A new crash

[alanjjohnstone]

Sign of the timeshttp://www.bbc.com/news/business-35635825Mining giant BHP Billiton has posted a huge half-year net loss of $5.67bn (£4bn) and warned that weak commodity prices will continue. It has abandoned its long-held policy of maintaining or increasing dividend payments to shareholders, reducing the payout from 62 cents a share to just 16 cents. Mining companies such as BHP have been under intense pressure as a slowdown in China's economy results in lower demand for key commodities, such as iron ore and coal.

[alanjjohnstone]

http://www.theguardian.com/business/2016/feb/25/china-seeks-to-reassure-markets-on-yuan-and-transparency-ahead-of-g20The Chinese stock-market remains skittish

[alanjjohnstone]

The IMF adds its concerns

Quote:

The International Monetary Fund (IMF) has said the global economy has weakened further and warned it was "highly vulnerable to adverse shocks". It said the weakening had come "amid increasing financial turbulence and falling asset prices".

http://www.bbc.com/news/business-35656895

[Young Master Smeet]

Apparently the Kurds are skint too:http://www.middleeasteye.net/news/analysis-crisis-exposes-flaws-kurdistans-economy-1363406840Teh oil slump is kicking in.But, my rough view is that this is 2000, not 2008, it will be bad in some quarters, but US and Europe will just about scrape by, but the BRICS will banana skin…

[alanjjohnstone]

Last year Chinese buyers spent a record A$12bn on Australian property, boosting house prices. Between October and December 2015, Sydney house prices dropped by 3%, the biggest fall on record. Investment banks like Macquarie are forecasting a 7% decline in 2016, and say a housing collapse could push Australia into recession. http://www.bbc.com/news/world-australia-35601102

[alanjjohnstone]

China has announced plans to fire around 1.8 million workers. In an apparent bid to restructure the world’s second largest economy, President Xi Jinping’s reforms to the coal and steel industries would see around 15 per cent of the current workforce at risk of losing their jobs. Weimin said in a news conference 1.3 million workers in the coal sector could lose their jobs, plus 500,000 from the steel sector.http://www.independent.co.uk/news/world/asia/china-to-lay-off-18-million-workers-from-coal-and-steel-industry-after-slowest-economic-growth-in-25-a6906701.htmlCan we expect an escalation and intensified class struggle and workers resistance?  No timeframe has been given as the plans were announced by Yin Weimin, China’s minister for human resources and social security.

[Young Master Smeet]

This is interesting:http://socialisteconomicbulletin.blogspot.co.uk/2016/02/the-mystery-surrounding-productivity.html

Quote:

n the UK productive capacity is being scrapped. This is not because there is no unsatisfied demand in the UK economy. On the contrary, there is both a scarcity of necessities, such as in housing and healthcare and other areas, as well as a large trade deficit. The productive capacity is being scrapped because its owners cannot make profits, or do not anticipate sufficient profits in a situation of growing competition and sluggish growth in consumption, for example in the steel industry. To survive and prosper, the owners of the UK steel industry would have to leap towards the front of global productivity or technical quality through very large scale investment and they are unwilling or unable to do so. A reduction in the stock of capital is one way in which capital can overcome declining profitability. Marx identified some of the others as increasing the working day, which is happening in the UK and US but not elsewhere. Other factors which can offset falling profitability are a reduction in the cost of capital goods (the means of production), a reduction of (real) wages, increasing the division of labour through the growth of foreign trade or by boosting profits through increased financial speculation.

 Socialist Economic Bulletin is Socialist Action, i.e. Ken Livingstone and friends, who are the group around Corbyn, so this is close to inhouse thinking of the Labour leadership (as suggested also by the bklog post that follows this one).  The analysis seems sound, the issue is capital and profitability.

[ALB]

Young Master Smeet wrote:

Socialist Economic Bulletin is Socialist Action, i.e. Ken Livingstone and friends, who are the group around Corbyn, so this is close to inhouse thinking of the Labour leadership (as suggested also by the bklog post that follows this one). 

I see what you mean as the blog ends:

Quote:

For now though, this weakness puts the British economy in a uniquely vulnerable position in the global slowdown. So it is no exaggeration to say that under current circumstances the need for state-led investment to rescue the economy and living standards from renewed crisis is more acute in Britain than elsehwere in the G7 economies. When John McDonnell says, “our mantra is investment, investment, investment,” this is exactly what is required to stave off renewed economic weakness.

Is it? What's the point of even state-led investment if there's no profitable market for the products?And of course the more of what is produced is invested the less there is for consumption, but that's the way capitalism works. In fact, it's what it's all about and why it can't be reformed to give priority to meeting people's needs.

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