The Credit Crunch

rynner2

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ramonmercado said:
I think this fits here rather than the Europe thread.
Europe's voters wiser than the continent's policy elite
http://www.irishtimes.com/newspaper/fin ... 41598.html
Au contraire, mon brave! That's pure Trash Europe material! It's about the failure of the Eurozone to do 'what it says on the tin', whereas the Credit Crunch was a world-wide affair caused largely by the selling of dodgy derivatives.
 

rynner2

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Recession? What recession?!

UK farmers enjoy boom despite economic slowdown

Britain's farmers have said they are enjoying a boom in business in spite of the economic downturn.
It comes as the National Farmers' Union launches a campaign to highlight farming's contribution to the economy.
Government figures show the agriculture and horticulture sector of the economy grew by 25% last year, the NFU says.

In addition, farmers say they are selling more produce overseas and farming now represents the UK's fourth largest exporting sector.
The BBC's Jeremy Cooke says that at a time of recession the latest figures make remarkable reading.
The Gross Value Added (GVA) contribution that farmers and growers made to the economy grew by £1.75bn, taking the total to some £8bn.
GVA represents the difference between overall output and costs.

It is welcome news for an industry which found itself in something of a slump just a decade ago, after suffering the disasters of BSE and foot-and-mouth disease, our correspondent says.

The NFU is launching the Farming Delivers for Britain campaign with a farm-themed boat trip along the River Thames in central London at 12:30 BST.
Afterwards a report on the importance of agriculture to the economy, and its contribute to its recovery, will be handed to MPs.
NFU senior campaigns adviser Gemma Fitzpatrick said the event was about "showcasing what farming delivers for Britain".
"We're hoping the boat will make a big impact and turn a few heads as it's not every day you see a farm sailing down the River Thames," she added.

http://www.bbc.co.uk/news/uk-18140854

I hope all the animals will be wearing life-jackets! ;)
 

rynner2

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Some people limit discussion of 'cuts' to party political issues, but whichever party is in power, in whichever country, the problems are world-wide:

Viewpoint: Why the young should welcome austerity
By Prof Niall Ferguson
BBC Reith Lecturer 2012

Governments should be more honest about the size of their debts and young voters would be wise to get politicians to pay them off as soon as possible, says economic historian Niall Ferguson in the first of his BBC Reith Lectures.

The critics of Western democracy are right to discern that something is amiss with our political institutions. The most obvious symptom of the malaise is the huge debts we have managed to accumulate in recent decades, which - unlike in the past - cannot largely be blamed on wars.

According to the International Monetary Fund, the gross government debt of Greece this year will reach 153% of GDP. For Italy the figure is 123%, for Ireland 113%, for Portugal 112% and for the United States 107%.
Britain's debt is approaching 88%. Japan is the world leader, with a mountain of government debt approaching 236% of GDP - more than triple what it was 20 years ago.

Now, often these debts get discussed as if they themselves are the problem, and the result is a rather sterile argument between proponents of "austerity" and "stimulus".
I want to suggest that they are a consequence of a more profound malfunction.

The heart of the matter is the way public debt allows the current generation of voters to live at the expense of those as yet too young to vote or as yet unborn.

In this regard, the statistics commonly cited as government debt are themselves deeply misleading, for they encompass only the sums owed by governments in the form of bonds.
The rapidly rising quantity of these bonds certainly implies a growing charge on those in employment, now and in the future, since - even if the current low rates of interest enjoyed by the biggest sovereign borrowers persist - the amount of money needed to service the debt must inexorably rise.

But the official debts in the form of bonds do not include the often far larger unfunded liabilities of welfare schemes like - to give the biggest American schemes - Medicare, Medicaid and Social Security.

The most recent estimate for the difference between the net present value of federal government liabilities and the net present value of future federal revenues is $200 trillion, nearly thirteen times the debt as stated by the U.S. Treasury. :shock:

Notice that these figures, too, are incomplete, since they omit the unfunded liabilities of state and local governments, which are estimated to be around $38 trillion.

These mind-boggling numbers represent nothing less than a vast claim by the generation currently retired or about to retire on their children and grandchildren, who are obligated by current law to find the money in the future, by submitting either to substantial increases in taxation or to drastic cuts in other forms of public expenditure.

