It's ending in America

Verity

I can't wait for all the mean-spirited sneering at the United States. If there's anything the Brits hate, it's success.

They twice voted for conster Tony Blair. (I'm taking into account the fact that the third time, Blair lost in England.) The Opposition is too weak to chuck out Gordon Brown. The British economy is in deep recession because the British voted in gross incompetents and Gramsci engineers THREE TIMES. How stupid do you have to be?

And it's too bad that the grotesque EU monster has accustomed people to referrring to "Europe" as though its aspiration to be a country had been realised. I am sure Germany is doing at least as well as the US.

ashley

What is the difference, in your commentary, between a bad debt and a toxic asset?

JohnW

What they are seeing is a dead cat bounce. I'll bookmark this and return 5 years into the Depression.

We await default on commercial mortgages and defaults on credit cards as the enablers of the next downturn in the US.

Augustus

Once bitten, twice shy. Japan has already been through more than a decade of pain. It's easy to believe that the West must follow a similar path, but hard to believe that Japan will tread that same path twice.

If through low interest rates and the magic of money printing,
US and UK authorities somehow succeed in winding the clock back to a debt-fuelled heyday, it will be the dominant exporter
nations such as Germany, China, and Japan who will rebound first. But if the global economy never really recovers in the medium term, then the exporter nations may have to face the challenge of finding new customers. But economies that have been built on debt, money-shuffling, and swapping properties with each other will certainly have to find a way to build whole new, efficient, and productive industries from scratch - a far more difficult task.

Rhuarc

"Particularly grim"? According to the article, the latest quarter's annualized contraction of 8% in Britain is much closer to the US's 6.1% than Germany's 14.4% or Japan's 15.2%. Germany is also far more reliant on exports than the UK, and far more heavily invested in Eastern Europe.

dearieme

"while the worst is over in America,..": not something to bet on.

Jim

It's obviously a sign that the dollar is about to collapse. America is as doomed as we are, unfortunately. It reminds me of the cover of The Economist '$10 oil?'. before it shot up to $140.
Don't trust predictions made by the anyone who wears a tie.

Tiberius

The £/$ exchange rate last week didn't reflect the conclusions of this article.

Verity

Augustus - interesting observations!

Olaf Rye

Although I am hoping that the worst is over, I would not count on it--the scale of public and personal debt is going to retard all growth and the markets are suspicious because the banks have not declared all their toxic assets.

We have the same problem in Britain, although our punitive taxation rate and intense regulation is going to make our recovery a much more protracted affair. I am afraid that is all the optimism that I can muster, and it is probably too hopeful. Until these clowns in Labour are sent packing, I doubt that there will be any grounds for optimism in Britain. In the US, we need to see Obama curtail spending and back away from his emulation of European state initiatives. It will be a miserable few years to come, I am sure.

Ian C

If the USA believes that they are in a better state than the rest, come again this time next year and check it out. We'll see.

The write offs by the banks on both sides of the pond, that have not yet been made, are far more significant than those that have. The feel good injected by QE and the announcement of PPIP (USA) that are behind the current sightings of 'green shoots' do not read consistently with the grim news on all the other pages.

If the exporting economies are to recover then the importing economies will have to pretty much simultaneously.

To say that it will be worse for one group rather than the other is wishful thinking.

Augustus and Tiberius - on the money with your observations, as you so often are. There is no substitute for a (prolonged?) period of paying off debt - by private individuals and businesses - and re-building stores of capital. It is going to take a long time - wherever you are. And it is overdue and very necessary.

Steve

What about the US deficit? Its still in awful shape, with things in California looking particularly grim. Before we get too optimistic about things across the pond we should be prepared for thousands of US state employees to lose their jobs before recovery can properly begin.

Olaf Rye

I think that it is worth mentioning that the US is in better shape than most western nations, not because of the policies pursued by this administration but because it is less hampered by the idiotic regulation that we have in Europe. We have a structural difficulty in recovering from any recession, given the scale of state interference in our lives, how businesses are forced to accept idiotically high overheads to sustain the mobs of bureaucrats. Naturally, Obama seems to admire this quagmire of bureaucracy and seeks to emulate it in the US, but it is one of our structural problems that I have not heard any politician nor broadsheet mention. We need to de-regulate our lives and business much, more more.

