But even red-hot online sales cooled off late in the year as consumers turned sour.
By Wolf Richter and Nick Corbishley, for WOLF STREET.
Consumers in the UK, generally a hardy bunch when it comes to borrowing and shopping, were not in a shopping mood before the holidays. Retail sales in December at non-food brick-and-mortar stores – ranging from specialty stores to department stores – fell 1.6% compared to December last year, seasonally adjusted, according to the UK’s Office for National Statistics (ONS). The less volatile three-month moving average fell 1.1% year-over-year, the biggest decline since September 2009, when consumers were trying to clamber out of the Financial Crisis:
The decline in December caused the non-food brick-and-mortar index to drop to its lowest level since June 2018. And it’s down 3.2% since its peak in July 2019, an indication of just how fast retail sales have deteriorated in the second half of the year:
Even sales at food stores fell 1.7% year-over-year in December. But gasoline sales rose 4.7%, on higher fuel prices.
Even red-hot online sales cooled off in the second half.
Online sales – including sales by the online divisions of brick-and-mortar retailers – had skyrocketed 18.4% in the seven months from December 2018 through July 2019, to a huge all-time record, but have since fallen off, in another sign of retail weakness in the second half, reducing the 12-month growth from December 2018 through December 2019 to “just” 13.3%:
Online sales in the UK now account for 19% of total retail sales. The biggest gains were in the household goods sector whose online sales surged 23% year-over-year in December. This rapid shift to online retail poses a major threat to the viability of many brick-and-mortar stores that have failed in building a vibrant and large online business.
All combined, including online sales, fuel sales, and grocery sales, total retail sales have fallen 1.6% from the peak in July 2019 – due to the weakness in the second half – but eked out a year-over-year gain of 1.5%.
Why this sudden slow-down in retail sales in the second half?
The British Retail Consortium — which focuses on brick-and-mortar stores and doesn’t cover big online retailers, such as Amazon — hammered the uncertainty surrounding Brexit:
“2019 was the worst year on record and the first year to show an overall decline in [brick-and-mortar] retail sales. This was also reflected in the CVAs, shop closures and job losses that the industry suffered in 2019. Twice the UK faced the prospect of a no deal Brexit, as well as political instability that concluded in a December General Election – further weakening demand for the festive period.”
“We’ve had the perfect storm in recent years,” says Martin Newman, a former multichannel operator for Ted Baker, Harrods and Burberry. “The political uncertainty has fueled a fall in consumer confidence and a subsequent tightening of belts.”
And lots of bankrupt companies. The highest profile collapses in 2019 included Thomas Cook, the world’s oldest travel agent that collapsed in late September, leaving 600,000 travelers stranded abroad. It was placed into compulsory liquidation, resulting in an estimated 6,500 job losses in the UK alone.
The brick-and-mortar meltdown.
Some of the biggest retailers that collapsed include:
- Debenhams, the department store that has graced British high streets for over 200 years and which was put through a “pre-packaged” administration in April. Around 4,000 members of staff were laid off. The store continues to trade after its creditors took control of the business, but is struggling to reinvent itself and just revealed plans for 19 more store closures this month.
- Bonmarche, the woman’s fashion chain that called in administrators in October, resulting in 2,900 lost jobs. It also continues to trade in administration, but its future, like Debenhams’ (and so many other chains), remains uncertain.
- Mothercare, Clintons, Links of London, and many other retailers fell into administration in 2019.
A total of 117,000 retail jobs were lost and 14,500 stores were closed in 2019 as a result of brick-and-mortar retail companies hitting the wall or simply cutting costs in a desperate bid to stay afloat, according to a report published by the Centre for Retail Research. The report identifies four main causes of the malaise:
- The high costs of running retail outlets, including rents and high labor costs.
- Low profitability resulting from anemic sales growth, high costs, squeezed margins and ruthless price competition.
- The rapid growth of online competition, with most growth achieved at the expense of brick-and-mortar retailers.
- Lack of preparation: low investment in stores and inadequate forward planning to anticipate the challenges of the future.
British consumers and their cherished credit cards.
Credit card balances have multiplied by a factor of four in seven years, from the post-Financial Crisis low of £55 billion in 2012 to £225 billion in November 2019. UK households, among the most solvent a generation ago, are now among the most indebted. Retailers and economists cherish that.
But the appetite for fresh debt appears to be fading, partly due to weaker confidence and the weakening retail environment late last year, but also because many consumers have already reached the outer limits of their borrowing capacity. In November, credit card balances fell on a monthly basis for the first time since July 2013, according to the Bank of England. But due to the online spending-and-borrowing spree in early 2019, credit card balances in November were still up 5.6% year-over-year.
Not even the “bankruptcy” word hanging over super-troubled Italian infrastructure giants Atlantia and Autostrade, whose bridge collapsed last year, can get their bonds to reflect any kind of serious risk. Read… Nutty Bond Wonderland in Europe Just Reached New Heights of Madness
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I was surprised to see about 6 Amazon sprinter type vans parked in a lot in Asheboro, NC. Unless it’s a pilot program the Amazon fleet has come to one of the more rural counties in NC.
Amazon have opened a small warehouse in Holyoke, MA and dozens of the Amazon navy blue vans enter and exit daily.
Asheboro , is that close to Cary ? I’ve got a friend from HS there
About 60 miles west, not to be confused with Asheville which is maybe 200 miles west of Cary.
Thanks I was thinking of “ Asheville”
Moderation : Destruction & expulsion.
Michael Engel,
You don’t get to derail the entire comment thread on retail sales with your vision of religious and moral issues.
Here are the commenting guidelines:
https://wolfstreet.com/2017/10/07/finally-my-guidelines-for-commenting/
I love your guidelines…most of my comments for 9 years online have been inside them.
I especially suspect comments when they are all positive or all negative about somebody or something. There’s very little of either in this world so we need to be fair.
I have no idea in hell what the said, not that I’m not used to it, and it’s sometimes an interesting word puzzle….Ambrose B seems pretty good at translating.
But isn’t the operative word “MY” guidelines, with the further modifier “guidelines” being distinctly different from RULES?
That aside, 117K lost jobs in a country that size is pretty serious.
How to keep the party going…?
Record debt, zero interest rates, lowering of lending standards, massive immigration….what is left?
London real estate has been declining in price for the last few years too.
Overpriced and now with Brexit hanging over everyone’s heads like the grim reaper No surprise there
Wolf,
Off topic a bit but still worrisome. This goes back to your articles on the fed and the repo market. Secured overnight financial rates being implimented with the repurchase agreements in the repo market by 2021. They seem higher than the libor rates. I do not see the fed stopping with liquidity in this market because of this, am I wrong? And didn’t the fed say they would stop the 60 billion a month of short term treasuries by April? Would appreciate your thoughts on this. Thanks.
John,
From what I can see, and these are just early indications, the Fed’s balance sheet growth has already slowed from the nutty pace late last year. Repos have come down (less demand). It’s still unwinding its MBS at about $20 billion a month. On the other side, it’s adding T-Bills of about $60 billion a month … but some of them might be replacing maturing Treasury securities. I should know more with the balance sheet that covers Jan 31.
Overpriced and now with Brexit hanging over everyone’s heads like the grim reaper No surprise there
Oh please, Nancy. Despite your globalist masters and the MSM parrots on their shoulders assuring everyone that BREXIT would mean anarchy, the UK is thriving relative to the EU satrapies across the Channel. Take France, for example, where the screwed-over proles are rioting against the globalist quisling, Macron, who is imposing “austerity” to increase the efficacy of the oligarchy’s looting and asset-stripping of the population. Boris Johnson, BTW, is moving the House of Lords out of Londonistan and to York, which still retains its English character. Government in exile? The globalists and their stooges are predictably unamused.
