Discussion
does anyone else think we are in a recession at the moment?
the number of business and personal bankrupcies is going through the roof. All my suppliers have gone to paying 90 days when they used to pay 30 days. customers seem to spending substantially less money in all the businesses i own- and i'm doing much much better than average in my sectors.
the only companies that seem to be doing really well seem to be banks and lenders. Huge companies with great economies of scale seem to be doing well which points to a reduction in price elasticity.
Consumer debt is going through the roof, and i konw a huge amount of businesses that have only really grown off the back of commercial property rises. I also know a veyr large number of businesses that have been either making redundancies or cutting back on hours!
am i being a touch pessimistic here?
the number of business and personal bankrupcies is going through the roof. All my suppliers have gone to paying 90 days when they used to pay 30 days. customers seem to spending substantially less money in all the businesses i own- and i'm doing much much better than average in my sectors.
the only companies that seem to be doing really well seem to be banks and lenders. Huge companies with great economies of scale seem to be doing well which points to a reduction in price elasticity.
Consumer debt is going through the roof, and i konw a huge amount of businesses that have only really grown off the back of commercial property rises. I also know a veyr large number of businesses that have been either making redundancies or cutting back on hours!
am i being a touch pessimistic here?
I am not sure about recession, bu there may be a slowdown.
I think the effect of ten years of being encouraged to borrow is now hitting in.
When peoples loans and credit card repayments start to consume their total income, they have no more to spend. Increasing the interest rates was just cutting back on the forest fire already starting to burn itself out.
What is interesting is that the people doing the best out of the situation are those who spent £30,000 on their credit cards that cannot afford to pay - indeed, technically the best course of action for someone who is in £20,000 of unsecured debt which they cannot afford is to cane as much more away they can as possible.
I think the 'govt legislation' is offering too many a get out clause - £30,000 of debt can be reduced to whatever can afforded to be paid back per month over a maximum of five years.
Thus if you were not clever enough to instead of shopping your money away to invest in a roof over your head you would lose the lot. If you caned your money away you are given a get out of jail free card and your debt written off.
The more cynical ones in us would say that this legislation gives a 'green light' to those already in debt to spend more. Secondly it reduces the amount of bancruptcies, who of course cannot spend freely for a good while!
I think the effect of ten years of being encouraged to borrow is now hitting in.
When peoples loans and credit card repayments start to consume their total income, they have no more to spend. Increasing the interest rates was just cutting back on the forest fire already starting to burn itself out.
What is interesting is that the people doing the best out of the situation are those who spent £30,000 on their credit cards that cannot afford to pay - indeed, technically the best course of action for someone who is in £20,000 of unsecured debt which they cannot afford is to cane as much more away they can as possible.
I think the 'govt legislation' is offering too many a get out clause - £30,000 of debt can be reduced to whatever can afforded to be paid back per month over a maximum of five years.
Thus if you were not clever enough to instead of shopping your money away to invest in a roof over your head you would lose the lot. If you caned your money away you are given a get out of jail free card and your debt written off.
The more cynical ones in us would say that this legislation gives a 'green light' to those already in debt to spend more. Secondly it reduces the amount of bancruptcies, who of course cannot spend freely for a good while!
Statistics can be very misleading.
Over the past eight years, the number of company formations rocketed - mainly because of Corporation Tax and Income Tax/NI policies adopted by Gordon Brown. In more recent years, some of the more generous tax breaks he made available to small companies have been reigned back. This has encouraged many of the small companies incorporated since 1999 to be wound up again.
This has led to an apparent increase in company dissolutions.
This government has also brought in legislation making the option of personal bancruptcy far easier - and far less of a stigma. Therefore, the personal bancruptcy option is much more attractive, and therefore popular, than it was in the past.
Over the past eight years, the number of company formations rocketed - mainly because of Corporation Tax and Income Tax/NI policies adopted by Gordon Brown. In more recent years, some of the more generous tax breaks he made available to small companies have been reigned back. This has encouraged many of the small companies incorporated since 1999 to be wound up again.
This has led to an apparent increase in company dissolutions.