In his Reflections on the Revolution in France, published in 1790, Edmund Burke wrote that the real social contract is not Rousseau's contract between the sovereign and the people or "general will", but the "partnership" between the generations.

"Society," says Burke, "is indeed a contract. The state is a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born."

In the enormous inter-generational transfers implied by current fiscal policies we see a shocking and perhaps unparalleled breach of precisely that partnership.

etc...

http://www.bbc.co.uk/news/world-18456131

As an old git, it seems that I'm part of the problem. But what did I do wrong? What else could I have done? It's all too complicated for me... :(
 

Jerry_B

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You haven't done anything wrong. You were also born into this problem. It's not a new predicament.
 

rynner2

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Californian city of Stockton faces bankruptcy
By Regan Morris, BBC News, Los Angeles

The Californian city of Stockton looks set to become the largest US city to declare bankruptcy, after a deadline to make a deal with its creditors passed.
Stockton City Council is expected to vote on Tuesday night on whether to file for bankruptcy protection.
Mayor Ann Johnston told local media such a move appeared "very likely".

The river port city of 290,000 - which lies 90 miles (144km) east of San Francisco - suffered badly during the US housing market crash.
Filing for Chapter 9 bankruptcy protection would allow the city to hold some of its creditors at bay while still paying for basic services like its police and fire department.
The city is facing a projected $26m budget shortfall and a bankruptcy filing could come as early as Wednesday.

The housing boom was good to Stockton. Flush with property tax, the city developed its waterfront, with a new marina and sports complex, and negotiated generous pension and healthcare benefits for city employees.

But in the past three years, officials in the city have dealt with $90m (£57m) in deficits through a series of drastic cuts.
They eliminated one-fourth of the city's police officers, one-third of the fire staff, and 40% of all other employees. They also cut wages and medical benefits.

Stockton's unemployment and violent crime rates now rank among the top in the nation. One in every 195 Stockton homes filed for foreclosure in May, according to RealtyTrac.
More than 15% of the population of Stockton is unemployed - nearly double the national average.

City buildings have been repossessed and "Out of Business" signs are a common sight.
City Hall was due to move into a new building, but since Stockton has run out of money, the new building has been repossessed.

Mike Brooking, 50, a Stockton native and coffee shop owner, blames city officials. He says they paid people unreasonably generous pensions and medical benefits.
"They gave employees guaranteed healthcare when they're gone - and their families," Mr Brooking said.
"To people who worked there for one month! They couldn't afford it then. They can't afford it now. No-one else has those guarantees.
"The fact is that the police department is shrunk and crime is crazy and there are no jobs. I think this is going on throughout the whole Central Valley, in the whole country and Europe."

Gusto Gifts, just down the street from Mr Brooking's cafe, was shuttered last month.
The shop's main business was selling passport photos, according to George Estrada, a 35-year-old computer programmer who worked there part-time and helped sell off its assets on the Craigslist website.
"Wells Fargo Bank took over a few parking garages that the city owned," Mr Estrada says.
"Now they own the building City Hall is in. You might well call it Wells Fargo town."

He added that it is very difficult for young skilled workers to find jobs. "Everybody here wants to leave town," he said. "People want to move out and find jobs in San Francisco, or Sacramento."

Stockton lies in the heart of one of America's most productive agriculture regions.
The city is built on an inland waterway, navigable to the nearby San Joaquin River, where the produce of California's fields are transported from Stockton's port.

The city has always relied on agriculture - but Mr Estrada and other educated young people have no interest in working in California's blistering hot fields picking cherries, almonds or other crops.
And the canneries are largely gone while other agricultural jobs have become automated.
A Wal-Mart department store is due to open soon in Stockton, "but nobody wants to work there", says Mr Estrada.

Mr Estrada already has a job as a computer programmer, but wants to leave the city because he says his opportunities in Stockton are too limited.
He is looking for jobs all over the San Francisco Bay Area, but says that the older members of his family would never leave Stockton.
He says the increase in crime is the hardest part about living in Stockton and you just never know when something might happen. The police agree.

