UK economy comes to a standstill

[m.i.t]

UK economic growth ground to a halt between April and June, according to the latest official figures.

The Office for National Statistics said the economy stalled, showing no growth from the first quarter of 2008.
It ends a run of more than 15 years of consecutive growth in the UK and will raise expectations of a rate cut.
The 0% growth figure was down from an earlier estimate of 0.2% and lower than the 0.3% growth recorded in the first three months of 2008.


'Challenging times'

The figures were the weakest since 1992 and the news sent the pound lower against the dollar and the euro.
The government said the economy was feeling the effects of global pressures such as high commodity prices and the continuing credit squeeze.
"The Government's priority is to guide Britain through these challenging times, while also supporting those hit hardest as a result of these global factors," a Treasury spokesman said.


But the Conservatives said that Labour's economic record had been tarnished.
http://newsimg.bbc.co.uk/shared/img/o.gif

[/URL]

"For years Gordon Brown boasted about consecutive quarters of economic growth," Shadow Chancellor George Osborne said.
"Now economic growth has ground to a halt and Brown's bubble has burst."
Friday's figures showed that the services sector, the backbone of the UK economy, grew just 0.2%, while manufacturing output fell by 0.8%. Household spending dropped by 0.1%.
Exports also fell as Europe, the UK's main trading partner, saw growth contract in the same period.
The UK economy grew 1.4% from the second quarter of 2007, revised down from an initial estimate of 1.6%.


"The figures are very weak and suggest the UK economy is already in recession," said George Buckley, an economist at Deutsche Bank.

The economy technically enters a recession when it shrinks for two consecutive quarters.


Rate dilemma

Bank of England governor Mervyn King has warned that the UK economy is in for a difficult and painful period due to a combination of high inflation and rapidly slowing growth.
Inflation, which at 4.4% is well above the 2% target rate, could make it more difficult for the Bank to cut interest rates to spur the economy.
But analysts said the zero growth reading could lead to lower borrowing costs by the end of this year. "This really does put a rate cut firmly on the agenda although it is unlikely to come until we have seen the peak in inflation," said Brian Hilliard, an analyst at SG.




[URL]http://news.bbc.co.uk/2/hi/business/7576274.stm (http://news.bbc.co.uk/2/hi/business/7576619.stm)

[CMNot]

Tough times on the horizon for us all. The US is not doing too great (nor too bad), the UK is slowing and Europe is following. Kind of like a ripple effect.

[Albatross]

Wait til China hits, then its going to get really bad.

[Lusitania]

The Asian markets are also down, and from many accounts, it looks like Japan is heading to a recession. This following article is a bit old as far as articles go, but you get the point...
Japan close to declaring recession

By David Pilling in Tokyo
Published: August 3 2008 17:47 | Last updated: August 3 2008 17:47

Japan’s government may be forced to declare that the country has entered a technical recession, according to several economists, although any downturn is likely to be far shallower than previous contractions in 2001 and 1998.
A statement from the cabinet office that the economy was “deteriorating” would in effect declare an end to what has been the longest recovery since the second world war.



Cont.
http://www.ft.com/cms/s/0/8c433874-617a-11dd-af94-000077b07658.html



It would appear as if we are heading for a worldwide slowdown as Asian, European and American markets are losing momentum and in some cases, retracting.

[Lazy Lob]

Doesn't help the git Gordon has spent all the money in the coffers. This is going to be a nasty one.

The lot I really pity are the Spanish.

[CMNot]

Lazylob you cynic, we can trust this man with our economy...

http://www.robertamsterdam.com/alistair_darling.jpg

p-)

[Mousepad]

In here too, looks like US lokomotive is slowing down for a few years repair.

[Lazy Lob]

Lazylob you cynic, we can trust this man with our economy...

p-)

Moi, un cynique? Jamais, you hear me...... jamais.

http://img57.imageshack.us/img57/7932/darlingil7.jpg

[Macs.]

