Bad morning in the markets

carolt

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3146703/Financial-crisis-Stock-market-suffers-its-worst-fall-in-history.html

"
Financial crisis: Stock market suffers its worst fall in history

The UK stock market has suffered its worst one-day fall in history as the banking crisis intensified."



http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4892170.ece

"The benchmark index on the London Stock Exchange closed at 4589.19, down 391.06, or a 7.85 per cent fall, led by mining stocks and banks. It was the third-worst percentage fall since the FTSE 100 was created in 1984. "

SingleSue

Ok this is going to sound really dumb (and I should really know this, I know I should) but could someone explain in simple terms (as the brain is half asleep right now) what is the difference/ramifications of deflation and stagflation etc.

Thanks...and please don't take the mickey out of me! :rotfl:

blisk

Heyman wrote: »

What's all this we stuff? I'm pretty good thanks Let's get inflation on the march and send my wages over 100K a year, then I can get myself a cushy BTL on all those properties that have dropped by 70% + :rotfl:

DEluded, youll be living in a tent.

WTF?_2

SingleSue wrote: »

Ok this is going to sound really dumb (and I should really know this, I know I should) but could someone explain in simple terms (as the brain is half asleep right now) what is the difference/ramifications of deflation and stagflation etc.

Thanks...and please don't take the mickey out of me! :rotfl:

Deflation means the actual supply of money will shrink .... therefore money will become more valuable. ie. You should generally be able to buy more for the same amount of cash as time goes on. However, it's very bad news for those with debts to pay as the debt increases with time, never mind the interest rates on top. There's also a huge disincentive to buy new consumer stuff as you know it will be cheaper next month. Very bad news for the economy and very hard to break out of.

Stagflation means that you see price increases in some things - generally essentials - but that the economy is stagnant or shrinking, so money is tight as well. You may even see overall deflation whilst seeing food and energy soaring. It's kind of the worst of both worlds.


I think we'll see stagflation. Governments can literally print money but they won't be able to make it circulate properly around the economy, so it will pool in essential commodities that people have to buy and the economy in general will stagnate or recede.

WTF?_2

GDB2222 wrote: »

I was wondering why the SWFs weren't buying? I guess they foresaw worse to come. Do you think they'll start now?

I think they'll wait til the financial organisations go bust and then pick them up lock stock and barrel for peanuts (when the western governments are too desperate to say no) instead of bailing them out as investors.

Plus, they'll start to use their dollar reserves while they still have value to outbid the West for vital resources. They'll also let the Yuan increase in value giving their own consumers much global spending power, hoping to stoke growth at home to offset the loss of profit from us.

(IMO of course ... for the nitpickers who are very antsy all of a sudden)

SingleSue

Thanks for that !!!!!!

moanymoany

News article on the beeb - overdraft rates for small businesses going up by 4% in some cases!

What is happening to personal overdrafts.

Small businesses are feeling the pinch and they told their organisation that they think we are in recession.

People are writing into the beeb saying the media is talking us into a recession. :rotfl: :rotfl:

Can't get Bloomberg this morning .............AGHHHH - withdrawal symptoms.........

carolt

And..another bad morning in the markets. Currently down 1.37%, on top of yesterday's highest ever points fall.

At what point does this improve?

lostinrates

moanymoany wrote: »

News article on the beeb - overdraft rates for small businesses going up by 4% in some cases!

What is happening to personal overdrafts.
.

We haven't ued our overdrafts for a while, but DH got a lettr aying unless he minded they'd like to reduce his limit from £2k to £1,900but if he minded they wouldn't. Coincidently we were considering negotiating larger overdraft limits, not to use but for reference later when we are negotiating things are in a less good personal position.

Dan:_4

lostinrates wrote: »

We haven't ued our overdrafts for a while, but DH got a lettr aying unless he minded they'd like to reduce his limit from £2k to £1,900but if he minded they wouldn't. Coincidently we were considering negotiating larger overdraft limits, not to use but for reference later when we are negotiating things are in a less good personal position.

They increased mine to 10K yesturday when I checked my on-line banking. I had to phone up to put back to 5.