"We've seen a rise in violent crime here in Stockton," says police officer Joe Silva, a Stockton native and 16-year veteran of the force.
"Last year was a record setting 58 homicides and so far this year we've had 31. This time last year we had 17."

Many blame the surge in violence on Stockton's economic woes. In 2008, the city had a budget for 441 police officers.
Today they have 317, according to Officer Silva, who adds that there is some optimism within the force now because of new Police Chief Eric Jones.

Officer Silva said they would have a few more police officers sworn into the force on Thursday and new strategies for policing some of Stockton's most dangerous neighbourhoods.

...

http://www.bbc.co.uk/news/world-us-canada-18605326
 

Cavynaut

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Just been informed that my 50 quid a week tax credits are about to be withdrawn.

I'm now all together in it! Nice to know that some are doing okay though.

£13tn: hoard hidden from taxman by global elite
• Study estimates staggering size of offshore economy
• Private banks help wealthiest to move cash into havens
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Heather Stewart, business editor
guardian.co.uk, Saturday 21 July 2012 21.00 BST
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The Cayman Islands: a favourite haven from the taxman for the global elite. Photograph: David Doubilet/National Geographic/Getty Images
A global super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary £13 trillion ($21tn) of wealth offshore – as much as the American and Japanese GDPs put together – according to research commissioned by the campaign group Tax Justice Network.

James Henry, former chief economist at consultancy McKinsey and an expert on tax havens, has compiled the most detailed estimates yet of the size of the offshore economy in a new report, The Price of Offshore Revisited, released exclusively to the Observer.

He shows that at least £13tn – perhaps up to £20tn – has leaked out of scores of countries into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks, which vie to attract the assets of so-called high net-worth individuals. Their wealth is, as Henry puts it, "protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy". According to Henry's research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than £4tn in 2010, a sharp rise from £1.5tn five years earlier.

The detailed analysis in the report, compiled using data from a range of sources, including the Bank of International Settlements and the International Monetary Fund, suggests that for many developing countries the cumulative value of the capital that has flowed out of their economies since the 1970s would be more than enough to pay off their debts to the rest of the world.

Oil-rich states with an internationally mobile elite have been especially prone to watching their wealth disappear into offshore bank accounts instead of being invested at home, the research suggests. Once the returns on investing the hidden assets is included, almost £500bn has left Russia since the early 1990s when its economy was opened up. Saudi Arabia has seen £197bn flood out since the mid-1970s, and Nigeria £196bn.

"The problem here is that the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments," the report says.

The sheer size of the cash pile sitting out of reach of tax authorities is so great that it suggests standard measures of inequality radically underestimate the true gap between rich and poor. According to Henry's calculations, £6.3tn of assets is owned by only 92,000 people, or 0.001% of the world's population – a tiny class of the mega-rich who have more in common with each other than those at the bottom of the income scale in their own societies.

"These estimates reveal a staggering failure: inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people," said John Christensen of the Tax Justice Network. "People on the street have no illusions about how unfair the situation has become."

TUC general secretary Brendan Barber said: "Countries around the world are under intense pressure to reduce their deficits and governments cannot afford to let so much wealth slip past into tax havens.

"Closing down the tax loopholes exploited by multinationals and the super-rich to avoid paying their fair share will reduce the deficit. This way the government can focus on stimulating the economy, rather than squeezing the life out of it with cuts and tax rises for the 99% of people who aren't rich enough to avoid paying their taxes."

Assuming the £13tn mountain of assets earned an average 3% a year for its owners, and governments were able to tax that income at 30%, it would generate a bumper £121bn in revenues – more than rich countries spend on aid to the developing world each year.

Groups such as UK Uncut have focused attention on the paltry tax bills of some highly wealthy individuals, such as Topshop owner Sir Philip Green, with campaigners at one recent protest shouting: "Where did all the money go? He took it off to Monaco!" Much of Green's retail empire is owned by his wife, Tina, who lives in the low-tax principality.

A spokeswoman for UK Uncut said: "People like Philip Green use public services – they need the streets to be cleaned, people need public transport to get to their shops – but they don't want to pay for it."

