Normality again?

unionjack81

Just after listening to Martin on Radio 1, good show! Good to hear someone speaking sense in the media.

Sorry if this has been discussed somewhere else but can't find it.

I just wanted to know peoples opinion on my belief that this whole 'crisis' is just bringing us all down to earth, normalisation if you like. Everywhere we look we hear about jobs going, firms going under, people loosing their houses. Would those jobs have existed in the first place had the credit not been rammed down our throats, people not lived unrealistic lifestyles based on credit and bought houses at prices which were inflated because of this.

For example: Car dealerships are feeling the pinch big style..... didn't they get to the size they got to because we were all out spending big money on cars that we couldn't afford in the first place?

Personally, I think the this crisis will give everyone a realitiy check.... we can't all go on a holiday every year, drive a new car and live in a big house. Silver lining in the cloud?

Anyone agree?

Generali

I for one agree. It's going to be a painful readjustment however as not only does lending have to drop back to normal levels, people's disposable incomes will be lowered as they repay debt already accumulated.

sarkin

Its not a reality check for me, I already knew. But for a lot of people yes and they will be looking for people to blame because it is defenatley not thier fault.

IveSeenTheLight

Generali wrote: »

I for one agree. It's going to be a painful readjustment however as not only does lending have to drop back to normal levels, people's disposable incomes will be lowered as they repay debt already accumulated.

And those that did not get themselves into debt (other than mortgage debt) will be proportionatly better off.
I still have the goal to overpay overpay overpay that mortgage.
Far better than accepting paying over 25 years

Generali

IveSeenTheLight wrote: »

And those that did not get themselves into debt (other than mortgage debt) will be proportionatly better off.
I still have the goal to overpay overpay overpay that mortgage.
Far better than accepting paying over 25 years

People with cash will be in a very strong position to buy assets on the cheap. People are losing their jobs sadly as incomes are reduced so consumption starts to fall away.

unionjack81

sarkin wrote: »

Its not a reality check for me, I already knew. But for a lot of people yes and they will be looking for people to blame because it is defenatley not thier fault.

I agree with you about people not being a fault in many cases. As Martin rightly points out, all of these big companies spend millions on marketing and training to get us to spend money.... what have we (the public) ever had. I'm just glad I'm only 27 and didn't have too much time to get sucked in (which I admit I was). It's only by the grace of God I'm not sitting with £50,000 in negative equity as I was considering dipping my toe into the buy-to-let market just before things went <bang>.

I've definitely lowered my expectations to a realistic level and will not be taking any more credit in future regardless of any government initiatives. Think I'll just try what my parents did and save!

Cannon_Fodder

IveSeenTheLight wrote: »

And those that did not get themselves into debt (other than mortgage debt) will be proportionatly better off.
I still have the goal to overpay overpay overpay that mortgage.
Far better than accepting paying over 25 years

I hope that you are right.

My concern is that all the billions being spent on our behalf are simply spreading the costs around the whole population - so that everyone gets equally hit whether or not they were part of the problem.

Interest rates changing to the disadvantage of savers and people on fixed income, higher tax rates in the future, poorer services if Govt has to rein in spending in the future, future inflation if all this money eventually circulates around the system and into somebodies pockets in the long run...etc?

I don't mind doing my bit for the disadvantaged, unlucky, etc, but some were down right profligate and deserve no help beyond subsistence.


All in the name of consumerism. The new religion?

penguine

Most of the last decade seems like mass insanity in retrospect. As someone who's been frugal most of my life and is concerned about the costs of over-consumption on the environment, I really felt like nothing I did the past 8 years made much difference when I looked at how many friends and acquaintances spent their money.

I feel worried for those I know who are now facing serious financial trouble, and the impact this is going to have on their families. But I hope that the recession makes society reassess our priorities and has some long-lasting impact on our behaviour -- I hope we really don't ever return to boom and bust this time around, because this boom has been such a stupid waste.

WestonDave

Its true that we will all get hit by the costs and also the risks of redundancy, but then to an extent we all gained as well from the extra jobs and economic activity created from the borrowed cash.

What I do know is I'd far rather be going into this mess with no unsecured debts, savings to cover some months salary if I lose my job, and decent equity in my house, than staring down the barrel of this mess with negative equity, a wallet full of maxed out credit cards and no savings!

I'm not sitting here in any way smug as I've already seen a cut in pay and hours, but I know there are others who should be finding it much harder to sleep at night (whether they have the sense to know they are in trouble is another matter). If the worst comes to the worst the vegetable patch I created for the kids to experiment with growing a few veggies for fun might have to become productive!

Swans1912

Sky news just run a story of the fear of the housing shortage which will drive prices back up!

New homes down 40% - Will only get worse.

2007 - 200K New Homes
2008 - 125K New Homes
2009 - Less than 100K New Homes

Demand on the increase, house hunters rises for first time in two years.

carolt

Gosh - must rush and buy a house quick!

Not.