Not really understanding finance here

Of all the terrors of Brexit:

The mass layoffs following the S&P rating downgrade of Britain to BB status were especially traumatic.

Doesn’t really work.

For the rating to actually change it needs two of the big three to change it. So S&P alone means nothing, it requires Fitch and or Moody’s to also.

Secondly, ratings don’t drive events, they react to them. If there were mass layoffs and a crumbling economy then maybe the agency would downgrade.

Finally, in order not to sound too Ritchie-like, why would a down grade cause lay offs? The government finding it more expensive to borrow means the private sector fires people why?

28 comments on “Not really understanding finance here

  1. Not the private sector, the public sector. If borrowing becomes more expensive, we can no longer keep running an ever-growing tab, and we have to fire all those diversity coordinators.

    That really is how these people think.

  2. National debt is now at 83% ( March ) and there is no secret that the Brexit State intends to make us pay tp disguise the short term visible disaster by abandoning what remains of the delicate and broadly successful strategy of moderating spending growth below the UK`s overall growth .( Corbyn-plus on lower growth with additional tax cuts is being proposed- ie madness )
    That overall growth was assisted by inward migration of working age people so that will make the squeeze tighter( my prediction is that they will let in a flood of New Commonwealth migrants what other choice is there ?)
    Carney made a huge impact by abandoning interest rate normalisation effectively a 2% cut to the forward house hold budget , 2016 recession averted , phew .. ..Predictably there has been a short lived consumer boom – there is not a lot more he can do as he has said and in any case he cannot unblock ports regain lost clients or re-establish passporting

    My feeling is that debt will be allowed to grow to over 90% at which stage nervousness will begin to set in especially with our lower growth and structural economic weakness .
    The Uk will, probably be downgraded but, it could be much worse
    The great fear is that confidence is seep away further and the sustainability of our now terrifying debt levels will be questioned . I have no idea how far out on the ice we are but if you keep on and on and on doing stupid things you will pay for it

    Experts – we are endlessly told , know nothing and get it wrong …true , economic predictions have consistently failed to spot disaster and erred on the optimistic side .
    I also do not belive the experts I think there isa real risk things could get much much worse than anyone has yet realised

  3. Because a lot of the private sector is there only because taxpayers are milked to spend the money “boosting the economy”?

  4. “When the Russian owner of the Belfast Freeport was arrested for fraud in the spring, even he thought his government was doomed. ”
    In five months> If he’s reckoning the current Parliament could get the complex legislation through to enable a Belfast Freeport through in under five months he’s an incredibly optimistic view of the dynamism of a post-Brexit UK. The implications for the rest of the UK’s political/economic performance are astounding. This guy some sort of ultra-Leaver?

  5. And money borrowed (stolen from the future) to “boost the economy”.

  6. If I thought UK tax money ended up back in the UK private economy I’d worry less. Seems to me much of it is creamed off to suit an internationalist class, which if it was buying goods and services for the UK citizens I would mind much less. Somehow government spending is going up and up but we seeing less and less on things that help.

    I would prefer smaller government anyway, but big government with lots of theft and fraud is definitely worse.

  7. Not the private sector, the public sector. If borrowing becomes more expensive, we can no longer keep running an ever-growing tab, and we have to fire all those diversity coordinators.

    Savage cuts to school budgets have already meant that the support staff have been cut to the bone .
    The poor and disadvantaged can go back to being functionally illiterate – who cares eh, as long we all get fucking Brexit.

  8. Newmania:“The poor and disadvantaged can go back to being functionally illiterate…”

    Most of today’s ‘functional illiterates’ would remain so even if they had support staff hovering by their elbow 24/7/365.

    It’s not down to ‘resources’.

  9. There’s not really been savage cuts to school budgets. What there has been is that the current budget now has to include the full costs of provisioning for teacher pensions. Which should, obviously, happen.

  10. National debt is now at 83% ( March ) and there is no…

    83% of what? Never mind, I’ll skip the rest. This contributor has the unusual ability to be reliably contentious and predictably dull.

