5000 jobs are to go at Chrysler, with talks of a merger with GM who don't look too healthy themselves -
tinyurl.com/5c2nzh
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5000 jobs are to go at Chrysler, with talks of a merger with GM
An article in the Guardian today focussed on Detroit today (home of the above) - houses going for as little as $500 (yes, no zeros missing..) - with quite nice brick built detacheds
less than $10,000. This recession is going to be awe inspriring in its depth.
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5000 jobs are to go at Chrysler .........
Let's put into perspective. It's 25% of its office-based employees, so it's a much much smaller percentage of the total number of employees.
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>>Let's put into perspective. It's 25% of its office-based employees, so it's a much much >>smaller percentage of the total number of employees.
Ok, if 1 in 4 of your office colleagues were sacked, what would that say about what was happening to the business? The fact is, many 'shop floor' jobs are now done by robots of one kind or another in motor manufacture, so the reduction in 'mere' office staff is hugely signifigant.
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Ok if 1 in 4 of your office colleagues were sacked what would that say ....
We were offered a 20% cut in salary in exchange for keeping our jobs. It was take or leave it and because not enough employees accepted it they made everyone redundant ~ all 500 of us.
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We were offered a 20% cut in salary in exchange for keeping our jobs. It was take or leave it and because not enough employees accepted it they made everyone redundant ~ all 500 of us.
Sorry to hear that - but doesn't that precisely show how signifigant the Chrysler cuts are?
Cutting 25% of their office workforce is almost exactly (in overall cost terms) what was offered to your colleagues - with the result you describe.
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The self employed have dealt with this scenario since time immemorial. It takes a bit of getting your head round at first but it does become a way of life.
You pay yourself what can be afforded by the business each year. Some years it is more than others and some it is far less. Economics in its raw state.
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Just got a letter from MINI this morning, inviting us to view their stock and offering £500 depost towards their finance deals - at a typical 9.9%apr.
Things must be tough if MINI are offering 'a la Citroen' deals to get you through the door.
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I agree broomlea with your sentiment in that things are tough when Mini start offering deals considering where they were. But £500 and 9.9% is still ridiculous - Bank base rate is 4.5%. I know LIBOR comes into it but that offer is nothing special given the circumstances. As I say I know your not suggesting this is good, just stating that even Mini are now trying to do deals. What makes me laugh is the arrogance of some dealers and manufacturers that they think this will get people through the door. I say arrogance but it is stupidity really. They need to get real and understand how bad it is for people.
(May be I'm just being unreal - after all there will be no return to boom and bust remember)
Edited by Pendlebury on 25/10/2008 at 14:09
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Last week I had a telephone message from my local BMW dealer asking me to give them a call. (I test drove a 3 series 18 months ago).
Today I received a letter from them saying they'd been unable to contact me and could I PLEASE get in touch to discuss a new purchase. They must be really desperate.
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Last week I had a telephone message from my local BMW dealer asking me to
. They must be reallydesperate.
Good, i hope the twerp at the local BM dealership who told an old friend of mine to come back when he could afford one is very desperate, jumped up fool...not my friend.
The amusing thing is he could probably buy the dealership if he realised half his assets.
Its making my job easier as no trouble finding a salesman to check new cars in now, except we arn't delivering any...doh..
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It still has not sunk into most people's heads that the banks went technically bust - that is why the UK taz-payer is, without asking, being forced to bail them out to the tune of 500 billion notes.
This is truly unprecedented in history and, worryingly, this is just the start as all the insurance companies, hedge funds and pension firms that got involved in all these credit default swaps and SIVs, etc, have not even yet begun to report their losses. The final number will be truly staggering. Basically, the US and UK obsession with easy credit, flash expensive cars and status based on house prices has bankrupted the global economy. Ok, the Spanish, Dutch, Icelandics and many others are just as guilty but it is us Brits and Yanks who have the biggest debt per person and, you have guessed it, us Brits are the most indebted nation.
This is going to have truly staggering affects on jobs, pensions, social care, shops, and hence jobs, in ways that people cannot yet imagine. I am a big fan of Moneyweek magazine and as much as Brown and Darling and Paulson claim that no one saw this coming the truth is that both Moneyweek and The Economist magazine have been warning about this for several years now. Disturbingly, Moneyweek has been 100% spot on about what would happen even to warning about the Icelandic banks over a year ago. I say 'disturbingly, because what they are saying is yet to come is truly dire.
I mention the above because the likes of Mini offering £500 off the price of a car with a loan rate of 9.9% just beggars disbelief IMPO. I have come to the conclusion that there are literaly thousands of Chief Financial Officers, MDs and Chairman out there, all earning vast salaries, who, IMPO, simply do not have a clue - let's face it, any Finance Officer with a brain who reads either Moneyweek or The Economist would have known not to put money into Icelandic banks a good 12 - 18 months ago.
