Anyone else here worried about the economy?

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Mortgage approvals are at an all time low, the governments are willing to throw money out of helicopters. Where do the joe public like us go from here?

How are other people preparing themselves for the crash landing? :shrug:
 
I'm definitely worried :( I'm in the lowest paid job I've had in a long time. I'm an IT contractor and have struggled finding work so don't know what I'll find next year.

Planning on buying a bigger house as well :'(
 
Yes I am worried:(

Can I do anything about it - not really:shrug:

Once we crash land i will stagger out of the wreckage and see where it goes:suspect:

In the meantime trying not too spend much and hopefully build a bit of a cushion
 
I have held off buying a house, because I don't want to get caught out when interest rates sky rocket. But on the other hand my deposit is equally at risk from many other things.

Does anyone own any gold? I am seriously thinking of buying some Kruggerands.
 
I play it on a very much take each day as it comes basis.
 
Why worry about what you can't control

and if you do control it, stop worrying about it and fix it :)
 
Nope. If it was going to be really bad it would have happened the first time around. If you work in a job that could be affected or rely on interest to live or have borrowed beyond your reach then you could be in a little more strife. I think I am not in any of those positions currently and so just plan to sit tight and see what happens.
 
menthel said:
Nope. If it was going to be really bad it would have happened the first time around. If you work in a job that could be affected or rely on interest to live or have borrowed beyond your reach then you could be in a little more strife. I think I am not in any of those positions currently and so just plan to sit tight and see what happens.
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I think the first time round was just the opening scene of this drama. Before we were all worried about banks and people having excessive leverage. Now its governments being exposed as having excessive leverage. I reckon the worst is yet to come. With the housing market giving up its gains made in early 2010, we could see another few banks hit the wall but the government wont be in a position to bail them out anymore.
 
Nope! Just waiting for those in the shop to drop their prices even further so I only have to pay em what it is really worth
thevil-rubbing-hands-2.gif
 
morsing said:
I'm definitely worried :( I'm in the lowest paid job I've had in a long time. I'm an IT contractor and have struggled finding work so don't know what I'll find next year.

Planning on buying a bigger house as well :'(
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Tell me about it!

Whilst I'm sure the IT jobs market has been hit by the recent downturn that's only a small part of it. IT has been on a downward spiral for the past few years and sadly I don't think we've hit rock bottom yet.

One of the reasons I've been thinking about re-training for another career.

Personally I'm very worried, my job is far from safe and I've got some loans that take a nice big chunk of my monthly :(
 
Unfortunately every sector is in decline. Other the city of london, I think everyone else is experiencing a drop in demand for their skills and services.
 
hsuffyan said:
Unfortunately every sector is in decline. Other the city of london, I think everyone else is experiencing a drop in demand for their skills and services.
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No it isnt, part of the reason why we went into recession was the media hype... we talked ourselves into it to a degree.

Now is a great time to buy a house. I live near Cambridge which is doing well. Low unemployment, house prices on the rise (slowly) and some houses are being sold very quickly. A good 2, 3 or 4 bed house will do well, as there is always demand for these. The people really caught out are the ones who bought flats (mainly) in areas like Hull or Liverpool where there are just too many. If I had the money I would be looking to buy another house!

Some businesses are stuggling, but for many people the low interest rate has massively lowered mortgages. Of course rates will rise, but we have never had rates like this before! If we continue to talk doom and gloom we will be screwed!

As part of my other job I speak to small businesses each day. One small double glazing company is booked up now until early/mid November, quite a few people are getting home improvements done and many other trades like this are doing well. Sure, things are not great, but they are ok.
 
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cambsno said:
No it isnt, part of the reason why we went into recession was the media hype... we talked ourselves into it to a degree.

Now is a great time to buy a house. I live near Cambridge which is doing well. Low unemployment, house prices on the rise (slowly) and some houses are being sold very quickly. A good 2, 3 or 4 bed house will do well, as there is always demand for these. The people really caught out are the ones who bought flats (mainly) in areas like Hull or Liverpool where there are just too many. If I had the money I would be looking to buy another house!

Some businesses are stuggling, but for many people the low interest rate has massively lowered mortgages. Of course rates will rise, but we have never had rates like this before! If we continue to talk doom and gloom we will be screwed!