  11. “economic predictions have consistently failed to spot disaster and erred on the optimistic side”

    In a nutshell we have facepainter’s worldview. 100% delusional.

  12. It’s hard to read and understand one of facepainter’s lengthy, poorly punctuated screeds so I have to take it in small chunks – I presume he is one of the functional illiterates produced by our education system. This sentence is truly amazing, however, displaying Murphyesque contempt for reality

    “Carney made a huge impact by abandoning interest rate normalisation effectively a 2% cut to the forward house hold budget , 2016 recession averted , phew”

    It took me a few moments to stop laughing out loud at that

  13. Diogenes, we have ample evidence that he is illiterate, do we have any that he is functional?

  14. “Savage cuts to school budgets have already meant that the support staff have been cut to the bone .”
    My heart bleeds. My London primary school class had 39 kids in it & one teacher. “Support staff” were the headmaster’s secretary & the dinner ladies. The pass rate at 11+ was 100% with 3 scholarships to private secondary schools. And no, it wasn’t Highgate or Hampstead. E London & more than half the kids off council estates.
    That the current teaching profession is uniformly a lazy bunch of useless c***s might suggest that actually doing what they’re paid for mightn’t do them any harm

  15. Newmania @ 8.56 “Experts – we are endlessly told , know nothing and get it wrong”.

    You’re not trying to suggest you’re an expert now, are you?

  16. Diogenes -The point about Carney`s stimulative moves post 2016 is that, in addition to the actual measures,they cancelled the long trailed normalization of interest rates that had been coming since original savage cuts post 2008.
    That is a vast increase in perceived available household income which is why the result was much greater than had been anticipated.
    I met Mr Unslicker for a few beers once, nice guy

  17. That overall growth was assisted by inward migration of working age people

    Lol. Importing hordes of Romanian car washers, Polish baristas and Bulgarian Big Issue vendors to boost GDP is the equivalent of selling at a loss on every unit, but hoping to make up for it on volume.

    Migrants need housing, healthcare, roads, policing and pensions too. The vast majority of them do not, and never will, earn enough to pay enough tax to cover the massive additional costs of housing benefit, tax credits, schools-n-ospitals, etc. that they and their families soak up.

    What you’re describing is a Ponzi scheme whereby we would need an infinitely expanding population just to maintain the pretence of solvency.

    In practice, our immigration system operates as a form of public-subsidised cheap labour to politically-connected business interests who pocket the short-term profits while mug taxpayers are lumped with the never-ending costs.

    A fatwa on this sort of thing, and the sooner we impose a migrant labour tax to bitchslap slum crapitalists into bankruptcy, the better.

    Maybe, just maybe, we can learn to wash our own bloody cars, or just wait till it rains like what normal people do.

  18. ol. Importing hordes of Romanian car washers, Polish baristas and Bulgarian Big Issue vendors to boost GDP is the equivalent of selling at a loss on every unit, but hoping to make up for it on volume.

    Even Eastern European workers taken alone are on average better qualified than the British worker and contribute much more to the exchequer ). I did not say this made the economy more rewarding, although it may have done what it indisputably does it make it bigger .
    That is very important when the size of the debt and deficit is judged against the GDP of the country and the loss of sheer growth will immediately make the fiscal environment worse ..yet again- thanks to Brexit

    You know what makes me laugh , the TV screens are full of lying scum politicians claiming the Brexit vote was about our constitutional arrangements
    About ten seconds on any Brexit supporting site, pub , football terrace or building site would tell you what it was really all about

    Ethnic cleansing

  19. Newmania

    I have to admire your tenacity – you don’t have relatives living in the channel Islands do you?

    Also, can I ask your opinion on a Land Value Tax or the work ‘Money creation in the modern economy’?

  20. Even Eastern European workers taken alone are on average better qualified than the British worker

    Doubtful, but let’s assume this is true. There’s a wonderful moment in BRIDGET JONES’ DIARY (my wife wanted to see it) where the eponymous heroine tries a spot of virtue-signalling on the rakish Hugh Grant character:

    Bridget:
    So what do you think of the situation in Chechnya?