The clever people trying to sell a hosue now are the one who dramatically reduce their price because even that big reduction now will, in 6 or 12 months time, look peanuts compared to where house prices are going. Likewise for car sales - offering a few hundred quid, or even a few grand as HJ often shows on the homepage, is truly peanuts as to where we are now in the global financial climate.
There is a gathering storm.
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tawse
Spot on - now what's your feeling about the right moment to move my, very substantial, house proceeds into gold. Hyper-inflation hurts cash savings and I'm looking to leave this wrecked country, so currency falls hurt too.
Gold temporarily down; dollar temporarily up - pound in freefall. A 3-way bet and I've got a LIBOR-deal window in only 6 days....?
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tawse Spot on - now what's your feeling about the right moment to move my very substantial house proceeds into gold. Hyper-inflation hurts cash savings and I'm looking to leave this wrecked country so currency falls hurt too. Gold temporarily down; dollar temporarily up - pound in freefall. A 3-way bet and I've got a LIBOR-deal window in only 6 days....?
I am no financial guru so anything I say is merely my gut feeling and nothing more - so best not to listen to me.
I know the gold-bugs think that gold is going up to 2 or 3 thousand bucks per ounce around 2012 due to inflation but they also thought it would be 1200 bucks per ounce by now. The problem with buying, owning and selling gold are numerous but it might well be the soaring place to be in a few years or it could equally continue to go down and then loiter there for years or even decades.
What is clear now is that we are entering a deflationary depression no different than that of Japan in 1991 - they still have not recovered.
My gut feeling is that we will have 2 or 3 years of deflation and then there will be huge leaps in the price of shares and, possibly, things like gold and oil as the global economy soars again and soars greater than the last few years. Of course, they felt the same way at the end of 1929 after the Wall Street Crash, throughout 1930 and then the dead cat bounce of 1931 proved nothing more than a flase recovery to simply catch-out and bankrupt those few with cash which then dragged on through the 30s and, despite what people think of Roosevelt's 'New Deal', was only finished with the arrival of World War Two.
We could well be entering a decade or more of deflation now where cash is king and the price of houses, cars and other such items fall by 90%.
Oil ETFs might be a better bet than gold as when, if, the global economy recovers then demand for oil will push the price up, in theory, to unseen highs. The economy will recover eventually - it will get worse first - but when it does people will suddenly remember that peak oil has come and gone. Of course, by the time the global economy recovers they may well have developed the hydrogen car - LOL!
All I know is this - it is going to get a whole lot worse before it gets better. I think house prices in the UK will fall by an average of 50 to 60 percent in the coming years leaving many millions in debt or bankrupt. At the same time car prices, especially of big cars, will also plummet as people will no longer be able to afford them. When the global economy eventually recovers the demand for oil will be such that petrol prices will soar, greater than we have seen, and will make running a Jazz or a Yaris or whatever small car that the majority of us will be able to afford.
In the meantime, stand by for even more shocks as we begin to hear about insurance companies, hedge funds and pension firms running out of money, going bust and asking Governments for cash. As ridiculous as it seems the 500 billion that WE bailed out the banks with is actually peanuts compared to the potential losses of these firms and which we all have a stake in willingly or not. Hence why the Argentinian Govt went and nationalised ALL PRIVATE pensions this week this week because it could not afford to bail them out but at the same time needed the funds - it may well happen here.
I am no financial expert so please do not follow anything I say as financial advice and certainly do not put all your eggs into one basket. People did that with Icelandic banks chasing an extra 1% interest and now a great many have lost their life savings. I would imagine spreading your savings is the sensible thing to do. Myself personally, I have all my money in cash spread over about a dozen banks and I am renting now.
This is going to get so much worse than many people can imagine.
One final point - the billy goat was wrong as the grass was not greener on the other side of the hill. There is a website called 'British Expats' which has a wonderful forum where Brits who have left to go live in Oz, NZ, the US and Canada post about their emmigration experiences. The interesting forum is the sub-forum of those hoping to find a way back to the UK. Sometimes you have to go away to learn where home truly is.
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Forgot to say, if you are interested in this kind of thing look up the name Fred Harrison and read his stuff on what is happening. You will find that he predicted much of what is happening now 3 or 4 years ago and argues why it was/is inevitable.
What is worrying is where he says we are going next.
tinyurl.com/6lqum4 will take you to his website and
tinyurl.com/54wxaq will take you to his Youtube page
Sorry to hark on about this but I actually think this is so relevant to car owners as what is happening now will fundamentally affect how and what we can afford as cars in the years to come.
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Well if gold is on the up we are all ok aren't we ?
We have got huge gold reserves..gee and I thought we were in trouble.
Oh no - hold on didn't Gordon sell all our gold at rock bottom prices..damn we've done it again.
Sorry.......please get me back to a proper motoring post.
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I had thought of mentioning that Pendlebury but the reality is that this is a very motoring related problem !
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Sorry.......please get me back to a proper motoring post.