Huge real estate bubble waiting to be blown... USA, Europe, Asia, especially Dubai etc.

The other big bubble is see coming is the car bubble, this can't go on for a long time, lot's of bull****tering going on with new cars.

[Mackie]

Huge real estate bubble waiting to be blown... USA, Europe, Asia, especially Dubai etc.


Don't say that. Our order books are full until 2015 and the Emirates are the best customer. p-)
They are prepared for a slow economy.

[Rudolph]

We've got inflation of over 10% this year. It's bad everywhere. Although economic growth is still above 4%. I've seen a lot of people having to downgrade their cars, and being kicked in the teeth by rising interest rates. Our property market has also crashed a little bit, who knows, maybe I can ever afford to buy property in a year or two...

[Excalibur]

so should we expect interest rate cut for GBP ?

[Lusitania]

Huge real estate bubble waiting to be blown... USA, Europe, Asia, especially Dubai etc.

The other big bubble is see coming is the car bubble, this can't go on for a long time, lot's of bull****tering going on with new cars.

That bubble has already busted in the United States, though there is still room for it to get a lot worse, especially in the financial and mortgage sectors. Fannie-Mac seems to be the most poignant problem in the United States today, as both companies will have to be bailed out by the country, as they are not as expendable.

[Mastermind]

That bubble has already busted in the United States, though there is still room for it to get a lot worse, especially in the financial and mortgage sectors. Fannie-Mac seems to be the most poignant problem in the United States today, as both companies will have to be bailed out by the country, as they are not as expendable.
I dunno...Sales of existing homes were up last quarter...and housing starts are coming back...Las Vegas area (here) has been one of the hardest hit in this crunch and yet, we now are back to business as usual in new home construction...and three new casinos are building...big ones...and several smaller ones. The condos are hurting...and slowing a bit, but thats because units on line are saturated...some not even begun have sold six times...that was a wooden nickle scam from the beginning, though.

Unemployment rates have maintained level...in fact, here, jobs are pretty easy to find and no lay offs.

Interest rates are still low...taxes are stabilized, for now...gas prices are on the down...

Doesn't sound all that bad. Unless, of course, you are a Democrat and are doing all you can to destroy the economy prior to the Stupid, Evil Bush end of term....or at least make it sound as bad as possible before November elections.

[Rudolph]

What do you guys pay on a car? Just for curiosity's sake... I pay 15%-fixed on my car.

[Lazy Lob]

I dunno...Sales of existing homes were up last quarter...and housing starts are coming back...Las Vegas area (here) has been one of the hardest hit in this crunch and yet, we now are back to business as usual in new home construction...and three new casinos are building...big ones...and several smaller ones. The condos are hurting...and slowing a bit, but thats because units on line are saturated...some not even begun have sold six times...that was a wooden nickle scam from the beginning, though.....

MM, it’s a freaky situation. Seems as we are being “pushed” into hard times.

[Lusitania]

I dunno...Sales of existing homes were up last quarter...and housing starts are coming back...Las Vegas area (here) has been one of the hardest hit in this crunch and yet, we now are back to business as usual in new home construction...and three new casinos are building...big ones...and several smaller ones. The condos are hurting...and slowing a bit, but thats because units on line are saturated...some not even begun have sold six times...that was a wooden nickle scam from the beginning, though.

Unemployment rates have maintained level...in fact, here, jobs are pretty easy to find and no lay offs.

Interest rates are still low...taxes are stabilized, for now...gas prices are on the down...

Doesn't sound all that bad. Unless, of course, you are a Democrat and are doing all you can to destroy the economy prior to the Stupid, Evil Bush end of term....or at least make it sound as bad as possible before November elections.