Leaders of G20 countries have repeatedly pledged to close down tax havens since the financial crisis of 2008, when the secrecy shrouding parts of the banking system was widely seen as exacerbating instability. But many countries still refuse to make details of individuals' financial worth available to the tax authorities in their home countries as a matter of course. Tax Justice Network would like to see this kind of exchange of information become standard practice, to prevent rich individuals playing off one jurisdiction against another.

"The very existence of the global offshore industry, and the tax-free status of the enormous sums invested by their wealthy clients, is predicated on secrecy," said Henry.
http://www.guardian.co.uk/business/2012 ... re-economy
 

Analogue Boy

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Cavynaut said:
Just been informed that my 50 quid a week tax credits are about to be withdrawn.

I'm now all together in it! Nice to know that some are doing okay though.

£13tn: hoard hidden from taxman by global elite
• Study estimates staggering size of offshore economy
• Private banks help wealthiest to move cash into havens

"The problem here is that the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments," the report says.

The word they were looking for is 'Trickleup'
 

drbastard

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Cavynaut said:
Just been informed that my 50 quid a week tax credits are about to be withdrawn.
Welcome to the club. I assumed when they talked about welfare reform they were thinking of targeting the workshy and benefit fiddlers. Apparently it's the hard-working sitting ducks they want to sink.
 

Mal_Adjusted

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well i'm losing all my benefits in a month's time - i'm not sufficiently disabled to get ESA according to the new rules. i can get jobseekers if i apply, but as i reached 60 a few weeks ago i took the option of getting a small pension and a lump sum now (no point waiting another 5 years - might not be around then) so i doubt i'd get more than £10 a week jobseekers once all my income was taken into account. i'm in a high unemployment area, most of what's available isn't what i can do. don't fancy signing on to jobseekers for a tenner a week and do 30 hours compulsory "work experience" into the bargain. Will try and survive on what i've got, sell stuff, for as long as possible. (bad time to sell in a recession) Hope to last another 2 -3 years before i have to go to jobcentre. maybe things will have changed by then ?
 

Quake42

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Jobseekers' Allowance - assuming you have paid your NI contributions - is not means-tested, at least not for the first six months. You should be entitled to the full amount.
 

ramonmercado

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Mal_Content said:
well i'm losing all my benefits in a month's time - i'm not sufficiently disabled to get ESA according to the new rules. i can get jobseekers if i apply, but as i reached 60 a few weeks ago i took the option of getting a small pension and a lump sum now (no point waiting another 5 years - might not be around then) so i doubt i'd get more than £10 a week jobseekers once all my income was taken into account. i'm in a high unemployment area, most of what's available isn't what i can do. don't fancy signing on to jobseekers for a tenner a week and do 30 hours compulsory "work experience" into the bargain. Will try and survive on what i've got, sell stuff, for as long as possible. (bad time to sell in a recession) Hope to last another 2 -3 years before i have to go to jobcentre. maybe things will have changed by then ?
Bad news. Any chance of an appeal working or have you tried that already?

Don't know if its the same over there but best not to let a gap in your record. Can you at least sign on for credits? If theres a gap it may affect your eligibility for old age pension.

When I parted company with the civil service at age 50 I got a reduced pension and lump sum.
 

Cavynaut

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Yeah...you really should sign on Mal. Even if you get next to bugger all at least you'll get the NI contributions credited to you.
 

Mythopoeika

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I agree with the other posters, Mal.
At least you should get something, and it's better than a tenner a week.
 

OneWingedBird

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It's likely i'll be in a similar situation in a month or so Mal, can only say good luck.
 

Mal_Adjusted

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Looks like I might be able to get Pension Credit in 2 years time, and my money should last that long. I'll go to Jobcenter and to find out that the score is, it is all very confusing, not knowing what benefits I might be put on. If they'd left things as they are I could have gone straight to pension credit :) The info on Jobseekers is pretty vague about additional income - and it seems to depend on which type of Jobseekers i qualify for. Appealing the decision doesn't appeal to me, it means more form filling in, bothering doctors etc. My physical problems i can manage - which is why i'm fit for work - if I don't have to do anything. anyways thanks for kind words - will let you know how it works out. In the meantime - anyone want any old copies of Nexus - I got a stack of them - dunno if they're worth anything :)
 

Mythopoeika

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I have had a stroke of good fortune at last - just landed a new full-time job.
Timing is good, as my money is close to running out.

