Lordship 516

???? Wrote: ------------------------------------------------------- > I don't disagree - I'd add fibre optic broadband > (or whatever the next generation is called ) to > that list. I do think the Tories are going to do > some Keynesian stuff for sure now - Ed Milliband > must be shaking his head in disbelief. Keynes was a capitalist & criticized unproductive government spending. Digging holes & filling them in again was an English solution during the Poor Law period & it produced no advantage other than abject poverty & broken spirit. Keynes did make a reference to this but also said it would be more sensible to build houses and the like. Just because Milliband, Corbyn etc. espouse an idea doesn't make it a bad idea nor does it make it 'keynesian' in the pejorative sense. Keynes was in favor of budget deficits during the contraction phases such as we are now in. The criteria for infrastructure & other investment spending must be that it is productive & self financing/liquidating; it must be regarded as a desirable asset for its payback period and a significant advantage for the future generations that will continue to pay for it. Replacing inefficient infrastructure would make the economy more efficient but only if the ROI justifies the investment - notional projects must pass a rigorous test on payback in financial & social terms. The focus must be on productivity growth & avoiding crowding out the private sector. Regardless of Keynes, Piketty, Stiglitz et al or Hammond, McDonnell or whoever, it is essential to increase aggregate demand & the only way to do this in the current circumstances is by government injection by way of funding, guarantees etc. Private housebuilders have failed to solve the normal housing shortfall not through any fault of their own [apart from bidding up the price of land bysome] but due to shortages of land available for building & shortage of buyers due to asset inflation stoked by QE. To buy the average London house [?600,625] with a 15% deposit would require an aggregate salary of ?113,450 and as we can see from recent reports the average salary for 35 year olds in London runs at ?35,000 which would at best give a combined salary of ?70,000 making it impossible for them to buy in current circumstances. Funding was taken away from councils & housing associations were tasked with providing social housing but they are staffed with the same old staff that were running the council housing departments & are largely inefficient organizations with poor financial & estate management. They have a huge capacity within their balance sheets to borrow at preferential rates but have failed to do so. Many are sitting on assets of three to 5 times their liabilities when in a normal property company it would be geared the other way. They are sitting too comfortable and getting government guarantees for 60% to 80% of their rent from Housing Benefit & other subsidies. A few are stepping outside their original role & renting in the private rental market but the volume is low. The government ought to allow private companies to carry out the same role [within safeguards] and then some progress could be made. Financing could be made available via government guarantees through the Homes and Communities Agency [with an expanded brief] & also from insurance companies who would relish the government guarantees & subsidized rents. Management of the assets could be undertaken by specialist ALMOs. The Germans & others have done this successfully for generations so why can we not do it also & better ?

???? Wrote: ------------------------------------------------------- > No mention of CAP? Seems a big gap in your > analysis > > My understanding is that the trade tariffs the EU > impose of food stuff (largely to protect French > farmers) artificially inflates food prices by > between 15-30%; so in the medium to long term > Brexit could well reduce food prices to a true > market level for foodstuff. well below the 7% > short term spike in inflation.... I have only addressed the issue of short to medium term [next two years] price inflation due to currency devaluation & normal expected variations [such as seasonal] - the various rates [5% to 8.5%] I have suggested are at the current level of the ? & might further increase if the ? devalues further which I expect it to do over the coming months. Agricultureal prices are unlikely to come down even after Brexit as the UK government are unlikely to dismantle the various protections & subsidies for UK farmers/fishermen. If they do, UK farming/fishermen/processing will suffer & food security in terms of supply & standards will be put at risk. The effects of CAP are somewhat overstated. In practice with Most Favoured Nation (MFN), Generalised System of Preferences (GSP) & GSP+ which targets vulnerable countries, reduce the impact considerably. Least Developed Countries can export all agricultural products duty free and quota free. Other developing countries have signed free trade agreements with the EU that also provide preferential access (Mediterranean countries, Chile, Colombia, Mexico, Peru, South Africa). African, Caribbean and Pacific countries benefited from the non-reciprocal preferential access arrangements under the Cotonou Agreement. These arrangements had larger product coverage than the GSP scheme and a zero or minimal tariff for many products. Special protocols for sugar, beef and bananas attached to the Cotonou Agreement allowed virtually duty-free access for specific quantities which thus benefited from the higher internal EU prices for these products. Since 1 January 2008, the EU has extended duty-free and quota-free access similar to the EBA scheme to those ACP countries which have signed interim Economic Partnership Agreements. GSP+ preferences are generous depending on the composition of a country?s exports, as the contrasting experiences of Bolivia and Ecuador show. Bolivia faces a trade-weighted average tariff of only 0.5% and 90% of its exports to the EU enter duty-free. Ecuador, on the other hand, faces a tariff of 15.7%, the highest of any country including developed countries shown in the table, and only 38% of its agri-food exports enter the EU duty-free. The overall effect for UK consumers has also been overstated by some commentators who for their own reasons state that the effect on consumers in the lowest 20% in the UK are being subjected to a 12% overall increase in prices. In practice this works out at a much lower figure of less than 5% [am currently involved in a project to evaluate this figure] & this only affects certain products. There are also strategic considerations such as food security & standards that are inherent in this issue. Fish is unlikely to reduce very much in price as it is now a very much globalized food resource & will always go to the highest bidder. The UK benefits greatly from very well established international trading arrangements & the UK government will not be so dissimilar to the EU when considering tariff & standards levels for food imports. Philip Hammond will want his share of revenue much the same as any EU administration & farmers will seek a continuation of their subsidies & protections. Possibly only a small number of products will benefit from reduced tariffs, such as sugar which is highly protected in Europe [German & French farmers pressures] - expect a significant reduction in sugar [50%] & a few other products but there will not be such a bonanza across the board as might first be thought. Also expect a disruption to the sugar-beet industry in the UK which is in the process of converting some capacity towards biobutanol production.