As part of my other job I speak to small businesses each day. One small double glazing company is booked up now until early/mid November, quite a few people are getting home improvements done and many other trades like this are doing well. Sure, things are not great, but they are ok.
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I think there are hotspots around the country that are fairing up quite well, with cambridge being one of them. I wouldn't agree that this was reflective of the whole country though.

Unfortunately the low interest rates arent being passed on to new borrowers, who are the ones that drive the demand for housing. When house prices peaked after the credit crunch, most people got onto 2-3years fixed deals, so about 2011-2012 when they are faced with resets (similar to the US) we could see a further drop in prices due to increases in repossessions or mortgage defaults.

Doom and gloom isn't just a media hype, it's a reality. Private debt in the country ballooned over the last 10 years, which subsequently fuelled all the growth and demand. With a massive deleveraging in private debt, I can't see where this demand and growth is going to come from? The government is de-leveraging through austerity measures, businesses and invididuals are doing the same and curbing their consumption.

I recently moved to a new flat (rented) in the essex side of london. For the first time in many years I saw that flats were in short supply, yet for sale properties were everywhere. My uptake on that is highly geared landlords are selling out of their portfolio and new buyers are holding off buying and renting instead. Rents have shot up, whilst house prices are largely flat.
 
It all depends on the personal circumstances.

Someone sitiing with a pile of cash right now will make a killing. Buying the house ( or even well balanced stock portfolio) will provide quite a handsome return in the long run.

A good time to have cash, bad time if there is a cash flow problem. True almost any time - more acute now
 
hsuffyan said:
I have held off buying a house, because I don't want to get caught out when interest rates sky rocket. But on the other hand my deposit is equally at risk from many other things.

Does anyone own any gold? I am seriously thinking of buying some Kruggerands.
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Gold is at an all time high just now because of speculators looking for a safe haven during the recession, there is no guarantee it will climb any further, and if the economy improves it will fall in price.

Also you will have to make up the difference between the buying price and the selling price before you see a profit.

Just my opinion but I do not see it as a good idea at this time.
 
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I don't think it's all doom and gloom, but I do believe that is exactly what the government and media would like us to think.

This government sees this as it's ideal time to impose cuts that would have met with much more resistance in the past. If people are told, time and time again, the same lies, then a large portion of the public will begin to believe them.

When a lot of our public services are dismantled, the impact to ordinary people in the street will be immense, but it will be too late at that stage.
 
Galaxy66 said:
Gold is at an all time high just now because of speculators looking for a safe haven during the recession, there is no guarantee it will climb any further, and if the economony improves it will fall in price.

Also you will have to make up the difference between the buying price and the selling price before you see a profit.

Just my opinion but I do not see it as a good idea at this time.
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I dont think Gold is up purely on speculation though. I agree its a pretty worthless lump with no cash flow or investment income. I think its up because the central banks are intent on destroying the value of their currencies through low interest rates and quantitative easing, Gold is just reacting to all of this by maintaining its value. I was looking at some charts earlier and every year the supply of gold is relatively constant at 70-80m ounces, whereas the money supply has skyrocketed. If we look back a few hundred years, money supply was kept in check because it was linked to gold and silver. The time since we dropped the gold standard is a relatively short period in the larger history of money and gold. I am worried we may be heading back to the old system.
 
ujjwaldey8165 said:
It all depends on the personal circumstances.

Someone sitiing with a pile of cash right now will make a killing. Buying the house ( or even well balanced stock portfolio) will provide quite a handsome return in the long run.

A good time to have cash, bad time if there is a cash flow problem. True almost any time - more acute now
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Totally agree. If you can survive a jump in rates (or your product insulates you against a rate increase) and build in a buffer for any short term damage, then accumulating assets seems like a very good idea.
 
Opted to stay in education rather than go graduate job hunting. This was in 2008 at the height of the crunch. So far it looks as though I probably played it too safe even though several friends that graduated with me are stressed to the eyeballs as to whether or not they'll be made redundant at their monthly townhalls. Worst is yet to come though, there's always inertia particularly as contracts are usually agreed years in advanced of a project that then goes live. The austerity cuts haven't actually happened yet too which is another factor to worry about in the near term.

I'll continue to bury my head in sand :-)
 
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Yes, very worried. I'm in the air conditioning industry which is allied to the building industry. I have been on half pay for the last year and my savings are vanishing rapidly. The building sector is getting slower and slower. Developers don't want to or can't invest at the moment and major projects are few and far between. Even if the economy improves it will be a long time before we see that in our industry.
 
