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Times: Back to the Great Depression?
WTF?_2
Posts: 4,592 Forumite
http://business.timesonline.co.uk/tol/business/economics/article4232875.ece
When Wall Street slumped on Thursday, in response to the oil price surging above $140 a barrel and renewed fears about the banking system, the alarm bells rang more loudly than usual.
Barring a miraculous recovery tomorrow, the Dow Jones industrial average is heading for its worst June since 1930, when it plunged by almost 18%.
..
This month, however, reality has hit home. “Some of it is clearly to do with the oil price but essentially what we are seeing is a slow-motion car crash,” said George Magnus, senior economic adviser at UBS.
“The first act was the housing market, the second act was the credit crunch, and what we are now seeing in this third act is the bigger picture of a downturn that has a long way to run.”
Few are gloomier about that prospect than Albert Edwards, strategist at Soci!t! G!n!rale in London. “America is leading the way, diving into deep recession as a collapse in consumer confidence induces the great unwind,” he said. Edwards compares the economy with a pyramid scheme that is poised to crash to earth and interest-rate changes can do nothing to avert it.
Looks like the more intellectual end of the mainstream media is starting to catch on. What will happen when the news hits the more popular dumbed-down press?
When Wall Street slumped on Thursday, in response to the oil price surging above $140 a barrel and renewed fears about the banking system, the alarm bells rang more loudly than usual.
Barring a miraculous recovery tomorrow, the Dow Jones industrial average is heading for its worst June since 1930, when it plunged by almost 18%.
..
This month, however, reality has hit home. “Some of it is clearly to do with the oil price but essentially what we are seeing is a slow-motion car crash,” said George Magnus, senior economic adviser at UBS.
“The first act was the housing market, the second act was the credit crunch, and what we are now seeing in this third act is the bigger picture of a downturn that has a long way to run.”
Few are gloomier about that prospect than Albert Edwards, strategist at Soci!t! G!n!rale in London. “America is leading the way, diving into deep recession as a collapse in consumer confidence induces the great unwind,” he said. Edwards compares the economy with a pyramid scheme that is poised to crash to earth and interest-rate changes can do nothing to avert it.
Looks like the more intellectual end of the mainstream media is starting to catch on. What will happen when the news hits the more popular dumbed-down press?
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Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
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Comments
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http://business.timesonline.co.uk/tol/business/economics/article4232875.ece
When Wall Street slumped on Thursday, in response to the oil price surging above $140 a barrel and renewed fears about the banking system, the alarm bells rang more loudly than usual.
Barring a miraculous recovery tomorrow, the Dow Jones industrial average is heading for its worst June since 1930, when it plunged by almost 18%.
..
This month, however, reality has hit home. “Some of it is clearly to do with the oil price but essentially what we are seeing is a slow-motion car crash,” said George Magnus, senior economic adviser at UBS.
“The first act was the housing market, the second act was the credit crunch, and what we are now seeing in this third act is the bigger picture of a downturn that has a long way to run.”
Few are gloomier about that prospect than Albert Edwards, strategist at Soci!t! G!n!rale in London. “America is leading the way, diving into deep recession as a collapse in consumer confidence induces the great unwind,” he said. Edwards compares the economy with a pyramid scheme that is poised to crash to earth and interest-rate changes can do nothing to avert it.
Looks like the more intellectual end of the mainstream media is starting to catch on. What will happen when the news hits the more popular dumbed-down press?
people will ignore it, concentrating more on Big Brother and Amy Winehouse
bread and circusesIt's a health benefit ...0 -
people will ignore it, concentrating more on Big Brother and Amy Winehouse
bread and circuses
Unfortunately bread is getting ever more expensive (like most stuff).
I wouldn't be at all surprised if, 12 months from now, a substantial number of people who currently would consider themselves relatively affluent are in the position of having to scrimp and save to make ends meet as the cost of living rockets and they struggle to service debts.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
I've always been poor. It'd be nice to have a few people joining me.0
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Indeed, interesting times and I doubt anything gets cheaper in the short term as the ECB meets this week with expectations that they will raise rates to fight inflation, further driving it higher for the rest of the world.Hope for the best.....Plan for the worst!
"Never in the history of the world has there been a situation so bad that the government can't make it worse." Unknown0 -
All I can say is thank goodness I don't have any debts. Having to service (tens of) thousands of quid of debt right now would not be pleasant.
I'll be amazed if I still have my current contract at the end of the year ... I have savings but if things get bad I have to consider erosion due to inflation and of course the very real possibility of banks going under. Time to think 'gold' again.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
No income old fruit. You're better off with index linked Gilts.
I'm not worried about income, I just want to protect some of my 'wealth'
.
Wouldn't be going all-in but certainly 20% as a hedge. The rest will be in cash and split between Sterling (with NS&I and NR) and CHF (probably moved to HSBC as UBS are looking shakier than a paint mixer).--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
I'm not worried about income, I just want to protect some of my 'wealth'.
Wouldn't be going all-in but certainly 20% as a hedge. The rest will be in cash and split between Sterling (with NS&I and NR) and CHF (probably moved to HSBC as UBS are looking shakier than a paint mixer).
Index linked gilts will protect your wealth - that's the whole point of them. I'd agree with holding Swiss Franc assets for wealth protection, again in Swiss govt bonds. You'll have to pay a 35% witholding tax on your income though.
Thought about Aussie dollars too?
It is more risky to hold foreign currency denominated assets than sterling ones as you have the extra FX dimension. You probably know that already.
UBS has their wealth management arm that should produce enough income to keep them out of serious trouble. I have a few mates that work there and things sound pretty chaotic. Sort of like Chicken Licken set in a bank.0 -
How disingenuous - and populist - of the Times to make the comparison with the Great Depression based on one month's stock market performance - and even then it's not comparable unless Wall Street falls 8% on Monday.
The Great Depression stock market crash lasted over nearly three years - from October 1929 to April 1932. From 381 down to 41 :eek:
1930 was about the best year of the three with a "mere" 33% fall for the Dow.
Nevertheless, the article does have David Smith writing, even if half the page has been filled by a fanciful cartoonist at some editor's request.0 -
Went to Auchon in Calais yesterday on booze cruise. Average wine price this trip £2.20 a bottle - 15p a bottle average up on February. We buy those wines with the cardboard 'selected' collar and have never been disappointed - and buy under 3 euro wines.
Prices in general are up overall. Diesal 1.50 euros a litre and petrol 1.55.
I usually buy £100 of groceries, things hard to get or expensive here. I estimated that this time it would cost £150 and I only bought a bogof olive oil, Dijon mustard and wine vinegar.
They are cushioned because they don't have much personal indebtedness. Housing is cheaper and interest rates very low for mortgages. They can rent cheaply while saving their deposit.0
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