Is the credit crunch really ending?

WTF?_2

fc123 wrote: »

OK I will keep you all updated BUT I am now implementing a NEW MasterPlan for Independent retail survival.

I will post where relevant as I chat to all the local chain mngrs who tell me how it really is.
Forget 3% down bla bla.......all major chains in my sector (clothing) are down 30%- 40% on prev yr same premises. The chains HO's are driving T/O through markdowns / promos and are going to worry about margins in 6 mnths time
Satisfyingly, our nearby Starbucks is DOWN :T :T though they opened a new branch in town. A 3rd is about to appear on an, almost, totally Indie St. The locals Anti Starbucks (and all it represents) guerillas have a campaign set up already.

I won't be able to post like for likes as I am changing our business from Sept 08 (Totally scary) as needs as must. I wont survive this downturn if I follow my signature.
Entrepreneurial to the end.....have a horrendous rent review to fight this year....shop valued at 70% more :rotfl: :rotfl: :rotfl:
Except I can't afford to risk losing.

Best of luck - I hope the new business plan succeeds.

You're in the clothing biz, right? Is it true that clothes look set to take an inflation hit next, after food?

Mandark

MarkyMarkD wrote: »

brit1234's scaremongering is without foundation.

Whilst A&L and B&B may be the most closely related to NR, they are not actually "closely related".

NR were growing their lending hugely; A&L and B&B are not.

NR were hugely exposed to unsecured through "Together"; A&L and B&B are not.

And, anyway, NR's problems weren't caused by poor asset quality as is often, and incorrectly, reported. Their problems were caused by lack of funding which was in turn due to the global credit crisis, exacerbated by their poor strategy in seeking funding at the last minute rather than obtaining it for a sensible future period.

Lenders have also significantly tightened up on things like new build lending. I don't believe that there is lots of unprovided-for bad news there.

Agree Brit's scare stories about the A&L and B&B being in trouble are out of date. This was last year's news.

Treadmill

Looking at the rapidly rising share prices for A&L and B&B will show you they are not in trouble, gains of 5.785 and 3.54% in a day looks pretty healthy.

brit1234

Mandark wrote: »

Agree Brit's scare stories about the A&L and B&B being in trouble are out of date. This was last year's news.

No it is very current in the city at the moment. Just watch this space. As for the share price I wouldn't use that as a bench mark to assesses the resistance to the credit crunch, shares are very volatile at the moment and have been for the last 6 months.

Conrad

As a mortgage broker I do not see credit losening for at least 12 months.

Lenders dont know where house prices are heading so it's caution all the way for now.
The BOE £50bn is earmarked for safe prime lending only. The point is the UK market had dozens of significant sub prime lenders until 12 months ago, yet now there are really only about 5 left lending.

People underestimate the size of the UK subprime / self cert market. I estimate 40% of all business was self cert or sub prime prior to the crunch and now only a small percentage of people in that market can access finance.

BOE must significantly reduc e rates if the mortgage / housing sector is to return to a semblance of normality, but the fear is ole Merv is way out of touch. I bet he doesnt even have a mortgage and has no real grasp on what life is like for those on the sharp end.

ixwood

Good point about Merv.

Although I bet he doesn't charge desperado's 5k for a sub prime mortgage. Or gleefully brag about it. Not sure where your concern is.

ixwood

And I'd say lenders know exactly where prices are going. As do you.

brit1234

Conrad wrote: »

BOE must significantly reduc e rates if the mortgage / housing sector is to return to a semblance of normality, but the fear is ole Merv is way out of touch. I bet he doesnt even have a mortgage and has no real grasp on what life is like for those on the sharp end.

I was in full agreement to this last paragraph above.

It was low interest rates that got us into the problem in the first place. If rates are pulled down again you are just continuing the bubble which will burst latter on with more force. Its far better to just take the hit now than in a couple of years time when inflationary problems are higher.

These low interest rates are also killing off savers, the key group who add resilience to economic downturns. We need sustainable interest rates not low.

neverdespairgirl

Conrad wrote: »

market can access finance.

BOE must significantly reduc e rates if the mortgage / housing sector is to return to a semblance of normality, but the fear is ole Merv is way out of touch. I bet he doesnt even have a mortgage and has no real grasp on what life is like for those on the sharp end.

It's not down to the BoE at the moment - base rates are not that relevant for mortgages for many.

More to the point, though, the B of E should be worried about inflation, not bailing out the housing market.

WTF?_2

Conrad wrote: »

BOE must significantly reduc e rates if the mortgage / housing sector is to return to a semblance of normality, but the fear is ole Merv is way out of touch. I bet he doesnt even have a mortgage and has no real grasp on what life is like for those on the sharp end.

Yeah, imagine wanting to keep inflation under control for the good of the economy (his remit as chairman of the MPC) instead of throwing caution to the wind to bail out a housing market that's gone awry because people borrowed to much and lenders didn't assess risk properly. What a cad :rolleyes: