It all over!!

tomstickland

The opinion of an economist

dopester

Amarillo wrote: »

I was a little taken a back last week when someone asked me if I believed the credit crunch was real, as she thought it was media hype to scare us,

I once saw a bit of that horror/gore film, "Hostel" (and stopped watching just after the nice boy woke up from being drugged to found himself hooded and sat in a chair in a chamber) - and also a few seconds of compilation scene online of "Hostel 2" (on someone elses PC).

Really sick, awful, terrifying films.

However it is kind of how I think of the property market. People lured in to a new wonderful reality. 300% HPI over just 11 year. Seeing house prices go up hundreds of thousands in price, and thinking it was real.

Over-extending themselves in to the boom. Buying a further property on margin. Taking on more and more debt. Having the expectation that is was all sustainable and there could be no real reverse.

Now these people are waking up to find themselves chained in to the chair, and being hit by the horrors of mortgage resets and higher living costs and creeping job losses. I'm just glad I wasn't lured in.

fc123

thriftybabe wrote: »

It all over!! Quite a number of people working with my OH believe it is all over. Lets get back to normal. No need to panic! OMG I cannot stand it. My OH has spoken to people in the building industry and neighbours in the last few days who are seeing things picking up:j . That is great . The only thing is my OH and I do not see this. As some of you may know we run our own business and thanks to MSE I was made aware of this in December/January last year (thank goodness). I am getting sick and tired of all these people who are in denial. People are getting paid off all around us and the signs from the top is it is not good. Some more housebuilders will be paying off staff as jobs finish. We ourselves have paid off a couple of people but are still OK until Xmas. After that we have nothing - not a thing. We have another couple of jobs to price which we may get but it will be hard going.

Has anyone else came across this denial mentality!!!

I was thinking about this thread today (whilst making things :rolleyes: ..things to sell) and I recall your other threads when you posted your concerms.

As we are in retail and don't sell anything paticularly essential (by MSE definitions), we are also in the front-line. Having already had the first drop in sales in Reallife land shop, it got me thinking of what is to come.

These things hit all types of businesses and one has to face them head on and ask 'Is there a future for this business in its current format? '
'Can I trade in a different way?'
' Is it possible to scale right down to trade through the slump?' or worse ' Is this the end?'
I was thinking about the pubs closing down. Not being a pub goer, I'd not taken much notice TBH.
My cousin has just sold off his mini chain of 5 pubs and came scarily close to being made bankrupt.

Some say Smoking ban, just a 20% dip in T/O can make a business unviable, others that people drink/ socialise in the home (me) and buy alcohol cheaply from supermarkets, younger people prefer cool bars instead or music venues to socialise etc etc.
But perhaps it's simpler than that. Pubs are no longer as popular as they were in some locations and the above factors became the tipping point.
The overheads became too high for some landlords too....which came from rising property prices.

There will always be some pubs about, just less than before and those that are left will then have enough market share to be viable.

Same in my sector. I do wonder what will happen long term to all those big shiny shopping centres (that are all much of a muchness). Will the Govt step in to 'Save' the Philip Greens and Baugers because people have decided to consume less fashion?
I can't see a reason why they should. In fact I may benefit from them NOT being 'saved' as trends indicate a gradual tiring of mass market fashion.

IFIRC, you have planned for this and are prepared financially to survive it so I wouldn't worry about the others. In fact I'd give up sharing your insights. I have.
If I hear one more time 'When things get back to normal' I'm going to scream.
This is the new normal and new opportunities will arise from it.

I've found some in recent months and they have exceeded all my expectations BUT doesn't stop me sitting at my machine, thinking what the worst could be.

Some of us may have to re-train, diversify, live in a different way and some of us are going to have areally tough time as the status quo changes.

Good thread this, I enjoyed it

neverdespairgirl

dopester wrote: »

I once saw a bit of that horror/gore film, "Hostel"

I never watch that kind of film / programme - I absolutely hate the whole genre. I've seen quite enough real murder scene photos for work to enjoy that kind of thing for fun!

jamescredmond

thriftybabe wrote: »

It all over!! Quite a number of people working with my OH believe it is all over. Lets get back to normal. No need to panic! OMG I cannot stand it. My OH has spoken to people in the building industry and neighbours in the last few days who are seeing things picking up:j . That is great . The only thing is my OH and I do not see this. As some of you may know we run our own business and thanks to MSE I was made aware of this in December/January last year (thank goodness). I am getting sick and tired of all these people who are in denial. People are getting paid off all around us and the signs from the top is it is not good. Some more housebuilders will be paying off staff as jobs finish. We ourselves have paid off a couple of people but are still OK until Xmas. After that we have nothing - not a thing. We have another couple of jobs to price which we may get but it will be hard going.

Has anyone else came across this denial mentality!!!

yes, thrifty. I hear this denial daily - so much so that I no longer attempt to offer my opinion.

one guy told me recently (all straight face and in business plan mode) that he was looking to get into the prop. devel game 'within the next 6 months'.

I said zilch.

there's absolutely no helping some people.

Bean_Counter

fc123 wrote: »

These things hit all types of businesses and one has to face them head on and ask 'Is there a future for this business in its current format? '
'Can I trade in a different way?'
' Is it possible to scale right down to trade through the slump?' or worse ' Is this the end?'
I was thinking about the pubs closing down. Not being a pub goer, I'd not taken much notice TBH.
My cousin has just sold off his mini chain of 5 pubs and came scarily close to being made bankrupt.

Some say Smoking ban, just a 20% dip in T/O can make a business unviable

To be honest that is a very sensible approach in the present climate.

I'm not sure if you do cashflow forecasts and the like, but it might be worth looking at the financial model for your business and doing some sensitivity analysis. What I mean by this is look at your profits now, and then say for example, what happens to my profit and cashflow if turnover drops 10%, turnover drops 20%, direct costs go up 10%, utility costs go up 30% etc etc.

This should help let you see what will happen to the business, whether you can survive, or what steps you need to take such as cutting overheads, to make sure that the business survives.