[MERGED] World Economy

ginge51 · 21-01-2008, 17:20

Hi all

I've been watching this for quiet a few months now in America about there economy.
They've been warned on numerous occasions about a looming recession and today everything has gone to pot

There's a guy in the U.S.A called Cramer some of you might of heard about him?
He's been warning of this for well over 6 months now.
Scary thought's indeed.
Don't forget once America goers into recession we won't be far from it we will all be hit hard money wise

This Bush guy needs to be removed seriously the trouble he's caused is mesmerising to say the least.Cramer here's his clip by the way from this morning.
http://www.cnbc.com/id/15840232?video=625518469
Warned everyone about it nobody listened and everything he's said has happened.
He said the dollar in the next few days if it doesn't get no fix will lose 2 maybe 3000 points.
That will spark a world resesion in certain country's 'im not sure about the uk but it doesn't sound very good at all

Bush and his government needs to be removed and quickly.
Madness.

Delta Whiskey · 21-01-2008, 17:35

I think it's already happening, all this sub-prime nonsense is coming home to roost both in the US and unfortunately for us here.

Taf · 21-01-2008, 17:36

Is America full of recessives?

Probably.

Especially at the top....

The market tumbling has begun... as the biggest debtor in the world is the good old US of A...

ginge51 · 21-01-2008, 17:46

So what happens once we are in resesion?
Call me a mong if you like but I'm hardly an "ecconemist"

lostandconfused · 21-01-2008, 19:05

interest rates go up. If you cant afford to repay your house gets taken away.

because of the interest rate increases people spend less in shops, so shop owners need less staff so make redundancies. That makes people able to spend even less making the problem worse.

Is a very simplistic overview

SMHarman · 21-01-2008, 19:26

In a recession demand for goods and services falls.
In retail because people want to save more or because other costs have gone up giving less disposable income, these costs could be their mortgage payment because of rising interest rates or could be petrol, energy costs (electricity and gas), commuting etc. Also as companies realise this is occurring salary increases are likely to be low or none again reducing the available disposible income.

At a company level recession means there are less people buying the goods or services the company makes leading to cutbacks in workforce and more significantly a reduction in capital expenditure for the future either in research and development or buying new machinery or general expansion, again leading to a reduction in purchasing from their suppliers.

This keeps going through the entire purchasing chain creating a vicious circle that is difficult to then escape from.

Russ · 21-01-2008, 19:36

If it leads to a collapse in the housing market and brings prices down to something vaguely resembling reality then it might not be all bad for some.

tweetypie/8 · 21-01-2008, 19:36

Quote:

Originally Posted by ginge51

Hi all

I've been watching this for quiet a few months now in America about there economy.
They've been warned on numerous occasions about a looming recession and today everything has gone to pot

There's a guy in the U.S.A called Cramer some of you might of heard about him?
He's been warning of this for well over 6 months now.
Scary thought's indeed.
Don't forget once America goers into recession we won't be far from it we will all be hit hard money wise

This Bush guy needs to be removed seriously the trouble he's caused is mesmerising to say the least.Cramer here's his clip by the way from this morning.
http://www.cnbc.com/id/15840232?video=625518469
Warned everyone about it nobody listened and everything he's said has happened.
He said the dollar in the next few days if it doesn't get no fix will lose 2 maybe 3000 points.
That will spark a world resesion in certain country's 'im not sure about the uk but it doesn't sound very good at all

Bush and his government needs to be removed and quickly.
Madness.

you bet it is

WHISTLED · 21-01-2008, 19:51

If Iran secure continue with the plan for soem arab states to trade oil in euros rather than dollars that would definately tip the scale. Interesting to see what the US do to prevent that.

Paul K · 21-01-2008, 19:59

Quote:

Originally Posted by Russ B

If it leads to a collapse in the housing market and brings prices down to something vaguely resembling reality then it might not be all bad for some.

Apart from all the house owners who have recently purchased their property and who will face losing everything they own. Apart from that, the job losses, increased poverty etc .... not all bad obviously.

SMHarman · 21-01-2008, 20:21

The problem a recession leads to in housing is not as either of you put.
Negative equity in a property is only a problem if you need to move. Negative equity will prevent that move until the market improves back to the level you bought at.
This means a lack of mobility. Say you lose your job in Bristol and find a new one in Newcastle, however you can't easily accept it as this will mean selling up in Bristol to move to Newcastle and that has the acompyning headache of the negative equity that you cannot afford to realise.

High interest rates are not a requirement for recession or a cause or effect. In fact in recession interest rates are often found to be lower as this discourages spending and makes investment more affordable for companies and borrowing cheaper for governments.

Interest rates are a very blunt tool for managing an economy though, it takes a good while for a change in interest rates to filter through the conciousness of the population and change their habits.

Russ · 21-01-2008, 20:59

Quote:

Originally Posted by Paul

Apart from all the house owners who have recently purchased their property and who will face losing everything they own. Apart from that, the job losses, increased poverty etc .... not all bad obviously.

What about us people who have no chance of getting on the property ladder while the currently house prices are as they are? Isn't it about time we had our turn at property ownership? I sympathise with the people you describe but there are plenty of others who are currently forced to pay over-the-odds in rent would welcome a downward change in housing prices.

You need to look at the bigger picture Paul.

SMHarman · 21-01-2008, 21:08

A fall in house prices will not increase availibilty as it will mean many are unable to move due to negative equity, this could mean more buyers chasing the houses that are available sustaining prices. The moving pieces in such a puzzle are not so black and white (to mix metaphores)

papa smurf · 21-01-2008, 21:13

Quote:

Originally Posted by WHISTLED

If Iran secure continue with the plan for soem arab states to trade oil in euros rather than dollars that would definately tip the scale. Interesting to see what the US do to prevent that.

cruise misiles ....high level bombing...cut them off from the rest of the world. sound familiar

Russ · 21-01-2008, 21:14

Quote:

Originally Posted by SMHarman

A fall in house prices will not increase availibilty as it will mean many are unable to move due to negative equity, this could mean more buyers chasing the houses that are available sustaining prices. The moving pieces in such a puzzle are not so black and white (to mix metaphores)

Well to be fair I did say it might not be so bad *for some*. As you rightly say some might be stuck in negative equity but the scenario I've been mentioning is of those in my situation - currently renting as house prices are just too high. Should prices fall to within my price range I'll be in an ideal position to buy as I'm not part of any chain. For years I've been priced out of the market - if this leads to me being given a chance then it's not something I'd consider to be all bad.