How much longer will this bear market go on for?

sevenhills

Millyonare 

UK has plenty of scope for more debt. It's not a major issue. Switzerland has 2 times more external debt per-head, for example. Japan has nearly 3 times more total debt. This is the Debt Age.

We are in a bear market. Everything is falling, regardless of whether it is good or bad. Need to look beyond short-term swings, and see the bigger picture.

Just because there are other countries that have a high debt, that doesn't make it positive.
A high debt is negative, which is why the market reacted negatively.

sevenhills

Type_45 said:

Exactly the sort of post I'd expect to see before a major crash. 

If this doesn't cause a massive crash, nothing will.

Millyonare

sevenhills said:

Millyonare 

UK has plenty of scope for more debt. It's not a major issue. Switzerland has 2 times more external debt per-head, for example. Japan has nearly 3 times more total debt. This is the Debt Age.

We are in a bear market. Everything is falling, regardless of whether it is good or bad. Need to look beyond short-term swings, and see the bigger picture.

Just because there are other countries that have a high debt, that doesn't make it positive.
A high debt is negative, which is why the market reacted negatively.

Need to move with the times. Don't live in the last century. This new century is the Debt Age. The world is awash with tens of trillions of excess dollars looking for a borrower. The UK has plenty of debt headroom.

masonic

The plummeting pound and gilt markets give us a pretty good steer as to what investors think about the prospects for the UK following this budget. Our inflation problem was already looking to be the worst in the G7 and this is going to make it a lot worse. Hence the devaluing pound. Holding UK government debt has become more risky, so investors are selling it off and demanding a higher interest rate for the risk they'll be taking if they hold it. This has thrown a spanner in the works for the MPC, who have been trying to get a grip on inflation, and will now have to raise interest rates even higher, which will send the government's borrowing costs sky high just at a time when they are recklessly borrowing without abandon.

All of this to hand out some unfunded tax cuts, which will do the vast majority of people more harm than good and are unsustainable. No wonder the government had to suppress the OBR's impact assessment.

When you look at what they're doing, it's about two parts smoke and mirrors to about one part asset stripping the UK. The majority of people who would benefit from the reversal of the NI levy and reduction in basic rate tax, will already be worse off in real terms due to the inflationary effect of the budget. Those who might have benefited from the stamp duty changes will see any gains pared away by the now even higher interest rates on their mortgages. Businesses with debts are going to be put under further pressure in the same way. Even the roughly half a million people paying additional rate tax, who are the only ones to get a substantial bung, may have more money in their pockets, but will suffer in other ways due to the likely economic decay all around them. That's money the government is supposing will drive growth in the UK economy, but these people will already be living a very comfortable lifestyle, which a few thousand extra isn't going to materially change. So they will likely save or invest it, and if they are not fools, which most aren't, they will not keep it within the UK economy as it goes down the toilet.

Fiscal irresponsibility doesn't get much worse than this, and traditional conservatives must be looking on in disbelief.

GazzaBloom

For anyone buying into the doom laden end of the world predictions being proclaimed by the resident pessimist here, please take a few minutes to have a look at the charts linked below:

http://help.timeline.co/en/articles/6157878-timeline-chart-2022

Global crises, political upheaval, monetary policy changes and market turmoil are nothing new, it's pretty much BAU...

But, if we don't panic, do nothing, stay the course and stay invested for the long term (decades) the bounty will come. Those that choose to swing in and out of the market and succumb to the enormous emotional forces of FUD during a bear market, as our resident doomster seems to have done, well you can expect below average returns and a meager retirement. That is simply a fact borne out by data.

RyanHello

Trickle down politics never work. It's been tried numerous times, each time resulting in failure.
Just look at the Barber budget in the 70's...

Type_45

The UK is about to go through the economic meat grinder.

Thumbs_Up

RyanHello said:

Trickle down politics never work. It's been tried numerous times, each time resulting in failure.
Just look at the Barber budget in the 70's...

“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

— W.C.

anonmoose

Masonic sums it up perfectly. And indeed independent analysis has confirmed all things considered anyone earning under £150k will be worse off. It's just so wreckless it is unbelievable. 

Thumbs_Up

sevenhills said:

Just because there are other countries that have a high debt, that doesn't make it positive.
A high debt is negative, which is why the market reacted negatively.

What about the USA?  Admittedly the dollar is the world’s principal reserve currency. But for how long?