Here you go - Volvo Truck sales are down 99.7
tinyurl.com/6grbe3
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Too many years of not enough industry !
Im only a little one man band but its been obvious for years that as a country we havent been making money. Simply buying imported goods and making money at each point of the sale isnt actually making any money for the country; the economy; and therefore us!
Its payback time now!
Time to invest in some industry. Bit late now but its the only way to grow the economy!
Not so long ago, (12 months approx) on this very forum, I was told how we didnt need industry; our economy was doing so very well! Our financial institutions and our IT businesses were making enough money for all of us.
Bunkum, pure bunkum! Head in the clouds!
Im old maybe, but have seen recessions come and go. Foreign sales is what we needed.
For all those of you who have not supported british industry (of all sorts) when you had the chance, may you all stand up and see where its got us.
And for all those who say but we have a thriving british car industry! Lets see where it is in 2 years, when we cant afford those cars. The plants will be off to countriies new!
2nd world country we are now, in all but admittance !
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For most products, it's simply not possible to make them in the UK competitively. It's only where there is some speciality which can't easily be done elsewhere and the associated premium that allows manufacturing in the UK to continue.
Only an absolute idiot would consider spending money to set up a mainstream manufacturing plant in the UK when it could so easily be undercut from abroad.
In the current downturn, I don't think that having a larger manufacturing sector would have prevented the problem at all - phrased another way, we had recessions even when we manufactured was a larger part of the economic make up of the country.
While the recession may be deep, and may be long lasting, I don't see why we can't recover, why London can't continue to be a financial centre.
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NC
I think the pictures of runs on the banks and the government's seizure of shareholders' interests may have caused long-term damage to international perceptions of the UK's attractiveness as a safe place to invest.
Maybe people will learn that wealth is only created by digging it up; growing it; or adding value to something by your labour - banking creates nothing and is just parasitism.
Fractional reserve banking is finite; it requires cheap energy to fuel it's never-ending growth - this might be a good time for the UK to establish and market an alternative.
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If you read some of the papers, people like the CEO of Rolls-Royce have been telling Brown this for years but they would not listen to him. He was just another manufacturer that felt hard to and wanted a pay out according to the city bankers.
Now whose looking for the pay outs.
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From this week's Private Eye
Mr. Darling used to boast to Wendy that her mother not only loved him but respected him. He was one of those deep ones who know about stocks and shares. Of course no one really knows, but he quite seemed to know, and he often said stocks were up and shares were down in a way that would have made any woman respect him ? Peter And Wendy, J.M. Barrie
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Has anyone decided what to do with their bank shares ?
I might sell mine in about a year and put it towards a new motor.
We are going to get the shares aren't we ??
I heard it best when it was described as a liquidity crisis.
The credit crisis is yet to come and that really will force us into a recession.
I would not have been as eloquent as tawse and others above but I do agree with all that was said. And whilst I am no liberal, Vince Cable was also telling Darling and Brown this would happen. What I love is that all the Boom was down to Brown and all the Bust is down to everyone else. I hope he gets another a kicking in the upcoming by-election because his financial policy and lack of control is going to make us all pay very hard for a few years yet.
And just to keep it motoring related, we are going to see some serious re-alignment of dealers and manufacturers in the UK over the next couple of years.
But to finish - that man has damaged this country badly and needs to be made aware of it from the electorate.
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We sold our last remaining ones (A&L) two weeks ago - a less than shrewd decision, should have sold them last year; but hey !
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We have all been caught like that Pug, your not the only one.
The problem is, it is so difficult to know what to do.
I was reading that as we enter a recession some countries are now having to put interest rates up because of the run on their currencies.
If you look at what is happening to £ who knows what will happen next.
The problems is that everything is spiralling out of control and it is all driven by greed so common sense goes out the window.
And whilst others have said that we have had recessions with a strong manufacturing base, well that was true, but at least you an alternative to try and create wealth. All we can do is move money around and look what effect that is having.
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The amazing thing is I think that Brown genuinely believes that the crisis is absolutely nothing to do with him.
Still, it's reassuring to know we're the first thing he thinks of when he goes to bed and when he wakes up. Bet his missus is pleased.
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The amazing thing is I think that Brown genuinely believes that the crisis is absolutely nothing to do with him.
It hasn't got that much more to do with him than it has to do with you or me. Blaming him for a systemic world financial crisis that has been building steadily for decades is a bit like blaming the police for speed cameras.
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Whose idea was it to de-regulate the banks then ?
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I don't know PU, nor do I know much about finance or economics, and as a small inherited shareholder I have been among the most helpless and wimpish.
If the present prime minister, perhaps as chancellor, deregulated the banks I don't suppose it has helped much, but nor do I suppose that it was necessarily his idea or that he had much choice in the matter. One has to remember what governments do: walk a tightrope between the voters and their real constituency which these days can probably be summed up as 'offshore money'. The pressures leading to perhaps important decisions often come from outside the country.