The Brits have spent more than they earned for 9 straight quarters beginning in 2016.
That kind of spending is not sustainable and we are probably seeing the beginning of recession now as a result…..
Cheap credit has more than one affect, and exorbitant spending is one of them.
The oligarchy is trying to snap up tangible assets before the bottom drops out.
Agree – this isn’t sustainable. A consumer economy is built on the idea that consumers earn enough money to purchase goods and services. As jobs keep getting shipped overseas, or automated out of existence, fewer consumers have money to keep purchasing those goods and services. Manufacturers, seeing dropping demand, don’t spend money expanding their factories – causing more job losses.
Credit only masks the problem for a while. Once the debtors can’t make their payments, things get ugly in a hurry.
Meanwhile, people are starting to realize that the First Law of Thermodynamics (Matter/Energy cannot be created or destroyed, only its form can be changed) means that the physical laws of the universe mean that there really are limits to growth.
You know it’s natural for all of us to want something for nothing. Who goes want stocks to go up, and bond prices to go up and government to have plenty of money to spend. There is only one group whose job is to bring discipline to the party and that’s the Fed. If they don’t do it, nobody will.
But I always thought it was the FEDS job to bring more wealth and riches to the already wealthy and rich You know George Carlin’s big club that we all ain’t members of
The Fed was sold as a mutually beneficial change…like those birds that clean lice off the rhino and the rhino if happier for it. Nature has many examples.
However, who benefits if the rhino is pecked to death? And why are they doing it?
The Fed was never sold, it was rammed down the throats of the American people who never had any say in its creation.
The Congress was never given power under the Constitution to abandon its duty under the Constitution to be the creators of the money, and to sublet their duty to a private banking institution.
The Fed is illegitimate, and we will never be a free country practicing self determination until it is abolished.
You know it’s natural for all of us to want something for nothing.
Not all. Some prefer a sense of accomplishment and the satisfactions of earned merits. Only toffs hunger for charity more than the destitute.
Many retailers are interchangeable corporate parts and will not be missed much, even by their investors. Many others are special, and their passing will be mourned, like others before them. It will be some time before Harrod’s and Swaine Adeney Brigg close their doors, but by then there will be little left to hope for anyway.
Or Fortnum’s…..
When my barber in St James’s – established for a couple of centuries – goes bust it really will be The End.
But they seem to be doing very well with international internet sales these days.
Interesting insofar as history repeats itself; shops -> 18th-19th century catalog sales -> shopping malls (‘arcades’) -> department stores -> shopping malls -> internet (‘catalog’ sales) -> ?
All that’s changed is the delivery time window.
Yeah.
Don’t overlook us endogenous morphine junkies!
The FED, and their creation of funny money is the reason for something for nothing, for the chosen. You greatly over-rate that bunch of cons.
Boomers who like shopping at stores are old
and have all they need. Millennials have no time and are too often
paid poorly so online they go.Store rents need to go way down
so the B&M’S can compete and entice the young ones to visit.
I’m a Boomer and I hate shopping at stores with the exception of IKEA because they have Swedish meatballs there
Do you mean Greta ?
I’m a boomer and I shop at nothing but stores. I also park as far away as possible to see what everyone is driving and learn other social things, like how many are living in their cars.
I’m a boomer and the biggest difference for me between BM and online shopping is that I spend more at BM because I can easily browse the entire store. Even if I go into a store to buy one item, I will still look at other things and usually buy something else.
Online shopping doesn’t lend itself to browsing, you just look for what you need and purchase those items. Online makes it easy to ignore the rest of the store. I think this change in shopping patterns is another reason sales are declining.
When my mom was nearing and finally at the end, my sister and I took care of her at sister’s. After a Doc appt, she enjoyed using a shopping cart as a walker and could still do 1hr+ of bargain hunting for food and just browsing in other stores. Made her feel useful and also satisfied what I think is a genetic need in women for what they call “shopping therapy”. I don’t know how this need can be well satisfied online, but I see plenty of commercials that are trying hard to get them to make the switch.
consumerism: the cancer that will eventually be the end of us.
The humans began as hunter gatherers…it’s natural to browse.
Spending an hour at Woolworths with a child and $20 used to be wonderful. Then a piece of pie and coffee at the little bar made it perfect.
Retail committed suicide…no more pie, no more coffee, no more chicken salad sandwiches, no more perfume samples, no more sales help, no more daydreaming. All was replaced by vending machines and cameras watching everything.
Like Hollywood, they badly guessed what people liked about themselves. Idiots
Yep Deanna,
I recall the exact experience you describe walking downtown with my mom……exactly….plus I usually got some little cheap toy for going.
The retail apocalypse may be a sign of the wealth distribution problems between the boomer, gen x and millennial cohorts.
I think it’s relatively intuitive to say that concentrating wealth in a small group has a dampening effect on aggregate demand. Even if you are loaded, you can only drive one car, eat one dinner at a time, etc.
Whereas millenials have generally lower wages, investment opportunities and job prospects than their parents. They are a large part of the population but cannot consume due to their economic situation.
This chart has some explanation of relative population sizes that’s helpful for context.
https://www.wealthmanagement.com/client-relations/illustrating-wealth-gap-between-boomers-and-millennials
They would love to consume and enjoy shopping IF the market analysts did their job.
Lack of spending money merely means having a pimento cheese and Lipton’s ice tea, enjoying some original posters on the wall.
It’s the snobby yuppie products that they can’t afford.
Who made decent $$ in the depression? Neighborhood bars with tables, beauty parlors, little sandwich shops, and the movies….pleasant getaways for tired people living with relatives.
Stagnated wages, record debt levels, bank illiquidity? We have to be coming to a head soon here. I understand that job market is good, but where exactly is the breaking point in all of this? There’s no way that we look back in 20 years and say “Hmm, I guess the population can run on a deficit up to their eyeballs and live perfectly, ignorant, happy lives!”. We might be at enlightenment point in terms economics where we can analyze just how immune the service economy can be before even it is affected by these developments. I am curious, but concerned.
Job market good? Uh, is it? 100 million gave up looking and most of the new jobs are low pay and/or part time but hey I hate to nitpick
When the 100 million give looking for work, that lowers the unemployment rate. That’s how it’s done now.
yes, this week I read some statistics from my country that supposedly has below 4% unemployment but the reality is that those 4% are just a fraction of the many people that are no longer looking for work because there simply are no jobs for them (because of age, wrong education, unwilling to work in general etc). They only count a very specific group as unemployed and the definition keeps changing (just like with hedonics for the CPI …).
Exactly. When you control the parameters used to obtain statistics you can get any statistics you want. The only issue is credibility. Government credibility is pretty much gone.
Social unrest has gone viral around the world in late 2019 as the screwed-over proles, pushed past desperation by their losing struggles in our oligarch-looted economies, take to the streets against the corrupt and venal elites. It is instructive that Lebanese of all sectarian groups are rioting outside their central bank, which like ours has served as the oligarchy’s chief instrument of plunder against the 99%. Now even the new IMF head who replaced Leatherface LeGarde, the convicted fraudster who previously headed that rapacious financial institution, is warning of a depression and rising wealth inequality – pure CYA on the part of these gold collar criminals, which suggests the long-deferred financial reckoning day may not be far off.
