Tag Archives: countries

Housing Review

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My out-of-consensus speculation that the Bank of England’s round of interest rate rises may be pretty much done looks sounder by the day. There may be one more rate increase, but it wouldn’t surprise me at all if they were pretty much over with it, and even if the next move (the end of this year?) wasn’t downwards. The reason? Growing evidence that the UK housing boom is bottoming out, and with this, UK consumption starting to take a hit.

U.K. mortgage lending growth probably slowed in August and consumer confidence may have weakened in September, suggesting economic growth peaked in the second quarter amid rising interest rates, surveys of economists showed……

House prices fell 0.6 percent in August from July, the first drop since August 2002, according to Edinburgh-based HBOS Plc, the U.K.’s largest mortgage lender. It was the biggest decline since December 2000.

Bank of England Governor Mervyn King and his rate-setting committee said they may have underestimated the effect of any decline in home values on consumer spending, according to minutes of the Bank of England’s Sept. 8-9 meeting.

“We’ve just come through a very slow holiday period and there is a general agreement that September is no improvement,” said Richard Hair, president of the National Association of Estate Agents. “We’re getting geared up for what may be a difficult market in the autumn.”
Source: Bloomberg

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It’s Deficit Time Again

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There’s a fair amount of talk again this week about the various government deficits and what to do with them. Earlier in the week the FT had a piece about the current state of play with the US deficit whilst the Economist is busy musing one more time over the ongoing saga of the EU growth and stability pact.

These two situations appear, on the surface, to be somewhat similar, but in reality it may be more interesting to consider how they differ.
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Outsourcing Debate Hits Germany

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Well, well, this was hardly unexpected. In fact the reality may well be that this time there is plenty of smoke but no fire, since Siemens has announced it has no concrete plans to move 10,000 jobs abroad. Indeed much of the noise at present may emanate from a threat to move as a negotiating posture in order to try and force changes. But behind this the underlying reality is that the problem is coming. Not only is Germany having a ‘job-loss’ recovery there is good reason to doubt whether it is having a recovery at all. And of course the main course may well be yet to be served since many of the jobs threatening to relocate seem to be in the industrial sector, whilst just round the corner the high-end services issue is surely coming. Still there is one difference with the US: the headlines are not being made by an opposition candidate talking about Benedict Arnold CEO’s, but by a Chamber of Commerce head who seems to be saying he’s Benedict Arnold and proud of it.
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Fair and Balanced?

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Two versions of the Jose Luis Rodriguez Zapatero story, Fox and Bloomberg, choose for yourselves.

BTW: anyone out there help me: what is the Blair/Labour Government official position right now on the UN and troop withdrawal? Just to put this in some sort of perspective.
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How Not To Pick The IMF’s Chief

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Trying to get away from the emotionally traumatising, this article caught my eye. Clearly it relates to my earlier post, and does have a Spanish connection, if only a rather tangential one.

I thoroughly endorse what the Financial Times has to say. We need multilateralism now more than ever. We should not simply think ‘Europe First’, and:

The IMF needs considerable reform: its voting structure is out of date; its resources are too small; and its ability to lead the global debate on macroeconomic adjustment and exchange rates is too weak.

Here, here. Especially the point about leading the debate on macroeconomic adjustment and exchange rates. If you want to fight terrorism more effectively, perhaps here might be a good place to start.
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Madrid Bombing: Evidence So Far

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Ok: it’s just gone half past six, and demonstrations all over Spain are getting ready to go. Meantime I will leave you with the following thoughts:

I think it must be difficult for anyone outside Spain to understand just how complicated this situation here is. As everyone by now knows, the Spanish police are following two leads: one that of Eta, and the other that of Al Qaeda. On the one hand the difference between the two – since in either case the question is one of terrorism – is minimal, on the other it couldn’t be greater.

In assessing the impact and consequences of the attack, perhaps the first of the major questions which strikes you is the quantity of immigrants – both documented and undocumented – who were involved. Just looking for five minutes at the TV images of the relatives filing past the cameras in the hospitals and mortuaries makes this abundantly clear. There are in fact victims from 11 countries, many of these countries surely being in Latin America. In fact so important is this question that Jos? Maria Aznar spent a significant part of his public appearance this morning underlining that any person among the victims who was found to be ‘undocumented’ would automatically be ‘regularised’. In addition any immigrants who have died in the attack and who had not been naturalised are automatically to be conceded the status of Spanish citizens, for themselves (posthumously) and for their families. What this decision highlights is the quantity of recently arrived immigrants that there are now here in Spain, and confronting some of the all too evident implications of this reality will undoubtedly now be one of the first priorities of the incoming government.

This brings me to my first ‘correction’: yesterday morning I said.. “and the victims are a total cross-section of Spanish society: from executives to recently arrived illegal immigrants”….. in fact this is wrong. There are relatively few executives, the majority of the victims it is now obvious come from poor families.
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Mr K?hler Comes Back from Washington

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Germany’s center-right and liberal parties have finally agreed on a candidate for the country’s largely, but not completely, symbolic presidency. Because these parties have been winning elections at the state level over the last few years, they have a working majority in the body that elects the president, even though they are actually in opposition.

(The selection itself has been a bit of an opera bouffe. Bild‘s lead yesterday showed various Muppets and cartoon characters over the headline, “Even more candidates!” The serious press had similar, if less colorful, opinions.)
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What’s It All About Alfie?

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Well I suppose it’s better to end the week on a bang rather than a whimper, so here I go with another of those posts. What really ended the week on a high note (or should I say a low one) was the US labour market. And since I am arguing that the euro-dollar parity is being driven at the moment by US labour market data, this news can only mean one thing: more upward pressure on the euro. Which makes me only want to re-iterate, and even more strongly, that an important opportunity was wasted yesterday to take some remedial action by lowering the interest rate. Remedial action which would also have supplied a much needed lifeline to Germany’s beleagured economy. But this, like so many things, was not to be.
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Hyundai Goes to Slovakia

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South Korean manufacturing giant Hyundai has picked Slovakia as the site for a new $870m (?466m) car plant, one of the biggest deals in the car sector this year. The factory, which will open in 2006, is intended to produce up to 200,000 vehicles a year under Hyundai’s Kia brand. The north Slovak city of Zilina beat a Polish location in what had been a long-running contest to get the plant. Both countries offered incentives for the investment, but Slovakia boasts slightly lower costs for manufacturers. In fact Slovakia has arguably the lowest business cost base of any of this year’s new EU members, and enjoys a strategic location on the border with Austria. All of which means that it is rapidly converting itself into an auto manufacturing hub since this is the second big car project that Poland has recently lost to Slovakia: last year, France’s PSA Peugeot Citroen said labour costs had persuaded it to pick Slovakia for a new plant roughly the same size as Kia’s.

This of course is neither outsourcing, nor is it job-migration. But it certainly is a news item which doesn’t go down too well here in Spain, which feels it is rapidly losing its pride of place as the European car components centre.
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Let’s Go To Bulgaria

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Actually just after my Chinese visitor dropped by I received a Bulgarian one, my former ‘research assistant’, young Bulgarian anthropologist Yassen Bosev. And what did Yassen want? To tell me to Forget India, Let’s Go To Bulgaria. Only trouble was, I had some bad news for him: India’s minister of Disininvestment and Technology, Arun Shourie, already got there first. Why does everyone think Indian president Kalaam was in Bulgaria on his first overseas visit late last year?
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