Are we really heading for a double-dip recession?

shortchanged_2

Thrugelmir wrote: »

Define worse off?

Attend fewer premiership football matches, eat in cheaper restaurants, switch off unnecessary lights and turn down the heating, think twice before driving somewhere they could walk to.

Life still goes on.............

The economy is still functioning.

Yes but as your examples show Thruglemir people cut down. So they are in fact spending less than they would have been previously.

Yes as you say the economy is still functioning but is it actually growing?

The last lot of growth figures showed it wasn't, but that was down to the poor weather wasn't it.

dunstonh

How many of these CEO's predicted there'd be a recession?

How many of these CEO's predicted the dip we've just seen in growth?

Just asking...

Predicting when a recession is going to occur is very difficult. All you know is that they will happen again and again. Typically at least one every decade. (there have also been 8 financial crisis since 1956, an average of every 7 years). So, business models will consider the negative periods as well as the bad. Anyone who claims to be able to predict these things is either a liar or someone who says it every year and like a broken clock, they will be right sooner or later.

wolvoman

RenovationMan wrote: »

Depends if you also sell at the peak in order to buy. I think most FTBers who bought in 2007 probably regret not waiting until the bottom of the crash in 2008, but there you go. You can't always second guess the market - ask those who decided to STR in 2001! :eek:

Its usually often best not to gamble with your family home.

I disagree.
I was an FTB who bought in 2007. I'm on a lifetime tracker at 0.19% above BoE base rate.

If I'd bought in Jan 2009 (bottom of the recent price drop) what sort of mortgage deal would I have got?

And since March 2009 I've been paying £200 a month in interest. If I'd bought in Jan 2009 how much extra mortgage interest would I have paid during that time? Probably not quite as much as the value of my flat has reduced in that time - but it's not a big difference.

And then there's my deposit. It was a 5 figure sum, held mostly in shares. When was a better time to sell the bulk of a share portfolio - 2007 or 2009?

Graham_Devon

RenovationMan wrote: »

You would have to have a large number of savers with a large principle sum in order to have an appreciable impact on the economy from people spending the monthly income from savings.

Are you the same bloke who told me I was crystalizing losses on my property by overpaying on my mortgage?

The figures were out yesterday as to how low savings rates have affected incomes.

I posted it on the "income falls 1.6%" thread. The biggest fall in the older generations income came precisely from low interest rates.

Thrugelmir

Graham_Devon wrote: »

The figures were out yesterday as to how low savings rates have affected incomes.

I posted it on the "income falls 1.6%" thread. The biggest fall in the older generations income came precisely from low interest rates.

And the loss of dividend income from bank shares (as well as the suspension of BP's dividend for 3 quarters).

geneer

RenovationMan wrote: »

Depends if you also sell at the peak in order to buy. I think most FTBers who bought in 2007 probably regret not waiting until the bottom of the crash in 2008, but there you go.

Yes indeed. There you go.
(don't forget those who bought in 2006, and 2005 too theres a good chap).

RenovationMan wrote: »

You can't always second guess the market - ask those who decided to STR in 2001! :eek:

Ah yes. That vast highly relevant majority who STRed in 2001.

RenovationMan wrote: »

Its usually often best not to gamble with your family home.

But you did though didn't you RM.
You and "most of your friends".
You may claim have thrown a lucky dice, but big whoops.

Or are you claiming you say the economic collapse coming, and also understood that the never before seen scale of it would force unprecedented emergency measures like effectively free loans from the BOE?

I'm gonna go with "no" on that one.

geneer

wolvoman wrote: »

I disagree.
I was an FTB who bought in 2007. I'm on a lifetime tracker at 0.19% above BoE base rate.

If I'd bought in Jan 2009 (bottom of the recent price drop) what sort of mortgage deal would I have got?

And since March 2009 I've been paying £200 a month in interest. If I'd bought in Jan 2009 how much extra mortgage interest would I have paid during that time? Probably not quite as much as the value of my flat has reduced in that time - but it's not a big difference.

And then there's my deposit. It was a 5 figure sum, held mostly in shares. When was a better time to sell the bulk of a share portfolio - 2007 or 2009?

Well done. You gambled and won. End of conversation.
But I fully expect Renovation Man to be along in a second to admonish you for gambling with your family home.

Graham_Devon

geneer wrote: »

But you did though didn't you RM.
You and "most of your friends".
You may claim have thrown a lucky dice, but big whoops.

Or are you claiming you say the economic collapse coming, and also understood that the never before seen scale of it would force unprecedented emergency measures like effectively free loans from the BOE?

I'm gonna go with "no" on that one.

To be fair, he took a gamble, yes. But one in which he sees lower rates allowing him to overpay (I believe).

If interest rates go up, I beleive he will be ok, just will take longer to pay off the mortgage.

Thrugelmir

shortchanged wrote: »

Yes but as your examples show Thruglemir people cut down. So they are in fact spending less than they would have been previously.

Yes as you say the economy is still functioning but is it actually growing?

The last lot of growth figures showed it wasn't, but that was down to the poor weather wasn't it.

What is required is capital investment not consumer spending to rebuild the economy. Anybody can set up a small business , import from the Far East and sell at a profit to make a living. That doesn't create economic activity in its widest sense i.e. any number of jobs.

Takes time to start sizable new ventures and get them up and running. Months in fact. So its going to take time. A long slow road.

shortchanged_2

Thrugelmir wrote: »

What is required is capital investment not consumer spending to rebuild the economy. Anybody can set up a small business , import from the Far East and sell at a profit to make a living. That doesn't create economic activity in its widest sense i.e. any number of jobs.

Takes time to start sizable new ventures and get them up and running. Months in fact. So its going to take time. A long slow road.

Yes but to be fair Thrugelmir I think it's a bit of both. Almost all businesses need consumers to spend in order to drive that economy.

You can have massive capital investment to say help build a massive new car making plant, but if people still have less money they are less likely to buy the cars it produces, therefore the venture eventually falls flat, unless there is further stimulus.

I do agree that it is a very slow long haul for this country to get back on its feet.