Hypocrisy defined: The head of the IMF cries crocodile tears over “wealth inequality” and calls on raising taxes on the rich. Not a peep, of course, about the true cause of wealth equality: central banks serving as the oligarchy’s chief instrument of plunder against the 99%.
https://www.cnbc.com/2020/01/08/imf-chief-calls-for-tax-hikes-on-the-wealthy-to-reduce-inequality.html
I’m sure those tax hikes on the “wealthy” are coming (probably for anyone with more than 100K or so in savings, or more than 2x median income?) because the REALLY wealthy aren’t paying any taxes (due to tax heavens and other tricks they can use, with the blessing of politics), so any tax hike is irrelevant for them. Indeed hypocrisy redefined :(
Heard it mentioned in a political talk show this Sunday morning that 50% of Americans do not pay any Federal income taxes. That would leave only the middle classes.
I think it’s about similar in Europe; a very large chunk of the population get far more in subsidies than they pay in taxes (if any). Plus in many EU countries those same groups are almost completely shielded from surging costs of shelter, medical insurance, tuition etc. because they don’t pay the market cost but just some fixed “fee” determined by politics, which usually increases below official inflation. I pay 4-5x more for renting a home than someone on social security or with very low income, despite the fact that I have no income at all and pay significant taxes.
The middle class is shrinking quickly on both sides of the Atlantic :(
Another thing to add to the general cheerfulness about life is that the main stream banks are now readying themselves to apply exorbitant interest rates on the hitherto near zero rates for overdrafts on current and savings accounts.
We just received letters from Barclay Bank saying the overdrafts on our two savings accounts will from 20th February be charged at 37.5% apr. Santander is quoted as introducing >40% overdraft rate.
Never mind slow Christmas sales.
It seems that debt enforcement is finally starting. Whoever cannot clear his debt sheets is about to loose his assets.
Just in time for the recession What a coincidence NOT
Do they also send Vito around to bust your kneecaps if you don’t make a payment?
That beats fixed overdraft fees, as they’re being applied in the US: $11.58 overdraft, $25 fee.
And banks got caught manipulating the timing of the overdrafts. If you write 5 checks, three for $10, one for $20 and one for $500, in total $550, and you have $520 in the bank, the bank would process the $500 check and the $20 check first, which brings your balance down to $0; then it would process each of the three $10 checks, each triggering an overdraft fee of $25 for a total of $75 in fees. It could have processed the small checks first, and then the $500 check, triggering only $25 in fees.
There are now rules against this in place, but still.
Here is my advice to follow: DO NOT EVER OVERDRAW YOUR ACCOUNT. This is a huge profit center for banks. Just say no.
Better solution is to not have overdraft protection. Has always been a scam. Too many people still think banks are your friend.
I believe the newer rules only applied to debit transactions, as in they can’t be authorized if the money isn’t there. The banks are still sorting in descending amounts non-debit transactions like checks during end of the day settlement. For some banks (such as BofA), ISF fees are the same as overdraft fees but ISF you’ll get hit on both sides of the transaction. Yours is the best advice – avoid them.
I use 4 banks in the Midwest. Overdraft charges at each are $35 not $25. Worth repeating – DO NOT EVER OVERDRAW YOUR ACCOUNT.
The dream customer is what they can responsible bouncers.
They also begin the day at midnight with outgoing funds, then incoming deposits after. Always….aren’t they cute?
The good news is: you don’t get any interest on savings, so why not park a bigger amount of money in the payment account so your overdraft risk drops to zero?
Although negative rates are far more modest percentage compared to overdraft, there is no easy way to avoid them and it quickly adds up to serious money. In Netherlands we will have -0.5% rate on savings above 2.5M from April, I predict similar penalty for savings above 100K before end of the year. In addition to that Dutch savers get hit with a 1.2-1.7% wealth tax.
What if you don’t have the money in any account and the bills keep coming? Back when I was in this position I paid quite a few overdraft penalties unfortunately for me
That’s a bad situation; one should prepare to avoid that by building a significant savings position before the bills arrive (even though saving is punished nowadays), but you cannot foresee everything.
Wasn’t it awful when checks began turning around in a nano second? Do stores not know how many sales they lose now that people can’t write a check for groceries on Friday night (payday) and cover it on Monday?
We beat many checks to the bank over the years…nothings fun anymore.
I follow fashionistas around the world and they seem to be cutting back a bit in the UK. One of them actually admitted to buying a Coach bag, which in her circle would be the BBB of handbags, barely a status symbol. According to her, prices of high end luxury items are still better in the UK than in the Euro zone.
I was unfamiliar with Links of London but heard one of the fashionistas comment that the company was profitable but taken to bankruptcy only because the parent company went bust. She thought it was a great loss to the fashion world, but got great deals on the going out of business sale.
As for me, I had planned to buy a Xmas item from a long established UK brand but didn’t because of the exchange rate. The price shot up since the summer, so I had to pass for now.
From what I hear Australian retail is just as bad and getting worse.
B&M retail on Warsaw’s high street called Nowy Swiat has been getting decimated the last couple years Lots of high end retail closing and pubs and restaurants opening in their place I make a trip every summer and the changes are very obvious Evidently the Poles are shopping online a lot more as well
Related news: Bose is closing all its retail stores.
I was going to say that’s a shame—because they have terrific products—but I think I’ve bought all of my Bose speakers at Best Buy. The stand-alone stores probably added some cachet to the items, but as I remember the Bose stores used a lot of real estate to showcase a few products. The closings are probably a smart move.
Bose stuff are overpriced luxury items. They need the added cachet.
ps Bose stuff is overpriced but very, very nice. Still want one of those cd players even though they are completely useless
when is Apple going to close their stores?
As is Papyrus.
My local Papyrus store closed after Christmas. They must have been at that location for over 20 years. But I never bought anything there even though I could afford to. Why spend $6 on a greeting card, when a 99 cent card from Trader Joe’s also does the job.
Dontcha just love how whenever bad news comes out of the UK, whether it be collapsing auto sales or a retail implosion, Brexit is blamed.
Does the average person, whose car is 10 years old, with repair bills mounting think, ‘I really need a new vehicle because I am tired of these bills. Oh hang on, maybe not, Brexit is making me feel uncertain about the future so I’d prefer to continue paying these crazy repair bills and keep this old jalopy’
I suppose it makes people feel better than telling them the truths.
Recall in the 70’s how the UK was headed into Third World status. The place was going to pieces and then Maggie arrived (and North Sea Oil came online…)
Truth 1. North Sea Oil production has collapsed.
Truth 2. UK has propped up its economy in recent years with gargantuan debt at all levels.
Truth 3. The consumer in the UK is drowning in debt. They WANT to buy more ‘stuff’ but the math no longer works. The cards are maxed. Salaries are stagnant.
Brexit has virtually ZERO impact. One might even wonder if Brexit is kept on simmer (let’s face it the EU is NOT letting the UK out) to be used as a scapegoat.
This sucker is rolling over now. The dam is busting. 2020 will be an interesting year. Will the UK be the straw that breaks the Central Bankers’ backs?
In the UK an unbelievable high percentage of new cars are leased. Nobody buys a new car. If you assume business etc leases for 100% than max 20% of the private market is bought.
You sound like Maggie was a good thing. North Sea oil came along and Maggie gave away all the state property. That makes for a good party but it is not good policy and the hangover is destroying the country.
Brexit is the excuse to call in the none performing loans to retail. That is the impact so Brexit is causing the British B&M meltdown now but otherwise it would have happen soon anyway.
Also the EU is absolutely letting the UK out but it is pointing out that the world outside the union is cold and if the UK wants to stay partly in she sound follow EU rules.
Maggie got the credit for turnaround – Chauncey Gardener would have done at least as good a job. Oil wealth puts lipstick on a lot of pigs
Yep! Was at Spokane World Fair (yeah, weird, huh?) in ’75 and the UK exhibit was all about saving lives on North Sea oil rigs.
Russian exhibit was a crawl around Soyuz model. We ate at their pavilion. Ten Bucks for a very small paper plate of Stroganoff! Capitalist pigs!
