Is the turnaround in sight?

[off_again]

There is a difference from a turnaround, a recovery and a bottoming out.

I saw that chap from Schroders on Newsnight last night and he seems to know what he is doing - doesn't mean its all over, just that he sees value in some stocks that are pushed down globally. So he is doing his best to buy up the cheap ones knowing / hoping they will go up - a risk but one that will get some decent gains.

Have we reached the bottom? Not yet I fear. We have yet to see some more people lose their jobs and more companies go bust. Its a sad state of affairs but its to be expected. There might be some 'green shoots of recovery' but in my opinion they are hidden in the ground and we can't see them! There are plenty of businesses doing well and plenty of others doing OK. So its certainly not as bad as we are told for everyone - though for some its dreadful.

The US Fed chief is suggesting that its going to be getting better at the end of the year. But the US is naturally a more optimistic nation than here. I would suggest that we will be 3-6 months behind them when I am being optimistic so we should be aiming for mid 2010 for some form of recovery (if we are lucky). However, some people and industries will see this before anyone else.....

So its all relative. I am think that things will stabilise at the end of 2009 and start recovery during 2010 - though I am of the glass half full variety...

[Digga]

Horse_Apple said:

I don't see why a recession cannot be viewed in the same manner as a berievement, insomuch as I think it is fair to apply the 5 Stages of Grief:

1 - Denial
Denial is a conscious or unconscious refusal to accept facts, information, reality, etc., relating to the situation concerned. It's a defence mechanism and perfectly natural. Some people can become locked in this stage when dealing with a traumatic change that can be ignored. Death of course is not particularly easy to avoid or evade indefinitely.

2 - Anger
Anger can manifest in different ways. People dealing with emotional upset can be angry with themselves, and/or with others, especially those close to them. Knowing this helps keep detached and non-judgemental when experiencing the anger of someone who is very upset.

3 - Bargaining
Traditionally the bargaining stage for people facing death can involve attempting to bargain with whatever God the person believes in. People facing less serious trauma can bargain or seek to negotiate a compromise. For example "Can we still be friends?.." when facing a break-up. Bargaining rarely provides a sustainable solution, especially if it's a matter of life or death.

4 - Depression
Also referred to as preparatory grieving. In a way it's the dress rehearsal or the practice run for the 'aftermath' although this stage means different things depending on whom it involves. It's a sort of acceptance with emotional attachment. It's natural to feel sadness and regret, fear, uncertainty, etc. It shows that the person has at least begun to accept the reality.

5 - Acceptance
Again this stage definitely varies according to the person's situation, although broadly it is an indication that there is some emotional detachment and objectivity. People dying can enter this stage a long time before the people they leave behind, who must necessarily pass through their own individual stages of dealing with the grief.


If this is the case then I would argue that we are, as a collective, at Stage 1.

Boom bust is a cyclical thing. Roughtly 7 years. We had a mini bust around 7 years ago but it was contained in the IT industry and other areas prevented it from being serious. Plus, massive Govt spending etc.

As someone has already pointed out, nowadays we expect everything instantly. For 15 years we've had growth and this means that an entire generation, maybe 2, has erroneous expectations that must be re-based. This takes time.

It takes time for those who are wiped out to re-build and for the memory of the last bust to fade enough for them to be part of the next boom thinking. It takes time for the next generation to appear on the scene with their bullish youthful views that offset the older bears.

Add to this natural process the fact that we are now so massively in debt that UK taxation has to go through the roof as soon as there is the slightest sign of growth and I do suspect that while we may see stability appearing this time next year we have to be looking at a very long period of stagnation.

I still expect huge changes in the highstreet, much more unemployment, massive increases in social unrest etc. None of this has really started to appear, which to me means we are still at the very beginning of this phase.

Edited by Horse_Apple on Tuesday 17th March 10:39

Horse Apple, can you conjour up some more stages for me to do - I'm sure I'm already past '5'.

[DrTre]

Orb the Impaler said:

I think it's going to get much, much worse. This is going to be a soup kitchens type of depression.

You reckon Heinz and Baxters are good to buy into then?

