Wasn`t expecting this - Austria about to implode

Reaper

Wookster wrote: »

Do you think that ultimately support will be cut for banks, which will end up in liquidation, and that savers will lose all their money?

Not a chance a million. The banking system is fragile. That means confidence is everything. If savers thought they might lose all their money they would withdraw it, convert it to gold coins and bury it in the garden and at that point you could kiss the economy goodbye.

The government can not afford to have savers lose any money so savers will always be compensated. But it's worse than that because you can't just let a bank go under and say "O well, never mind, it wasn't very well run and there are plenty of others" because they are all inter-related. The other fragile banks that lent them money now discover they aren't going to get their money back and that tips them over the edge too leading to a domino effect.

So in practice the government is determined to either nationalise or encourage takeovers wherever it is needed. Some of these banks and their debts are huge but in my view the government will do anything to stop them failing, even if it were to mean printing vast quantites of cash to prop them up because inflation is better than collapse.

Phew. I rambled on a bit there. I'll shut up now.

leveller2911

harrup wrote: »

well, if Austria is imploding....their daily newspapers sure don't let on! I just checked and apart from moaning about hefty snowfalls, the odd murder and some banalities they don't shout "let's panic".

We've just come back from a long vacation there and it seemed vibrant & healthy with small & large industries, tourism, etc.

In fact, that was a discrepancy I really noticed. WHERE are all OUR small local industries? Our carpentry businesses, joiners, stonemasons, blacksmiths, bakers, craftsmen? Over there, every small town abounds with them. They all have long standing employees and young apprentices. We just buy cheap junk from China.

I wouldn't worry about Austria. They'll be fine. We, conversely, are snookered.

In my locality nearly all of the small joinery and building companies employing 10-20 employees all went bust in the last recession and never recovered.Nearly all businesses are sole traders or two man bands.We now have "the world and his brother" advertising as "builders,bricklayers,carpenters "etc and sadly the quality of workmanship has really dropped off. Ive said it onece and will say it again, we NEED proper apprenticeships and NOT wishy washy NVQ etc.... We just hear endless government lip service with little substance..........

luvpump

Generali wrote: »

I think there is a real risk that will happen. I can't way whether it actually will happen or not. Nobody knows. Perhaps these problems will just evaporate. I have my doubts.

That is a truly frightening scenario :eek: ... Surely they would have to honor the 50K Limit !!!.. & let savings above that go ?? But I knew things were bad ..but surely not that bad ..?

Alan_M_2

leveller2911 wrote: »

In my locality nearly all of the small joinery and building companies employing 10-20 employees all went bust in the last recession and never recovered.Nearly all businesses are sole traders or two man bands.We now have "the world and his brother" advertising as "builders,bricklayers,carpenters "etc and sadly the quality of workmanship has really dropped off. Ive said it onece and will say it again, we NEED proper apprenticeships and NOT wishy washy NVQ etc.... We just hear endless government lip service with little substance..........

Actually what we really need is policy to support and help small businesses grow, not bleed them dry with excessive taxing and overheads from Day One.

The sums of money required just to stand still as a small business are shocking, it's no wonders we have no micro economy business in this country, and what does exist is cash based.

Generali

luvpump wrote: »

That is a truly frightening scenario :eek: ... Surely they would have to honor the 50K Limit !!!.. & let savings above that go ?? But I knew things were bad ..but surely not that bad ..?

As I say, nobody knows exactly how bad things will get. Perhaps this will turn out to be a blip and it will all blow over.

I was out with a bunch of mates from UBS Sydney last night. They were very pessimistic about the future.

Oh, as a footnote, finance in London is very unlikely to return to it's former glory at any time in the near future. It looks like the (formerly) big banks are offshoring everything they can to India (and Poland in one case). In the past if things went bad and you were working as a middle level bank worker you could get yourself a low level temping job in a bank just to tide you over. It kept you in the industry and kept your skills current.

Now so many of the jobs like that have gone to India there just isn't any way of staying in the industry for most people. The big competitive advantage London has had over other financial centres is the huge pool of talent it has available. That is now being split up and so The City is losing a big part of her edge.

I know a lot of you guys hate bankers but The City provides a large chunk of tax revenue, GDP and employment so it will have a big impact on the rest of the country.

stargold

I was out last night arguing with a Citigroup Analyst. She reckons everything will be fine by 2011!! The property markets will recover. The equity markets will recover. Dogs and cats will be living together in harmony... Utopia basically... So we can all relax.

I personally see a huge amount of pessimism, but I feel that it has been over done. In my view the BBC has been nothing short of completly irresponisble in its scare mongering so far.

Ian_Griffiths_Halifax

stargold wrote: »

I was out last night arguing with a Citigroup Analyst. She reckons everything will be fine by 2011!! The property markets will recover. The equity markets will recover. Dogs and cats will be living together in harmony... Utopia basically... So we can all relax.

I personally see a huge amount of pessimism, but I feel that it has been over done. In my view the BBC has been nothing short of completly irresponisble in its scare mongering so far.

Ask her if she'll lend you a grand of her own money for the next 3 years and then you'll know if she REALLY thinks it'll be all ok. I think we'll be through the worst of it, but I can't see a full recovery by then.

Wookster

stargold wrote: »

I was out last night arguing with a Citigroup Analyst. She reckons everything will be fine by 2011!! The property markets will recover. The equity markets will recover. Dogs and cats will be living together in harmony... Utopia basically... So we can all relax.

Maybe that's why Citigroup is in such deep doodoo