Henry_17 Wrote: ------------------------------------------------------- > Rook, > What has the capital account surplus / deficit > been the past couple of years? In the discusion of > risk areas you summarised did the FPC provide > estimates as to what level of capital account > flows they expected, or an estimate of what level > would be required for a stable GBP? your view? "The current account deficit narrowed slightly from a record7.2% of GDP in 2015 Q4 to 6.9% in 2016 Q1 (Chart A.7), but it remains high by historical and international standards. The widening of the deficit since 2011 has predominately been driven by a sharp deterioration in the primary income balance, which fell from 1.0% of GDP in 2011 Q4 to -3.1% in 2016 Q1. The UK trade deficit has remained broadly stable over the same period. The weakness in primary income, which largely consists of net investment income, has been mainly due to weaker foreign direct investment (FDI) earnings. Since 2011, UK-residents? earnings on their outward FDI have fallen substantially, while foreigners? earnings on their inward UK FDI have been comparatively stable. While the fall in earnings on outward FDI has been relatively broad-based across the main industrial sectors, the weakness in the mining and quarrying sector has been particularly pronounced, explaining around half of the total fall in UK earnings on outward FDI since 2011 (Chart A.8). This has coincided with lower oil and other commodity prices. The recent fall in the value of sterling should have the effect of narrowing the current account deficit. For example, it should have a positive impact on the United Kingdom?s net investment income, as receipts on foreign-currency denominated assets will be worth more." I would expect the Current Account Deficit to come in for Quarter 2 to be in the region of 7% to 7.1% of GDP [let's see what their report on 30th Sept 2016 will produce] & from analyzing their report & other sources, applying realistic criteria/projections it appears to me that the Current Account Deficit for Quarter 3 will reach a new record at more than 7.2% of GDP, more likely to be in the region of 7.5% or ?35.5Billion. This would trigger more negative economic sentiment and reductions in economic behaviour unless the government will produce something significant that will stimulate growth, investment, employment & incomes. The government [& the BoE] has to take the lead & not only waffle on about the great future for the UK but take pragmatic steps to lead the way forward. The BoE is between a rock & a hard place - either stabilize inflation & risk a certain fall in growth below 0% & increased unemployment or accept a period of heightened inflation in the interests of going for growth & maintaining employment. There is only one locomotive to achieve this & that is government investment. The Brexiteers wanted control - now they have it they need to be bold & decisive & make that decision - sooner rather than later. A 10-year national program of self financing investment in the order of ?20/?30billion per year would put the UK on the highway to long term growth & stability if it is targeted towards improving the essential elements of the economy. Borrowing that generates growth can reduce the debt-to-GDP ratio. Projects such as massive housing development for rental to all sectors would be self liquidating & could be achieved off balance sheet through issuance of bonds or other instruments to/by not for profit SPVs [please God not Housing Associations !]. Projects such as building/improving essential infrastructure that would also be self liquidating would also fit the bill. HS2 nor HS3 do not fit this criteria as the payback is uncertain in both time & yield and in these austere times ought to be put to one side in favour of improving existing networks where the benefits are measurable & can be implemented in the relative short term. Improvements in education provision are also needed as would vocational training to beef up the skills necessary to provide the indigenous workers for such a massive investment program. Direct investment in government facilities such as prisons, hospitals etc., instead of PPP projects, would also return dividends to the public purse instead of generating profits for private interests & increased burdens on the exchequer for generations to come. Strong planning provisions would have to be put in place such as use-it-or-lose-it/compulsory purchase for land holdings coupled with fast track permissions, as would robust criteria to control construction prices [such as bench-marking prices of materials & unit rates] to prevent excessive profit taking. We have a period of national crisis and such measure would be justified in the circumstances so we can rebuild/restructure the whole fabric of the country. Any supplier who doesn?t like it need not participate.