Everything did indeed look very gloomy in Britain in the 1970’s: economic failure, power-cuts, crazed unions, endemic muggings, first waves of mass immigration, ‘brain drain’, etc.
And in fact senior elements in the military in the UK were planning a coup in the 1970’s, to reassert traditional values and deal with destructive, Marxist, union activity – a friend of mine who was in Special Forces (SAS trainer) at that time was one of those approached to take part.
It was a little comical, but very British:
‘I say, we’re getting together some chaps to help sort things out, for the sake of the country: it’s all going to the dogs and it has to stop. Can we count you in?’ (He declined).
Needless to say, it was all whitewashed away, and in fact they were only patriotic Establishment people, from old army families, looking for a simple way to stem the rot.
Yes exactly: UK oil wealth gone; consumer credit exhaustion setting in; discretionary spending crucified by the rent/mortgage bubble, for some of the shoddiest new housing in the world; and huge rises in the basic cost of living ie commuting by train, food, heating, etc.
The economist Dr Tim Morgan posts regularly on this, and broader world developments – well worth reading alongside Wolfstreet.
If it were not for cheap clothes from Asia, many Brits would be in rags. God bless Primark!
And the disgusting Subway fast ‘food’ places always seem to be full…..
Disappointed that you finished your comment with contempt for the lower class. it does not bode well.
Fernando,
I eat at Subway occasionally. in terms of fast food for a quick lunch, it’s one of the less unhealthy options out there (you get to choose what’s on it). I don’t consider myself or the people who eat there “low class.” They’re just there to get a quick not-totally-unhealthy bite to eat.
Xabier,
Subway has not been doing well at all. Revenues in the US have been falling since 2013. It has been closing stores globally (1,000 in 2018) and hundreds in 2017. It had a franchisee revolt on its hands over pricing, etc. And the stores I have been in are never “full.” Not even close. This company is on a downward slope.
This is a UK university city -Cambridge – and so the one Subway is always full.
They seem happy, but, like the French waiter I once met who once had a ‘very bad experience with an aubergine’ and refused even to serve it, my one experience of a UK Subway 20 yrs ago was quite enough for several re-incarnations……
Please note, I didn’t mention class at all !
Although if pressed I’d say that some of the lowest class people I have ever met worked in the City of London…..
Bravo! Having class has nothing to do with wealth.
Big problem with high seas piracy when major debts were settled in gold. So someone had the bright idea to move it all to the “City” and just move it from room to room.
So, true to form, the pirates all went where the gold was….and stayed there.
“If it were not for cheap clothes from Asia, many Brits would be in rags. God bless Primark!”
Primark clothes after a couple of washes look like rags.
You can’t even use them as rags as they are 100% non absorbant polyester.
I am still wearing cotton sweat shirts that I bought in the 80’s when “Dash” went bankrupt.
Your average clothes are cheap in comparison to salaries now compared to the 70’s and 80’s but the quality is appalling.
Washing them is more expensive then buying new*).
*)Almost true
Most symptoms in economics are complex/from various causes. As such, it opens things up to a lot of discussion.
Having worked abroad with lots of Brits, I would say Brexit has had significant impact, but is not the whole cause… as usual.
Think about it a bit- if economic issues had only a single cause, they would be solved quickly and easily.
Business opportunities will abound in old fashioned, inexpensive ways…people need to use their imaginations.
My son runs a small coffee/waffle place near the big library…it has wifi, a cozy corner for students, and Pokemon on Saturday. It’s doing great.
In the USA we’re destroying brick&mortar with one hand while ringing the register with the tech like AMZN that’s replacing them. China they’re doing the same. A net positive maybe? The stock market thinks so.
But you want to know where the obliteration will occur? The UK, EU, etc. Places where there is only death and destruction. Their obsolete companies and economies run over by big American and Chinese tech. Their brightest minds leave for high paying jobs and H1B visas so UK/EU can never catch up.
For hundreds of years the UK/EU colonized the world. But soon it is they who will be modern day colonized by the new East India Trading Company we call FANG stocks. You think the world is going to hell in a handbasket? I say it’ll start and be worst in the UK/EU.
A,
A wee bit strong and out there, isn’t it? I am referring to, “But you want to know where the obliteration will occur? The UK, EU, etc. Places where there is only death and destruction. Their obsolete companies and economies run over by big American and Chinese tech. Their brightest minds leave for high paying jobs and H1B visas so UK/EU can never catch up.”
Death and destruction….obsolete companies, brightest minds leaving all visa(ed) up for the US. hmm.
Okay here are a few:
“New figures for Boeing’s sales in 2019 show an unprecedented plunge from 893 airplanes ordered in 2018 to just 54.
In 2019 rival Airbus sold 768 airplanes.”
” Nokia sold naming rights to HMD, and in 2016 the new company, also based in Finland, bought Nokia’s old feature-phone division from Microsoft for $350 million.”
Sure, there are some individual basket cases like Greece, and Italy, but:
“In the EU-28, the government debt-to-GDP ratio declined from 82.1 % at the end of 2017 to 80.4 % at the end of 2018. ”
“In the third quarter of 2019, the U.S. debt-to-GDP ratio was 105%. That’s the $22.719 trillion U.S. debt as of September 30, 2019”
I remember about 17 years ago I was attending a presentation by a British Historian. It was just after the Iraq war started. He was drawing comparisons of the past British Empire to that of the current US Empire. He referenced the decline after the Falkland War, the decline after WW2, and stated the US would start decline in the very near future; has started decline. This was in 2003. I paraphrase his answer after I asked if the war was about WMDs or oil. : “Oil obviously,” he said. “The USA has reached its apex and is in decline, afraid and angry about it, and doing so not very gracefully I might add. Hence, these unending wars. China is in ascendency and will be the dominant world power in our life time. My advice to the US is relax, you’ll get over it. Life goes on. We had our crack at World domination and when it was over we have done just fine. The US will too.”
Brexit is an unknown, but thinking about it Brexit seems very doable. The process has started. What will the US do to reset and reunite; pull in the same direction. I read somewhere that the USA has only been united twice in its history; immediately after Pearl Harbour and immediately after 911. It might be hard to grasp, but everyone is not lined up for a US visa or work permit. Honest.
“Death and destruction….obsolete companies, brightest minds leaving”
There are lots and lots of fine places to live in the world, trust me.
“Sure, there are some individual basket cases like Greece, and Italy, but:”
Even this can be debated, just look at the record numbers of Porsches on Greek streets, or the median wealth of Italian citizens that is one of the highest in all Europe (and over 4x the wealth of the supposedly too-wealthy Germans). Why work hard if others will work for you, thanks to a construction called EU? Maybe these countries are just more clever than the ones in the North ;(
And while government debt may be relatively low in most EU countries (easy when governments can borrow for less than zero …), both Netherlands and Denmark are in the top-three worldwide for private debt-to-GDP.
But I agree that Europe is not by definition a basket case. They just need to grow some balls and become independent of Big Brother USA; sadly no sign of that happening yet but I guess Mr. T got them thinking …
One reason Porches and pools re all over Greece is that they love bling and spent their EU agricultural and industry funds on bling.
This is what my Greek son in law says, and he doesn’t feel sorry for them.
Paulo, “In the EU-28, the government debt-to-GDP ratio declined from 82.1 % at the end of 2017 to 80.4 % at the end of 2018. ” That may be the problem in the EU, governments and the EU banks are not flooding the market with Euro’s during a time when consumerism is going down. I always thought that was the function of government, add needed money to the economy when credit and spending power wanes. Greece had huge concessions applied to their safety nets for citizens, before the EU would refinance their debts.
You think the world is going to hell in a handbasket?
