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As rob and mg accused me of being one-sided, I am posting a link to an article which claims that UK will fare worse than Spain.
I am claiming the opposite, but I am just a forum member, not an editor at MOney Week.
http://www.moneyweek.com/file/45457/spains-in-trouble–but-the-outlook-for-the-uk-is-far-worse.html
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I wouldn’t take too much notice of this article; it’s full of discrepancies. For example the idea of the Spanish coming over here to buy holiday homes is, quite frankly ridiculous. Most Spaniards can’t afford their own homes, yet alone one in the UK! I get the feeling that this won’t turn into the slump some people are predicting. UK employment has gone up by 39,000 today. Odd that this should still be rising. You’d expect it to start falling by now. This is just a slow-down. The Spanish economy, however, is too exposed to construction sales. That’s the real problem for Spain. Not the credit crunch.
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I wouldn’t take too much notice of this article; it’s full of discrepancies. For example the idea of the Spanish coming over here to buy holiday homes is, quite frankly ridiculous. Most Spaniards can’t afford their own homes, yet alone one in the UK! I get the feeling that this won’t turn into the slump some people are predicting. UK employment has gone up by 39,000 today. Odd that this should still be rising. You’d expect it to start falling by now. This is just a slow-down. The Spanish economy, however, is too exposed to construction sales. That’s the real problem for Spain. Not the credit crunch.
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@ralita wrote:
As rob ….. accused me of being one-sided, I am posting a link to an article which claims that UK will fare worse than Spain.
ralita – I didn’t accuse you so much of being one sided but more of putting spin into an external link that was an absolutely incorrect interpretation of the story/article you were linking to.
Funny thing is that the Moneyweek article you are now linking to is almost the same as the Times article you linked to yesterday and has used all the same facts and figures. The only real difference between the articles are the headings and, because of that, the meanings that you are reading into them ……….
Sun is setting on economic boom in Spain
Spain’s in trouble – but the outlook for the UK is far worse
At the end of the day, we all know that the credit fuelled consumer markets throughout the western world are all on the brink of a disaster as that credit dries up. There are going to be casualties everywhere – Dollar land, Pound land and Euro Zone. What is important is how each banking system can and will deal with matters and how each country can and will deal with supporting the economy to try and stave off the full effects of what could be.
Both articles have made the point that Spain has some reserves whereas the UK does not and that this should help to keep the impact in Spain lower than in the UK.
I can even see my own son having problems – he is a futures trader for an American Bank in the City [London] with a large mortgage that relies on Bonus payments for it’s funding. A typical 30 year old buying on credit against future un-guaranteed performance based earnings. The mortgage is subsidised by the employing bank so if the job goes, so does the subsidy – double woe.
At the end of the day, the economies of the US, UK and Spain are all so similar in that their growth has relied upon borrowings. Of the three, Spain is generally less exposed and has a government that has kept something back for a rainy day as also many of it’s residents have done (think that is the stuff under the floorboards and yes, it still exists in many Spanish households!). The ex-pats may feel the crunch because so many do rely on credit and then those with fixed UK incomes will suffer even more as the pound continues to bite the dust. The “locals” will be in a better position to maintain their positions, as will the ex-pats without borrowings.
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@ralita wrote:
As rob ….. accused me of being one-sided, I am posting a link to an article which claims that UK will fare worse than Spain.
ralita – I didn’t accuse you so much of being one sided but more of putting spin into an external link that was an absolutely incorrect interpretation of the story/article you were linking to.
Funny thing is that the Moneyweek article you are now linking to is almost the same as the Times article you linked to yesterday and has used all the same facts and figures. The only real difference between the articles are the headings and, because of that, the meanings that you are reading into them ……….
Sun is setting on economic boom in Spain
Spain’s in trouble – but the outlook for the UK is far worse
At the end of the day, we all know that the credit fuelled consumer markets throughout the western world are all on the brink of a disaster as that credit dries up. There are going to be casualties everywhere – Dollar land, Pound land and Euro Zone. What is important is how each banking system can and will deal with matters and how each country can and will deal with supporting the economy to try and stave off the full effects of what could be.
Both articles have made the point that Spain has some reserves whereas the UK does not and that this should help to keep the impact in Spain lower than in the UK.
I can even see my own son having problems – he is a futures trader for an American Bank in the City [London] with a large mortgage that relies on Bonus payments for it’s funding. A typical 30 year old buying on credit against future un-guaranteed performance based earnings. The mortgage is subsidised by the employing bank so if the job goes, so does the subsidy – double woe.
At the end of the day, the economies of the US, UK and Spain are all so similar in that their growth has relied upon borrowings. Of the three, Spain is generally less exposed and has a government that has kept something back for a rainy day as also many of it’s residents have done (think that is the stuff under the floorboards and yes, it still exists in many Spanish households!). The ex-pats may feel the crunch because so many do rely on credit and then those with fixed UK incomes will suffer even more as the pound continues to bite the dust. The “locals” will be in a better position to maintain their positions, as will the ex-pats without borrowings.
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Hi Rob-fuengirol,
At the end of the day, we all know that the credit fuelled consumer markets throughout the western world are all on the brink of a disaster as that credit dries up.
An interesting point Rob. I’ve never really thought of the economic boom in these terms. It’s all been an expansion of credit rather than ‘true’ sustainable economic growth.
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