I don't see that Gordon Brown or any British grandee can be blamed for the US sub-prime mortgage crash that started all this. Capitalism thinks highly of itself and so do we think highly of it, perhaps for good reasons. We should not be blind to the fact though that it is really (in the words of a friend of mine) a system of interlocking banana republics.
By the way 'sub-prime' meaning obvious utter stinking rubbish must be the euphemism of the millennium.
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When the chancellor gave independence to the BoE he also removed any control they had over the city.
Of course he cannot be blamed for the US sub prime specifically but his whole tenure has been based on creating debt.
Edited by Pendlebury on 25/10/2008 at 20:25
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It hasn't got that much more to do with him than it has to do with you or me. Blaming him for a systemic world financial crisis that has been building steadily for decades is a bit like blaming the police for speed cameras.
Gordon Brown has been responsible for Fiscal policy in this country for over a decade. He's bankrupted this country. While the financial crisis might be world wide, the fact is we've only got mouldy buttons left in the UK tin to tide ourselves over. And that is certainly all down to him.
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And what about the PFI black hole ? When the contractors/developers involved in this off the balance book activity come to liquidate their assets as they are facing bankruptcy - it'll be couch up Joe Soap.
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Aren't the PFI companies the one the banks won't lend to now to build our hospitals and schools.
I think we are seeing the results of one of the most dis-jointed approaches to running a country in History.
Well down Labour, still at least Harriet is at the top with them doing all the stuff that matters. Making sure we get lots of social justice and whatever else it is she does.
I am moving further and further away from motoring - and my BP is escalating, I'd go to a doctor if one was open at the weekend but no we just double their wages for less work.
Stop it pendlebury - back to motoring ----- sorry guys.
Edited by Pendlebury on 25/10/2008 at 20:02
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fact is we've only got mouldy buttons left in the UK tin to tide ourselves over. And that is certainly all down to him.
I hope you are exaggerating the depths of our destitution mlc. I think you may be a bit. But I refer you to my post above. I have a feeling that good housekeeping with a view to the rainy day that is now upon us wouldn't have gone down all that well in the square mile. And what would have happened then?
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I was reading that as we enter a recession some countries are now having to put interest rates up because of the run on their currencies.
We should also put rates up to promote increased saving into the battered banks.
Cutting them is pointless anyway; the sterling LIBOR [currently 6%+] has now fully decoupled from the base rate and dear old Mervyn is finding that you can only pull on the reins to slow down - pushing on them to go faster is ineffective. [And you know who nicked his spurs....]
Fractional reserve banking means that for every pound a bank loses in dodgy deals; it has to recover ten pounds from it's borrowers to maintain it's ratio. That level of de-leveraging has never even been tried before - and they have no way of even estimating their exposure to CDS losses.
I saw the property crash coming and turned my house into cash; maybe a tad early, but you should always leave the last of a boom to the idiots - but I certainly never envisaged what is approaching now. Cash savings could be nearly wiped out.
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>>long-term damage
I think that's true SL, but I don't think America's or any European country's finance sector is going to emerge unscathed.
I do agree about the basics of wealth creation, but, I don't agree that having stronger manufacturing would have helped us that much in this particular situation. Germany, for an example where manufacturing is stronger (and engineers are held in proper regard!), is by no means immune to the current downturn.
In one way, we're lucky, because as a family we aren't particularly dependent upon credit, but, on the other hand, my employment contract ends next autumn, and I suspect that jobs aren't going to be too plentiful then...
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I tend to disagree NC.
Sure not everyone will be immune but having an alternative to support the wealth of the nation has to be better. Coupled with some decent regulation as Spain has. What confidence do you think there is going to be in financial services for the next 10-20 years, very little IMO. So you need to create wealth or dig it out. China, the US and Europe will all start selling home made goods again soon, and the Oil countries will start pumping more out. We will be left with our debt and finances to move about. I agree you will not be immune from the effects but you have somewhere ales to go. Your eggs are not all in one basket as it were.
PS Good luck with future work.
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I think the only thing I will add to support this is an example of 2 countries.
UK and an old staging post of ours, Singapore.
We had manufacturing, destroyed it and and decided that financial services was a much better idea and look where we are - even after all that North Sea Oil.
Singapore had nothing when we left it. It decided that the only thing that would differentiate it was it's people. As such it invested heavily in education and wealth creation through manufacturing. Now it has companies lining up to set up factories there, be they electronic, aerospace or drug companies. To support this they also have a financial service sector. But they recognise it is manufacturing that drives the need for services.
They are now one of the wealthiest nations on earth and there people enjoy some of the highest standards of living.
Meanwhile in good old services led blighty our currency is falling faster than in the last 40 years, we are in debt up to our eye balls and some of the worlds leading economists think our chancellor is mad for trying spend his way out of this mess with more debt - yes you got it the stuff that got us into this mess in the first place.
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>>PS Good luck with future work.