Indeed I do. And it’s in a big hurry to get there.
“Are we there yet? Are we there yet? . . . .”
Didn’t the Dutch buy Manhattan from the Natives in return for a box full of trinkets?
IIRC the Dutch later exchanged it for a country that only cost them loads of money … I think in the end the Americans proved the more clever merchants.
Not true. They made oodles out of Suriname.
@char:
maybe … Another take I have heard is that most of the profits were private and the state didn’t make much money from it in the old colonialism days, while for sure they spend loads of money on it later on.
The Dutch state gave a few billion as partying gift. But half the population moved to the Netherlands so i would say we had the better deal. Do feel sorry for the people of Suriname with the bad news about finding oil.
Not only that, they bought it from the WRONG natives who gladly took it and didn’t correct the issue….even then the bs was going strong!!
The colonization of Africa started a little before 1900. The whole EU bunch got together in Germany to decide how to divide it up in a civilized manner.
We, meanwhile, had a whole huge backyard to colonize.
Big advantage.
Ah, the real problem is deftly shown to be too little debt. Consumers need to borrow more, not less, lol.
Wages are stagnant in the entire first world, and in America health care inflation easily sucks up any gains.
So we stagnate in real life.
The stock market doesn’t matter for 90% of America, real estate for 40%, and devil is taking down the hindmost.
That failure of society to work for the majority of Americans is increasing disconnect and discontent.
So either a new deal, or decline.
stagnant wages: not everywhere in the first world, depending on your yardstick.
In Netherlands the average wage rise for union contracts last year was 3.1%. This is the highest pay rise ever since recording began (probably from the sixties). Many government workers received pay rises of 10% or even more, for the next 1-2 years plus often a hefty one-time sum of money. Our official inflation was 2.6% so theoretically most workers are better off, government workers for sure.
Problem is, the CPI vastly understates real inflation as is mentioned on this site frequently and with rising taxes and real income strongly dependent on many subsidies etc., in reality the pay rise will not mean more money to spend for many (certainly not for those on fixed income or with relatively low income).
Over here the stock market is even more irrelevant for the average citizen, and real estate is a playground for the elites and some rich boomers who have more trust in RE than in bank accounts. Many small players are using the booming RE market and lowest-ever rates to spend more (temporarily) and increase their debts which probably won’t end well.
Green New Deal, to be specific. But time is running out (or it’s too late) and our masters don’t like the idea one bit.
The real question is, what do they like, or do they even know?
I wonder if we are close to “peak consumerism”. Maybe the frugality of “delayed gratification” is coming back into fashion as it was after the great depression. Back then, using debt to fund frivolous purchases might have been enough grounds to have one committed for insanity. I have never had a loan in my life: I refuse to pay over double for what an item actually costs. Somehow, I have always managed. Dr. Phil: ” If you knew how little anyone actually thinks about you, you would be surprised”. Thus I have never felt any need for “aspirational” crap to try to impress phantoms of my own mind. The emerging emergencies of this world might finally be educating the newer generations as to what is of actual real importance as opposed to what is just marketing spin. The quintessential example of this type of marketing evil is “fast fashion”… this type of lunacy has to stop: notice how many female clothing chains are biting the dust.
Mr. Smith,
Delayed gratification is not coming into fashion. And the idea that you have “never” had a loan puts you into the demographic, statistically, of non-existent humans.
It’s a demographic that is doing the least damage to the planet.
RE:”The emerging emergencies of this world might finally be educating the newer generations as to what is of actual real importance as opposed to what is just marketing spin.”
Nicely put. Marketing spin well architectured to keep markets spinning. In the past, at least there was some real product remaining, that either represented or created some good for somebody, somewhere. In the past, a lot was in the US. Now, there has been some improvement, up to a lot of improvement everywhere else. But, is it enough to count and pay for what was destroyed to do it so far?
Our children were trained to buy things they don’t need, with money they don’t have, to impress people they don’t know. It’s not working out well.
Yeah they usually have to be trained to be monetized, but it can be done without training. Like, when I was in grammar school they had us with candy, movies, and breakfast cereals, but dirt clod wars in WW1 trenches were never monetized, and considering the amount of time we spent doing it, anyone that figured out a way to do that would be an S&P company, easily.
Wolf, I have never heard it detailed short and sweet (like you do) about Brexit. Who stands to lose more, the Britts or EU? Penalties to the Britts are the worst fears?
I used to cover Brexit a little and got worn out. I’m glad Brits got to decide. There are also big issues, though they can be dealt with.
From a business point of view, these years of uncertainty are the worst. They are impossible to deal with. Businesses with international supply chains or sales or both need to know what the border/trade situation is going to be in three months. But they have not known that for three years. This is really tough. And I think there is a toll to pay. From a business point of view, it would have been far better to get it done and over with fairly quickly and get some certainty.
Yes…it was get off the pot time long ago…
By now everything would have settled down and be heading for a good adjustment. But oh, no.
Brant,
” Who stands to lose more, the Britts or EU? Penalties to the Britts are the worst fears?”
That depends on the competence of the UK government that has a majority in parliament. The UK has been tototally undemocratic from the calling of the referendum to implementing Brexit until the last election.
UK citizens have no idea what is going to be negotiated with the EC regarding trade agreements and immigration.
The UK government holds the trump card (and jokers) on negotiations with the EC but for some reason appears to continually appease the EC.
As a result, small business people like myself have become very frustrated, untrusting and have no intention of contributing to the fiasco.
Most SME business people in the UK that are able to get out of business (i.e. can close and clear debts, leases) have already called it a day as there is little to no margin for capital and risk and too much legislation and government interference and policies and regulations.
I am one of them that over the last three years has managed to get all my capital (except my London home) out of the UK to Asia and holding in Swiss Francs and physical gold.
I am in a position (like others) that if I want to bring my capital back to the UK (unlikely with economic and financial future in the UK and EC zone) can bring the capital back as a loan ( in a foreign holding company) and negate profit on paper by charging any European company interest and management charges.
RE:….”can bring the capital back as a loan ( in a foreign holding company) and negate profit on paper by charging any European company interest and management charges.”
The new business paradigm, and all you really need is a laptop to do it from anywhere. Bye bye BM, even beyond retail BM.
“The new business paradigm, and all you really need is a laptop to do it from anywhere. Bye bye BM, even beyond retail BM.”
For your information, this method and other methods have been used for years.
It is just that there has been a bit of publicity about it recently, though 955 have no understanding or interest anyway.
Switzerland was obviously used and oddly enough Cyprus used to be used by Swiss to avoid Capital Tax until Cyprus joined the EC.
Switzerland lost total credibility when the banks gave all the information to the US government.
A lot of Swiss bankers are now based in Singapore.
The UK holds the trump-card in the same way as Canada holds the trump-card in renegotiating NAFTA
Depends if you look at loses as a percentage of total wealth/income or in absolute numbers. EU is so much bigger than the UK that it will always be lower as a percentage of total.
The EU will not penalize Britain cause it does not need to. Being treated slightly better than Canada because that is what they want is bad enough for Britain.
“The EU will not penalize Britain cause it does not need to”
Of course the EU would like to make sure that the UK economy falls after leaving the EU, otherwise if the UK prospers economically from leaving, then other EU memeber countries will want to leave.
I am pretty sure that the UK will be better off economically leaving the EU, but the EU will suffer more because the UK was paying 12 Bn Euros annually to the EU (second largest contributor to the EU after Germany).
The EU burocraps will have to charge the remaining EU member countries to make up for that 12 Bn Euro shortfall resulting in those EU countries having to increase the tax to their citizens that are already strugglingin the EU zone.
Lets watch the EU member country elections in the coming decade.
Interesting times for the EU and the value of the Euro.
