The recession hits home

quote:

This downturn feels a little different from others though, as the modern economy is so much more dependent on credit than previously.

It could be deep and dark I'm afraid.

Dear Mark,

The issue of personal debt is potentially what will make this a very long and deep recession for the UK, and not curable by 2.5 per cent cut in Value Added Tax, or the likes.

Either people aim to pay their debt back, which will mean not spending as much as they did in the good times, or going bankrupt, thus creating bad debt, which the Tax payer will have to underwrite in the form of higher taxation.

Either way the money spent in future is going to be less than it has been, even if times were not looking so gloomy economically.

Countries with low levels of personal debt, such as the former Eastern European Block will bounce back far faster than the UK which has fueled the economic good times on a credit bubble, which has now burst.

I suspect that this down-turn will exceed the depth of the early thirties crisis, and that in fact it signals the end of of Anglo-Saxon [USA/UK] ecomonic dominance of the last 150 years.

China will emerge as probabl;y the greatest economic power with the USA and the UK representimng the biggest loosers in the relative World significance economically, miltarily, and morally.

I see every reason to believe that capital will abandon the UK as its base in Europe, in favour of our more prudent [less personally borrowed] Continetal neigbours, but ultimately this is the last part of the overturn of the power that has lasted from the British Empire.

The implication is that the UK will become one of the poorest of the European nationms, and requiring the support of even the former Eastern block nations within a decade.

George

This may sound a little extreme to some, George but I fear that what you say may be true.

Dear Mark,

Probably the worst portent is that the political consensus that seemed to be emerging on the emergency economic measures has broken down with the Tories openly mouthing very unpopular things about the outcome of recession.

They don't want to be elected!

Thay want Brown to finsish the disaster that he started. They want him crawling off to the IMF, Darling in tow, to implement the catastrophic but necessary rationalisation of Public Expenditure that would necessarily follow, and this time will be far worse than the Calalghan/Healey dealings with the IMF in the late seventies.

If anyone can convince me that this is not the least well prepared for economic down-turn in living memory, then I shall be glad to read why.

One could blame the New Labour catastrphy of an administration that was and is Blair and Brown, but I do not.

I blame those who voted for them.

George

quote:

This is a natural law. Just like evolution.

Evolution is a theory, not a law.

Regarding personal debt - does anyone have any figures? I know it's increased in absolute terms, but what about as a proportion of total personal wealth? In other words - how bad is it (really)?

Lots of people have spent more than they earned, defying common sense and one of the rules of money.

However, this money doesn't just float away into nothingness (money could rightly be called a form of energy, and thus subject to the laws of thermodynamics...), it goes somewhere!

Where does it go?

To the rich and the clever - thus proving another rule of money.

I don't have any personnal debt but am finding it increasingly harder just to survive with just the basic outgoings.

I have found it hard the last few years probably because i did'nt borrow,trying not to elude myself that life is better than it really is!
My own view is that the labour government have been fantasically incompetent with just about every issue regarding this country and therefore... i have no confidence in them that they will sort this out.
They have a consistent habit of adding fuel to the fire.

Steve

I work a freelancer (ex staff). I'm lucky because I have a contract to 2010, & I've been told my services are still required. However the management have called a department level meeting with the union branch committee tomorrow. It's at high noon , & we're not expecting a slap on the back & bonuses for the hard-working staff we represent.

quote:

Regarding personal debt - does anyone have any figures?

In the UK unsecured PD (credit cards, hire purchase & personal loans, etc) is very close to £1 billion. Seems likely the next financial failures will be due to defaulting borrowers who can't service their unsecured debt.

It 's one trillion, isn't it?

One billion amounts to just £16 per head of population on a 60M UK population basis

Fraser

quote:

Originally posted by GFFJ:
The implication is that the UK will become one of the poorest of the European nationms, and requiring the support of even the former Eastern block nations within a decade.
George

i hope you got this one wrong. if we end up with a more equitable distribution of wealth world wide, it won't necessarily be a bad thing. it may even signal the end of wars between nations.

Dear Mike,

It may sound strange but I am looking at this as a challenge but with tremendous optimism for the long term. The real oportunity this unpicking of conventional consumerist thought will bring about may well be a bigger levelling of unjust inequalities than any democratic administration could bring about, both within nations and between them!

ATB from George

quote:

It 's one trillion

Whoops - yes it is.
God help the staff I represent!

Well actually it is a billion. A British billion that is which is 10 to the power of 12 rather than the American Billion which is 10 to the power of 9 which appears to have been adopted as a short hand for one thousand million.

