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As events have unfolded over the course of this year, I am in little doubt that the inexorable growth paradigm is coming to an end. It is the events of the last month or so in particular which are making me nothing short of confused. Or rather, it is common perception and reaction to them. Today, news programmes on the radio and TV have bombarded us with stark warnings of 'that R word', while simulatenously people are thrilled at the news of petrol prices around 20p less than in the summer. Many, of course, are hounding the 'robbing ba****ds' in power saying if oil prices have halved, then why haven't prices at the pumps. Of course, it is a logical claim to make, but whichever side you take, it's going to do no use arguing and moaning about it. Like all of my posts, this is mainly me rambling so all I ask is some general thouughts on that 'R' word: are Britons taking it seriously enough; is the media scare-mongering; indeed, are we not taking it seriously enough?

One unfortunate consequence of a recession is that it affects people in a very uneven, unfair and pretty unpredictable way. You might be largely unaffected or you might be made redundant and affected a very great deal.

biffvernon wrote:One unfortunate consequence of a recession is that it affects people in a very uneven, unfair and pretty unpredictable way. You might be largely unaffected or you might be made redundant and affected a very great deal.

In a situation in which banks the world over are being nationalised, I find it difficult to believe anyone will be unaffected.

I mean, if talk of a super-depression is valid - and I suspect it is - then we're looking at unemployment well above the 25% it was in the Great Depression. The social repercussions of that could be very severe indeed - there will be so many people who are absolutely destitute that anyone with any possessions is going to have a hard time keeping hold of them, absent emergency rule.

Ludwig wrote:

biffvernon wrote:One unfortunate consequence of a recession is that it affects people in a very uneven, unfair and pretty unpredictable way. You might be largely unaffected or you might be made redundant and affected a very great deal.

In a situation in which banks the world over are being nationalised, I find it difficult to believe anyone will be unaffected.

I mean, if talk of a super-depression is valid - and I suspect it is - then we're looking at unemployment well above the 25% it was in the Great Depression. The social repercussions of that could be very severe indeed - there will be so many people who are absolutely destitute that anyone with any possessions is going to have a hard time keeping hold of them, absent emergency rule.

What timescales are you expecting 25%+ unemployment Ludwig?

Things are looking bad, but all this fuss about a 0.5% fall in GDP seems a bit mad. Apparently a 0.2% fall was expected, so things are twice as bad as expected, so the stock market crashes and the world is about to end. In my well over 60,000 hours ( ) of accounting experience in smallish businesses, I've produced a lot of accounts, using pretty accurate figures, and I could come up with a variety of "correct" results that varied by vastly more than 0.5%. So how can something as complex as the British economy, using figures that can't be as accurate, complete and accurate as those I had to work with, be reported with such accuracy?

An individual company's figures may not be very accurate, but unless there is some unknown systematic bias in the direction of inaccuracy, summing thousands of companies' figures might give an accuracy of a fraction of a percentage point change.

biffvernon wrote:An individual company's figures may not be very accurate, but unless there is some unknown systematic bias in the direction of inaccuracy, summing thousands of companies' figures might give an accuracy of a fraction of a percentage point change.

I thought I heard a few months ago that some official figures were revised quite drastically, when the actual figures were available some months after the figures were first released. How do the government get the information to calculate accurate figures within a couple of weeks of the month end? I'm not aware of any returns company's are required to send in that quickly, and most wouldn't have produced their own management accounts in that time.

I was wondering this earlier today, no-one from hmg has asked us how our business is performing!

Neil

How do the government get the information to calculate accurate figures within a couple of weeks of the month end?

You probably need only a couple of hundred items of data to get a fairly good picture.

People and companies are more similar than we might like to believe.

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Vortex wrote:You probably need only a couple of hundred items of data to get a fairly good picture.

Fairly good, but accurate enough to say it's fallen by 0.5%, rather than the 0.2% that was expected?

JohnB wrote:

Vortex wrote:You probably need only a couple of hundred items of data to get a fairly good picture.

Fairly good, but accurate enough to say it's fallen by 0.5%, rather than the 0.2% that was expected?

I suspect that sparse sampling (or whatever it's called) especially if multi-variate is a lot more powerful than you might expect.

Some of this data, such as the steady flow of VAT returns (complete with industry codes) will reveal a lot!

Rasputin69 wrote:Many, of course, are hounding the 'robbing ba****ds' in power saying if oil prices have halved, then why haven't prices at the pumps. Of course, it is a logical claim to make,

No it's not. The price charged for the fuel itself is only one component of the total price.

biffvernon wrote:but unless there is some unknown systematic bias in the direction of inaccuracy

It's not unknown. It's called "optimism".

Suss

Oh yes. But how do you apply optimism when filling out VAT returns?

biffvernon wrote:Oh yes. But how do you apply optimism when filling out VAT returns?

Only the govt is allowed to have rose tinted statistics. Your numbers have to conform to reality sub poena.