The EU will “persuade” the movement of a large part of the City to more domestic places, and rightly so. And industry is largely focused on Europe. About the future.I have no doubt that the Brits will claim in the future that it is more prosperous because of Brexit but than the Brits are good at exporting humor.
12Bn divided by the EU populations is peanuts, even in Bulgaria. Besides Brussel has environment on its mind and will increase its budget massively. That 12Bn is small beer.
The UK is still a member so you are correct that Scotish and National elections will be most interesting. And the demonstrations and riots in between
ps. You assume that market access does not come with costs. If you look at Norway and Switzerland you will see something else.
Penalties to the Britts are the worst fears?
Their worst fears are the loss of identity and purpose that comes with Brexit.
One notices how Brexiteers are always very angry and are always somehow being ‘betrayed’ by someone? That is their identity!
After Brexit is finally taken over by the adults and done, there will be nothing for the Brexiteers to be angry about and they will have no real purpose except that of buying beer to get people to stay still and listen to their rants.
Thus true Brexiteers will drag out Brexit any way they can rather than face the boring realities of it!
—
Besides, pretty much everything being said & done by the UK side, reminds me very much of the very long (but occasionally funny) tale of my German Boss divorcing Crazy Brazilian Wife.
It’s gonna be a messy divorce and it will never stop, coming up next will be the ‘Stalking Phase’ of the ‘relationship’. Randomly interrupted by the ‘showing off the new hunky toy-boy I got for your money’-episodes.
Very funny! Ever see “Marriage Italian Style”?
B&M melt down continues in the Netherlands. This was the worst year after the real bad year of 2013/2014 when most private equite owned retail in the Netherlands went to that mall in the Sky.Hudson bay closed shop the Netherlands, a few clothes chains closed their doors and a lot of mom & pop’s are closing when their rent contract runs out. 9% of stores are now empty.
I guess a lot more than 9% vacancy in the medium and smaller size cities; in my city it’s more like 20-30% empty (if you include the fake shop windows, pop-up stores that probably pay next to nothing etc.).
What I hear form several retailers is stagnant or declining shop sales with strong pressure on margins and increasing web sales but often with zero or negative yield due to very strong price competition from the big web outlets. Not a good time to be a small retailer unless you are catering to one of the many heavily subsidized sectors.
Retail property might be converted housing. Restaurants had so much competition many failed. McDonalds is still there. Starbucks is hiring.
Australia had a huge property bubble. Australian housing prices fell for a time. Now they have been rising. Apartment buildings started during the boom are being completed. Rents fell in some areas.
Today I bought a 5’ X 7’ rug from Home Depot online. They had much variety to choose from; a well stocked online emporium. I save on shipping by agreeing to pick it up at the store free. They do not have to hold excess inventory for long in the store.
Restaurants have always had a high failure rate. It is normal for them. Chain retail not so much. If they had good locations the failures would even be bought up just for their locations
I believe that part of the decline in December sales is that the holiday spending has been brought forward a huge amount. 20 years ago stores (in the USA) waited until after Thanksgiving before pushing anything for Christmas. Black Friday was the start of the season (if the stores even had such a sale). But now its Christmas stuff in the stores before Halloween, and in some cases at the same time back to school sales used to run. January was always the slow month for retail; the month for inventories, taxes, etc. If Christmas shopping is completed the first half of November there’s nothing left to prop up end of year sales figures. Which actually works well for retail store owners who can let the holiday hires go and not have to pay them over the actual holidays.
Easter eggs etc. are already for sale at the supermarket. Diet plans for this month have been scrapped.
I went into Walmart the weekend after Christmas, and they were already stocking Valentines Day candy before the New Year was even here.
KGC,
That’s why the first chart is a three-month moving average. So “December” in that chart reflects the average of Oct, Nov, and Dec. This irons out the kinds of shifts you describe.
Well, look on the bright side!
Now I can buy, more cheaply the required bricks I need, for which I intend to throw at those big beautiful banker’s glass windows!
This will greatly ease the deep state’s fudging of positive GDP’s numbers!
A few explanations for fall in retails sales in the UK.
Food:
Thanks to Aldi and Lidl selling below the major supermarkets ( Tesco, Sainsbury, even Aldi and Morrisons) and expanding rapidly, the major supermarkets have been forced to reduce their prices.
Non Food:
The truth of the matter is more and more consumers are buying online as generally cheaper than the shops and actually better return/refund rights.
Credit cards and available credit is now exhausted for consumers because new credit card terms have been issued, credit limits lowered due to government legislation and interest rates increased by the banks.
Aldi and Lidl have been growing for years so does not explain food. Could be that the real population of Britain has gone down because Eastern European left for home or other West European countries.
Non food could be explained by the none existence of a lot of shops and their previous closing sale and also fewer people.
cashbox
“…Credit cards and available credit is now exhausted for consumers…” – not even close.
Only 70% of US adults have a credit card. Considering just those card-holders, 42% of credit card users (70%*42%=29% of US adults) pay their balance in full each month; 37% (70%*37%=26%) pay revolving balances; 21% (70%*21%=15%) don’t use cards they’ve been issued.
Undoubtedly, some portion of the 37% paying revolving balances are in over their heads.
He was referring to the UK, where the FCA (Financial Conduct Authority, a government regulatory body) introduced new rules in September 2018 for dealing with borrowers with long-term and/or persistent debt.
Persistent debt is a particular form of “staying above water, but just barely”: the debtor only pays off the interest on his outstanding debt every month but not the principal.
Under the new rules this kind of borrowers won’t receive any credit limit increase until they have paid their principal off. If after 36 months the borrower is still in persistent debt the credit card company must offer a way to repay the principal over a “reasonable period”.
Leaving my personal comments out of this, the FCA says these new rules should impact about 4 million people out of the 30 million credit card holders in the UK (60% of the adult population). It’s not a lot of people but it’s a lot more than anybody is comfortable with: cracks always appear in the basement first.
Many of these folks are undoubtedly “milking the system”, meaning they have the means to repay the principal but just don’t want to. But the others are maxed out and if they aren’t given credit limit increases they just cannot go out and spend some more, at least until they have repaid their debts. See what the problem is?
It will be curious what this will mean for consumer credit, a sector European banks are enthusiastically embracing. What’s consumer credit? Very simple: it’s an unsecured loan extended to an individual (not a company) so he has money in the bank to do whatever he wants. Note the term “unsecured” here.
Given interest rates are not particularly high (they top around 15% but average around 6%; compare to credit cards) this is yet another attempt at squeezing the last bit of consumption to goose nominal GDP figures.
MC01
Thanks. Interesting UK approach to the problem.
Any “legitimate” regulated financial system will have people who game the system as well as people who get trapped in debt.
This debt problem has been with humanity ever since the invention of the worthless brother-in-law. Turning companies into welfare agencies isn’t the answer, but for those getting booted out of the “legitimate” system, legions of semi-criminal/criminal bottom-feeders await.
The more I read about this, the more I think Larry Summers was right.
Listen.
https://www.stlouisfed.org/from-the-president/video-appearances/2016/homer-jones-memorial-lecture
For sure. Especially re, what he refers to in page 9 of the white paper.
….”More broadly, Figure 5 illustrates that in a global secular stagnation, neo-mercantilist policies – policies that attempt to improve one country’s net foreign asset position relative to another or run persistent current account surpluses – are beggar-thy-neighbor. Neo-mercantilist policies alleviate the secular stagnation of the country pursuing them by exporting savings, but at the expense of the trading partner. The real exchange rate is a second channel that can transmit secular stagnation, independently of the capital flows. …..”
https://www.nber.org/papers/w22172.pdf
The more I research it the more I like Tanger (SKT). Stock price fell too far. They are just free cash / per share price. Dividend pay out 9% plus enough free cash left to over to reduce share count 2% per year. Insiders started buying in mid $14s and now $15.37. Good business model too as rents are cheap at under $30 per as ft and average store revenue $310 plus / ft although Tanger is landlord. It’s mostly east coast thing. Do your homework, but it’s very cheap.