By Deena Beasley
LOS ANGELES, Aug 14 (*******) - Elad Group, the owner of New York's iconic Plaza Hotel, confirmed Thursday it has postponed plans for a multibillion dollar Las Vegas Strip project as well as repayment of a loan used to purchase the site.
The decision comes as a slumping U.S. economy and much tighter credit markets have caused other developers to reassess the need for more hotel capacity in the gambling corridor.
"The (Las Vegas) Plaza project is set to break ground a little later than expected and will do so in 2009," said Michelle Tsang, a spokeswoman for Elad IDB Las Vegas LLC, a joint venture between Elad and Israel's IDB Group.
The developer said in March that it expected to complete the design and start excavation no earlier than the end of the year.
Meanwhile, two investment banks have postponed the repayment of a $625 million loan Elad IDB took out in 2007 to purchase the now-demolished New Frontier Resort & Casino at a record high price of $1.25 billion, or about $35 million an acre.
Payment of the loan from Goldman Sachs Group (GS.N: Quote (http://www.*******.com/stocks/quote?symbol=GS.N), Profile (http://www.*******.com/stocks/companyProfile?symbol=GS.N), Research (http://www.*******.com/stocks/researchReports?symbol=GS.N), Stock Buzz (http://*******.socialpicks.com/stock/r/GS)) and Credit Suisse Group (CSGN.VX: Quote (http://www.*******.com/stocks/quote?symbol=CSGN.VX), Profile (http://www.*******.com/stocks/companyProfile?symbol=CSGN.VX), Research (http://www.*******.com/stocks/researchReports?symbol=CSGN.VX), Stock Buzz (http://*******.socialpicks.com/stock/r/CSGN)) has been deferred until May 2009, according to Tsang.
Officials at the banks have not responded to requests for comment.

cont.

http://www.*******.com/article/marke...0080815?rpc=44 (http://www.*******.com/article/marketsNews/idINN1527393120080815?rpc=44)




NEW YORK, Aug 1 (*******) - Casino operator Boyd Gaming Corp (BYD.N: Quote (http://www.*******.com/stocks/quote?symbol=BYD.N), Profile (http://www.*******.com/stocks/companyProfile?symbol=BYD.N), Research (http://www.*******.com/stocks/researchReports?symbol=BYD.N), Stock Buzz (http://*******.socialpicks.com/stock/r/BYD)) said on Friday it has decided to delay construction of its new Las Vegas Strip casino called Echelon and suspended quarterly dividends.


The company also posted lower second-quarter profit as the U.S. economic slowdown reduced gambling revenue.
The company also said it has decided to delay the construction of Echelon due to the challenging economic environment. It plans to resume construction in three or four quarters, assuming credit market conditions and economic outlook improves.
Boyd had been paying quarterly dividends of 15 cents per share.
Boyd reported net income of $21.7 million, or 25 cents a share, compared with $22.1 million, or 25 cents per share, a year earlier.


Income from continuing operations slipped to 25 cents a share in the quarter from 26 cents a share a year before.
Excluding items, earnings in the quarter were 30 cents a share, down from a year-ago 45 cents a share. (Reporting by Euan Rocha, editing by Gerald E. McCormick)

http://www.*******.com/article/marke...0080801?rpc=44 (http://www.*******.com/article/marketsNews/idINWNAB436120080801?rpc=44)

[end]


The Casino industry is hurting from this crunch, as they have reported much lower returns than they usually do. These new Casinos are running into funding problems, as are many other projects across the United States. Take the Chicago building boom we are seeing, there have been credit problems with the new Trump tower (which is still U/C), as well as the Waterview tower (a large high rise), whose Chinese creditors have just cut off funding; the Waterview was in the middle of construction and when the loan did not go through, construction was immediately stopped. The Waterview has not seen a construction worker in weeks and is a half-completed silhouette in the Chicago skyline. It is a matter of investors and the feasibility of buyers in the market, which results in many builders and investors cutting funds and stopping projects to ensure that it is economically logical to continue at the current rate and time. So we are not out of the dark just yet, but I do agree we are slowly starting to reemerge from the credit crisis.