Suki

The Spectator Business magazine has an article saying how America will be stuck in the doldrums, which it certainly will as long as Bunkum O'bama is in the White House.

He plainly has no idea what to do about the American economy, mind you, and this is reflected in his stance on Gitmo and Iran.

He seems to think himself in possession of a messianic gift but then reality dawns and he has to admit to being mortal. "I will close Gitmo. No, I won't. I will release photos. No, I won't."

There are, apparently, huge numbers of journalists who think such behaviour amounts to 'leadership'.

Suki

This is the Spectator Business article I refer to:
It’s Groundhog Day for Obama’s economic team

James Doran 20/05/2009

STEVE

The USA will not recover as fast as the economists claims. First of all, many of these Keynesians have been unable to predict or warn people enough about the policies that led to the current mess we are in now; and secondly, printing a bunch of paper has never enabled any sorts of economic recovery. I truly believe that we in the US are in a path toward a lost decade or more as what happened in Japan but only worse. We ought to remember that the Japanese economy was overally strong enough to compete with the West and China despite the deep weakness of its stock market. Japanese are carrying close to a trillion dollar of US IOU and that's one reason they have never been able to recover themselves. The US for me is the leech of world economy because it is not showing any sign of trying to get back to the fundamental productivity that enabled her to become the first power it is. The government policy are essentially geared toward consumerism and squandering of the world wealth and in the long run people are going to get fed up by that. I am very much indeed a bear on the USA.

steve

I haven't red this article and I certainly do not need to in order to laugh at its conclusive analysis. The recession is over in America? When? How? Has it even started yet? Some miracle workers believe that you can cure an economy by pouring paper money printed out of thin air on the financial institutions that took an exagerated amount of risk, replenish their portfolio and shoot victory! That is to me an insult to human rationality. The effect of the US recession haven't even began to feel their effects and for those who are poking fun at the Brits, we are in for a long painful lost decade of sufferings.

Steve

This is a joke! America is swimming to an ocean of debt and deficit as never before carried by any nation is recorded history. the household debt alone is alone 15 trillions, billions of dollars of trade deficit, unemployment at close to 16% countless wars around the world and trillions of dollars owed to foreign Nations. Have all these liabilities vanished out of sudden through black magic? This is nonsensical! The great depression did not run it course on a flat scale but had its run for 15 years. We have been in crisis for almost 2 years already and the same people who caused the crisis (Bernanke Keynesian gang) are claiming to fix the broken ship. This is total nonsense and any fool who drinks this cool aid must be out of his mind! I don't know much about Europe but they have enormous problem indeed and from what I am hearing, they are not doing anything to prevent their own descent into the abyss. However, claiming that the US is "saved" is probably the most irresponsible and ignorant statement made by a rational person. We are in for a long run, a very much painful period indeed. These people think that they can hit the cloud with their magical sticks and fix the world's problem! They better recognize!!

Kyle Harrison

The Washington post is a very right wing American newspaper, believe med I've read it, they love to bash "socialist" Europe. Anything which will make the USA seem better they will say. Therefore, I wouldn't take it to serious! I think some of Europe is to left wing and will suffer but Britain has a very similar economy to America since the 1980's so I think we'll do OK, Plus some British banks are said to make profits and Barclays has turned into a world leading Global Investment bank after buying some of Lehman brothers. I think finance will bounce back quicker than manufacturing and the UK will benefit, Germany and Japan with their dependence on exports I think will be suffering for longer, since even when the economy picks up I think it will take a while for consumers to be confident enough to buy big consumer goods, e.g. luxury cars, doesn't Germany make them!? So, therefore, I feel Britain will recover quicker than some think and our unemployment is lower than on the continent and the USA. Plus, our labour market is very flexible since the Trade Unions were smashed in the 80's and in manufacturing people have to be laid off if no order comes in, they cannot simply lower wages because people will simply be stood there doing nothing if no orders simply comes in. But in services people's wages can be lowered more easily without people being fired.

Bruce Campbell

Sat July 4 Spectator.

I am utterly amazed that all the scandals that you have reported are able to allow the perpertrators to go free. If it were an average person, they'd be jailed for years.

Shahid

Yes,No American economy is going to stable day by day.But America should think that her economy is now war economy.http://www.designsoftstudios.com/ best web development company.