Very cheap but could get even cheaper Especially if the big downturn comes this year as many are forecasting
We have a bifurcated economy. Wall Street’s rigged casino is poised to keep levitating higher, thanks to the Fed’s QE-to-Infinity and balance sheet expansion. However, the real economy where the 99% have to live, work, and make their way is in an inexorable decline after being systematically looted by the globalist oligarchs and their financializaiton of everything schemes. So the already super-wealthy will continue concentrating all wealth and power in their own venal talons, thanks to the central banks, while the pauperized middle and working classes sink deeper into debt servitude and despair.
Did your research note that SKT’s long-term debt has been increasing while equity has been decreasing? A trend has been established here.
When times get tough, this company could have trouble refinancing, dividend could get cut, and all that.
Why isn’t management focused on debt reduction?
That’s two SKT promos. Wolf’s repo example paid $10.19%. Didn’t you say it was a local outfit? How close?
“don’t buy shit you don’t need” isnt a bad thing, it’s the best advice I’ve ever had. Perhaps the rest of the population is waking up.
Good advice in my book.
Maybe the environmental hymn has something to do with it too.
Buy less, waste less, cost less (in more than one way).
I saw the latest study that on average people were the most unhappy at 47 and it was true for me. I was smart enough to be able to do equation that I could get to my retirement goal the quickest by whacking expenses. It took about 2 years to cut enough to be able to get out. If you are average income earner it’s pretty easy to retire early with a $1500 – $3000 net income. If you need net $5000 – $7500 income it’s tough.
Same here 47 was a horrible year for me followed by 4 more while I waited for the divorce lawyers to get their fill and for my ex to realize she wasn’t getting more than 50%
Living debt free pretty nicely now on around 2500 dollars a month If I had stayed in NY I would have needed at least
5k a month I’m sure
Our family (everybody was on board) acted on that principle, 45 years ago and we have lived happily ever after.
Your family must be very smart and insulated or immune from the barrage of mainstream consumerism I wish that I had been as enlightened a your family much earlier
Not me! 47 was 4 years into off grid project and construction was starting up the exponential curve. Enough comfort up there for FWBs from work on rainy winter nights.
USPS is notorious for nepotism, but also casual flings, and adultery…..800 people in one big building, so keep mouth shut and fish off the company pier all you want.
Never risked the infamous “sack room” thrills, though, but many did.
I doubt that.
The marketing machine is better than ever. Notice how you are followed around by banners if you open a website for a product or service?
People still want more ‘stuff’ – if they are not participating in the raping and pillaging of the planet as much as before, it’s because their wages are stagnant, and they are maxed out on debt.
That creates a very stressful situation that people deal with by:
1. turning to Fentanyl and alcohol
2. rioting
I am keeping a close eye on the UK after reading this article. If this continues to head south (how can it not – what more can the BOE do that they haven’t already) then the natives are going to get restless.
Recall the UK riots a few years ago.
Sad but true.
Lebanon went completely off the charts last night – this is well worth watching https://www.aljazeera.com/news/2020/01/lebanon-anti-government-protests-turn-violent-beirut-200118160101017.html
Note the comments throughout ‘we cannot afford to live’ — ‘live is not worth living’
This is economic. It’s what happens when stimulus and credit reach their limits.
UK next?
Hong Kong is back on the boil again today as well.
Not everything is going to hell in the U.K due to Brexit but it definitely helps a whole lot.
Reportedly, there are rumors Boris Johnson might privatize the U.K. national healthcare system, under the pretext of using the NHS as bargaining chip to secure an allegedly “favorable” post-Brexit trade deal with the U.S.
So Brit’s shopping figures might take a step up should this happened. When Brits discover they suddenly have the privilege of “shopping” for massively overpriced insulin sold them by drug monopolies.
But there’s nothing to worry about, I’m sure arrangements can be made for those in need for abundant access to debt and borrowing for insulin, so they add to the GDP figures, so the U.K. government can turn around and cheerfully report that as a result of Brits dying sooner while paying much more for less healthcare…that this has contributed to a wonderful surge in U.K. retail sales, growth, and GDP!
If I was doing that, I would keep the NHS public and instead privatise all of the Services, like cleaning, blood testing, x-rays, IT; basically everything that the NHS does ‘around’ patient care, but not the patient care itself.
That way Boris can keep the shitty end of the stick in the hand of the taxpayers while the never-ending shittyness of the NHS will support the argument that the NHS needs more funding – which will of course go to cronies, corporations and quangos via their thick feeder tubes inserted into the NHS, the Services.
With the pesky EU rules out of the way, the public procurement of a critical NHS-Service becomes a lot less risky for ‘Business’ (or should one say ‘DYEH-lah’)?!
A lot of that is already privatized. Public Private thievery and all. It is also not cheaper.
1) All UK interest rates are above water, from 3Y the lowest @ 0.372% to 30Y @ 1.16%.
2) The 10Y @ 0.628%.
The 2016 low is the 10Y support line for the major European countries.
3) For UK its > 0, but for Germany, France, Switzerland its > 0. Europe 10Y in a 4Y trading range since 2016.
4) In US the 10Y in a trading range for 8Y, since 2012.
5) The current rates in UK, Germany, France came from below
to test the 2016 lows, to test support. The move above, so far, is a thud.
6) If the major European nations will enter a recession, rate will turn
down and breach the previous lows.
7) I don’t think gold will see 2,000, or above.
Speaking of paying more for healthcare
I paid last May 360 for one month of rifabutin an antibiotic. Last week rite aide said 2000. Wah? I was fortunate enough to switch to an older class drug essentially the same drug for 38.00. What happens to the Americans who cannot? I guess they just want us to hurry up and die. American exceptionalism at work
I’ve read similar pricing horrors with insulin but am no expert on the subject by any means. Fits in with others things I observe in my daily life. Presently I work with someone who’s 80 plus mother is in and out of hospital & elder Care facility & overhear lots of medical billing theivery. For example as part of the ACA which was designed to enrich insurance corporations & begin the gutting of Medicare, you can’t be admitted in hospital unless you spend 3 days. If you’re not admitted, Medicare won’t cover it. So push is on for to discharge in under 3 days leaving you stuck with entire bill. Lots of people getting slammed with this nonsense.
Doom and gloom, folks in here and Hollywood predicting end of times.
Meanwhile phone wont quit ringing, new construction to the moon.
Cupboards are full, freezer is full, wood boiler and burning barrel are lit.
Time to fire up the diesel and hit the taverns. Food drink and hopefully great football games.
Ya, but this place is a fun read, isn’t it?
Reportedly, there are rumors Boris Johnson might privatize the U.K. national healthcare system, under the pretext of using the NHS as bargaining chip to secure an allegedly “favorable” post-Brexit trade deal with the U.S.
All true, but it’s not just a rumour. The idea is to open up NHS to corporate exploitation. It’s considered a done deal in some quarters, pending some consolidation of the Tory political base, but the pie has already been divvied up.
Similar plans are in place to privatise and later decommission the US SS system, starting with benefit cuts and impediments to obtaining benefits designed to discredit the system. Corporate disinformation campaigns against the system have been in place for years but have become more aggressive recently, now that the process is in motion. This accounts for the recent controversies here surrounding the US SS system, promoted by new commenters on this web site. Anyone in the US who plans to retire on SS, or to remain retired, will need to reconsider those plans. Overseas tax havens are expecting a significant uptick in business to accomodate the spoils.