Henry_17 1. "Surprised at only 3% on feed, with the sterling weakness we've had doesn't that imply a decrease [LS 516 - increase ??] in underlying $ prices?" Animal feed is a blend of open forage for 5/6 months & winter feed supplements which in turn is a blend of farm produced food [silage, hay etc] & provender meals]; also animal feed decreased in price over the last six months or so but this year could see prices increase from October onward [expected] when harvest yields will become better known - this could lead to more increases for winter feed. Nitrogen fertilizer prices have reduced considerably as they use natural gas as their feedstock - this, along with reduced costs of diesel, has helped to keep the production costs of hay & silage down. 2. "So c?100bn of spending is on non-food, this is booze and eating out? or what else? Surely this will be the first pool from which the ?14bn additional spending on food can be funded, implying the impact on other areas of retail sales may not be too severe... what was the '08 experience here?" I had already alluded to that - " People might be expected to cut back on drink & catering spending but not on food." This is all drinks & catering plus other 'grocery' items [household consumables, loo paper, detergents, personal care etc.]. This can be the first pool for cutting back but the experience is that people cut back very little or for a limited time [resignation & management fatigue sets in] or drop down to a cheaper price point [own brand, budget brands as in Aldi, Lidl & Poundland]. If you remember back to 2008/2009 you will see that the retail markets were devastated with several household names failing in the aftermath of the financial crash & the BoE was slow to react. Most consumers stopped buying except for essentials & this didn't change until 2011/2012; they also reduced their credit card balances whenever they could but personal indebtedness, whereas not as high as in 2008 [150% of disposable income] is again at an all time high in cash terms [132% of current disposable income] & is only barely serviceable due to advantageous rates of interest. Highly indebted households are particularly vulnerable to unexpected events that increase the burden of servicing existing debts, such as an increase in interest rates or a fall in incomes. Vulnerable households may cut back sharply on other spending in order to continue servicing their debts, with negative implications for economic activity. Alternatively, weaker households may default on their debts. Memories are short, very short. In 2007/2008 on the global markets, saw the wheat price rise 130%, soya by 87% and rice jumped 74%. Since that UK shopping costs have risen sharply. These price rises on the global commodities markets had a rapid and significant impact for all EU consumers. This time around this hasn't shown any sign in global commodity price rises but with warmer wetter winters forecast alongside drier summers, increases in the range and types of UK pests, diseases and weeds are likely to significantly change and there could also be more problems with pesticide resistance. Higher temperatures could lead to an increased number of generations per year, which allows time for resistance build up, and warmer winters could improve survival in resistant pest populations - this has implications for production of winter cereals & other early crops. Currently the UK produces less than 25% of its requirement for fruit & vegetables so the price rises of this category could also be higher in the short term. 3. "With all this price inflation expected, we will surely we see the MPC to stick to the letter of their mandate and enter an aggressive hiking cycle?!" The BoE is between a rock & a hard place - either stabilize inflation & risk a certain fall in growth below 0% & increased unemployment or accept a period of heightened inflation in the interests of going for growth & maintaining employment. The government will have a part to play in making this call as the mandate may have to be modified in the short term. There is only one investor that can stimulate the economy in the circumstances we find ourselves in - the government & they will take some time to gear up so there will be an interim lag in the economy, say, two years of tough times. 4. "Most importantly, how much do you expect the price of a bacon sandwich to increase?" The UK is only 56% self sufficient in pigmeat but export much of the cheaper cuts [belly & shoulder] & import a lot of bacon & ham that mainly comes from Denmark & Ireland. So you can expect your bacon to increase by at least 8.5% at the current rate of exchange, say 18p per normal 250 gm medium sliced back bacon. The UK produces 100% of normal bread flour but this is subject to international commodity pricing pressures so you can expect a price increase in bread also, say by 10p per normal 800g sliced loaf. So your ordinary common or garden variety of bacon sarney can be expected to increase by about 8P not including increased labour costs. With all the posh variations on here, the poor old bacon sarney is likely to inflate beyond the normal mouths capacity to consume it !

Jah Lush Wrote: ------------------------------------------------------- > Loz Wrote: > > > > > TOASTED? No. Just no. > > You sir, are a fecking wrong-un. Always had my > suspicions but this post confirms it. Wondering what Father Jack would have to say about this..?