[blindswelledrat]

David87M3 said:

hope it is...
We had a contractor in last week who creates signage for big national companies pizza hut ect ect.
He recknons businesses are starting to see the credit crunch as media propoganda/crap.

Dave

He sounds like he knows what he's talking about.
He wasn't in a pub was he?

[MaxAndRuby]

DrTre said:

Orb the Impaler said:

I think it's going to get much, much worse. This is going to be a soup kitchens type of depression.

You reckon Heinz and Baxters are good to buy into then?

[Mx_Stu]

On a similar vein to one of the other guys, I am not qualified or in a position to say everything is rosy but a couple of observations I've made...

There are about 6-8 houses in the area around my house which have gone up for sale and sold within a matter of days (prices suggest they are selling for about 10% higher than 5 years ago but about 20% less than late 2007/ early 2008).

Also at work we are quoting for jobs and clients are instantly giving us the go ahead rather than going away and thinking about it (as they have been doing since about mid last year).

I purchased a new car the weekend before last (was only in the dealership for about half an hour) and there were about 3/4 people buying new cars. Plus when I collected mine there were more people about to sign on the dotted line!

As such even if we are not 'on the turn' it seems people’s confidence has risen and that is one of things that will help us get out of this.

[MaxAndRuby]

Mx_Stu said:

Also at work we are quoting for jobs and clients are instantly giving us the go ahead rather than going away and thinking about it (as they have been doing since about mid last year).

Same with us, big, positive difference from six months ago.

We had so many deals on the table where the client had the cash, wanted the product, but just sat on their hands. That's stopped. Also our cold prospecting doesn't result in "fk off, I'm not spending anything!" as was the case before Christmas.

[JagLover]

off_again said:

I saw that chap from Schroders on Newsnight last night and he seems to know what he is doing - doesn't mean its all over, just that he sees value in some stocks that are pushed down globally. So he is doing his best to buy up the cheap ones knowing / hoping they will go up - a risk but one that will get some decent gains.

I would agree there. If I had significant sums of money I would be putting them in shares. You should see a very healthy return after 5-10 years.

As far as the economy goes however I would predict another year of pain (severe pain in some sectors and countries), massive government deficits, social disruption etc. This will be a depression I feel, but not a great depression (as in the 30s).

[MaxAndRuby]

mickken said:

THERE IS NO fkING MONEY. THE MONEY HAS BEEN SPENT OR LOST.

Money isn't spent or lost, it's transferred. The way we value assets is the problem, but global quantitative easing will sort that out.

I hope.

[bobbylondonuk]

Mx_Stu said:

On a similar vein to one of the other guys, I am not qualified or in a position to say everything is rosy but a couple of observations I've made...

There are about 6-8 houses in the area around my house which have gone up for sale and sold within a matter of days (prices suggest they are selling for about 10% higher than 5 years ago but about 20% less than late 2007/ early 2008).

Also at work we are quoting for jobs and clients are instantly giving us the go ahead rather than going away and thinking about it (as they have been doing since about mid last year).

I purchased a new car the weekend before last (was only in the dealership for about half an hour) and there were about 3/4 people buying new cars. Plus when I collected mine there were more people about to sign on the dotted line!

As such even if we are not 'on the turn' it seems people’s confidence has risen and that is one of things that will help us get out of this.

People have realised what the commonsense party has been campaigning all along!!!

Basic economics=demand and supply

Commonsenseparty logic: every supplier is also a consumer. if cars are not bought, loads of suppliers go bust, suppliers going bust means lots of people unemployed.
If people dont consume more cheaper retail goods, loads of suppliers going bust = more people out of work!

So a retail worker should buy a car if they can afford it simply because the car parts suppliers are the retail consumers!
And car parts suppliers should buy more retail goods because its those retail workers that are the car consumers!

Bingo~! recession solved! Somehow in the thick of all this...we all forget the basics of what keeps us going. Affordable stable consumption of goods and services...Growth has to be affordable...problem was that growth was not affordable so far!

Message to all! consume if you can afford to and things will come down to reality!

Back to topic...looks like reality will be with us shortly...So any recovery should not be expected to 2007 rates of growth. This is the key point! its got to be slow and steady from now on!