I was made redundant (from RBS!) this year whilst pregnant so a big YES from me... setting up my photography business has been a long held dream and now a forced reality... I have watched loads of friends being made redundant over the last 12 months... I have no doubt at all that this change in my circumstances will be for the long term GOOD but it is VERY difficult at the moment as I have 2 little ones to provide for but at least they get mummy at home all the time!

This recession is very different to the last... peoples standards of living have changed greatly in the last few decades and consequently due to the "why wait" "buy now-pay later" culture and the belief that we all need to run mobile phone contracts, high speed net connections, 100+ TV channel subscriptions, brand new cars with all the bells and whistles, 42" TV sets etc.... we have a lot further to fall. It also means we have a lot more we can "give up" before it starts to hurt the serious things but like most things in the UK just now we need to have a huge cultural shift to get away from the greed and excess that got us into this mess in the first place.

I don't use an overdraft, or keep a credit card balance but I know a lot of people who couldn't eat each week without theirs!
 
anniephoto said:
I was made redundant (from RBS!) this year whilst pregnant so a big YES from me... setting up my photography business has been a long held dream and now a forced reality... I have watched loads of friends being made redundant over the last 12 months... I have no doubt at all that this change in my circumstances will be for the long term GOOD but it is VERY difficult at the moment as I have 2 little ones to provide for but at least they get mummy at home all the time!

This recession is very different to the last... peoples standards of living have changed greatly in the last few decades and consequently due to the "why wait" "buy now-pay later" culture and the belief that we all need to run mobile phone contracts, high speed net connections, 100+ TV channel subscriptions, brand new cars with all the bells and whistles, 42" TV sets etc.... we have a lot further to fall. It also means we have a lot more we can "give up" before it starts to hurt the serious things but like most things in the UK just now we need to have a huge cultural shift to get away from the greed and excess that got us into this mess in the first place.

I don't use an overdraft, or keep a credit card balance but I know a lot of people who couldn't eat each week without theirs!
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that's really sad to hear. Can I ask what you were doing whilst at RBS? As far as I am aware, RBS has been cutting its operations staff but not the people that grew the company to become the behemoth that it is. One of those would easily equal 3-4 times the salary of an operations staff member.

We had a baby in April so my wife is now a fulltime mum, so we lost our 2nd income as a family, which is why photography for us is a necessity rather than a part time business, even though I still have a fulltime job.
 
dont forget the VAT increase in January, the large numbers of govt. workers being laid off, contracts being cancelled killing off medium sized co's. (Conaught for one), it will be a great 2011 :nono:
 
hsuffyan said:
that's really sad to hear. Can I ask what you were doing whilst at RBS? As far as I am aware, RBS has been cutting its operations staff but not the people that grew the company to become the behemoth that it is. One of those would easily equal 3-4 times the salary of an operations staff member.

We had a baby in April so my wife is now a fulltime mum, so we lost our 2nd income as a family, which is why photography for us is a necessity rather than a part time business, even though I still have a fulltime job.
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I had been there for 11 years and was a successful Manager within HR and Operations. The cuts are taking place in many parts, many of the telephone centres are now closing and a lot of the operations being taken offshore. The elite level of management has remained quite untouched... for me it was labelled as voluntary redundancy but I was told that if me and the 3 colleagues who would be able to do the 1 remaining role all wanted to stay the issue would become forced and as I was pregnant and stressed enough I couldn't face the battle and would have ultimately lost it... I'd have been ranked 2nd out of the 3 people who would have fought for the job.... I knew this and they knew I knew this as I had just had to do the same thing for my own team!

As I said though I do believe it will eventually transpire to have been the best move I ever made but it is going to take years to build this new business before I can say that with some conviction! Still, Tate and Willow love having me at home so I feel blessed for that!