    Daniel Cleaver:
    I couldn’t give a fuck, Jones.

    I couldn’t give a fuck if these were magic Romanian car washers who had PhD’s in car valet studies and a cure for BMW drivers. We have far too many foreigners in our country, it’s costing us bigly, and they have to go back.

    Britain is not some disgusting Middle Eastern souk with an airport attached, it is our home. The only home we have, and our children’s birthright.

    Ethnic cleansing

    Imagine being so infused with soy that you think not paying to turn England into the cantina from Star Wars is “effnik cleansing, innit 🙁 🙁 :(“.

    I’m surprised you didn’t trip over your gigantic squeaky shoes en route to the computer to signal your imaginary virtue.

  21. Newmania July 5, 2019 at 1:28 pm

    Eastern European workers taken alone are on average [1] better qualified than the British worker and [2] contribute much more to the exchequer

    1. Possibly: we have Polish Accountants, Lawyers and other professionals picking vegetables, making sandwiches,washing cars etc

    2. and sending as much of their pay back to Poland benefiting their exchequer

    Poland benefits, not UK

    .
    @Steve

    +1

    Nor are we the world’s free hospital

  22. Even Eastern European workers taken alone are on average better qualified than the British worker

    To the extent that that means free movement between countries with quite different GDP/capita, bad idea. Similar GDP/capita generally creates a much better balance in terms of movement. If anyone imagines it’s a good idea, imagine what free movement with Africa would do to this country in about 5 seconds flat.

    And never mind the fact that you deprive those countries of some of their most capable people whilst at the same time wasting their talents.

    E Europe was not necessarily a bad idea (values, heritage, etc), but a more gradual introduction might have been better from a societal basis, as most other EU countries did in fact do.

    About ten seconds on any Brexit supporting site, pub , football terrace or building site would tell you what it was really all about. Ethnic cleansing.

    Newmy on a football terrace or on a building site – lol. And if you’re daft enough in any case to want to believe that that’s why 17.4 million people voted Leave, carry on kidding yourself, it’s a free and liberal country..:)

  23. Pcar – Absolutely, though the (increasingly foreign) British Medical Association disagrees.

    In today’s “better qualified than the British worker” news:

    UK’s largest modern slavery gang trafficked more than 400 victims

    Vulnerable victims including homeless people and ex-prisoners forced to live in squalor as they earned ringleaders millions

    A human trafficking ring which made £2m by exploiting hundreds of vulnerable victims has been dismantled following the UK’s largest modern slavery investigation.

    More than 400 people – many of them homeless, ex-prisoners or alcoholics – were forced to work for almost nothing after being lured to the west midlands by a well-organised Polish gang

    The ringleaders told victims they would earn good money in the UK but instead placed them in cramped, rat-infested accommodation and forced them to work on farms, rubbish recycling centres and poultry factories.

    They were paid as little as 50p an hour for their labour and in one case a worker was given just coffee and a chicken for redecorating a house.

    The victims – aged between 17 and 60 – had to use soup kitchens and food banks to eat, while one man was forced to wash in a canal because he had no other access to water.

    https://www.independent.co.uk/news/uk/crime/modern-slavery-ring-victims-human-trafficking-uk-poland-a8990151.html

    Is this England? Is this what we want?

    Demographic instability – as anyone who studies the horrific effects mass migration has always had throughout history knows – is the root of all social evils. It’s a cancer eating away the high-trust society our ancestors built so painfully over the centuries.

    So there’s nothing decent, tolerant or liberal about supporting open door immigration policies.

  24. I was in Edmonton, north London, today. First time for some years.

    It’s like Mogadishu transplanted to Albania, with all the welfare hopelessness of Northampton.

    Even little old racist me was shocked.

  25. Facepainter–what is needed for scum like you is a Treason Tax. 90% of income and capital–more if richer –whatever is needed–to knock well off Prog scum like you into the arms of the underclass you so sneeringly despise.

    Watching garbage like you applying for a council house would be worth a 3 hour TV special all by itself.

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