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Explaining recession
Comments
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I dont think anyone is immune from job insecurity of consumers spending less. Its what we all rely on, ultimately.
Spot on.
It's not only the actual job losses that cut people's spending, it's the fear of losing their job and the loss of overtime and bonuses that's just as bad for the economy. That cuts spending overall by at least as much as job losses.
Also, people tend not to move jobs so much if there's a recession. The thinking seems to be, "Well my mate Dave lost his job and got £xk redundancy so I'm not going to move and jepardise that potential payoff"0 -
I am dreading it.
We were on target to be DF in Feb 08...then mortgage free in 2012 (stupid me planning ahead and counting chickens).
We were running 10% up on previous yr until July 07 when the storms affected T/O ; down 25%. August ; OK. Sept 25% down, Oct 50% down.
Xmas pulled back a bit but was 20% down overall.
I concentrated on margin rather than drive T/O with markdowns, promos (anyone can sell items at cost) and so theend result wasn't too bad.
My neighbours are big chains and some were down 40 - 50% on T/O through the season.
I have been doing some sums based on how low my turnover can go.
If T/O halves (which could be possible if the weather goes against us too) I will earn £0 for 70 hr wk. If it can just not go below a drop of 35%, I can survive.
I have a rent review in June 08....this is going to be a nightmare.
Oh, what is a dead cat bounce? I didn't really understand it but read that things could pick up for while and THEN fall off a cliff...or does it just apply to shares?0 -
A dead cat bounce is a stock market term.
What happens is that as people think a share is going to fall they sell short. That is they borrow shares from someone and sell them hoping to be able to buy them back later when they have fallen in price and thus make a profit.
The 'dead cat bounce' is when the short sellers buy stock to cover their positions (and thus take profits) and the stock rises a little in price temporarily - the stock is still rubbish but the fall has been temporarily arrested by people buying.
It comes from the idea that even a dead cat will bounce a bit if you chuck it off a tall building.0 -
I took over a retail business in 1988,just before the last recession.Shortly after i had a sharp rent increase,my mortgage shot up i and i thought that it was a matter of time before being forced to go under.
The opposite happened.my competitors were the first to go to the wall so my turnover rose very steeply.
Suppliers were keen to provide me with stock and would give me good credit terms and discounts.
The only problem was funding the sudden growth and an overdraught of 6 points above base was pretty steep.I found it stressful to cope with the levels of debt.We carried on until the end of the lease early in 2000.The outcome was we had saved quite a bit of money,lived well for a number of years.however that money went to pay off debts at the end and then some.
Overall,it wasn`t a great experience.0 -
So if enough people followed Martins advice and think 'do i need it,can I afford it, could i get it cheaper' before splashing the cash it could cause a recession???0
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Surviving down turns is largely a function of having some cash in reserve.0
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Is it the one in North London
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No, it's in the West Midlands, but thanks for your reply. I understand better now. Economics was never my strong point!(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
No, we would be called 'Germany'
Hopefully the one that spawned Lidl, Aldi and Tchibo, not the early Weimar Republic! Am getting a tad concerned with everything for which my demand is inelastic going up in price so much...Please stay safe in the sun and learn the A-E of melanoma: A = asymmetry, B = irregular borders, C= different colours, D= diameter, larger than 6mm, E = evolving, is your mole changing? Most moles are not cancerous, any doubts, please check next time you visit your GP.
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Looks like itSo if enough people followed Martins advice and think 'do i need it,can I afford it, could i get it cheaper' before splashing the cash it could cause a recession???
....plus businesses doing the same thing ;so sourcing more from the Far East and outsourcing more jobs to India.
And then laying off the person who implemented all the outsourcing (the girl in The Apprentice picked up over 100k pa by re-locating call centres for companies).
I know 0 about stocks but plenty about fashion and trends , and Martins mantra is very "on trend" + the mood for thrifty, less visible consumption (flashy cars, clothes etc) and a feeling for "just having less stuff.
Mrs Hedge fund may stand in my shop and appear to be Mrs thrifty as she has traded down from the £200 frock to my £60 one (which she will boast about)......but she still has a grands worth of injections in her face (less visible consumption that OH won't notice).
The fashion industry has "survived" their prices deflating over the past 10 yrs with the "fast fashion" trend; lower unit prices but more volume.
Unfortunately, as trends change (and one can't truly create the mood of the time but ones work and products will reflect it and evolve from it) the message now is; fewer items but better quality / more ethically produced etc HOWEVER, this is a journalists interpretation.
Out here in the real world a whole generation don't know how much things should really cost and with Primark now setting the new benchmark of price in my sector, I have to try to justify the price of a UK made item retailing @ £25.
In the downturn, people will buy 1 X £3 tees instead of 4.
On a positive note, recessions do throw up a lot of creativity. The last one had the rave scene (taking over a field rather than paying to go to some corporate owned club) and young people will create their own fashions, music. events etc rather than be fed a load of contrived, corporate, stuff from some phoney 40 something media, cool hunter type........who will have to re-train.
Oh and houses will no longer be used as cashpoints.0
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