PRICES Prices are expected to increase, even in the short term. The first effects will be felt in the food sector where about 46% of the food supply to the UK is imported. Even locally produced food will increase as farmers are sensitive to prices from elsewhere in the world & the UK export about ?12bn of food products. There is sufficient data to evaluate this effect from examining the causes of the price spikes that occurred in 2008. Already the devaluation of the ? is affecting the pricing of rape seed products & wheat for animal feed [already up about 3% with more upward pricing pressures expected due to low harvest yield because of bad weather] that will result in increased cost pressures on egg/dairy/meat products [uK is 86%/86%/84% self sufficient in these sectors] in the short/medium term. Feed constitutes about 60% of costs of production. The UK food, drink & catering market accounts for over 50% of all retail sales and amounts to ?198 billion in 2016 - food accounted for ?94billion of this figure, approximately 25% of all retail spending & 11% of all income. The poorest 10% of UK households spend 15% of their expenditure on food, a figure that is just 7% for the richest 10%. This is because low income consumers spend proportionately more on meat, milk, eggs and bread ? staples that will be hard hit by food price rises. Any increase in food prices will directly affect other retail sales as people only have so much disposable income in their pocket and food will be a priority as will paying their unavoidable costs such as mortgage/rent/co. tax, transport & utilities costs. I expect food costs to increase by about 7% in the short term & other grocery sales to increase by a similar amount which will reduce other retail sales by about ?14billion & possibly more as people will become increasingly careful in their spending habits due to uncertainty. People might be expected to cut back on drink & catering spending but not on food. For Christmas expect a lot of bargains/sales but for the new year expect an increase in unemployment/liquidations. Energy prices must also be expected to increase as the wholesale cost of energy makes up approx 45% of the cost & is normally priced in $ terms - so expect an increase of about 5% in energy costs soon. Price increases will trickle down to all sectors of the market once the trend in the value of the ? stabilizes & manufacturers/retailers work their way through existing stock & current forward purchases. Competition in a weak market may cause a temporary reduction in margins & retailers holding/reducing prices but this cannot be held indefinitely. Expect price increases for food to bite in the short term [before the year end] & for other products early in the new year 2017.

Johnson...Fox...these are just appointments to address internal Conservative politics. Hopefully Johnson will clean up his act sufficiently, cop himself on, grow up and do the job he has been entrusted with. Fox - no comment apart from I think this appointment was unnecessary & incomprehensible. ?I know you are working around the clock, I know you are doing your best and I know that sometimes life can be a struggle,? she told voters. ?The Government I lead will be driven not by the interests of the privileged few but by yours. We will do everything we can to give you more control over your lives.? All words that sound good, talking to the left but veering towards the right with her appointments - who knows what she will deliver. More uncertainty ahead on all fronts. No action on economy until Autumn Statement [16th Nov] - 4 months away is much too long a time to wait for some reasonable indication from the Chancellor on the way forward; more uncertainty. Hopefully the BoE will give some lead next month but their tools are very limited. More uncertainty. Not a great environment for investment & jobs - depressing !

It is fitting that on Bastille Day that Fortress Cameroon has been breached & Brexiteers handed the poisoned silver spoon of managing the Brexit process - if it goes a bit hairy she can place the blame/responsibility directly on their shoulders. Her education plans look promising - lets hope they will be properly funded. May is a tough, canny operator & is setting out her stall early on - lets hope she follows through on her words. Lets also hope that she will abolish much of the latent & virtual feudalism that still exists in UK society.

???? Wrote: ------------------------------------------------------- > I think your view (and forecasts )on Europe are > very, very rosy indeed in my opinion. Italy, the > obvious example, which you acknowledge slightly, > is right on the edge, all its banks teetering - > and we (in the UK) employ about 100,000 young > Italians so if we see stagnation then a lot of > this 'unemployment' will get exported (see also > Spain) back. France is in a right mess with all of > its badly needed structural reforms rejected by > militant unions. The EU economy is in a pretty > poor state, was trending downwards earlier and > Brexit isn't going to help. Even Germans > performance is below par (and we are responsible > for a HUGE % of their trade surplus with the > world) > > I agree with you on both the lending (in terms of > demand) and the relatively impotency of interest > cuts...I'd like some helicopter money :) > > A Labour government in 5 years.......looks very > unlikely (and I suspect some wishful thinking) > > "A fall in GDP would cause a recession"...er, a > fall in GDP (for 2/4) defines a recession, strange > turn of words? > > I don't get your logic how the trade deal works > out well for Europe and at the same time not us? > > Also, you seem to be contradicting your line on > both precedent and measureability in your thread > the other day with this, which I think was my line > of argument/challenge back then: > > > As I wrote above - "everything is immeasurable, > the current understandings are set aside, the > timing of everything is unknown as is the sequence > of events & there is no precedence even on which > to base any possibilities." The Labour government had a ? after it - it would be premised on the electorate being tired of the difficult times ahead until 2020 - tongue in cheek but stranger things have happened. I am assuming that a trade deal will be achieved but the difference for the UK is the uncertainty - the uncertainty for the EU 27 will have less effect except for those countries that I mentioned. With regard to the matter of recession - I am still of the opinion that stagflation will happen but that it will be of a shorter duration than previous stagflation events. I believe [from interpolations I have done] that it will hit during the middle of 2017 & continue through 2020 & will begin to recede slowly over 5 years or so. I'm not so rosy about Europe but France is not so bad as you might think - they have structural problems in the labour market but they also have some growth. Greece is still a basket case, as is Italy, which has hidden their problems since 2007 but these are now coming home to roost. Spain & Portugal are in slight recovery but not out of the woods. Only Ireland is improving [GDP is a skewed figure - 26.3% - due to FDI, aircraft leasing & corporate transfers] GNP is up a measured 17.6% up but this is also a skewed figure with the real GNP being closer to about 7.5% up - still a good number. Ireland carries a huge exposure to Brexit & also has the only land border with the UK.