It's also dreadfully unfair for the media to describe it as "cutting its operations staff but not the people that grew the company" ... growth may well be important but some of the people loosing their jobs are the ones who have hand delievered statements to customers resolve complaints, come in to test IT systems at 3am, worked Christmas day to answer that 1 phone call from someone who wants their balance that day.... find me a senior manager who would do any of those things!
 
as-i-said said:
dont forget the VAT increase in January, the large numbers of govt. workers being laid off, contracts being cancelled killing off medium sized co's. (Conaught for one), it will be a great 2011 :nono:
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Vat decrease had no impact and cant see the increase having one. On a TV costing say £400 ex vat, will be £470 at current rate, and £480 at the higher rate... whoopee do! Will people NOT buy a £500 TV for the sake of a tenner!!!

HSUFFYAN - Buying a property is the best thing you can do. Even if there is a dip. Say you buy a place for £200k. Even if it drops in value to £150k and stays at that value for some 20 odd years, at the end you have property worth £150k and no mortgage. By renting though, you are chucking money away, and in 20 years time you would have spent around the same amount, but have nothing to show for it. Renting and Owning are not that far apart in monthly costs in many cases.

People on a variable rate now are probably much better off than any point in last 50 years or so. While the banks could and should reduce their markup, when I bought 10 years ago or so, think rates were 8% or so.

Yes, there is to much debt, and things are not great, but they are not that bad either. At my wifes work, they offered people redundancy due to restructue (they make loads of money so it wasnt to save costs) and far too many people applied, so much so that in the end they were offering people payments NOT to leave!! People my wife spoke to thought they could easily find a new job, and her friend there was in a new job 3 weeks after leaving!

I can only speak for my area, but to be honest if things did pick up yes, I would earn more, but that would be wiped out with higher mortgages as rates would go up.
 
hsuffyan said:
Unfortunately every sector is in decline. Other the city of london, I think everyone else is experiencing a drop in demand for their skills and services.
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Not so. I run two totally unrelated businesses and both are booming. The only thing I'm short of is hours in the day.


cambsno said:
No it isnt, part of the reason why we went into recession was the media hype... we talked ourselves into it to a degree.
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Not so. It's a world wide recession triggered by the banking industry forgetting the basic rules about lending. We'll suffer more than most countries because of the gross enlargement of the public sector under Nu Labour.

Cut the public sector by 40% and quangos by 60% and we'll be somewhere close to where it's needed. Let the private sector break away from constraining bureaucracy and we'll all be better off - but not for five years.
 
Hi all doom and gloom, we just have to tighten our belts and stop spending.

Merc:thumbsdown:
 
cambsno said:
quite a few people are getting home improvements done and many other trades like this are doing well.
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as-i-said said:
dont forget the VAT increase in January
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Every single tradesman I know has work comming out of their ears at the moment. People appear to be trying to get all their home improvment out of the way before the VAT increase.

Ironically, it may actually end up cheaper to wait until late next year, when demand has tapered off and people are having to work a bit harder to get jobs in. The decrease in in the quoted price will most likely mean that the jobs cheaper even with the extra VAT.

hsuffyan said:
Unfortunately the low interest rates arent being passed on to new borrowers, who are the ones that drive the demand for housing. When house prices peaked after the credit crunch, most people got onto 2-3years fixed deals, so about 2011-2012 when they are faced with resets (similar to the US) we could see a further drop in prices due to increases in repossessions or mortgage defaults.
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Not sure I get this. Most people who have fixed will have done so at a rate significantly higher than whatever their banks default rate is, so when the fixed term ends their payments will actually go down (assuming we don't get much in the way of interest rate rises in the mean time).

We fixed at the point we weren't sure which way interest rates would go and we've lost out financially from that decision as I've been paying about 2% more than is being charged for a tracker. We gained in peace of mind though.
 
cambsno said:
HSUFFYAN - Buying a property is the best thing you can do. Even if there is a dip. Say you buy a place for £200k. Even if it drops in value to £150k and stays at that value for some 20 odd years, at the end you have property worth £150k and no mortgage.
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Yes, but your £150k would no longer have the same buying power as it did when you bought the house.

Say you had made your purchase in 1990, adjusted for inflation your £150k then would have been the equivalent of £238371.86 in today's money, but now you only have a house worth £150k, which equates to £94390.34 in 1990 money.....
 
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Personally I am in a lucky situation to not be worried at all. We haven't been affected by the recession one bit, if anything we're better off. I work for a company who has gone from strength to strength over the last 10 years. We bought our house before it all went wrong - hasn't affected our mortgage at all. I don't have loads of money in savings earning interest.

