Since I am in Grand Cayman, a British Overseas Territory, I thought it only appropriate to note that its now official: the UK joins the US in the ranks of formally being in an announced — and pronounced — recession.

The British economy contracted 1.8% for the 2008 calendar year. For the first time since 1991, the country has felt 2 consecutive quarters of negative GDP: Q3 fell 0.3%, while the miserable 4th Q fell 1.5% — the worst quarter since 1980.

Both services and industrial production saw the largest declines since the 1970s.

I wonder if anyone in the UK wrote an editorial last month proclaiming how wonderful the British economy was . . . probably not. The Brits are known for having a stiff upper lip, and are neither delusional nor incompetent, with have always had a solid streak of realism.

Category: Economy, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

15 Responses to “Congratulations Britons: Its a Recession!”

  1. ben22 says:

    wow this is really breaking news eh

  2. Tucker says:

    I hope you are spending some time underwater in GC, the best Cayman has to offer is below the surface. And a visit to Hell is always fun.

  3. John Borchers says:

    The breaking news should be it’s only 1.5% down in 4Q. That not the -10% we need for depression type scenario.

    Looks like we are headed down again today. I’m set to buy ANF believe it or not.

  4. ben22 says:

    John Borchers,

    have you considered that perhaps it is not -10% yet because this has only just begun?

  5. John Borchers says:

    Ben we should be just about in the heart of the crisis. In my opinion it should have been much worse by now.

  6. Darkness says:

    Enjoy yourself!

  7. NadineD says:

    I was at the CBO conference yesterday, and I say this with no intention to suck up whatsoever, but yours was the most informative, logical, easy-to-follow, and entertaining presentation of the day. And it was the one that made the most sense to me.

    What did you think of Calomiris? Was it just me or were some of the things he said about Fannie Mae & Freddie Mac pure political spin?? I thought deregulation was the whole problem with them, not the answer…

    And you should check out the jewellery stores down by the waterfront at Georgetown harbour while you’re here… we’ve got every kind of watch you can imagine (one of the very few things we have in abundance here… ) : )

    ~~~

    BR: He’s an interesting guy, and while I disagree with him on many things, I can respect his process — he is rigorous and analytical. I think I could debunk his Fannie/Freddie argument, but it would be more complex and time consuming than usual.
    We both agreed that the last speaker was baffling . . .

    Our wives coincidentally both flew down on the same flight Thursday, and the 4 of us are going out to dinner tonight — Papagallos was booked so we are heading to Calypso Grill.

    Georgetown satirday afteroon!

  8. ottovbvs says:

    The sainted Luskin, people must laugh as this guy enters the room. Brit households are more overleveraged than we are if thats possible to believe. It’s all the housing market over there where at the start of 2008 home prices had risen 300% since the mid 90′s. They fell about 16% in 2008 with most of the decline in the second half. I’ve seen several research papers forecasting total property price declines of 25-45% depending on the severity of the recession and I’d say it’s going to be be a bad one so total real estate declines of a third are quite feasible.

  9. ben22 says:

    BR,

    Don’t get suckered in by Nadine, I’ve been to Grand Cayman, swam with the sting rays there, you can find better price on Rolex, etc. here in the states. They are about as valuable as those duty free liquor shops.

    Sorry Nadine.

  10. ben22 says:

    @JB

    I hope you are right, I fear though, that you are wrong. See today’s quote of the day.

  11. Mannwich says:

    We are in the 7th inning of this crisis. Unfortunately for us it’s going to extra innings. Could end up a suspended game. Alright, free baseball!!

  12. plawery says:

    The reality is the problems in the UK are infinitely worse than reported, and by the way infinitely worse than in the US. We don’t make anything anymore and the economy is virtually dependent on the City and the property market. Our property bubble was greater (average house price to average income a year ago was over 6x).

    At least you guys have a new leader. Granted I don’t see what he can actually do, but he can inspire people and instill hope; that can be quite powerful. What do we have on this side of the pond? No leadership, no credible opposition, the only people prepared to work are 10% of the indingenous population and the migrant labour force, and they are returning home. We have crippling taxes. A social services program that is crippling us. Tax revenues are plummeting but we have a government intent on solving a debt crisis by raising more debt! Jim Rogers hit the nail on the head earlier this week, “the UK is finished”.

    The only good news is that the stock market is probably the most non-domestic in the world.

  13. danny b says:

    Barry – think the last time I contacted you was 2002 -2003 about the same time the Baltic Dry Index started to make its move in the green shoots of recovery we had back then. Just pointing out that the BDIY has now had 3 up weeks in a row. Yes its coming from a very low base and very bad 6 months but I wonder if this early indicator is telling us something……

    Barry – love reading the BP – keep up the good work – sounds like you are on top of things in GC…
    Good luck

  14. Thisson says:

    So is it time to go long DRYS, DSX or NAT?

  15. ben22 says:

    thisson,

    I used to really like DSX but they pay no div anymore. Clean balance sheet on DSX. They have an advantage, IMO in how the lock in rates vs. a drys, I never looked at NAT so I have no idea.