The UK government has used 10 to the power of 9 for a billion for some years.

It's not as easy as it appears; should we feel sorry for our leaders?

Only when they appear to be reluctant to weald power. Up to that point they deserve all the disrespect we can heap on them, of whatever political party they are members, or whether or not we voted for them. The only ones who diserve respect are those who demonstrably earn it, and this particular political breed appears quite possibly extinct currently, though perhaps a new sighting will occur with a new generation, to disprove this supposed extinction ...

I think they would do well to remember that as Christ pointed out, the first remains the servant of the last!

ATB from George

quote:

Up to that point they deserve all the disrespect we can heap on them, of whatever political party they are members

Agreed

I still think one decent chap made it into the houses of parliament though - namely Guy Fawkes.

I really hope everybody gets to keep their jobs and that we make it through this depression.

All the power's in the hands
Of people rich enough to buy it
While we walk the street
Too chicken to even try it
Everybody's doing
Just what they're told to
Nobody wants
To go to gaol!

Please click

First, my very best wishes to those whose job is currently in jeopardy.

I must be rather strange because in fact I am a huge fan of Woolies precisely because they are stuck in the 1970's! I have found them about the only shop who will still change or refund a CD bought in error on the odd occasion I have bought one that ended up being unwanted or a duplicate. In addition my Daughter (aged 3) is clothed almost entirely in their great kids clothes which are invariably 100% cotton, great value and don't try to turn her into some sort of lolita (as the more fashion conscious shops tend to).

I love Woolies and their slightly 1970's style stores always reminded me of Christmas as a kid drooling over the Scalextric or whatever! I have also found they tend to have a great quality/performance ratio on most things e.g. dinner sets/plates probably because they don't spend vast amounts of money on their stores trying to make them look up to the minute.

Maybe I'm just weird though!

Jonathan

When i asked my local Woolies (St Neots),when did they expect to be closing down.
They said - "We are not closing"
So i'm not sure what is going to happen.

quote:

Originally posted by Fraser Hadden:
It 's one trillion, isn't it?
Fraser

IIRC it jumped to 1.2 trillion over the course of a couple of years.

I predicted this whole precise scenario happening from about five years ago. Vested interests have kept the property and credit party going way past closing time and ensuing even more economic mayhem.

Property has been the world's biggest pyramid selling scheme and the credit scam has seen the pillaging and breaking of the system - leading to the future misery of many.

Andrew Randle

quote:

Property has been the world's biggest pyramid selling scheme ...

No Andrew; it's been a classic bubble which has been driven by greed & ignorance.

We had our meeting at woork today & what an ugly one!
It's been officially described as 'constructive'!
210 jobs to go out of a total workforce of 700, & 174 of those in my department.



This is the 5th time I've been involved in a major round of redundo with this employer in 20 years, & each time they have announced the grim news just before Christmas.

quote:

Originally posted by 555:
210 jobs to go out of a total workforce of 700, & 174 of those in my department.

That's a very high percentage - 30%! We are losing 10% of our staff which amounts to just over 200. Some of our competitors we know will be offloading around 20%.

These are substantial figures and if mapped across many other businesses will make the projected figure of 3 million unemployed in the UK seem optimistic.

It may become necessary for me to emigrate ...

I would leave if I lost my job here, and could find gainful employment overseas.

The ultimate "Tebbit" man hoping onto his ferry to find a job ...

If that happened, I would consider that there could be no possible loss in leaving the UK for me.

ATB from George

George

You need to remember that the UK still has one of the lowest unemployment rates in Europe.

Europe is a place to retire after you have made your pile.

Regards

Mick (now resting/retired)

Dear Mick,

Nice to be exchanging words again!

I definately plan to retire overseas if that is possible. After more than two years of difficulty with getting a permanent job where I was not treated like a village idiot at least, I now have a proper job in a kind environment - hard work, but pleasant people - making ice cream, in a team of nine emplyees and the boss ...

But if this goes belly-up, then I would not want to go through what I have in the last eighteen months again, just to stay in the UK. Literally, I nolonger have anthing left to lose, though partly my struggle was made tougher because I had next to no faith in a financially secure future, so I borrowed nothing and spent the pitance that was coming in [in temporary and agency work] on paying rent and the remainder simply subsisting. I could not bring myself to claim state aid beyond a few weeks of 59 GBP per week of Unemplment payment.

It cost a very nice Naim set to make ends meet, but that option is no longer there, so it would not take much for me to go now, if needs must.

I do not suppose my idea is quite what Norman Tebbit had in mind, but the way I see it, I think he would sympathise with my view by now.

Best wishes to you from George