Thanks!
I don't think it's impossible for us to manufacture again, and quickly, if we wanted to strongly enough. I think this would mean "thinking the unthinkable"
I remember reading a prescient article in one of the engineering magazines saying that there would have to be a major re-adjustment of people's salary expectations and a reduction in the social costs tacked onto the costs of employing people in the UK before mainstream manufacturing in the UK would become viable again. Perhaps this downturn is the precursor of such a re-adjustment?
So, which costly legislation needs standing against a wall and shooting first?
Health & Safety at Work Act 1974?
Working Time Directive?
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I do have to agree you with all you say above NC.
I would only add that I believe the 2 acts you quoted were meant for the good of the people. Unfortunately we get idiots, both managerial and TU based that screw it up with their version of the acts. Usually again driven by some form of greed.
Edited by Pendlebury on 25/10/2008 at 19:49
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I suppose the only other thing I will add to your point NC is that yes I think we can also start manufacturing again.
But how do we ask our future scientists and engineers to get educated to the highest levels.
The answer.
By going into debt with fees etc.
My goodness it's all coming home to roost now after 10 years of proper labour rule.
You just couldn't make it up could you.
Edited by Webmaster on 26/10/2008 at 01:58
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As much as I fear the financial implications of all this as much as the next person my biggest worry is reserved for the potential response.
When the depression was at at its worst in the late 1920s and early 1930s we had an amount of civil disobedience but by and large the population at that time still respected, or perhaps more accurately, feared authority.
If we are to experience long term and severe deprivation, I am genuinely concerned for the very fabric of society given our more individualistic attitudes this time round.
If ever we needed strong and trustworthy leadership it is now. If the mob decides to react, someone help us.
Edited by Webmaster on 26/10/2008 at 01:58
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Humph, plus swinging cuts to Policing as well, they're talking about cutting Police jobs in some Forces due to the "dramatic cut in crime" dream on.
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"When the depression was at at its worst in the late 1920s and early 1930s we had an amount of civil disobedience but by and large the population at that time still respected, or perhaps more accurately, feared authority."
And bear in mind the Police service is slowly being replaced by PCSOs and a civilianisation programme. Recruiting has ground to a halt as posts are converted.
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Your all worrying over nothing guys, we have gatsos CCTV and community support officers.
Don't panic.
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Ooops - sorry full chat - you got there first.
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it's all coming home to roost now
As part of my normally fairly hands-on role, I spend a few months each year teaching on a group design course for third year physics undergraduates at a well respected University. I know this is easy to say, but based upon the standards of the students I see, I'm sure that qualifications at all levels have been massively devalued during the last decade.
As an illustration, I set some basic engineering example questions to get the students used to the sort of engineering calculations they will need to inform their design trade offs. I'm having to consider removing a question on the simple bending of a cantilever beam, because so few of them are even coming close to having a reasonable go at it. I would prefer to simply mark them with a poor grade, but, we can't do that to the customers!
Much as it sticks in my craw to say this, I think that trying to make Universities work as a market has been an awful idea. It really was only the ability to fail students that kept standards up, and made qualifications meaningful. I know now that if I fail a student, I am made to jump through hoops and justify my actions far more than the student is!
This means that, perhaps, one of the raw materials needed to rebuild manufacturing, some real engineering talent, isn't actually there.
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Is it me or has anyone else noted that buisnesses are starting to appear greedy?
My telephone company ( the only independent on in the UK now imposes a £10 fine if the bill is not paid in a fortnight - handy if you go away for 2 weeks!)
Oil boiler service charging £56 labour above the service for coming back to fit a part that was not on the van 15 min to fit. Had them for 15 years - no more.
Local TV service charged my mother £36 to replace batteries in a remote on the way back from another job.
And other examples Is this indicative of the crunch as they are trying to claw in money
Edited by Fullchat on 25/10/2008 at 20:40
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I came into regular contact with teenagers over a 20 year as an ADI. During that time the percentage preparing to go to university went from the odd exceptionally talented individual to what seemed like every other one. Without being unkind, many of them were just plain thick and were wasting their time and everybody elses money. In my day they would have been advised not to bother staying at school on till 16 and going for CSE's as they were not academic enough, but to leave and learn a practical trade. Now we end up with a load of "Highly qualified" graduates filling shelves in Tescos, their Meeja Studies degree meaning naff all.
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....and the thick ones don't make it into the hands on trade where they used to flourish. My neighbour is a joiner, he can get willing and capable non-academics as apprentices but their college work is a non-starter so no good to him. In the past they would have made it on artisan skills alone.
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If the government is serious about following JMK and "borrowing it's way out of debt;" then it could do worse than to reactivate all those suspended road upgrades that were shelved as "they'd only encourage more traffic...." Faster to take effect than all their other mad suggestions so far and there might be some visible results this time.
[Incidentally JMK wasn't a fan of borrowing in a recession; he advocated saving during the good years first....]