TwoScoops Wrote: ------------------------------------------------------- > I count 2 hard facts, both of which are quickly > followed by assertions or opinion that are > masquerading as facts. The rest is just the > latter. > Yes each to their own opinion, was just making > mine. I just prefer balance that's all. > Your take is obviously very negative and my guess > is it would read as fact to the layman which I > wanted to pull you up on that's all > No offence meant. It's an interesting subject area > and it's good to see people talking about it on > here The ? is down and the markets expect it to go lower [feedback received from more than one trader]. The analysis on QE is a hard fact & well known. It only benefits the participating institutions [mostly banks] & wealthy people. The trickledown effect is small & as a tool it is not effective except in macro terms. People's Money is a concept that is being seriously considered elsewhere including the US - it would stimulate the economy directly & the benefits would accrue to the whole population. My comments on property are reported widely by others. The issue of interest rate reduction is measurable & its effect will be economically negligible but will possibly give confidence to a narrow group of investors. Making funds available from banks will only be effective if companies & people borrow - its unlikely they will in an uncertain environment. Sorry about the second post - I wasn't aware of the other one. The MPC members agree that they have very few tools at their disposal in this scenario & Carney indicated likewise - all he has at the moment is talk, giving confidence through his reputation etc.

TwoScoops Wrote: ------------------------------------------------------- > Sorry Lordship but I find your posts high on > opinion/ emotion but low on balance/facts. It's a free country [so far] & we are both entitled to our respective opinions. As I wrote above - "everything is immeasurable, the current understandings are set aside, the timing of everything is unknown as is the sequence of events [Article 50/negotiation first, Scotland veto] & there is no precedence even on which to base any possibilities." Only certain areas of the EU 27 will be affected - some would have been in trouble no matter what the Brexit decision was [italy] & others due to trade uncertainty but overall the effect on the EU 27 GDP will be small. I merely share my opinion with others insofar as I can - no emotion

Angelina Wrote: ------------------------------------------------------- > "For the rest of the EU the overall effect will be > negligible".........so EU did not benefit from UK > being a member? The expected fall in overall GDP for the remaining 27 is less than 0.1% It is inconceivable that a trade deal will not be done with both the UK & the EU maintaining much of their exports. However, only the UK will experience the uncertainty from the Brexit result. Individual countries such as Ireland, Poland, Portugal & Spain will suffer a bit more but if a trade deal is made the impact will be negligible.

Now we have an end of local political uncertainty - the internal squabbles in the conservative party may bubble on a little but there is a certain hand at the helm & the Labour Party issues won?t affect the progress of the Brexit resolution too much. However, there are great risks ahead & none of them can be assessed or consequences measured so we have only economic uncertainty ahead. However, the greatest uncertainty ahead of us are the unknown uncertainties - everything is immeasurable, the current understandings are set aside, the timing of everything is unknown as is the sequence of events [Article 50/negotiation first, Scotland veto] & there is no precedence even on which to base any possibilities. The pound is still down against the $ & Euro [-9%] & likely to fall further by the end of the year. Price inflation is inevitable - only the number has to be established - say 4% to 7%. Salaries & wages will stagnate again so everyone will be worse off. Commercial property values are in shock as is liquidity in the market & the vulture funds are hovering - values of pension funds will suffer. Residential property values are down or questionable, lenders are reticent, valuers have nothing to base their assessments on, builders are reluctant to build & borrowers are also reluctant to buy/borrow. Carney has released the main banks from ?5.9billion of capital requirements that theoretically could release ?150billion capacity to lend but the borrowing demand is likely to be weak & this will be unlikely to have much effect to stimulate the real economy. In fact the release of capital requirements may well be offset by a rush by many to pay down debt so the liquidity effect is likely to be neutral for the real economy. Tomorrow the MPC are likely to reduce the interest rate to 0.25% [0% ?] & possibly to 0% by early next year but the rates are already very low so this will have little effect in stimulating the real economy but can have a negative effect on annuities - it will help the city pests feel better about the outlook. Carney is also projecting that the BoE will engage in more QE - he is suggesting this as he is running out of options to further reduce interest rates - but the last rounds of QE resulted in increases in bond & share prices & a very small boost in stimulus in the real economy. The effect of releasing ?100 in QE results in only about ?7.50 entering the real economy & most of the effect of QE benefits the already well off people by inflating bond & share prices with QE relying on the trickledown effect to boost the real economy - a very inefficient hope. The reality is that QE is seriously inefficient way of solving the core problem as well as causing artificial asset inflation in the housing & other markets. It would be better to apply the QE amounts towards the creation of Public Money [instead of bond purchases or Funding for Lending whereby the banks hoarded much of the cheap funds] that would be lent from the BoE to the government and this money used for productive purposes in the real economy such as building new houses, hospitals, prisons, schools & infrastructure projects solving employment, the housing crisis & other critical issues in the process. The balance sheet of the BoE will be no worse off & the sovereign debt issue won?t breach any EU strictures as the UK is free to run its own show from now on . Productive borrowing at very low interest rates is a healthy economic activity & can be structured off balance sheet through use of SPVs. Why give this money to commercial banks & the already wealthy when it is badly needed within the overall community where it can also boost the real economy & provide much needed resources, including housing, for the future that would be self financing. The tools currently available to the BoE are limited. What Carney is really doing is political, trying to create confidence, using only words to stabilize the markets, preparing everyone for the downturn ahead, with some analysts predicting a fall in GDP of about 3% to 5% [but the effect should fade from about 2020] which would cause a recession - how bad or how long it will be for no one knows for sure - I suggest it would also begin to recede from 2020. For the rest of the EU the overall effect will be negligible except for a few countries like Ireland, Poland & Portugal. May?s future - recession - 4 tough years followed by 5 years of [Labour ?] rebuilding with stable economy by about 2030.

Villager Wrote: ------------------------------------------------------- > JoeLeg Wrote: > -------------------------------------------------- > ----- > > > > > The idea that the a) the French are going to > care, > > when they have much bigger sticks to hit us > with, > > and b) the British public is going to accept > being > > told they can't have French wine because of > > 'politics' is so risible that the inevitable > > rebuttals are almost pointless, as it's > unlikely > > anybody who forms that idea in the first place > is > > open to counter-points, as LL516 is finding > out! > > JL, > > If things are going to get tough then what the > Goose is suggesting may well be the right > approach. > > Maybe the yuppies of East Dulwich drink French > wine exclusively but most of us get by quite > nicely on Aussie, Chilean South Africa and here I > would add Italian and Spanish ie anything but > French if we are forced into penury by Brexit. > > Vic I agree with you with regard to choice of wines - the French wines that are worth drinking are too expensive. However, GG's approach would not be a good place to start or even to get to. Merkel has already telegraphed her stance in regard to negotiation - she wants to reach a mutually suitable solution and she has already reined in the gung ho member of her party. I would give finite amounts if I had the time but I off shortly to a wedding in Ireland between an Irish person & a French person - the wine will be French, the craic will be Irish & will last for four days [or so]. We have counted over 20 nationalities that will be present so no mention of EU or Brexit is allowed ! Even if I produce the figures, GG has zeroed in on a relatively small, if important, sector of the whole trade matrix. The negotiators won't favour one industry over the other, nor will they seek to score points over every position. With literally thousands of categories to sort out, tit for tat negotiations would just leave a lot of blood on the floor and entrenchment thus dragging out the agony unnecessarily. Gove would be the wrong person as would Johnson. We need a very even handed person to lead, tough but fair & ready to see the other side within reason. There should only be winners, with each side leaving more or less happy with the long term outcome. Bye for now & have a great weekend.

GG I note you 'had' a career with a major European car manufacturer. I have a career in major economic analysis across many industries globally. "Turning to the wine trade again, do I take it that my argument there has been accepted as that line of thought has gone without response." I gave you a response but you choose to ignore it. You like of thought had no validity in practice - only in your head. I accept the figures you quote for car exports - no problem. I had already noted the report from the Bertlesman Foundation analysis. You might have a look at the aims of the Bertlesman Foundation - "Freedom, solidarity and goodwill are the values that underlie our work and determine our goals" But you choose to ignore figures - 44% of all UK car production goes to Europe against 20% of EU production coming to the UK. The problem is that the UK is equally vulnerable & therefore it is a good think that you won't be around that table. The scenario is more or less equally weighted on both sides with jobs at stake on each side of the equation so we need an equable solution. We need parity of esteem & respect - not grandstanding & bullying.

Jeremy Wrote: ------------------------------------------------------- > I always thought Blair achieved some good things. > Education and NHS spending increased under him. > Low unemployment, low inflation. Good Friday > agreement. Child and pensioner poverty fell. > > Shame about the war. And the lying about the war. The Good Friday Agreement was mainly achieved by a very ethical & brave move by John Major in association with the late Albert Reynolds - Bliar & Bertie Ahern did good work following through & they tried to take all the credit. It was Albert Reynolds that was the main catalyst & he convinced Bill Clinton to get involved.

GG I have never rattles percentages in relation to JLR - I have concentrated on the overall auto exports & if you have trouble with percentages then I can only feel sorry for you. Every car export lost is a job lost to the UK & EU - it is mutual and the solutions must be on a mutual basis. 44% of UK car production goes to Europe, 20% of European car production comes to the UK. They would far prefer to grow their sales in Asia than in the UK so they have other strategies in place & the Germans have already established that Brexit would probably result in a 2% loss of sales. I wonder what the Toyota/Nissan/Mini outlook looks like or what contingency strategies they have in place for a Brexit meltdown ? JLR already have manufacturing facilities in China, India and Brazil with a further one opening in Slovakia in 2018 - just in time for Bexit. They can keep the heart of their operations [R & D, innovation & design] in the UK & export the jobs to wherever it is most beneficial to the company, just as Toyota/Nissan/Mini can also do. Virtually all of UK car production is under foreign control. How's about them apples ? Waste of time discussing issues with someone who wants to avoid the central issues. You seem stuck on the hard shoulder over auto imports/imports. The fact is that we are exposed to the EU in regard to auto exports just as they are to us, except the impact would be greater to us if there is no agreement. The whole matter is about percentages Start with 45% of UK exports go to the EU, equivalent to 13% of GDP 16% of EU exports go to the UK equivalent to 3% of GDP. Of this figure, when you break out the individual EU countries trade with the UK only Ireland & Cyprus export more than 10% of their goods to the UK. France & Germany both export 7%of their exports to the UK. The UK exports 10% of our exports to Germany & 4.5% to France. There are two kinds of statistics - those you look up & those you make up; worse than that are those that you suppose. If you are using Dan Hannan MEP 's statistics you will be using made up statistics, apparently based on flawed extrapolations. Numbers are dangerous in the wrong hands. Which economy is more exposed ? The EU is a composite economy [GDP 10 trillion Euro] - if we are leaving, we will be on our own [3 trillion Euro GDP} & we need all the friends we can get, especially from the largest economic block in the world - the EU - not the US, not China, not India, not Japan. Exporting to new markets or expanding sales in existing markets is a tough & long drawn out process - its always more economic to keep the customer you have than chase new ones. If you fail to understand the import of all this then it is not worth discussing further. No point in having a crack at Germany/France just because of the notional premise that their vulnerability is greater than ours - you have to look at the percentages & the interrelated issues to come to a mutually beneficial agreement. It won't come by posturing as the hard man or by telling them to stuff their goods/take a hike.

GG Car sales in China crashed in 2016 - down by 44% which started in Sept 2015 due to a crisis of confidence in the economy which has yet to sort itself out. Individual company statistics are important but more important are jobs - 44% of all car production in the UK goes to Europe; 90% of all Toyota UK production goes to Europe; 80% of all Nissan UK production goes to Europe - these companies have no particular loyalty to any country abut their workers do & need to keep their jobs plus the other jobs that are in the supply chain here. The MINI is the second most produced car in the country; 175,000 MINIs are produced in the UK with 34,000 being sold here. Of the balance the US Germany China France & Italy were the top export markets; however there are MINI plants in Austria, the Netherlands and Asia. Arguably we are more vulnerable that the Europeans on the issue of car production/sales as we will in many more sectors. You ignore the fact that the EU has 27 countries that can resolve supply/demand issues & even after any agreement we will be vulnerable to import substitution pressures from within the EU as they will want to keep as much economic activity within the EU region. We have very few unique products to offer [Rolls Royce engines is one] However there are complex commercial relationships shared with the EU - Airbus, Finmeccanica etc EU space Agency & all of these will be in play with UK jobs at stake. The UK has a lot of specialist expertise but much of this can be replicated elsewhere or moved with the human resource following. Only a mutually measured approach with each side giving respect to the other; otherwise there would be an economic bloodbath & all will suffer. We export 45% of all our goods to the EU & they export 16% of their goods to us. The EU [ex UK] exports something over 600 billion euro in services, while the UK imports only about 40-45 billion euro in services from the rest of the EU but exports about 65 billion Euro of services to the EU. Hopefully we can achieve a mutually beneficial agreement on car sales with the EU & the same across all industries. Hopefully also we can also reach agreement on the migration of workers to & from the EU. The EU is the world's biggest exporter of manufactured goods and services, and it is the biggest import market for over 100 countries. It is also the world's largest single market area. I forecast that in the end of a lot of wrangling [that could have been avoided] we will have more or less the same conditions as we currently have but with the UK not having any say in how the EU is regulated but we will be subject to most of the regulations if we continue to want access to the single market. OK we will be able to do trade deals with other countries but one of our main competitors will be the EU & they will always have more fire power than we can ever have. All of this disruption, unfriendliness, anguish & consequential loss was caused to massage the egos of the inadequate mob of fools who hark back to a colonial time when their forbears were in 'control'. Those times have passed but the DNA lives on in the psyches of a bunch of silly nincompoops. Like the Grand Old Duke of York the rhyme goes: ?Oh, The grand old Duke of York, He had ten thousand men; He marched them up to the top of the hill, And he marched them down again.? This will be the Brexit anthem !

GG "Remember, France =wine whilst Germany = cars when it comes to targetted negotiations. Please keep up." France exports 12.5% of its wine to the UK and the percentage has been dropping progressively for the last 10 years as UK buyers have already been opting for cheaper New World wines. On the other hand the French have been increasing their sales to the US, Germany, China, Japan, Canada, Singapore, HK, Switzerland. The French strategy is not to compete and only sell at the highest vintage levels & lowest plonk levels. They are already resigned to dropping UK sales. 57% of UK car exports [44% of total production] go to Europe - so how do you resolve this little conundrum when you tell the Germans to stuff off ? "The other 22 are just marginal players." This shows how much you really don't understand. The UK is between a rock & a hard place - threatening main players who you want as allies & trading partners is not the way to win for UK jobs.

