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View Full Version : The recession-where are we?



Covenant
04-05-2009, 16:29
At what point in the economic cycle to you think we are at? Do you subscribe to the view that the worst is past and that within six months things will be improving? Is your view that the few small positive indicators seen over the past two weeks are nothing more than a blip and share values, house prices etc will continue to decline for a long time yet?

Mike
04-05-2009, 16:36
Hmmm... I think it's 'here' for the rest of 09 at least unfortunately.

On the other hand, it's (somewhat perversely) having a positive effect on my finances at the moment. I'm paying around £300/month LESS on my mortgage compared to last year!

Steve Toy
04-05-2009, 16:39
I think in the normal scheme of things we've hit the bottom and will start to recover by the end of the year. The only issue is government borrowing/scorched earth fiscal policy designed to leave the country in a total mess for the next administration... I fear we will have borrowed to the extent that repaying the national debt will prevent economic recovery taking place for ten years or more.

If we lose our AAA credit rating as a nation we are even more crippled.

Covenant
04-05-2009, 16:49
But most economists seem to agree with the idea of increased borrowing. The alternative looks pretty bleak. If financial stimulus works and world trade improves maybe the national debt will shrink. The hidden costs of not taking action have to be considered. I lived in Liverpool during the 1980 riots and would not want to see a return to mass unemployment and the misery it produces. Keeping people working is important for their own self esteem.

Spectral Morn
04-05-2009, 17:04
Sadly I think the smart money is on this being for the long term. One of the problems with being inter linked to every other country in the world (Globilization) is that it becomes much harder to recover by ones self. Every one is linked into everyone else. A degree of isolation is not such a bad thing.

The current situation for those still in work with mortgages is good with low interest rates but for those on savings...the unemployed, pensioners etc it is a disaster. Only ISA's are paying any interest now. Most savings accounts are paying next to nothing.

I don't see any small shoots green or other wise...I think things will get worse and only perhaps the middle of next year or later will there be any type of improvement. After that I think we are looking at 5 years plus for things to improve.

However the big problem is the way in which finances were managed or not, the idea that the market(like its some kind of self aware entity)can look after its self or that everything can be mapped via statistics (Labour and most governments approach over the last 10 years) has lead to the mess we are in at the present. With the UK the lack of an industry based economy but one based on financial services and retailing has left us this time round well and truly stuffed. 200 billion in debt so far will hang around our collective necks for years to come...and it may get worse.

I think the current government should thank its lucky stars this isn't the time of THE TERROR...otherwise they would all have lost their necks to Madame Guilotine.


I don't see a solution to all this happening over night. A new way of finance operation will have to be worked out that allows enough free trading but keeps a tight eye on it. No more rouge agents, full accountability with suitable punishments for massive stuff ups. Caution and prudence being the order of the day....but without risk of some sort its hard for business to grow. I really don't know the answer.:(


Regards D S D L

Covenant
04-05-2009, 17:12
With regard to your last point Neil the separation of clearing banks and investment banks looks inevitable I would think.

Steve Toy
04-05-2009, 17:26
The problem lies not with increased borrowing now. I agree that this is necessary and I'm a big believer in Keynesian economics. However this means that the government should spend wisely on front-line public services and infrastructure rather than on government control and failed IT projects all designed to consolidate their power base at the taxpayers' expense. It also means creating budget surpluses during times of economic growth rather than still borrowing.

Beechwoods
04-05-2009, 17:33
I'm paying around £300/month LESS on my mortgage compared to last year!

Mike, if you can, over-pay now and you will have less of a mortgage burden when interest rates rise again. If you're on a variable rate mortgage and the rates have dropped, then more of your money is paying off capital rather than lining the bank's pocket. Clear as much capital as you can as quickly as you can!

I'll post properly on the main subject of the thread when I have more time :)

Spectral Morn
04-05-2009, 17:37
The problem lies not with increased borrowing now. I agree that this is necessary and I'm a big believer in Keynesian economics. However this means that the government should spend wisely on front-line public services and infrastructure rather than on government control and failed IT projects all designed to consolidate their power base at the taxpayers' expense. It also means creating budget surpluses during times of economic growth rather than still borrowing.

I agree with the above. Part of if not the main problem is the Government and others round the world despite what democracy should mean but sadly doesn't is that there is no accountability and prudence in how OUR money is spent. Sadly the common malaise and lack of interest in how things are done in government/politics means that the sheep mentality in our citizens allowed a vacuum (which they exploited). They thought they could get a way with it but hopefully thats the end of crazy wasteful spending on bloody rubbish ideas. Heres hoping....but we must all hold them accountable.


Regards D S D L

Covenant
10-05-2009, 18:28
So a week on and positive indicators increase. Parallels with the Great Depression where there were a number of raliies before shares plunged in value for a long time.
It looks like the majority of banks will now survive in one shape or another. The car industry is damaged probably beyond repair and the scrappage scheme is a pale imitation of what's being done on the continent.

Spectral Morn
10-05-2009, 20:22
So a week on and positive indicators increase. Parallels with the Great Depression where there were a number of raliies before shares plunged in value for a long time.
It looks like the majority of banks will now survive in one shape or another. The car industry is damaged probably beyond repair and the scrappage scheme is a pale imitation of what's being done on the continent.

Where I am at (living), more companies are closing my bank has made a bigish loss and jobs are none existent...

And those in parliament can't, unlike the rest of us take their living costs out of what they earn....no Expenses are as well as earnings.....great UK public get of your back sides and truly make them accountable for how they use OUR money.

Makes me sick.....:steam::steam::steam::steam::steam::(:(:(


Regards D S D L