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Anyone wondering how the world got itself into this financial nightmare that is going to have a serious impact on all of us should read "Cityboy" by Geraint Anderson. It gives a chilling insight into how we were all shafted by arrogant gamblers who robbed us blind and made temselves super-rich in the process by stipping any worth out of financial institutions and businesses, benignly watched over by a government who were blind to what was going on and too scared of upsetting the city to look closely and regulate it properly.
I suspect that the problems of whether buy a car based on MPG and VED bands or what discount you should negotiate are going to seem an insignificant little detail with the real problems that may be looming.
Edited by Robin Reliant on 25/10/2008 at 21:31
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I am short the FTSE but expect to close within two days due to a crash next week. Then a rally to January 2009**? Sell everything then because from there it's Armageddon.
As for cars, well they are going to get a LOT cheaper. I keep looking at C class Mercedes diesels in ebay: 6-8 years old. They are not selling very well.
In 9 months time with 2.6 million unemployed and loads of negative equity I expect them to be much cheaper.
Most economists would be better employed at council tips feeding their papers into recycling machines: they are certainly worthless acting as economists.
Business cycles do exist and have done so since about 2000BC . to talk of abolishing them is hubris of the worst kind.
Never mind, the current Government is likely to be interred for a generation after the next GE. WHether their successors will be any better, I have no idea.
I think I would like a 2 year old Bentley Continental at £15k when all the Premier League club owners go broke: starting early next year.
** at current rate sof decline the FTSE 100 will be zero end November and £1 = $0.0000 so the current trend is unsustainable and near a powerful rally which will hopefully be very profitable.. (I own no shares at present)
Edited by madf on 25/10/2008 at 21:51
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We are reaping the whirlwind from the deregulation of the 1980's when this country's manufacturing base was decimated and 'The City' and 'Services' were supposed to lead to economic Nirvana. Anyone remember Thatcher's speech on how the UK was supposed to be the first 'Post Industrial' economy and we henceforth make money by selling each other stuff and 'taking in each other's washing' (as IIRC Ted Heath said) ?
Who deregulated the mortgage market?
Who introduced legislation to allow the demutualisation of the Building Societies?
Who introduced the PFI (PPP's)?
Labour's mistake was to continue with what has been effectively Thatcher/Joseph/Friedman economic policy.
And (having worked in Universities for a good many years teaching engineering) I can tell you for certain that 'The Market' was introduced into HE in the late 1980's (anyone remember that excellent TV series 'A Very Peculiar Practice' ?). Prior to 1988 universities spent very little on 'marketing' - now the spend is measured in many £millions. Universities now respond to market forces and so engineering and science courses have fallen by the wayside because they are too expensive to run. BTW, although 'Media Studies' gets a very bad press, there are actually very very few students studying Media Studies (way under one percent of the total) - but it gets all the bad press.
On the positive side, I don't think the UK is quite the basket case its made out to be by the (somewhat negative) posters on this forum. Public debt as a percentage of GDP is actually not too bad by the standards of most of the G7 (low 40%'s), and the oft quoted PFI issue is not actually that big. The Northern Rock debacle has swollen the figures, but it looks like things are going in the right direction there.
Private (consumer) debt is vast, of course, and that will mean a period of relative austerity, but life will go on.
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qxman - it is enlightening to see how many followers of Friedman et al have suddenly re-discovered John Maynard Keynes. Pity they and some academics all stopped reading him and Galbraith in the 80's.............
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This must be serious because at this point a moderator usually steps in to guide the discussion back to motoring !
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Well in my humble opinion it has everything to do with motoring. This country made 1.5 million vehicles last year, the country buys 2 million, most are company cars, most private cars are funded by credit packages - goodness knows how many jobs depend on the above in everything from washing them through to design. So motoring depends on the economy "working". None of the other mods or HJ himself have said anything so carry on !
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qxman - it is enlightening to see how many followers of Friedman et al have suddenly re-discovered John Maynard Keynes. Pity they and some academics all stopped reading him and Galbraith in the 80's.............
Yes, was reading the interview with Greenspan. Apparently he is in a ?state of shocked disbelief.? He can't believe that self-regulation of financial markets has not worked and reckons its the end of a 30 year period of unfettered capitalism -admits that he made 'mistakes'. I suspect the US will be changing a lot. Was speaking to my uncle on the phone last night (has lived in the US for many years, now retired) and he tells me there is a brewing health-care crisis because many people can no longer afford the premiums (he's one of them), and employers that used to include it as part of their benefits packages have cut back. Nearly 2 million people made bankrupt by medical bills in the last 12 months!!
Things are not too rosy in the UK right now, but there are lots of worse places to be in the world.
On a motoring note, local Mini dealer has more used stock than ever, rows of the things - there must be some massive price deals on the horizon.
