Recession predictions

Wanderer78

Roger the cabin boy wrote:

Well, sales are going to tank with the threat of closure hanging around. Who would want to spend any money when you might not be able to claim any warranty or returns.

....and watch our politicians start their drumming machine of let's get spending, let's get borrowing!

Darc19

RGARDINR wrote: »

Just wondering on the Debenhams situation, how much longer in the tank do they have? Realistically if you read it until end of next month if no buyer is found, would that be right. Staff who were in Irish stores might be thinking there is no point in still picketing their stores now if looks like there going in the UK. Wonder would the store even make it to Xmas time in the UK. I still buy from online Debenhams. Could be a lot more bigger sales on their website soon.

There's a potential buyer for the Irish stores in the wings. Mandate has asked picketers to withdraw.
This could happen quickly.

The likely buyer is Next who will use them to trial a new department store concept. They were going to do this in the uk but debenhams stopped them taking over 5 stores.

Debenhams has been a basket case for the past few years. Nothing was going to save them imo. The surprise is that they haven't gone bust yet in the UK

Even 20+ years ago they had issues (I used to be a sales manager in the uk and they were a customer - near impossible to get paid from them)

CorkRed93

https://twitter.com/SkyNews/status/1295605043593383937

Roger the cabin boy

CorkRed93 wrote: »

https://twitter.com/SkyNews/status/1295605043593383937

6 months ago, this would have been earth shattering news.
Now, it's just another headline.

Rinse/repeat

Wanderer78

Roger the cabin boy wrote:

6 months ago, this would have been earth shattering news. Now, it's just another headline.

Still devestating for employees though

Cyrus

Roger the cabin boy wrote: »

6 months ago, this would have been earth shattering news.
Now, it's just another headline.

Rinse/repeat

this isnt really covid related though, M&S have been in rag order for years, they may be using Covid as a smoke screen or it may have accelerated their plans but it was going to happen regardless.

For that see debenhams, BOI and the rest.

Cyrus

Arthur Daley wrote: »

Jim Power on with Dunphy was suggesting that the Income tax has held up because more or less the only people who have lost their jobs were paying little or no tax.

But from a business perspective certain businesses looking to cut costs won't be 'top heavy' for long with high earners, and if jobs or parts of jobs can be done from home, there may be a suggestion that the job (or part of it) can be done anywhere.

er surely whats important is who is doing the job, not where they are doing it?

saying a senior exec can work from home therefore that senior exec can be replaced by someone in a cheaper jurisdiction doesnt follow.

Eric Cartman

Roger the cabin boy wrote: »

https://news.sky.com/story/coronavirus-debenhams-owners-draw-up-plan-for-department-store-chains-liquidation-12049794

House prices rising you say?

High street retail has been on its deathbed for years, especially larger mid tier fashion brands. We're a few years behind the US but have a look at what happened big players like sears, Macy's etc...

if your store is an anchor tenant in a shopping centre , you're probably fighting for survival now.

AndrewJRenko

Arthur Daley wrote: »

Jim Power on with Dunphy

combat14

there wont be any recession .. a million students going back to school starting next week.. covid is gone god be praised .. the economy is saved

Wanderer78

combat14 wrote: »

there wont be any recession .. a million students going back to school starting next week.. covid is gone god be praised .. the economy is saved

the economic story is just unfolding now, it doesnt look pretty, and covid is far from gone

Gerry Hatrick

combat14 wrote: »

there wont be any recession .. a million students going back to school starting next week.. covid is gone god be praised .. the economy is saved

Wrong on both counts.

Geuze

combat14 wrote: »

there wont be any recession .. a million students going back to school starting next week.. covid is gone god be praised .. the economy is saved

The recession started already.

We are in it now.

Q2 saw very sharp falls in GDP.

Geuze

Eric Cartman wrote: »

High street retail has been on its deathbed for years, especially larger mid tier fashion brands. We're a few years behind the US but have a look at what happened big players like sears, Macy's etc...

if your store is an anchor tenant in a shopping centre , you're probably fighting for survival now.

And have retail rents fallen to reflect the difficulties faced by retailers?

I don't think so?

Wanderer78

Geuze wrote:

Q2 saw very sharp falls in GDP.

What's the official definition of a recession again?

Wanderer78

Geuze wrote:

And have retail rents fallen to reflect the difficulties faced by retailers?

Have the banks reduced their rates, and reduced landlords overall debts, in order to do so?

Geuze

Wanderer78 wrote: »

What's the official definition of a recession again?

Standard definition is two consecutive quarters of falling real GDP.

According to that defn, we won't know until the Q3 data is released, whether Ireland is officially in recession.