The financial markets and real estate markets are still a wretched mess, especially here in California, and with little to no demand in areas, the banks are still foreclosing. Unfortunately, many banks do not even know the value of their properties, and just want to relinquish these homes. I'm not interested in over-hyping this credit crisis, as it does no one any good (part of the problem lies in consumer confidence, or lack there of), it should always be emphasized that the United States economy has not gone into a recession, as its growth has not seen a retraction. We have just seen a slowdown, and a reality check to the entire banking industry; basic economics tells us that the business cycle will do what it wants, as this current crisis is a strange break in its pattern, which could mean we are seeing a shift in the business cycle of the United States, but certainly nothing to be overly concerned about.

[Mastermind]

AS I said...the condo projects ranr into a slump...but, for crying out loud...they were a blatant scam in the first place. Room the size of a single bedroom..small motel room, selling for a falf to one million????? That bubble had to burst sooner than later.

But, two new casinos are opening this fall. My firm has begun work on proposals for three more rather large casinos, and the Faountain Bleau and City Center are still going great guns toward completion.

Yes, the gaming is off about five percent....but we have three super holidays coming up...gas prices are falling...visitations are on the up...

Doom and gloom all you want...we're still doing business as usual...This is, after all, Las Vegas.

[Lusitania]

Doom and gloom all you want...we're still doing business as usual...This is, after all, Las Vegas.

I fail to see how I can be accused of "doom and gloom," I am simply stating that things are not "business as usual" in the United States, because things are not, people are still losing their homes and the banking and mortgage systems are still a mess. As I said before however, this is just the course of the business cycle, something of which every free market economy must deal with. When markets burst, the economy cools down; for the past thirty years the business cycle was set to a boom and recession type economy, with the recession hitting just about every ten years (early 1970s, early 1980s, early 1990s, early 2000s), the latest cause being the dot com crisis. Since currently we are not in a technical recession, this can be seen as a hiccup in the business cycle (which is only an economic pattern, but not always an economic reality), but certainly nothing that could cripple the country. One thing this slowdown has done is draw attention to the banking systems, the trade deficit and the need for alternate energies, though I fear after this hiccup, we will forget all about these problems.

I cannot emphasize enough though, that overreaction to this is the worst thing that could happen, as this was never on the scale of being a depression. In the late 19th century the US business cycle was a boom/bust cycle, where large times of economic prosperity, would be followed by depression every few years. So no, things are not really that bad, and things are most certainly improving, but we must always be careful with misplaced optimism in markets, especially when those markets are not in the best of health. Nonetheless, I think we are on the same team here on this issue, as we both oppose the Democratic parties' exploitation of the fears of average citizens in order to gain votes, which in turn hurts consumer confidence, and contributes to the economic downturn.

[brainplay]

The US seems to have begun stabilizing for the most part. Unfortunately anything having to do with credit is going to be pretty tight as banks are scared they'll lose out again. People are getting tighter with their money all around which is going to cause a slow economy. Heck, even if it rained giant gold doubloons the economy would be slow unless people started to spend more freely.


I cannot emphasize enough though, that overreaction to this is the worst thing that could happen, as this was never on the scale of being a depression. In the late 19th century the US business cycle was a boom/bust cycle, where large times of economic prosperity, would be followed by depression every few years. So no, things are not really that bad, and things are most certainly improving, but we must always be careful with misplaced optimism in markets, especially when those markets are not in the best of health. Nonetheless, I think we are on the same team here on this issue, as we both oppose the Democratic parties' exploitation of the fears of average citizens in order to gain votes, which in turn hurts consumer confidence, and contributes to the economic downturn.

+1

The overreaction to the housing bubble is what led to a burst instead of a slow deflate. Comparing the speculation on the "futures" market with energy is another good comparison. But hey, at least the news people got themselves a big doom and gloom story. And at least the credit card offers in the mail and email spam and died down.

[Mastermind]

Nonetheless, I think we are on the same team here on this issue, as we both oppose the Democratic parties' exploitation of the fears of average citizens in order to gain votes, which in turn hurts consumer confidence, and contributes to the economic downturn.

Yeah...I pretty much agree on that.