Phew! 8)
 

GNC

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Congratulations!
 

ramonmercado

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Mythopoeika said:
I have had a stroke of good fortune at last - just landed a new full-time job.
Timing is good, as my money is close to running out.

Phew! 8)
Congrats!

I told you joining the Masons would be worthwhile.
 

Mythopoeika

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Haha, thanks - but I never joined the Masons. :lol:
 

rynner2

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Monstrosa said:
He joined the Carpenters.
No, he used Black Magic, sticking pins in wax models of his rivals...

well, that's how I got rid of my ex-wife... :twisted:

Well done anyhow! :D
 

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rynner2 said:
No, he used Black Magic...
That's a good point. I should buy a packet to celebrate with. :)
 

rynner2

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Is there light at the end of the tunnel? An upsurge in British manufacturing! Can this be true? :shock:

How Britain won the global car war
The surprise renaissance of the nation's car makers shows British industry the road ahead.
By Jeremy Warner, Associate editor
4:30PM BST 11 Aug 2012

For Europe's beleaguered car makers, news of vast losses at Peugeot and, to the dismay of the French political class, the closure of one of its flagship plants, was an all too familiar story.
It's partly a "Made at Peugeot" problem, but the company's travails are also part of a deeper malaise at the heart of the Continental auto industry.

From General Motors to Fiat and Renault, most of the big household names are struggling. Poor demand, crippling overcapacity, and increasingly intense competition from foreign entrants have combined with a structural shift in the market to premium and value vehicles to squeeze established marques.
For some, cash is fast running out. With credit scarcer than ever, major restructurings and state-funded bail-outs – possibly even full-scale bankruptcies –are just around the corner.

Yet amid this tale of decline is one unexpected bright spot. Remarkably, the UK car industry seems to be enjoying something of a renaissance. So remarkable, in fact, that industry veterans – hardened by years of failure – keep pinching themselves to make sure it's real. The full range of good-news stories over the past year is too long to list, so here is just a taste.

Last month alone, Jaguar Land Rover (JLR) announced a further 1,100 new jobs at Castle Bromwich, in the West Midlands, to support the launch of new Jaguar models, while BMW confirmed a further £250m of investment at its Oxford, Swindon and Hams Hall facilities to expand Mini production.

These announcements come hard on the heels of major new investments by JLR at Halewood, Nissan at Sunderland, Honda at Swindon and Vauxhall at Ellesmere Port. At the elite end of the industry, McLaren Automotive is also investing heavily in a new facility at Woking.

Over the past 18 months, virtually all those involved in the British automotive industry have announced expansion of some form, a collective total of around £4.5bn of new investment.
This is prompting a host of matching initiatives in the supply chain. The surge in activity is virtually unprecedented, with car production this year expected to top 1.5m vehicles, more than at any time since the late 1990s.

For the first time since 1976, the UK exports more cars by value than it imports – amid supposedly the worst downturn since the Great Depression.
The previous peak for UK car production was back in 1972, when the industry sold 1.9m cars. Such has been the intensity of new investment that the Society of Motor Manufacturers and Traders is confident this record will be surpassed within three years, assuming there is no meltdown in the eurozone.

To understand this resurgence, it is necessary to go back in history and explore what went wrong in the past with the British car industry, once the thriving heart of UK manufacturing.

etc...

http://www.telegraph.co.uk/finance/comm ... r-war.html
 

rynner2

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More good news, but I guess this could be more short-lived...

Team GB's success boosts retailers
Olympics effect sees surge in bicycles and TV sales, and patriotic customers buy British-made merchandise
Julia Kollewe
guardian.co.uk, Saturday 11 August 2012 12.04 BST

Team GB's gold medal haul and Britons' national pride in the London 2012 Olympics have brought people flocking back to the shops, with soaring sales of bikes, sportswear, picnic foods and TVs.

