The Economy

[Yel]

A thread for the economy, because covid will be old news in a few months but the financial ramifications will be with us for decades to come.

Arcadia saying it's in trouble, but I expect it will last until Jan

Sir Philip Green's TopShop empire Arcadia Group 'faces collapse within DAYS' - putting 15,000 jobs at risk
https://i.archive.is/oldest/https://www.dailymail.co.uk/1s/2020/11/27/11/article-8992973-36171322-493_964x543.jpg
Sir Philip Green's Arcadia Group empire which owns high street labels such as Topshop, Burton and Dorothy Perkins could face collapse within a matter of days - putting 15,000 jobs at risk. In what could be the biggest British corporate collapse of the coronavirus pandemic so far, the group is set to appoint administrators from Deloitte as early as Monday next week although the plans could still be delayed. The move, which is said to have followed Sir Philip (left, in Monaco on Tuesday; and centre, with Pixie Geldof, Kendall Jenner, Cara Delevingne and Jourdan Dunn in London in 2015) being unable to secure an emergency £30million loan to keep the retail giant afloat, puts its 15,000 staff at risk of redundancy, after it axed 500 roles in its head office in July. The businessman (whose £100million superyacht Lionheart is pictured bottom right), who bought the London-based high street group for £850million in 2002, had asked lenders for support after lockdown restrictions hammered sales, disrupting crucial trading up to Christmas. There is expected to be a rush among creditors to secure the company's assets if the Arcadia Group's insolvency is formally declared.

 

[Readread]

He's a gob. I feel for the people who may lose their jobs but he has bled Arcadia dry and will now expect a bailout which the British taxpayers will no doubt end up having to pay for somewhere along the line. Maybe if he stopped paying his family members millions in dividends he wouldn't be in trouble.

 

[Mulholland Drive]

All part of the Great Reset.

High Streets are dead or dying; everything will be centralised via ecommerce. No need for paper cash, just use a card. Also means the likes of Amazon will make even bigger profits but probably pay far less tax.

Our chancellor reckons keeping the economy afloat will cost around £400bn by the end of the FY next March. He can't raise taxes because it will kill any hope of reigniting an already struggling economy.

He is running out of options, but unless you're rich with money scattered across the world, the financial implications for the rest of us will be dire; not helped by the uncertainties regarding Brexit and Biden and their dealings with the UK over the next 3 or 4 years

 

[emmer_moans]

I was just browsing the Dorothy Perkins website with stuff in my basket but have backed out of buying anything now I’ve seen the headline, in case they might go bust. Surely there’s a risk that orders might not get fulfilled?
I do worry about our economy but I also get sucked into the convenience of Amazon I am trying to buy Christmas presents off people on Etsy though to offset my ‘Amazonning’...

I wonder if a time will come where national governments collectively force Amazon and massive companies to pay more tax. Speaking as A UK dweller, imo, we need need UK-owned, taxed and operated version of Amazon so people can have choice and convenience but the money helps us out.

I’m not an economist though so i may be talking out of my bottom.

P.s. surely Green could sell his yacht? For the emergency cash injection he needs?

 

[Readread]

I was just browsing the Dorothy Perkins website with stuff in my basket but have backed out of buying anything now I’ve seen the headline, in case they might go bust. Surely there’s a risk that orders might not get fulfilled?
I do worry about our economy but I also get sucked into the convenience of Amazon I am trying to buy Christmas presents off people on Etsy though to offset my ‘Amazonning’...

I wonder if a time will come where national governments collectively force Amazon and massive companies to pay more tax. Speaking as A UK dweller, imo, we need need UK-owned, taxed and operated version of Amazon so people can have choice and convenience but the money helps us out.

I’m not an economist though so i may be talking out of my bottom.

P.s. surely Green could sell his yacht? For the emergency cash injection he needs?

Totally. For someone who was boohooing about how he was no longer a billionaire last year, why's he sitting with a £100m yacht?! I honestly have absolutely no sympathy for him or the board at Arcadia. They're all con artists.