[anonymous-user]

mickken said:

The banks have no money that they want to lend.

Personal credit is to be tightened up.

All banks know that they can't fk up again like this time....no more bail outs.

First time buyers need 20%+ for a deposit for a house.

The car industry is in tatters.

Unemployment is going to hit 3m.

........Brown, the self styled world saviour, first of all saves the world, then admits it's all his fault. Believe nothing of the spin you are reading. If you think all is getting better now/soon fooking read this, THERE IS NO fkING MONEY. THE MONEY HAS BEEN SPENT OR LOST. PRINTING £75BN, DROPPING INTEREST RATES TO VIRTUALLY ZERO AND DROPPING VAT TO 15% IS THE MARK OF ABSOLUTE DESPERATION......ANYONE WITH AN OUNCE OF INTELLIGENCE CAN SEE THIS.

IS IT OVER ...... IS IT fk.

and breathe.......

[MaxAndRuby]

mickken said:

MaxAndRuby said:

mickken said:

THERE IS NO fkING MONEY. THE MONEY HAS BEEN SPENT OR LOST.

Money isn't spent or lost, it's transferred. The way we value assets is the problem, but global quantitative easing will sort that out.

I hope.

So if there is a house that was worth £1m last year, and now it is worth £700k.......who was the money transfered to?

In 99% of cases it is written off?? ....or am I missing something here.

It was never there in the first place, the assets were hideously overvalued.

[Chris_w666]

Maybe the whole recession was invented just to give PH'ers something to talk about?

[tonyvid]

MaxAndRuby said:

mickken said:

MaxAndRuby said:

mickken said:

THERE IS NO fkING MONEY. THE MONEY HAS BEEN SPENT OR LOST.

Money isn't spent or lost, it's transferred. The way we value assets is the problem, but global quantitative easing will sort that out.

I hope.

So if there is a house that was worth £1m last year, and now it is worth £700k.......who was the money transfered to?

In 99% of cases it is written off?? ....or am I missing something here.

It was never there in the first place, the assets were hideously overvalued.

It depends on whether you are a first time buyer or "made money" though various other houses on the way up. If the second, it always was the Emperor's new clothes and never really existed unless you sell up completely.

[Horse_Apple]

Digga said:

Horse_Apple said:

I don't see why a recession cannot be viewed in the same manner as a berievement, insomuch as I think it is fair to apply the 5 Stages of Grief:

1 - Denial
Denial is a conscious or unconscious refusal to accept facts, information, reality, etc., relating to the situation concerned. It's a defence mechanism and perfectly natural. Some people can become locked in this stage when dealing with a traumatic change that can be ignored. Death of course is not particularly easy to avoid or evade indefinitely.

2 - Anger
Anger can manifest in different ways. People dealing with emotional upset can be angry with themselves, and/or with others, especially those close to them. Knowing this helps keep detached and non-judgemental when experiencing the anger of someone who is very upset.

3 - Bargaining
Traditionally the bargaining stage for people facing death can involve attempting to bargain with whatever God the person believes in. People facing less serious trauma can bargain or seek to negotiate a compromise. For example "Can we still be friends?.." when facing a break-up. Bargaining rarely provides a sustainable solution, especially if it's a matter of life or death.

4 - Depression
Also referred to as preparatory grieving. In a way it's the dress rehearsal or the practice run for the 'aftermath' although this stage means different things depending on whom it involves. It's a sort of acceptance with emotional attachment. It's natural to feel sadness and regret, fear, uncertainty, etc. It shows that the person has at least begun to accept the reality.

5 - Acceptance
Again this stage definitely varies according to the person's situation, although broadly it is an indication that there is some emotional detachment and objectivity. People dying can enter this stage a long time before the people they leave behind, who must necessarily pass through their own individual stages of dealing with the grief.


If this is the case then I would argue that we are, as a collective, at Stage 1.

Boom bust is a cyclical thing. Roughtly 7 years. We had a mini bust around 7 years ago but it was contained in the IT industry and other areas prevented it from being serious. Plus, massive Govt spending etc.