Last week in London the West End – usually buzzing with tourists at this time of year – was described as a "ghost town" as people were put off travelling by warnings of potential transport chaos. The widely feared travel disruptions never materialised, and shoppers were this week back out in force. Shopper traffic increased by more than 13% in the West End on Tuesday compared with a year earlier, according to the latest footfall figures from Experian, which credited the impact of the triathlon. Having witnessed the historic victory for the Brownlee brothers from Yorkshire, spectators then hit the shops.

Jace Tyrrell at the New West End Company said: "We know from other Olympic cities that it definitely builds in the second week." Compared with the first Olympics weekend when footfall was down 9.1% in the UK as a whole and 21% in London year on year, the second Games weekend saw a pick-up in shopper numbers, according to Springboard. Saturday 4 August saw national footfall rise 5.4% and London footfall 8.3% and Sunday 5 August maintained this uplift with 1.8% and 5.4% respective rises in year on year growth.

Britain's higher-than-expected medal haul in a variety of disciplines has prompted a jump in people taking up those sports. Cycle and sports shops and department stores have reported a surge in sales of bikes and accessories, running, swimming and tennis gear and rowing machines. Halfords, the biggest seller of bikes in the UK, reported higher sales of Boardman and its own-brand road bikes. A Victoria Pendleton-designed bike range for women saw sales rise more than 70% this month.

Evans Cycles has enjoyed a 35% increase in the sale of road bikes and a surge in visitors to its website in the week after Bradley Wiggins' triumph in the Tour de France, followed by his Olympic gold medal. The cycling chain said the last few days have been the busiest of the year, with higher sales in every region across the UK. Bikes costing between £700 and £2,000 are most popular. Getting kitted out like Britain's cycling hero would set customers back £7,400, with a similar bike costing nearly £7,000, plus shorts, helmet and shoes (minus the sideburns). 8)

Even though gold eluded Brits in the swimming, with Rebecca Adlington having to settle for two bronzes, swimming costumes and goggles are flying off the shelves. John Lewis sold 77% more men's Team GB swimming trunks last week than in the previous week, as well as 44% more goggles, and 34% more Monster Beat headphones, sported by many of the Olympic swimmers when walking up to the pool.

Ben Rogers, sports buyer at John Lewis, said: "Olympics fever has really gripped the nation and we have seen an increase in people buying the equipment to try to emulate their favourite stars."

Rowing machines have seen a 106% surge in sales week-on-week, while running clothes and trainers are up 41% on a year ago and tennis gear has risen 14%.

As the nation got together to watch the Olympics at home or on one of the many outdoor screens around the country, sales of beer, snacks, ready meals and celebration cakes have jumped.

etc...

http://www.guardian.co.uk/business/2012 ... -retailers
 

rynner2

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rynner2 said:
Is there light at the end of the tunnel? An upsurge in British manufacturing! Can this be true? :shock:

How Britain won the global car war
The surprise renaissance of the nation's car makers shows British industry the road ahead.

http://www.telegraph.co.uk/finance/comm ... r-war.html
Jaguar Land Rover Halewood plant in 24-hour production

The Merseyside Jaguar Land Rover plant has moved to 24-hour production, with the introduction of an extra shift.
The car maker has created another 1,000 jobs at its site in Halewood so it can meet demand for its Evoque and Freelander models.
As a result, staff will work to a three shift pattern with the first night shift starting at 21:30 BST on Monday.

The new jobs take the site's workforce to 4,500 - three times the number working there three years ago.
They include production operators, supervisors and engineers.
In December 2010 there were more than 14,000 applications for 1,500 new jobs as the plant began production of the Evoque.

The Indian-owned car manufacturer reported a 34% rise in profits in May.
Parent company Tata Motors attributed the significant increase to strong demand from China and Russia, particularly for the new Range Rover Evoque.

http://www.bbc.co.uk/news/uk-england-me ... e-19240981

We've become so used to doom and gloom in recent years that I think many people can't believe this good news. Even politicians seem to be keeping quiet, perhaps for fear of jinxing it!
 

rynner2

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Back to doom and gloom:

US 'will return to gold standard', says Euro Pacific Capital chief Peter Schiff
A major US investor has predicted the world's leading economy will return to the gold standard, giving further weight to Republican moves to set up a commission to look at the issue.
By Andrew Trotman
2:22PM BST 31 Aug 2012

Peter Schiff, chief executive of Euro Pacific Capital, has argued that the US is heading for a currency crisis, and an immediate move to peg the dollar to gold is needed as the economy is caught in a "phony recovery".