 

[eSsExBiRd]

No doubt he’s trying to make sure he stays as rich as possible like he did when selling BHS. No morals

Redirect Notice

 

[Mulholland Drive]

Totally. For someone who was boohooing about how he was no longer a billionaire last year, why's he sitting with a £100m yacht?! I honestly have absolutely no sympathy for him or the board at Arcadia. They're all con artists.

I have read of a number of well known British entrepreneurs similar to Green, who have huge personal wealth but find that their businesses are going through tough times during the pandemic, and therefore go pleading to the government for a big bailout from the taxpayer. Which I think is "virgin" on the ridiculous

But never fear, these people will survive no matter how bad the economy gets because all they have to do is cut costs, which in reality means cutting jobs. But their personal wealth will probably be untouched.

It all depends what kind of Chancellor Sunak really is. He is throwing money around like confetti, but is he throwing it at the right places? And how long can he keep on borrowing if there's no end to this lockdown/tiering system?

Reading his Spending Review yesterday, made me feel even more pessimistic we'll be able to escape from a "depression that will make the Great Depression of the late 1920s, look like short change!" as one analyst put i!

The only consolation is that most of the West is in the precisely the same boat, while China looks on with its forecasted double-digit growth

 

[Readread]

Oh absolutely. Branson is another rat bag, wanted a bail out for VA yet he's not paid tax in 15 years!

 

[The Dowager]

@Bezolabub who is forecasting ‘double-digit growth’ for China, and for what period?

 

[Practically Perfect]

Oh absolutely. Branson is another rat bag, wanted a bail out for VA yet he's not paid tax in 15 years!

And sued the NHS - beardy fucker

 

[Mulholland Drive]

@Bezolabub who is forecasting ‘double-digit growth’ for China, and for what period?

One or two sources, but I was reading this from Bloomburg a few days ago

https://www.bloomberg.com/news/arti...-plans-to-preserve-economic-growth-into-2030s

 

[emmer_moans]

I hope we don’t end up completely dependent on China for trade. Still don’t believe their low number of Covid cases or deaths either.

 

[The Dowager]

One or two sources, but I was reading this from Bloomburg a few days ago

https://www.bloomberg.com/news/arti...-plans-to-preserve-economic-growth-into-2030s

It's an interesting article, but personally (professionally?) I don't think double-digit growth for China can be confidently asserted, certainly not in the mid to long-term. High single-digits in the short term are possible, mainly given the contraction from COVID-19, but I'm not seeing any of the main analysts and researchers predict anything like the growth of recent years. There'll be success stories in certain sectors, and it's easy to envisage China performing more strongly in the next few years than the US and the UK, but that's a fairly low base to beat unfortunately. And of course the wonderful complexity and messiness of a global economy means that it's hard for a developed economy to sustain a significant outperformance; if other countries aren't doing so well, who are they selling to? How much are non-Chinese consumers spending? Who's driving the R&D? Who's driving the capital investment? [I think China will do well in this latter point from BRI, but that's a post for another day].

Oh economics, I you.

 

[Mulholland Drive]

It's an interesting article, but personally (professionally?) I don't think double-digit growth for China can be confidently asserted, certainly not in the mid to long-term. High single-digits in the short term are possible, mainly given the contraction from COVID-19, but I'm not seeing any of the main analysts and researchers predict anything like the growth of recent years. There'll be success stories in certain sectors, and it's easy to envisage China performing more strongly in the next few years than the US and the UK, but that's a fairly low base to beat unfortunately. And of course the wonderful complexity and messiness of a global economy means that it's hard for a developed economy to sustain a significant outperformance; if other countries aren't doing so well, who are they selling to? How much are non-Chinese consumers spending? Who's driving the R&D? Who's driving the capital investment? [I think China will do well in this latter point from BRI, but that's a post for another day].

Oh economics, I you.

Moreover, since it's China you can expect all sorts of "misleading" information coming out of their government departments, especially their interpretation of growth compared to that of say what the IMF predicts by downgrading Asian growth, including China's for this year.