We don't intend moving for another 5 years so thats the only time we'll be affected by it if it is still happening then and we end up losing money on the house we bought.
 
anniephoto said:
I had been there for 11 years and was a successful Manager within HR and Operations. The cuts are taking place in many parts, many of the telephone centres are now closing and a lot of the operations being taken offshore. The elite level of management has remained quite untouched... for me it was labelled as voluntary redundancy but I was told that if me and the 3 colleagues who would be able to do the 1 remaining role all wanted to stay the issue would become forced and as I was pregnant and stressed enough I couldn't face the battle and would have ultimately lost it... I'd have been ranked 2nd out of the 3 people who would have fought for the job.... I knew this and they knew I knew this as I had just had to do the same thing for my own team!

As I said though I do believe it will eventually transpire to have been the best move I ever made but it is going to take years to build this new business before I can say that with some conviction! Still, Tate and Willow love having me at home so I feel blessed for that!

It's also dreadfully unfair for the media to describe it as "cutting its operations staff but not the people that grew the company" ... growth may well be important but some of the people loosing their jobs are the ones who have hand delievered statements to customers resolve complaints, come in to test IT systems at 3am, worked Christmas day to answer that 1 phone call from someone who wants their balance that day.... find me a senior manager who would do any of those things!
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hi annie, just wanted to clarify that I didnt mean any offence. I meant, the people who took the company to the wall by taking unimagineable amounts of risks. Not people like yourself, who no doubt worked immensely hard. I work with a few people who got made redundant late 2009, its a similar story all round.
 
hsuffyan said:
hi annie, just wanted to clarify that I didnt mean any offence. I meant, the people who took the company to the wall by taking unimagineable amounts of risks. Not people like yourself, who no doubt worked immensely hard. I work with a few people who got made redundant late 2009, its a similar story all round.
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That's OK... I know you didn't :)
 
Seems that for us business is looking up.

The other half and I run 3 businesses between us. One of them has just signed a contract for 6 months work that is on it's own equivalent to the annual turnover of the business.

People are spending money.It is just a case of finding who and where.
 
2blue4u said:
Not so. I run two totally unrelated businesses and both are booming. The only thing I'm short of is hours in the day.


Not so. It's a world wide recession triggered by the banking industry forgetting the basic rules about lending. We'll suffer more than most countries because of the gross enlargement of the public sector under Nu Labour.

Cut the public sector by 40% and quangos by 60% and we'll be somewhere close to where it's needed. Let the private sector break away from constraining bureaucracy and we'll all be better off - but not for five years.
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I did only say PART of it, the banking side was the starting point but if the papers keep going on about recession people stop spending which causes recession.

Agree fully about public sector though!
 
Flash In The Pan said:
Yes, but your £150k would no longer have the same buying power as it did when you bought the house.

Say you had made your purchase in 1990, adjusted for inflation your £150k then would have been the equivalent of £238371.86 in today's money, but now you only have a house worth £150k, which equates to £94390.34 in 1990 money.....
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My point was that you would still be able to sell the house and have some money - as opposed to spending 20 years renting and just having a pile of receipts!
 
cambsno said:
HSUFFYAN - Buying a property is the best thing you can do. Even if there is a dip. Say you buy a place for £200k. Even if it drops in value to £150k and stays at that value for some 20 odd years, at the end you have property worth £150k and no mortgage. By renting though, you are chucking money away, and in 20 years time you would have spent around the same amount, but have nothing to show for it. Renting and Owning are not that far apart in monthly costs in many cases.

People on a variable rate now are probably much better off than any point in last 50 years or so. While the banks could and should reduce their markup, when I bought 10 years ago or so, think rates were 8% or so.
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I'm not sure I agree to that. Whilst overall I think property is a good investment to have, the approach needs to be considered carefully.

In your example, say if you purchased with a 75% (liberal ltv compared to historic ltv's) loan and paid an average interest of 4% (very liberal estimate) throughout the loan.

Total repayment over 20years = 218,152.92
Less £50,000 deposit
market value = £150,000

Net loss over 20years = -£118,152. If you include what your £50,000 would have been worth if it grew at the rate of inflation over 20 years, your loss would be even greater.

Also, during those 20 years you could experience situations where your property in unlet (if you are an investor) or your circumstances force you to sell (through relocation, loss of job etc.). Thats why I don't believe anything in life should be a buy-to-hold investment.
 
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