"Eventually we will be back on a gold standard, not because politicians want it, but because the public demands it and the situation requires it," he told King World News.
"We are headed for a currency crisis, and the only way we’re going to stop it is by putting real value back into the paper dollar. So we have to tie it to gold.
"The sooner we do it the better because the sooner we start to repair the problems the easier it is. The longer we wait, the bigger the problems get. But I think it’s happening soon [a return to the gold standard]."

The economy is so bad, Mr Schiff argues, that despite Ben Bernanke's speech today in which he is expected to dampen hopes of further monetary policy stimulus, the Federal Reserve chairman will soon be forced into another round of quantitative easing.

“QE3 is coming. You know we’ve got a phony recovery, so it’s going to fail. So we are going to get more QE. It’s not that we need it, but if we don’t have QE3, then we are back in recession," said Mr Schiff, who ran as a candidate in the Republican primary for the US Senate seat in Connecticut in 2010.

"We have a lot of problems, and if we cure them it’s going to mean a short-term recession as we repair the damage. Until the Fed lets us have a real recession, as painful as that may be, we are never going to have a recovery."

Added to North America's economic woes, a "fiscal cliff" is looming. A number of tax increases and spending cuts are due at the end of the year that are expected to weigh heavily on growth and possibly drive the economy back into a recession.
Mr Schiff believes this will push the US into currency and debt crises, paving the way for a return to the gold standard.

etc...

http://www.telegraph.co.uk/finance/pers ... chiff.html
 

ramonmercado

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Full text at link.

Austerity: The madness of a dying system

The ruling class has no alternative to austerity and the drive to create a pristine capitalism. Not only is that impossible, but, as shown by South Africa, the working class is beginning to revolt. This is an edited version a speech by Hillel Ticktin, editor of Critique, on November 17

If one looks at the current situation, one would have to conclude not that we are coming out of a crisis, but that the ruling class is becoming more and more afraid. Mervyn King, the governor of the Bank of England, says that the real position is getting worse. Why is he saying that? One could say, of course, that he is coming to the end of his term, and that he has to say how bad everything is. But it is clearly more than that. There really is a degree of pessimism now within the ruling class itself, which he is expressing.

The second aspect of the situation is that austerity has more or less become the dominant mode of discourse. Barack Obama represents the left wing of the ruling class, and even he frames his policy within it. Except that his austerity is not the same as the Tea Party austerity, which seems to rule in the Republican Party and would have been the policy if Romney had won. Nevertheless, there will be a form of austerity, whichever side you take in mainstream politics at the moment.

In this country it is obvious that Ed Miliband has more or less accepted that line as well. In fact it is the line that was set in the 1930s - the Austrian line, as it was called. Paul Krugman has said that austerity is in effect a means of control. Behind the word ‘austerity’ one can hide the form of control, hide the fact that there is a ruling class that is doing very well, and that society is, if anything, becoming more unequal, not less so. That can be hidden behind the word ‘austerity’ - that is what Keynes said and what Krugman has been saying.

One might have expected Keynes to have said that if he had been a reformist. But he was nowhere near the left, and was strongly anti-working class. However, one has to accept that the ruling class, in order to survive, has to make concessions at certain times. And in order to make concessions they have to recognise their own real position, and make it clear that by making concessions they are retaining control. It amounts to removing the veil of commodity fetishism and saying, ‘Yes, we are here in control, despite these concessions’.

However, the austerity line is the reverse: it amounts to a refusal to accept what is real. Yet it is the dominant viewpoint now. In 2007 I attempted to analyse the different forms of capitalist control - both those that are inherent in the nature of capital itself and the substitutes employed at this time - and see how far they could be maintained. Austerity is part of that. ...
http://www.cpgb.org.uk/home/weekly-work ... ing-system
 
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