Just bought a brand new car for a family member (a Skoda). Local dealer rather poor. We wanted to discuss a discount (it was a cash purchase), the dealer would not even quote a firm figure. "We will look after you on the price" - what does that mean?? I suggested 15% off and got the comment, "if you are expecting that sort of discount then we are wasting our time, there is no point in talking any more". Basically rather rude and aggressive. I ended up buying from a dealer miles away, who came in with a low price and some 'free' fitted options. Even then it was hard work because he 'forgot' to reply to several of my queries on what options were fitted to the car. I rang back on his day off and none of the other salesmen would help, it was suggested I phone back with my query on the following day when he was back in. Seems like they never heard of teamwork, and given the market is supposed to be so slow I don't know what they do with their time?
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Any advice for someone who owes nothing and has a few quid in the bank then?
I am a little worried that if I do nothing then my savings may be vaporised. I would be tempted to buy gold if it wasn't at the relatively high watermark that it's around already. I'm a little concerned as the oil price has recently demonstrated that the price of commodities can go down as well as up.
The motoring link to this questions is that I am half tempted to buy the TVR that is winking at me in the local "bling motors" dealership. At least I would have something to show for it if financial meltdown occurred the day after. TVRs dont rust and they dont make them anymore after all. Can't be any worse than bank shares or investing in sterling (which has lost 25% againt the dollar) surely?
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Richie
Gold is the question I'm struggling with. E-bay, non-proof, Krugerrands may be one way round the VAT issue. Seem to be going around £495 a pop.
Coincidentally; a chippie offered me his treasured TVR for cash just this afternoon - no idea which model, convertible thing with a Rover V8. He wanted half of what it cost him two years ago, so I let it pass.
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Richie
If you spend money on a TVR (which is a poor choice of car IMO) the money will disappear, never to return.On the other hand, if you invest in shares of the right companies, in the longish term you will be onto a winner.
The fall in the stockmarkets cannot go on forever, just like the rise in house prices could not go on forever.If stocks kept falling at their current rate, then pretty soon we would get to the situation where companies would be worth zero, with assets that are worth zero.This is plainly not going to happen.
We have the crazy situation where a company( a true example) may have say 120 million in the bank and assets of gas reserves of billions of cu feet, worth just about what they have in the bank, so the gas is in the balance sheet for free.
This situation will end at some point, and before it does, I reckon the smart money will be placed accordingly and fortunes will be made.
When Warren Buffet says he is buying stocks right now, then its time to listen. Like he says, he does not know when the situation is going to turn, but turn it will. You just have to find the value companies with a good track record, invest and wait.
Edited by Mr.Tee43 on 26/10/2008 at 07:47
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I can?t see the stock market ending up in zero territory. The best time to buy, of course, is when all around you are selling. All it takes is a lot of nerve and some cash you don?t mind gambling with!
No one is buying commodities at the moment and that is well reflected in the price of mining shares. Just look at some of them - even the big names that have been around for donkeys years. And for those of us of a more nervous disposition, there is a good selection of major high street retailers whose shares are trading around a third of their 07/08 highs.
I think many people will make a lot of money if they get their timing right. Others will lose everything.
Now, what?s happened to my B & B shares??
Clk Sec
Edited by Pugugly on 26/10/2008 at 09:41
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Great thread, guys. Off to slit my wrists now.
Completely serious question to all of you in the "if you think this is bad, just you wait..." category - what satisfaction is it going to give you if you are right?
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I always say `are you a financial advisor?` if its affirmative I insist on dealing with someone who isn`t. It`s only 3 months or so back, that I was in a certain high street bank wanting to put money into a 2 year fixed rate bond.
Anyway, discussing the amount, they started to `flock` around us. Cups of coffee perhaps? culminating in someone else intervening - who I believe was the head chicken- trying to get us to put money into something or other that was linked to the FTSE 100.
"GUARANTEED TO GET YOUR MONEY BACK"
Yeah.. right.
Thing is she was so excited - wired. You just knew that she would get enough commission for a new Fiat Panda or something. I actually nearly walked out, but knew their fixed rate bond was better than the other place, where we keep the rest.
Shoulders slumped in front of me, when we refused to get involved with the FTSE 100 and when we left, the other workers in the main office all smiled like Cheshire cats and said "bye" in chorus.
We have this about three times a year as bonds come up to term and Isa`s need topping up and I just hate it all. Dealing with them that is. Constantly trying to get you to put your pile into something that will feather their own nest. Even though you state at the outset that you won`t..
A further note.
In the early 80`s while working I used to often encounter people with no bank accounts and large amounts of cash stuffed around the house.
And when you asked why, it was always the same. Either they or their families or friends had been badly burnt by the 1929 crash.
When the great Gosling-Snortpowder-Powerhead (the 3rd) says it`s time to buy shares and `speculate` . Perhaps it`s best just to `expectorate`, in honour of all the self serving tricks and traps, large and small, that the financial sector, has done, and has still to pull.
oilrag
Edited by oilrag on 26/10/2008 at 09:43
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>>I always say `are you a financial advisor?` if its affirmative?
