there will be shock and amazement all round when Spain is back up to ‘The Bar’ asking for ‘The Same Again Please’ !

    • Spanish goats will eat anything. Especially subsidies. Don’t forget that each one is individually tagged and the subject of lifelong EU subsidies. Either they are underprivileged goats or goats in need of development. Or they could be both. Basta de las cabras.

      The real number for the Spanish bank/construction disaster is thought to be between 300 and 400 billion Euros. The 100 number that is bandied about is just a holding position while the real number is gradually fed to the public in digestible chunks. Isn’t PR wonderful? Still, these days value is only entries on a computer or at best a truckload of paper. I expect Draghi will magic up the funds within his jewel encrusted laptop somehow, with the ultimate debit arriving at the contributing countries’ balance sheets over the next several years. That’s the meaning of bail out, you write off your decade of gross extravagance against the future tax income of other countries. Now why didn’t we think of that? David and George and Mervyn? At this stage I would like to paraphrase a well worn category of G Brown’s. ‘Hard working families’ becomes ‘hard done by contributing countries’.

  6. Spain will not request a bailout until they are down to their last euro and their bond yields are over 8%.

    Which will not happen after OMT. The paradox being that the yields are down in expectation of the bailout. When one doesn’t come they are going to lose their shirts.

    And the cycle will begin anew.

    • OMT has (apparently) tough strings. Sell those bonds to the ECB and you may as well mortgage your first born. That’s why Rajoy is so reticent, he doesn’t relish the idea of telling Catalunya, Andalucia and the other 15 that they have to get down to some real spending reductions. Under the twin circumstances of ongoing big regional deficits (and high unemployment) and secessionist sabre rattling from Catalunya, I have to say I feel a bit sorry for him. There is no easy way out, and we have not even mentioned the banks and the real estate disaster. Tough times in Spain for a while yet, I fear.

  7. Pingback: John Ward – UK Recession : Gipsy Merv Foresees A Recovery…. But Next Week Sees The Spanish Bailout – 21 September 2012 | Lucas 2012 Infos

  8. ZH opines that Grexit has been postponed to after 6 November,so as to not upset Obama’s return.So,Greece is bust,Spanish banks are insolvent,and Italy’s GDP is falling like a stone.European car and truck sales are down the proverbial,the UK government is borrowing way over target.Have a nice weekend,everybody.

    • All to get a preferred candidate a second round in the big chair.

      They aren’t even trying to hide their contempt for the non-elites anymore are they?!

      I often mock the system for its flaws and hubris but this one truly is a slap in the face for basically every normal person on earth. Greece can muddle through, a walking corpse for a little longer, every other bailed out nation can sleepwalk for another few months, more time, more waste, more insult. All to re-elect a sub human f**k-wit who is happy to carry the interests of the elite in exchange for his morality and decency.

      Well at least that sets a date: November 7th, the western world comes to an end. And the man holding the ball will be Mr Barack Obama, the worst president in the history of the United States, and a truly sh***y human being to boot.

      This action by the EU is indefensible but not surprising given their track record for cowardice and corruption. And like Bernanke a week ago, all they’ve done is pull back the curtain on their half-baked plans and show everyone what their true worth is…ie nothing.

      • Obongo may be close to hopeless but Dubya was far worse and that creep Romney would definitely be dreadful. The american Empire is in decline and it is going to be tough ride at best. Mushroom clouds before this is all over. Welcome to the wonderful world of WWIII.

  9. Buggered if I know, but it seems like nobody is talking about what is happening.
    People in the US seem to be unaware that the recent moves by the Fed constitute a declaration of war .
    Blowback is inevitable (if you fondly hold the view that it is not occurring as
    we speak).

    Outside of the US there is a view that Ben Bernanke should be arraigned for crimes against the world’s middle-class, working -class and the poor especially.

    Ben Bernanke is an advocate for the rich and he is extremely dangerous. He says that he will print money until unemployment falls.

    If anyone thinks that there is a direct link between employment growth, and
    relieving banks of their most toxic “assets” , then that person is demented.

    The banks are being bailed out by the public rather than having to write off the losses from their terrible mistakes in lending in the sub-prime, ninja, and other non-prime mortgage markets.

    Let’s be clear; the Fed is declaring war on the rest of the world. This is the
    most beggar-thy-neighbour policy since Hitler paid for Romanian oil with cuckoo clocks.

    The US has invited retaliation and this will surely follow if the US continues
    to abandon the international economy.

    Eventually every other country will have to adopt protectionist measures, which will wipe out ALL savings; everybody who isn’t already doing so is going to print money ; but there is nothing which can protect aginst the tide of Bernake -induced inflation.

  10. Pingback: EXCLUSIVE: Spain broke eurozone rules to cut bond debt costs today | A diary of deception and distortion

  11. Pingback: John Ward – Exclusive : Spain Broke Eurozone Rules To Cut Bond Debt Costs Today (21th Sept.) – 22 September 2012 | Lucas 2012 Infos

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