As someone has already pointed out, nowadays we expect everything instantly. For 15 years we've had growth and this means that an entire generation, maybe 2, has erroneous expectations that must be re-based. This takes time.

It takes time for those who are wiped out to re-build and for the memory of the last bust to fade enough for them to be part of the next boom thinking. It takes time for the next generation to appear on the scene with their bullish youthful views that offset the older bears.

Add to this natural process the fact that we are now so massively in debt that UK taxation has to go through the roof as soon as there is the slightest sign of growth and I do suspect that while we may see stability appearing this time next year we have to be looking at a very long period of stagnation.

I still expect huge changes in the highstreet, much more unemployment, massive increases in social unrest etc. None of this has really started to appear, which to me means we are still at the very beginning of this phase.

Edited by Horse_Apple on Tuesday 17th March 10:39

Horse Apple, can you conjour up some more stages for me to do - I'm sure I'm already past '5'.

Noel's your man. I'm cursed with natural optimism.

[Plotloss]

mickken said:

MaxAndRuby said:

mickken said:

MaxAndRuby said:

mickken said:

THERE IS NO fkING MONEY. THE MONEY HAS BEEN SPENT OR LOST.

Money isn't spent or lost, it's transferred. The way we value assets is the problem, but global quantitative easing will sort that out.

I hope.

So if there is a house that was worth £1m last year, and now it is worth £700k.......who was the money transfered to?

In 99% of cases it is written off?? ....or am I missing something here.

It was never there in the first place, the assets were hideously overvalued.

Agreed that they were overvalued....and still are. But money has been lent on that house and has now gone! No??

No.

If we agree that a house at a point in time is worth £100 and a bank lends you £100 to buy it the bank will get their £100 plus interest. If the asset is transferred at a lower agreed cost the difference doesnt vanish, the money still exists its just no longer asset backed.

Valuations are often fantasy but debt is very real.

[digger_R]

mickken said:

MaxAndRuby said:

mickken said:

THERE IS NO fkING MONEY. THE MONEY HAS BEEN SPENT OR LOST.

Money isn't spent or lost, it's transferred. The way we value assets is the problem, but global quantitative easing will sort that out.

I hope.

So if there is a house that was worth £1m last year, and now it is worth £700k.......who was the money transfered to?

In 99% of cases it is written off?? ....or am I missing something here.

The £1m was a valuation, unless realised through a sale it will only ever be that. The same applies to the £700k valuation - it is only realised with a sale/transfer.
The deluded part is the bit where you borrow to buy more on the assumption that it will go up further in value, when that assumption no longer holds those borrowing lose (if they have to realise the sale).
Exactly the same prinicple at the start of the 90s depression except it was private indiviuals borrowing loads to buy shares instead of houses.

[Horse_Apple]

mickken said:

MaxAndRuby said:

mickken said:

THERE IS NO fkING MONEY. THE MONEY HAS BEEN SPENT OR LOST.

Money isn't spent or lost, it's transferred. The way we value assets is the problem, but global quantitative easing will sort that out.

I hope.

So if there is a house that was worth £1m last year, and now it is worth £700k.......who was the money transfered to?

In 99% of cases it is written off?? ....or am I missing something here.

It never actually existed. It wasn't anything you could ever touch, or hold. It was a fabricated number. The money only ever existed if you sold the asset and realised the gain.

That's the whole genius of Gordon. He knowingly built an entire economy of debt secured against something that didn't actually exist.

If everyone suddenly realised this he would be dragged out of Parliament within the hour and strung up.

He is a criminal.

[Landlord]

fear, FEAR, FEAR FEAR FEAR FEAR FEAR!

NONE OF YOU ARE FEARFUL ENOUGH! YOU MUST FEAR THAT WHICH YOU CANNOT KNOW NOR CONTROL. FEAR ALL FOR THE TIME FOR FEAR IS UPON US. COMPLACENCY IS THE TRAP FOR FOOLS, FEAR IS YOUR ONLY SALVATION. FEAR AND REPENTANCE. REPENT YOUR WESTERN GREED. NOW ONLY FEAR AND REPENTANCE AND DESPAIR WILL SAVE YOU.

[sa_20v]

What recession...?!