Reply to timbers, above.
Disinfinfortion on SS & Medicare? How is that possible? LOL. Yes, just look at all the comments tight here on WS from those who actually BELIEVE SS & Medicare not only contribute to deficit, but are the main drivers of it. Pete Peterson’s multi billion propaganda campaign to destroy SS & Medicare has worked it’s charms.
One of the reasons MMT is being promoted by the left, with the help of big names on Wall St., is that the predators want the peasants on income they can confiscate, old debts, child support, fines, etc. Pension money is somewhat protected from creditors but MMT won’t be, and the bulk of the income will go to the usual suspects.
Petunia, I enjoy your outlook and comments but MMT is way above your simplistic application. MMT explains our past economic policy more then the future. At times of economic collapse, a modern sovereign country has the ability to pay any bill with sovereign script. I agree others may use this to their advantage but that doesn’t disprove the theory.
454,
The only theory these parasites support are the ones they can exploit to full advantage. My simplistic outlook is based on knowing the F’kers only too well.
Agreed. The volume is sharply increasing. I’ve never heard a good argument expressed from a position of sanctimony, but I hear more and more of it, especially as we approach the elections …
Unamused, thanks for this:
“Similar plans are in place to privatise and later decommission the US SS system, starting with benefit cuts and impediments to obtaining benefits designed to discredit the system. Corporate disinformation campaigns against the system have been in place for years but have become more aggressive recently, now that the process is in motion.”
I am generally aware of this effort, but, are you aware of any recent info on plans to act? As in, soon?
I have not come across anything of note RECENTLY….but….I can dream up a plausible way it happens soon, as in after the election, should the current POTUS gets re-elected. He could propose Privatizing SS & Medicare, and it gets rammed thru in a flash, with the pretend opposition party quietly allowing just enough of their side to guarantee passage.
Scary thought. Try not to think of it.
What’s the worst that could happen?
That is not a rhetorical question.
The USA becomes like Brazil?
Meaning that the worst that could happen to most people is that one suddenly gets capped by some dude wearing Cloggs and pink shorts over a 30$ watch. The footage ends up on ‘Liveleak’ and the Internet express its total concern, grief and horror with: “Use a tripod, dammit!”
The other people, those who matter, will be commuting by helicopter instead of motorcade.
That’s about it, I think.
As 2019 drew to a close, social unrest had spread to one in four countries. The common denominator: rising popular anger at corrupt, unaccountable elites that had plundered their countries’ wealth with the connivance of the financial sectors and central banks, while ordinary people increasingly struggled to make ends meet.
Sure glad such unrest couldn’t happen here….
Very interesting article but I wonder what’s happening in France. There is a media black-out in the US over the massive protests going on there. Could France be bleeding over into Britain?
Just how bad is the French economy doing and could it drag the whole EU down?
The French economy is doing better than the German economy. French GDP +1.4% yoy in Q3; German GDP +0.5% yoy in Q3.
Protests in France are totally routine. Anyone who has ever lived in Paris long enough knows that. It’s part of how their system works. If anything is going to drag down the EU economy, it’s Germany.
The reason the protests have flared up once again after calming down is precisely because of those juicy GDP growth figures: inflation in France has been heating up again in the second half of 2019 in spite of promises to put it under control. I think I read on this very website that unreported inflation can mask a lot of nasty stuff including economic stagnation. ;-)
Almost complete Yellow Vests blackout in Netherlands too. But we did get the news that most of the Macron pension reforms are now toast, in reality. Many French workers (especially in government) wills till retire at 50-55 and Northern Europe will pay for it. Not sustainable, without a doubt.
And yet a few thousand protest in Iran, and U.S. headlines galore….
Same story here, strong coverage and support in the media for e.g. the Hong Kong protests or very minor protests in countries the West doesn’t like, but very little coverage (and if any strongly negative) about the Yellow Vests.
Or Chile
It wasn’t just the MSM that had a de facto blackout on reporting the French yellow vests protests. Some French young people put together a satirical song called “The Good Guys, the Bad Guys” blasting the French elites, and despite the song and video going viral, YouTube insured the view count stayed in the high 800,000s, even though its probably been viewed millions of times. I’ve actually seen the view count go down by several thousand in a single day.
I’m sure Youtube and all the other FB/Google/Twitter etc. subsidiaries listen extremely well to what kind of coverage the EU (European Commission) wants. Not just with the Yellow Vests, the same happens with other politically sensitive topics like Russia/China or migrants.
While EU authorities often like to paint themselves to the EU public as saints fighting the evil US internet corporations, they are in bed with them for all kinds of propaganda and censorship.
It is not what the EU wants but what DC wants. EU behavior is extreme poodle-like.
The UK is more than London, but are there defections from the City of London, and how much anxiety has Brexit (and BJ) caused?? Then add in prince Harry leaving the Royal family. Put this against Germany and France and Italy maybe.
1) The key to Doom & boom is Boing.
2) We can be speculate as long as it take, but have
no clue, because we are not part of the gang plans, when the shakeout of the market start, and when its over.
3) Is it possible that the Fed x4 rates increases in 11M was the major
banks plan, the market makers plan, to sell at the high and buy in
Dec 2018 lows ??
4) True or false, we will never know.
5) All we know is BA unexpected accident. There must be plan chg.
6) MM were caught with too much inventory on the shelves,- it must be liquidate, – before the mark down start.
7) Before MM clear enough inventory from the shelves, before they are satisfied, the markets must go up !!
8) Only they know, the real owners of BA, when its time to let go, and
how far below.
BA earning Jan 31.
I don’t think it’s just about the money. From what I see, everyone’s house is full up to the rafters with stuff after a couple of decades of excess. I got sick of it years ago, but others are catching on now and saying “why in heck do we need all this stuff?”.
Some French young people put together a satirical song called “The Good Guys, the Bad Guys” blasting the French elites, and despite the song and video going viral, YouTube insured the view count stayed in the high 800,000s, even though its probably been viewed millions of times. I’ve actually seen the view count go down by several thousand in a single day.
Good article and thanks Wolf & Nick for covering the UK. This balanced look at offline and online confirms the brick & mortar downturn is more than the ubiquitous shift to buying online and also confirms the impression that things are getting tougher in the UK. As has been commented before, outside of prime locations and the most central locations, you’ll often see the high street dominated by low cost chains (“one pound shops”), gambling halls, charity shops which don’t pay business rates (=taxes) and restaurants/coffee shops where there is disposable income.
Brits don’t like to hear it much, but the country to an important degree does live off the spoils of City of London. It clings to property bubble prices as indicator and proof of wealth and a strong economy – similar perhaps to the U.S.’s view at the big equity indices. UK policy accordingly is making huge efforts at keeping property prices inflated.
Here’s where I think the UK may have just shot itself another bullet in the foot: legislation (‘IR35’) has just been passed that basically kills the contractor business of individuals contracting through their company with clients, rather than being employed. Having a large pool of hard-working and skilled contractors that as a client you can contract (and terminate) flexibly is a big advantage for a spectrum of regular and rare business needs. IR35 now puts a stop to this for medium and large clients.
I suspect this was lobbied for by big contractors such as Capita and Interserve (yes, the ones that live off the gov’t and still manage to go bust as Wolf had been reporting). Presumably they expect that the contractors which the clients are now firing will be re-employed through them to satisfy IR35 while maintaining the flexibility that the clients require as before. The UK gov’t probably liked the idea as a tax increase easily disguised as an action to protect the “vulnerable”.
This will be another hit to the UK economy. It will push at least some of the contractors to leave the UK, older ones to retire together with their experience, or to change into a slower lane of regular employment at significantly lower pay.