GG "We have alternatives elsewhere to Germany and France." Where are these alternatives ? Further, why have the UK manufacturers not been selling to these buyers already ? Are they lazy & complacent ? I don't think so. Any new buyers will be hard to win & will drive a hard bargain plus the main competition for those buyers will be those people from the EU that you have told to stuff off & take a hike. It's we who will be stuffed.

Merkel is facing an elecion next year & she can afford to hold out until she can get back in. Then she won't be under so much pressure. Already the UK politicians are accomodating her by delaying action. I have already given you stats for UK exports to Germany. Uk exports to France - Aircraft Parts 7.8% Cars 7.4% Hard liquor 3% Your stance is destructive - the EU negotiators would just walk out of the room & wait until the UK negotiators asked for another meeting. No serious negotiator would adopt the attitude you suggest - that's gambling. The EU is a complex multidimensional matrix of resources - the UK is a single resource. Much of the goods imported by the UK can be moved around. I gave the simple example of bovine meat earlier this week. Ireland export about 1.2billion Euro of bovine meat to the UK; the UK export about 900 million Euro of bovine meat to Germany; the Germans can get this from Ireland and the Irish will then have to resolve the other 300million Euro elsewhere. The UK doesn't yet have that facility available to it. Also some of the main manufacturers of cars in the UK are German - Rolls, Royce, Bentley, Minis & some components are made in Germany. If you play hardball with these guys they have several options & UK workers could suffer. A study by the Bertelsmann Foundation in April 2015 forecast a 2 per cent fall in German car sales to the UK in the 12-year period following any exit of the UK from the EU - the Germans have already put their strategy in place - it appears that Whitehall has yet to sort out theirs.. With Toyota & Nissan any significant increase in costs will cause them to question whether they will stay in the UK or move to a EU location as most of their UK exports go to the EU. They might conceivably just pack up & go & under WTO rules they couldn't be stopped taking all their kit with them and probably a lot of their human resource also. I do believe in win-win but believe more in optimizing the resolution in the shortest possible time so constructive work can get under way. There are about 2000 categories of exports that have to be negotiated item by item, company by company and the EU have 27 resolutions for each one - the UK will only have one plus any new markets the UK can develop & they have very few negotiators in place to do this. For every position the UK will try to adopt the EU can canvass 27 options to counter that - not an easy road ahead & certainly not with 'stuff this/stuff that, take a hike' barrow boy attitudes.

Robert Poste's Child Wrote: ------------------------------------------------------- > Has his face shrunk or did they just choose a > specially piteous-looking one for the front > pages? > > God, I'm getting old. I think so - he looked pretty knackered n TV just now. ...but some of these guys fake this by staying awake on purpose & put a little shake in their voice just like an actor might do - Tony boy is skilled at method acting, believe nothing he says & only a little of what you see.

Bliar is now giving his usual emotional speech - false git ! One time too many Tonio ! You got shown up and know it ! You did lie - many times; on Iraq, on Wendy Deng, on Saudi Oil deals - you don't know anything else.

...a further note on cars - 90% of all Toyota car production in UK is exported with 57% of UK car production going to the EU so the pressure is equal - a mutual solution must be found. Car exports from Germany to the UK accounts for 20% of their production. We already had that a good solution in place but the lunatic fringe decided that they wanted control. Now they are left with no one in control & the EU will never compromise on the four main principles including free movement - that will have to be on a mutual basis also. It will either be all in or all out.

GG "The UK does not export much (apart from whiskey) to either France and Germany. So, we have nothing much to loose but they have. Scotland wishes to stay in the EU so let the Scots do it their way on their own and negotiate with whiskey. " Whisky[not whiskey] & hard liquor exports to Germany account for 0.82 of UK exports. We export more ink 0.94% than we do hard liquor. Cars 7.7%, Aircraft Parts 6.4%, Car Parts 2.7%, Various types of engines 4.6% & so on.... Its not possible to source French wine except in France...and you cannot get BMWs, Mercs or Volks except from Europe...UK buyers will want these & no government will stop the demand. The opposite is also true - Europeans will also want Range Rovers & Jags. Besides, do you for one moment think that adopting the traditional bullying attitude of the City of London will faze the Germans or the French [& others] ? I think not. They will have many positions of their own that they can counter hard ball positions from UK negotiators and they will have more substitution options from within Europe. You strategy will merely drag out the negotiations. Exports to the UK are important to the EU but are only 12% of the overall exports & 3% of their GDP. Exports from the UK to Europe constitute 45% of UK exports - I think the EU negotiators might be aware of these facts. Your suggested tactics would just prolong the agony for the UK. We do need tough negotiators but they also need to be realistic and pragmatic. We need stability as much and more than the EU. Sooner rather than later. WE need to make deals - not history.