Thursday, February 11, 2010


In 2009, British exports recorded their biggest fall since records began.

Total UK exports fell 9.5% in 2009. (UK exports in biggest fall since 1947 )

In a UK town we visited in January 2010, we could see that a very large number of shops had gone out of business.

Most of the factories are closed.

Many of the local people looked too poor to buy anything other than heroin or vodka.

Some of them are like the people George Orwell described, "people who have fallen into solitary, half-mad grooves of life and given up trying to be normal or decent."

The only well dressed person we saw is the local Labour MP, a man who voted for war in Iraq.

Some businesses, such as the American owned Alliance Boots, the chemist, seem to be doing OK.

Alliance Boots has a monopoly in many towns, and people always need medicines.

On the other hand, "there has ... been talk that Alliance Boots, which was bought for £11.1bn (in 2007) by private equity giant KKR before the credit crunch hit world markets on a leverage multiple of nine times equity, could have difficulty repaying debt if the downturn is prolonged." (A Nightmare on the High Street as shops fall like dominoes ...)

And the chief executive of Alliance Boots is Andy Hornby who was chief executive of Bank of Scotland when it went down the plughole.

In Wolverhampton and Bradford, nearly a quarter of shops lie empty. (Ghost town threat as UK shops fall empty)

On 10 February 2010, the BBC reported that, in the UK, banks are facing a commercial property meltdown.

According to the BBC, in 2006, the shopping centre in the town of Shrewsbury had six of its 135 shops lying empty.

Today, 29 shops are empty.

When it comes to the commercial property sector in the UK, negative equity is now widespread.

There could be £50 billion of negative equity. (banks are facing a commercial property meltdown.)

Shopping centres are often worth less than the cash loaned by the banks for their original purchase.

The balance sheets of banks are affected if shopping centres go bust.

According to William Newsom, of property consultancy Savills, negative equity on investment properties could rise to £50bn if the drop in land values on development property is considered.

"It has never been seen before to this order of magnitude. It is 25% of the entire lending book in round terms." (banks are facing a commercial property meltdown.)

Listen now (40 minutes)

Poor need 'new minimum income' to live healthily

Q&A: Greece's economic woes

New MPs' expenses watchdog cost £6.6m to set up


1 comment:

subrosa said...

Q & A link broken Aangirfan.

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