[MERGED] World Economy - Page 2

SMHarman · 21-01-2008, 21:19

What you need is correction, not recession. A housing market correction is highly likely due to the credit crunch that is currently occurring as affordability of mortgages gets scrutinised and lending requirements get tightened.
I'm in a similar situation but the NY and surrounding area seems to currently be very resilient to the mess over here.

Russ · 21-01-2008, 21:23

Quote:

Originally Posted by SMHarman

What you need is correction, not recession.

Aye ok, that'll do then

22-01-2008, 05:18

It's started according to SKY news, the dollar on the Asian market has slumped to an all time low, it's even slumped below the 9/11 level. My boss who is well up on the money markets said this reccession is going to be a bad one.

iglu · 22-01-2008, 08:07

It does not look good: Hong Kong -9%, FTSE -4% @8:07...is today a holiday in Germany?

FTSE just turned positive! @9:01!

BBKing · 22-01-2008, 09:23

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is today a holiday in Germany?

Nein. Last one was Epiphany, next one is Good Friday (21st March). People forget how religious Germany is - you are asked to state your religion to decide where some of your taxes goes - either Catholic or Evangelical. Not sure what the large Turkish community do, fill in another form I suspect, being Germany. I'd be tempted to put 'Jedi' and see where they sent the money ('Herr Lucas? Ve haf a cheque for you').

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It's started according to SKY news

The US economy is 'phenomenal' according to Fox News, though.

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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.

Years? I'd suggest that if prices fell low enough for you to buy a *lot* of people would be in negative equity. You'd have to have a correction going back to roughly when you could last have bought with your current income, which is presumably tens of percent.

Recessions are funny things - most companies survive them and not many people are affected, but those who are are affected very badly. Also, stock markets aren't remotely a good way of measuring recession likelihood. So many things affect them other than forecast economic growth - mergers, confidence, dividends, profit forecasts, interest rates (people moving money in and out of shares into other instruments, exchange rates)...

NitroNutter · 22-01-2008, 10:08

Unfortunately we left capitalism and entered bananaism ('Labour era of boom 'n' Bust') a few years ago or so, so yes the correction in many markets globally may well be quite a nice downhill slide. Savy economists were laughed at then but there we go, at the end of the day everyone knew it has to go down sometime and the longer its propped up the bigger it will drop in the end. Tomorrow will bring a new boom that will end in more bananaism because we cannot learn from past mistakes and our markets as a whole rely on profiting from the misery of some.

Risk avoidance strategy: 'Dont buy during a high'.

Taf · 22-01-2008, 10:50

Loaners can't loan if savers don't save... usually.

But then the loan companies started to loan more and more off each other... buying debt.... and once that debt turned bad (when people who had loaned beyond their financial means were unable to make repayments) the stuff hit the fan.

Voila Northern Rock.

The banks are taking too big a cut of the profits and not rewarding the savers enough, so their cash supply is drying up.

iglu · 22-01-2008, 11:36

Quote:

Originally Posted by BBKing

Nein. Last one was Epiphany, next one is Good Friday (21st March).

Thanks, my Dax index was not updating...it works now...

BBKing · 22-01-2008, 14:36

The US Federal Reserve has cut interest rates a colossal 0.75%, biggest cut since 1982. Seriously big. One problem with this is the Monty Python Messiah Theory - if there's nothing to worry about ('I'm not the Messiah') why are you panic cutting interest rates ('Only the true Messiah denies his divinity')? Could have the opposite effect, but it will also drop the dollar right in the doo-dah, and thus reduce relative oil prices. On that note, it increases the incentive for oil nations to move to the nice, stable Euro, where you only have to deal with Sarkozy'n'Merkel, not the fag-end of the Bush disaster.

iglu · 22-01-2008, 14:50

Quote:

Originally Posted by BBKing

The US Federal Reserve has cut interest rates a colossal 0.75%, biggest cut since 1982. Seriously big. One problem with this is the Monty Python Messiah Theory - if there's nothing to worry about ('I'm not the Messiah') why are you panic cutting interest rates ('Only the true Messiah denies his divinity')?

Well, the Dow Jones futures were pointing to a 500 points loss, he had no choise...

So far the actual loss is 135 points, NASDAQ -3%, ftse positive, dax and cac negative.

Disappointing....

SMHarman · 22-01-2008, 15:48

Quote:

Originally Posted by Taf

Loaners can't loan if savers don't save... usually.

But then the loan companies started to loan more and more off each other... buying debt.... and once that debt turned bad (when people who had loaned beyond their financial means were unable to make repayments) the stuff hit the fan.

Voila Northern Rock.

The banks are taking too big a cut of the profits and not rewarding the savers enough, so their cash supply is drying up.

Not quite how Northern Rock panned out.
Northern rock had savers and it had lending. There was a gap between these that it funded with short term borrowing, like you or I using an overdraft, thing was they had a GBP24Bn Overdraft with other banks.

The other banks decided they wanted that money back but NR could not go to it's mortgage customers and ask for it back so it ended up in the pickle it is in.

BBKing · 22-01-2008, 15:54

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Well, the Dow Jones futures were pointing to a 500 points loss, he had no choise...

He had no *good* choice. The Bush adminstration are good at leaving themselves with no good choice, of course. Anyway:

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Dow Jones drops more than 400 points within minutes of the opening bell

Osem · 22-01-2008, 18:16

I suggest we all panic large, led of course by the trusty media - that'll help the situation....

NitroNutter · 23-01-2008, 11:50

Quote:

Originally Posted by Osem

I suggest we all panic large, led of course by the trusty media - that'll help the situation....

Why would anyone want to panic, no one has allowed the banks financial and mortgage advisors to talk them into placing themselves into the position where by their secured debts and any associated payment protections are costing them more than 1/4 of there net income while being on or below the national average wage have they ?

If so then I suspect the FSA may be getting a lot more calls, the potential for similar suits to the ednowment ones maybe in order, meaning banks could end up footing some seriously large bills for their folly, which they would then of course have to pass those costs on to everyone else to remain profitable, meanwhile the tax payeres also end up footing the bill for all the associated legal fees and in which case we may as well all spend the last of our moolah on the renting of a bulldozer and then tell the banks to take the house back.

One does have to wonder as overall crime wave trends tend to follow in similar oposite lines to economic state trends of which does of course stand to reason, whats going to happen if this is a more serious downturn and the prisons are by all accounts bursting at the seams now that they are having to let out some who it would be prefered to not allow premature ejaculation from being behind bars ?

BBKing · 23-01-2008, 12:15

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One does have to wonder as overall crime wave trends tend to follow in similar oposite lines to economic state trends of which does of course stand to reason

Remarkable insight and perfectly true - an leaked Home Office report said much the same thing, no matter how tough you are on crime the figures follow the economy. Which rather begs the question as to how come we came to lock so many people up that the prisons budget eats up the money that should be providing court and probation services and do the project prisoner numbers figure include an allowance for recession crime wave (no, I've looked. The DfT's projections for transport costs, which ruled out railway electrification, projected an oil price of $20 a barrel...).

In stable-door-horse-bolted news, Gordon Brown is discovering the wonders of effective bank regulation with his Euro chums, having spent years (prompted by his, er, banking mates) telling them about the wonders of laissez-faire deregulation and a light touch. Northern Rock is a hefty dose of clue, really.