Quite right. I?ve only ventured into the office of one financial advisor in my entire life. If I?d gone along with his idea my mortgage redemption, some years ago, would have cost me considerably more than is did.
I might enjoy dabbling in shares- but not with my mortgage.
Clk Sec
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Thankfully I sold all of my shares in May. I had a feeling that things were going to get bad. Of course I was advised not to by a 'financial advisor'. My experience of 'financial experts' is not good. I did a PhD in semiconductor physics which involved lots of maths/stats so I'm pretty good at doing calculations and 'modelling' in my head. I've spoken to so-called financial experts (many of whom seem to have nothing more than a GCSE in maths) and who can't do a simple interest calculation. Steer clear of these guys - look at the staggering mess they've made of the banking sector.
Its possible to be overly gloomy though. Whilst a lot of sectors such as finance and construction, new car sales etc, are going to be badly affected, there are many people who will not be hit and will continue to do quite well. Maybe taking one less foreign holiday a year and eating out a little less often. Taken as a whole I think the word 'meltdown' is too strong - life goes on.
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Some good sense talked here. The main worries seem to be in the areas of overall company liquidity & hedges against inflation.
Myself, having taken a bit of a haircut with my financial sector shares, it seems quite prudent to look at the 'almost-utilities': landline telcos, mobile telcos with 3G assets, some supermarket groups. Another area would be the 'green'/alternative power generation sector - this doesn't mean the neo-dotcom-type rash of 'windfarm'n'biofuel' start-ups we've seen recently, but the larger diversifying 'classic' energy companies: BP, Shell, BG, Centrica etc.
- may add or delete from above list as & when info becomes more available.
Although inflation is a real worry for cash, the fact that equities have fallen greatly means that my cash pile is currently 'worth' much more - deflation in equity & general asset/commodity prices means a timely reversion to them should hedge against cash inflation.
So, all in all, not too bad. I like to think the current 'correction' is a simple global re-valuing of things & expectations - A zero or two has been chopped off valuations, but overall value relationships remain fairly constant. It must be remembered that although there has been massive value & asset destruction, the underlying asets remain; and those that made those notional profits (think hedge funds & oligarchs) have lost them - no-one really escaped over the horizon with all the cash.
Next year or two in the UK? Pretty dire in terms of jobs & govt. debt, lots of re-balancing in the economy: some sectors diminishing hugely, others becoming more viable & growing. I don't believe in the notion that we're all yesterday's people in the West, we're still global leaders in many sectors & have strong & large investments in the emerging economies. China, India, Russia et al still have to invest their nett trading surplus billions & require us to buy stuff for their economies to continue as they are.
All IMHO of course - DYOR.
Now, back to the important stuff - let's get stuck into a discussion about wheel trims!
Edited by woodbines on 26/10/2008 at 10:29
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Must be nice to have all this spare dosh... care to share it around a bit?! ;)
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Not sure if you're referring to me b308, but I'm not at all rich. The money I do have would probably be the equivalent to an average 'pension-pot' - but I don't have a pension, I prefer to make my own bad decisions at least!
I think very many quite ordinary people like myself - but with formal pension arrangements in instead of cash - will be badly hit. The advantage with pensions are the associated tax-breaks/incentives - the disadvantages being that the money is beyond your reach should your mind and/or circumstances change - you're locked in to your pension holder. The opportunity cost in the present situation must be enormous & crippling to some.
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It wasn't at anyone in particular - as many of the posts were about how to "invest" money! Hence the smiley after the comment!
I agree with you about the current situation being hard on "cash only" pension pots... rather glad both of mine were/are final salary... but it seems they might suffer in the future... only ones who will be ok are those with a guaranteed one from the Gov... like our MPs... couldn't think of any group more deserving....
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Can anyone remember how previous recessions affected the car industry and motoring in general? I'm afraid I'm way to young to remember, all I've known is national prosperity.
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Regarding "Takes it`s toll"
I think it`s worth considering the psychological implications of constantly being exposed to (via TV, newspapers and so on) the current financial situation.
I call it the `Princess Diana effect`. As some of you know, I used to work in Mental Health and at the time of Princess Diana`s death, the sheer exposure to the television (and other) coverage actually caused lowered mood leading to clinical depression in some people.
If not having to deal directly with aspects of current events it`s likely to be beneficial to mental well-being to limit expose to the news coverage of it and have a more positive train of thought about something else. (Even if affected directly by it to limit thinking about it to certain times of day)
There`s also the fact that `The Recession` is likely to be like a dead rabbit flung about by a pack of hounds by the media.
Sometimes, as we have seen, these guys and gals can make news out of trivia like "snow is now actually falling" when some of them in London actually went out onto the streets with cameras to show it.
Not their fault of course `its news` but, in my experience, prolonged exposure to bad news can have it`s own detrimental effect, even when not directly affected by the actual event.
oilrag
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