There was growth in Q1.

https://www.cso.ie/en/releasesandpublications/er/na/quarterlynationalaccountsquarter12020final/


Here is a discussion:

http://econbrowser.com/recession-index

Geuze

Wanderer78 wrote: »

Have the banks reduced their rates, and reduced landlords overall debts, in order to do so?

Prices can fall even if costs remain the same.

Many buildings are owned outright.

Many may have small loans.

Wanderer78

Geuze wrote: »

Prices can fall even if costs remain the same.

Many buildings are owned outright.

Many may have small loans.

oh i understand that alright, but we dont know the details, so nobody really knows for sure, but its all interconnected

Geuze

Estimated mild deflation in over 10 EU countries now.

https://ec.europa.eu/eurostat/documents/2995521/10545459/2-01092020-AP-EN.pdf/7c0db6bb-3974-ce20-a7f0-6281743d0d7c

-1.2% estimated for Ireland for August.

Mainly driven by energy prices falling.

Wanderer78

Geuze wrote:

Estimated mild deflation in over 10 EU countries now.

What are the issues with deflation?

KyussB

The main issue with deflation, is that it increases the real value of debts (making them bigger), and risks getting the economy trapped in Debt Deflation - where deleveraging/paying-down of Private Debt, suppresses peoples purchasing power and spending in the economy - at a time when such spending is desperately needed, to restore/boost the economy back to Full Output.

If Private Debt levels are high enough, this can become a malaise on the economy that lasts for decades - like in Japan from the 90's onwards - and in most western countries since 2008.

Deflation is probably the thing that is most universally agreed among economists, as being a bad and undesireable thing - which is why such huge contortionist policies, like QE and negative interest rates, are being undertaken by central banks in order to (unsuccessfully) reverse it - and is why we're nearly at the point where direct financing of governments using money creation, is acceptable (as all other methods gradually become ineffective, and end up hugely distorting wealth inequality).

Wanderer78

KyussB wrote: »

The main issue with deflation, is that it increases the real value of debts (making them bigger), and risks getting the economy trapped in Debt Deflation - where deleveraging/paying-down of Private Debt, suppresses peoples purchasing power and spending in the economy - at a time when such spending is desperately needed, to restore/boost the economy back to Full Output.

If Private Debt levels are high enough, this can become a malaise on the economy that lasts for decades - like in Japan from the 90's onwards - and in most western countries since 2008.

Deflation is probably the thing that is most universally agreed among economists, as being a bad and undesireable thing - which is why such huge contortionist policies, like QE and negative interest rates, are being undertaken by central banks in order to (unsuccessfully) reverse it - and is why we're nearly at the point where direct financing of governments using money creation, is acceptable (as all other methods gradually become ineffective, and end up hugely distorting wealth inequality).

had a feeling of this, just needed it confirmed, thanks as always

Arthur Daley

Good if you're fixed income though. Pensioners won't complain.

Wanderer78

KyussB wrote:

Deflation is probably the thing that is most universally agreed among economists, as being a bad and undesireable thing - which is why such huge contortionist policies, like QE and negative interest rates, are being undertaken by central banks in order to (unsuccessfully) reverse it - and is why we're nearly at the point where direct financing of governments using money creation, is acceptable (as all other methods gradually become ineffective, and end up hugely distorting wealth inequality).

Neoclassicals, are still bloody digging their heels in though, it's kinna disturbing to watch unfold, we all could end up in serious trouble, even the wealthy

Geuze

Wanderer78 wrote: »

What are the issues with deflation?

Deflation due to productivity, increased supply, etc. is welcome.

Think of computers, TVs, etc.


Price deflation due to a recession is not welcome, it's a symptom of a lack of demand.


One factor causing the current mild deflation are falling energy prices, these positive supply-side shocks should not be conflated/confused with a recession.

combat14

electricity prices set to go up about 10 euro a month in october with change to PSO levy charge

Wanderer78

Geuze wrote:

Deflation due to productivity, increased supply, etc. is welcome.

Geuze wrote:

Price deflation due to a recession is not welcome, it's a symptom of a lack of demand.

Can't bait neoclassical!

KyussB

Geuze wrote: »

Deflation due to productivity, increased supply, etc. is welcome.

Think of computers, TVs, etc.


Price deflation due to a recession is not welcome, it's a symptom of a lack of demand.


One factor causing the current mild deflation are falling energy prices, these positive supply-side shocks should not be conflated/confused with a recession.

Agreed generally - though on the last sentence, falling energy prices is often a symptom of a recession

brisan

KyussB wrote: »

Agreed generally - though on the last sentence, falling energy prices is often a symptom of a recession

Exactly
Lack of demand for oil and energy from manufacturing industries leads to an oversupply and a price drop.