Fingers crossed...

[BillyStubbsTears]

Back in 2008, when the financial earthquake hit, the first tremor was a sudden spike in the TED spread. That's effectively the interest rate that banks charge each other to borrow colossal amounts of money for a short time to settle their books. High TED spreads indicate that banks are getting worried about the credit worthiness of their colleagues. So they demand higher premiums to cover the risk.

The spike in TED spreads was a precursor to the entire credit system collapsing, resulting in the Great Recession.

Well, over in China, there's just been a huge spike in their equivalent of TED spreads.

http://mobile.businessweek.com/news/2014-02-25/crisis-gauge-rises-to-record-high-as-swaps-avoided-china-credit

If this is the same thing again, the roof may be about to fall in once more.

[IC1967]

You forget that the roof fell in last time because Labour overspent wildly. This time around we don't have a Labour government in charge. Things will be nowhere near as bad for the UK if things get bad again in the rest of the world. At last the tories are getting us on the path to living within our means.

[roversdude]

Shock news - Tony Blair was actually running US of A, labour at fault for Wall St crash

[BillyStubbsTears]

Here we go again.

Pen pic:
Name: Mad Mick
Favourite hobby: Posting one dimensional WUM musings
Favourite band: One Dimension
Etc, etc.

Here's what happened to the world last time. This image shows the percentage change in GDP in each country in 2009, after the credit crunch of 2008 (which of course, was massively exacerbated by the panic in the financial markets that occurred when the US Fed did what Mickonomics says should be done, and let Lehman's go bust.)



Between 2009 and 2012, the world economy lost about $7-10 trillion worth of production. That wasn't because companies were inefficient or needed to cut back. It was because of the fact that the financial system stopped working for a month and the effect was like a haymaker on the chin. That was what happened last time we had a financial freeze up of the sort that is threatened in China at the moment.


Pretty much every single advanced economy in the world went into reverse. But that's OK in Mickonomics because...well because Mick says so.

But it's ok because Mick reckons that we'd not be hit now, because we have a Govt that has cut back Govt spending.


Mickonomics says that Govts shouldn't borrow money to deal with such a catastrophic crash. We should man up and deal with it.

The only moderately advanced countries in the world that refused to vastly increase their Govt borrowing as a result of the credit crunch were Latvia and Estonia. When you've Googled to find out where they are Mick, have a look at their colour. You might also want to Google their unemployment figures for the aftermath of the crash. They both hit 20%. Which, if repeated here would mean 6-7 million people on the official unemployment figures.

Mickonomics. Good int it?