What is going to happen next?

Conrad

clobber wrote: »

My OH reckons Leicester will be protected from the worst of the financial crisis because of the large Muslim population, who by and large don't use credit,

The reverse is true.

In my time since 1991 as a broker, generally speaking those from ethnic Indian sub continental groups (such as Pakistannis) tend to have more adverse credit.
There are dedicated London radio stations for these communitites and last time I heard the predominance of adverse credit mortgage ads was completely unlike any other radio station not targeted at asians.
My own experience is they are much harder to place due to predominance of adverse and complex business dealings.

Just a reflection of the fact they tend to be self employed, risk takers I guess.

In terms of brokers being struck of the FSA register, it is noticable that an overly high proportion are asian, which I suspect is due to those brokers taking on more risky cases from 'thier' community.

dopester

There is some insight here to what is ahead, but I don't believe it really covers the worst of it.

Unemployment, pay-cuts, deflation, and depression - with some very destabilising consequences.

Where the recession will bite... Reports by Cahal milmo

Thursday, 9 October 2008

Average home values have fallen by £23,000 from their peak last year, according to the Nationwide, and the 12.4 per cent annual drop in prices is the largest ever seen by the building society.

But those figures are based on a low volume of transactions (mortgage lending has collapsed by more than 90 per cent) and the true picture could be much worse.

Auction prices are down 25 per cent and there is evidence that newly built flats in northern cities are being sold for half their original price.

Repossessions are rapidly rising, particularly in the South-west of England, where high demand and low supply have led to record borrowing. Experts say there is still plenty of room for prices to fall further.

Amid warnings from one City analyst that the British high street is heading for its worst Christmas in 30 years, an insolvency specialist warned this week that 323 UK retailers are on a "critical watch list" with a 70 per cent chance of failing in the new year.

But with stalwarts such as John Lewis and Marks & Spencer reporting sharp falls, the gloom is difficult to dispel. Consumer spending accounts for two thirds of the cash that keeps the British economy going.

British manufacturing production has now fallen every month since March. Yesterday it was announced that output fell by 0.4 per cent in August – twice the expected rate of decline. The result is plunging profits, production and confidence. New car registrations fell by a calamitous 21 per cent in September with sales of large cars particularly poor. Staff at Land Rover and Ford's Transit van production line in Southampton have been put on a four-day week.

Housing equity withdrawal, whereby homeowners swap the increase in the value of their homes for an increased mortgage, has fallen from £10bn in the second quarter of last year to zero, with a drastic knock-on effect for the holidays and home improvements it funded.

?

Consolidation of the sector, which will be dominated by HSBC, Barclays, RBS and the proposed Lloyds Halifax, will lead to less competition, fewer loans and dearer current accounts.

http://www.independent.co.uk/news/business/analysis-and-features/where-the-.htmlssion-will-bite-955491.html

lostinrates

I lay awake a lot of last night about wondering about it all. I an't help think that the amount of regulation as opposed to informally imposed morality (I'm thinking shame rather than beatings with sticks, charity rather than state funding of starvation) has let us all off the hook morally, not just those who have 'lost out' but those who have smugly made good, playing by the rules 100% but not with a spirit of society as well as self. With a bakground in animal behaviour I have always grappled with the concept of fair and rules. I believe fundamentally we will put ourselves and our nearest first, I don't think thats wrong, but rather inevitable. By trying to make things so fair I think we've made less of ourselves as people beause those who don't need help feel less of a responsibilty to look back and help beause that is what the state is for. I suppose all that sounds like I'm saying that our support network is wrong, but I'm not, I think in the artifiial 'human' word we have created it is very necessary, but we have to remember that we have superimposed this human, and indeed western world human, vision of what is 'real' over the atual reality....again nothing wrong with that so long as it is not forgotton that the world was not designed to be fair o unfair, it just is.

Where do we go from here? Forward, its the only way we can go. I'd love this to be an oppertunity for shake up of society, where people supported by the state but capable of contribution do so.., where its reognised that low self esteem is not an NHS problem (I'm talking boob jobs and ear pinnings, not depression) where we are all encouraged to look to ourselves more and recognise our leaders and guiders are fallible and that is not necessarily their fault, and where the successful are enouraged to hold helping for the good of society as a mark of prestige greater than a new car yet not penalised for their success.

I have smiled rather wryly at some of the more extreme forecasts here, but now we discover that well, some local services are going to be restricted. Here we have the oppertunity to start in a small way with change of mindset. We should, imo, be forced to cut our cloth, some services are more essential than others, some we could all do more for...if it weren't regulated against (DH was once issued with a fine for taking an ederly neighbours stuff to the tip for her, thats a great example of what I mean). Is it our faults the councils have lost money? well, not directly, no...but they have, I'd rather be asked to do more for myself and immeadiate neighbours, than go into debt more to keep things going 'just as normal'. Of course, I recognise none of this is at all likely to happen and the mosty likely option is some cuts will be made and more debt will be taken by government, and we'll all continue to say 'it shouldn't be allowed'. How very pessimistic I feel this morning.

posh*spice

Generali wrote: »

Well it looks like the Fed has a policy response to problems with companies being able to borrow short term using commercial paper*. They are going to buy it themselves.

In short, the Fed is starting to become what used to be called a merchant bank (yeah funny).




*Commercial paper is a way to borrow money short term for an existing project. Traditionally it was used by merchants if they needed finance between the time when they bought a load of something and selling it again. This sort of finance was how the Lombardis first got going as bankers and is why we have a banking industry in London and a road called Lombard Street.

I seen an analyst posit that inter bank lending might be done for and that Central Banks might have to take on this role permanently. Interesting view point.:rolleyes:

BACKFRMTHEEDGE

the '80s weren't that bad, were they?;)

domcastro

My sister phoned me last night and doesn't understand what the fuss is all about!!!!! I tried to explain that was becasue she has a low mortgage and no money in the bank - she's not effected. Whereas I sold my house, have 85k in Halifax in a bond, and wanting to buy a house. I've been stressed. She told me that it's just the media's fault for panicing everyone. She then went on to tell me to buy now as house prices will be going up again soon. I said they had to go down as the price was too far away from income multiples. She wouldn't have it!! If I hadn't sold my house (for relocation purposes), I also wouldn't be effected and would probably be wondering what's the fuss about?

Dithering_Dad

posh*spice wrote: »

I seen an analyst posit that inter bank lending might be done for and that Central Banks might have to take on this role permanently. Interesting view point.:rolleyes:

Didn't understand a word.

Yeah, but no, but yeah, but no.

Thanks for that bit of financial analysis, vicky*pollard

:rotfl:

Realy

Well we have got Andy Pipkin as PM

ad9898_3

Dithering_Dad wrote: »

I also have to keep my skills up to date and I am prepared to work anywhere in the UK and western europe. Also, I probably have a much larger emergency pot than most people and simply can't commit to long-term finance (credit) because my job is always so short-term, hence I have no debts, not even a car loan.

Wouldn't it be a different world if most people had thought like this. Good for you DD

posh*spice

Dithering_Dad wrote: »

Didn't understand a word.

Yeah, but no, but yeah, but no.

Thanks for that bit of financial analysis, vicky*pollard

:rotfl:

Oh look I have my own troll. What an honour:D

I believe you went around telling posters not to put their pensions into cash at the beginning of the year? That must keep you awake...:rolleyes: Especially given all the grief you gave Edinvestor about her poor financial advice. Didn't you want to sue her?