That said, the IMF predicts a strong recovery for most countries next year but still reckons China's growth will be less the 9%

https://www.imf.org/en/Publications/WEO/Issues/2020/09/30/world-economic-outlook-october-2020

The UK needs a strong bounce next year, which is one reason Sunak shouldn't raise most direct or indirect taxes, especially regressive ones that will hit the poor, or small businesses. Its difficult to say whether he will adopt a Keynesian or Monetarist theory

(I did A Level Economics, but that was 10 years ago, and only got a C. Forgotten most of it, ha!)

 

[Mulholland Drive]

Seems that there is pressure on the Treasury not to raise "significant" tax increases until at least March 2022, primarily to make sure we are over the worst with the Pandemic, and that businesses can get back on track during 2021. There is also a suggestion of spending restraint in the public sector.

It all hinges on how successful the vaccine rollout will be in terms of controlling the virus and ultimately lifting lockdowns/tier restrictions permanently.

So it would seem tax rises will be coming later rather than sooner. But if taxes do go up in 2022, Boris needs to think about how to please the public with a general election coming into view 2 years later. But then again he might think "duck it, let Labour pick up the debt burden!"

 

[Yel]

Pubs and restaurants in T3 are apparently to be given £2-3k to get them through. Maybe that is enough if staff have all been furloughed, rates cut and they've negotiated a rent reduction?

But if taxes do go up in 2022, Boris needs to think about how to please the public with a general election coming into view 2 years later. But then again he might think "duck it, let Labour pick up the debt burden!"

I really can't see Johnson still being at the helm come 2022!

 

[Mulholland Drive]

I really can't see Johnson still being at the helm come 2022!

I don't see him lasting beyond Summer of next year!

It would be great if he would keep it simple and just resign, rather than having to go through the laborious process of being forced out through a vote of no confidence, for example.

I suppose it depends on the sentiment of the 1922 Committee

 

[Yel]

I don't think he's going to need much encouragement to be put out to pasture. I'm guessing April.

But will Sunak want the poisoned chalice? None of the senior cabinet inspire confidence

 

[Meh]

Totally. For someone who was boohooing about how he was no longer a billionaire last year, why's he sitting with a £100m yacht?! I honestly have absolutely no sympathy for him or the board at Arcadia. They're all con artists.

Philip Green is the worst. I am outraged he still holds a knighthood.
Worked for Arcadia 2006-08 when I was younger. Really appreciated making £5.52 p/h and having a 16 hour a week contract. Although had to be available full time. making rent monthly was a stress and a half. Terrible management, bullying culture. They made you access their uniform allowance by taking a mandatory store card. So... putting people in debt / credit risk to give them a uniform. Charlatans. Worst company I ever worked for.

 

[Mulholland Drive]

I don't think he's going to need much encouragement to be put out to pasture. I'm guessing April.

But will Sunak want the poisoned chalice? None of the senior cabinet inspire confidence

I do like Sunak, but at the moment he's just putting off the inevitable by currently relying on the Magic Money Tree to get the country out of a jam. As a consequence he is winning favour with a lot of people, and therefore a favourable candidate for the PM job.

However, I want to him to stay as Chancellor and see how he copes when the tit finally hits the fan and he has to cut down the Magic Money Tree with his Tax Axe. I guess he won't be quite so popular then!

But I would agree, he is currently the best out of a bad job for PM

Philip Green is the worst. I am outraged he still holds a knighthood.
Worked for Arcadia 2006-08 when I was younger. Really appreciated making £5.52 p/h and having a 16 hour a week contract. Although had to be available full time. making rent monthly was a stress and a half. Terrible management, bullying culture. They made you access their uniform allowance by taking a mandatory store card. So... putting people in debt / credit risk to give them a uniform. Charlatans. Worst company I ever worked for.

Even more annoyingly is if his Arcadia group goes bust, HMRC (and therefore the Taxpayer) could miss out on millions of pounds in tax revenue from his failed empire!


https://www.telegraph.co.uk/business/2020/11/30/taxman-could-miss-arcadia-collapses-today/ (could be behind a paywall, but a quick Google will return more details)