This government has also brought in legislation making the option of personal bancruptcy far easier - and far less of a stigma. Therefore, the personal bancruptcy option is much more attractive, and therefore popular, than it was in the past.
pugwash4x4 said:
All my suppliers have gone to paying 90 days when they used to pay 30 days. customers seem to spending substantially less money in all the businesses i own- and i'm doing much much better than average in my sectors.
Companies are buying the same or even more but at less cost. It's very difficult to put prices up when inflation has been static and low for so long and you have emerging markets biting at the heels of domestic businesses. As a result, everyone is looking for marginal gains in profitability and at the top of the food chain (or bottom depending on your point of view), big buyers sit on money for longer to gain that extra margin .....and if you don't like it, then they know a supplier who will!
I think we're far from being in a recession but it sure aint easy (but when was it ever?)
I agree about the recession. This country is very slowly but even more surely heading into some very dark days. The whole population is obsessed with material gain and have got into the terrible trap of spending money they don't have. All these f**king loan companies advertising 24 hours a day to the average week willed man on the street cannot do the country any good at all in the long term.
I make bread for a living, my customers are seeing a slowing down in sales. That is the surest sign as any that we are in the start of a recession...
I make bread for a living, my customers are seeing a slowing down in sales. That is the surest sign as any that we are in the start of a recession...
Scraggles said:
used to get seeded bread from the local baker, then the eho done a town audit and they failed on all points, ie lack of hygiene and now use my bread maker more. tastes much better as welll
for anyone who has spent 10 minutes trying to figure out... he meant EHO - Environmental Health Officer(s)
jeevescat said:
I'm in retail, and for the past 2 years it's been like getting blood out of a stone to get customers to part with their money.
In the leisure industry supposedly less affected, there has definately been a slowdown in spending in pubs/clubs/restaurants etc in the last 18 months...
Short answer, yes. Public finances are as near out of control as makes no difference. Real inflation openly moving ahead now, but salary levels cannot adjust the way they did in the past because of fierce international competition. Interest rates up.
The big question is will it become a serious recession like the early eighties or what the government like to refer to as a soft landing.
The big question is will it become a serious recession like the early eighties or what the government like to refer to as a soft landing.
richg1999 said:
All these f**king loan companies advertising 24 hours a day to the average week willed man on the street cannot do the country any good at all in the long term.
A lot of people being able and willing to pay for credit is surely
the sign of healthy economy.
When folks tighten their belts, discretionary spending reduces.
Does that then mean credit reduces ?
I don't know - I don't waste my life watching Chav-TV.
richg1999 said:
I make bread for a living, my customers are seeing a slowing down in sales. That is the surest sign as any that we are in the start of a recession...
I don't see bread as a cyclical product.
When folks are short of money I don't think the first thing
that pops into their heads is "must buy less bread".
dcb said:
richg1999 said:
All these f**king loan companies advertising 24 hours a day to the average week willed man on the street cannot do the country any good at all in the long term.
A lot of people being able and willing to pay for credit is surely
the sign of healthy economy.
When folks tighten their belts, discretionary spending reduces.
Does that then mean credit reduces ?
I don't know - I don't waste my life watching Chav-TV.
richg1999 said:
I make bread for a living, my customers are seeing a slowing down in sales. That is the surest sign as any that we are in the start of a recession...
I don't see bread as a cyclical product.
When folks are short of money I don't think the first thing
that pops into their heads is "must buy less bread".
Agreed.
I would have said that bread was one of the only examples of non-discretional spending!
I would have said a downturn was for other reasons such as pricing or competition etc.
Although I am not sure I agree that people continually funding non-discretionary spending with neverending credit is a healthy long term sign. In the short term maybe, but we will end up seeing a large proportion of the buying public practically 'skint' as they cannot afford their repayments *and* discretionary spending or are in the process of 'writing off' their debt my means of the noew fangled get out of jail free policies.
Ey, you can't beat a bit ov "chav" tv when you get home from a night shift in the bakery!! You'd be surpised how cyclical the bread market is, we supply all kinds of trades and when their trade suffers ours obviously follows. Once our trade falls, its a sign that we're closer to recession than Mr Blair would like to admit, when people can't afford bread its very serious...don't get me started on bread makers, else i'll send the EHO round to all your houses!!!
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