Really really gloomy article from Robert Peston this morning

Really2

huntersc wrote: »

You have £100k in your property today. Of course to realise that you would need to sell which, in this market, is a little unlikely. But tomorrow that £100k is £99,990. If you're lucky this time next year that £100k will be £60k. Sorry, that's a bit of a distraction but probably worth pointing out to you.

Getting back to the point, the poster said:

"I'd rather have tons of savings than tons of debts during a recesssion."


You disagreed with him. I think it's very difficult arguing from an economic perspective that having debt during a recession or in an inflationary or deflationary period is a positive!!

Right now everyone should be doing everything to pay down every little debt that they have. Get rid of it and don't get into any new debt. Being leveraged 5/1 right now is bad, very very bad.

Spending money, although potentially good for the economy (depending on which school of thought you subscribe to) is not good for the individual. It's even worse if you're spending on the basis of future wealth,m i.e, on credit.

And once again, with all things being equal, the person with no debt is in a better position than one with debt.

Its OK I purchased 30% below April 08 prices so my LTV is conervative, I hope to ride out most of the crash without loosing any money (infact paying it off quick).

It is a bad time to be in debt, but it is better to have a debt and assets than debt and no assets.
I am not going to run people in debt down. Hopefully those with mortgages and have seen rate cuts will be paying down like nutters now.

My point is some people think they are less likely to be touched by the recession just because they are in a better position financialy.

Unfrotunatly having cash in the bank will not make your job safe.

huntersc

Really2 wrote: »

It is a bad time to be in debt, but it is better to have a debt and assets than debt and no assets.
I am not going to run people in debt down. Hopefully those with mortgages and have seen rate cuts will be paying down like nutters now.

My point is some people think they are less likely to be touched by the recession just because they are in a better position financialy.

Unfrotunatly having cash in the bank will not make your job safe.

That's entirely sensible and I wouldn't disagree with that. As I said, all things being equal its better not to have debt than to have it.

Everyone will be touched by the recession, but those without any debt and with lots of savings will be in a far stronger position. If we both had the same job, car, house etc etc but you had £100k in the bank and I owed £100k you would be in a better position.

That's what the OP was trying to say and that's what I was agreeing with him on.

So I guess we all agree

Really2

huntersc wrote: »

So I guess we all agree

I agree, we agree.:D

WTF?_2

huntersc wrote: »

You see, that's exactly the attitude that got us here in the first place. "Who cares about debt, savings are crap anyway".

I mean for goodness sakes, don't we want to encourage people to save? In any case, your analogy isn't exactly valid is it?

Cēterīs paribus the person with the savings will be in a better position than the one without.

I'm looking at the way things were going and wondering if it wouldn't have been a better idea to have spent like a lunatic for a decade and then just went bankrupt, with a few tens of k stashed away in gold and paper notes somewhere.

Right now, I feel like my income and savings are just an ATM machine for the government to take from to bail out the borrowers (and lenders).

sabretoothtigger

That'd make you a criminal hardly a fair comparison.
The best deal would have been to borrow 100% in 2000, sold in 07 and turned all profit into gold or dollars (for the moment) and moved to the Caribbean while society attempts to recover the cost of giving people double their money in just a few years

Right now anyone who didnt sell up is part of the repayment adjustment but anyone who sold and especially changed to another currency has got away with criminal profits totally legally.

SGE1

huntersc wrote: »

Certainly not the penis size but I have a really really nice car which I let her prang a lot so maybe it's that...

Northern Rock's collapse had nothing to do with bad PR, that's a totally different issue. They could have employed every PR agency on the planet and had them singing carols outside of branches and the same thing would have happened.

Furthermore PR isn't really about revenue generation. It's about positive exposure. As such PR budgets of large companies are being severley cut back and the budgets moved to marketing. Take Tesco. It has lost complete ionterest in the green agenda, sustainable farming, pollution, all those things that the PR agency worked so hard to promote. Now it's about 50% sales, pushing profits rather than pushing an agenda. As such marketing is now at the fore and PR has taken a back step.

I think you're somewhat mixing up PR and marketing. I understand they derive from the same department and are sometimes undertaken by the same agency but they are tow very different functions.

But why ensure positive exposure in the first place, if it's not linked to revenue?

And again I disagree, Northern Rock PR was very badly handled: when their troubles began to hit the press, they put dodgy messages on their website and refused to invest in extra server capacity to let people access their online accounts. As a result of that, when people couldn't access their deposits online, they freaked out massively, believing they couldn't access their money because Northern Rock had run out of cash (which wasn't the case), and flooded en masse to branches. PR disaster continued thereafter: the queues should have been dealt with asap, for example by employing every staff available for front-end work to get people off the streets.

A quick google search came up with this.