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| The Credit Crunch; How is it affecting U? | |
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| Topic Started: 13 Nov 2008, 04:10 PM (756 Views) | |
| Christchurch Kiwi | 13 Nov 2008, 04:10 PM Post #1 |
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I just wondered how the worldwide credit crunch is affecting you guys in Aus or UK, if at all? Is it all just hype? Do you think companies are using it as excuse to lay off people? Could it be a good thing; if we consume/purchase less it is better for the environment. Fi |
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| koalakim | 13 Nov 2008, 04:36 PM Post #2 |
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Well everytime I read the news from the UK it gets gloomier plus they seem to be hyping it up in the news here as well now. The company I used to work for in the UK has made some people redundant including the guy who used to work for me. They changed his job after I left and have now decided that it's not needed! They are blaming it on reorganisation of jobs plus the downturn. Time will tell I guess. It will affect us as we are one of those services you use when times are good! According to other photographers bookings are down and again if people are looking to cut costs they will go with someone cheaper although it might mean they won't get such a good service or photos but that never seems to matter at the time! I suppose it depends on what job and industry you are in, maybe companies just won't recruit or sit tight on investing until things start to improve. On the news last night they were saying General Motors in the US was going down because they can't get any finance! You just can't imagine a huge company like that running out of money. That seems to be the problem - if companies and people can't borrow or stop spending then the whole cycle of supply and demand slows down or even ceases. If companies can't get fiancing to pay staff, they go, or they can't produce their products, or no one will buy them because they haven't got any money! A vicious circle! It maybe better for the environment but not for those people who loose their jobs as a result and then in turn loose their houses! Then that isn't good for the Govt who has to support them! On one website I was reading there is a loophole in UK law that is now being used to reposses houses if someone misses 2 mortgage payments or even 2 credit card bills - you would think it would cost them more to do this but it seems that some lenders are doing it. They are now talking about 35% drop in home values and no recovery for about 3 years. For us that means no home here until things start to improve as I'm not giving the place away! People are wanting to move in the UK but it's the lack of money around is the problem. I think the mortgage market is just so confusing at the moment - one week an offer is there the next it isn't, rates up then down so people are sitting tight until it settles down. Things will improve, they always do as it's a cycle but whether it lasts 2/3 or 10 years is anyones guess! |
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| mojo | 13 Nov 2008, 06:08 PM Post #3 |
Newbie
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And with this, what would be the impact on Holden in Australia and Vauxhall in the UK (plus Opel in Germany)... |
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| tam_n_brett | 13 Nov 2008, 06:09 PM Post #4 |
A phenomenon
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The credit crunch is deffinately in strong hold here in the UK. My OH is a builder so it affected him very early on as house builds were the start of the stop. With mortgages and credit being extremely difficult to get it's a sad knock on effect to the building industry, so we feel like the recession started a good while ago. The news reports now are showing the affect in industry and redundancy is deffinately on the up, todays report is 1.8 million and is thought to be 2 mil by Christmas. We are feeling it in that work for OH is tight and prices are crap!! We also have our house on the market so......... quite depressing really :crybaby: Things can only get better :pray: |
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| koalakim | 13 Nov 2008, 06:30 PM Post #5 |
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Hi Tammy Hope you guys had a good flight back. What's it like - how do you feel about things now you've been and got the t-shirt? Oh blimey, must be very worrying for you with Brett being a builder. My mate is a builder but fortunately they've managed to line up a few jobs to keep them going for several months with someone who still has some cash! Just get that house sold or rented out and get over here! Take care...chin up. Kim :waving: |
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| bradybunch | 13 Nov 2008, 10:49 PM Post #6 |
Bradybunch
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Must say that it hasn't really affected us and I believe a lot of it is hype by the media who aren't helping things in my opinion. One of the construction giants (Wimpy I think, but can't be sure) whose shares have been all but killed had their shares up to 18p. So what did they do? They promptly announced doom and gloom and warned of very rough times ahead, at which point their shares plummeted to 11p. Doh. I don't think negative talk is helping matters. Having said that, there are becoming many more stories daily now of very large redundancies over here. One story on the news last night was a small recycling firm who are having to close now as they can't sell their cardboard to the Chinese, because the Chinese aren't making the white goods which the cardboard used to be packaged in. Also, the lady that does our stationery and some bookeeping has just lost 4 main clients. She is now looking for a 'proper job' and doing some mobile hairdressing to avoid being repossessed. The ramifications of all this are absolutely massive, and I feel so sorry for those who are caught up in it all. On a bright side though is that Unleaded is now down to 92.5p per litre. Lorraine |
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| OzTennis | 14 Nov 2008, 03:28 AM Post #7 |
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With respect it's real (everywhere and not just in UK) and not media hype eg: http://www.hifx.co.uk/marketwatch/market_news/headlines/uk_sterling_tumbles_on_bleak_outlook_for_uk_economy_13_nov.aspx |
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| tam_n_brett | 14 Nov 2008, 04:10 AM Post #8 |
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A phenomenon
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Hi Kim, I will at some point soon add to the reccie list on the forum......... We had a fab time and are in no doubt that we do want to make the move permanent. We did loads but only scraped the surface. I'm really glad now that we have ended up coming over and having a look around as i think when we come for good it won't feel as daunting. Both my boys really liked Mel and are looking forward to returning so that in itself was a great success. We met some great people and are looking forward to cementing those freindships further. Keep a look out for my reccie review, i just haven't had time to write it yet but will do soon. It was really lovely to meet you and Steve thanks for coming to meet us :bow: We have had chats with our EA and have reduced the house by another 5K today, don't know if it will help but are willing to try as desperate now to get it sold. |
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| koalakim | 14 Nov 2008, 08:24 AM Post #9 |
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Legend
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Yes, the situation is real but a lot of how markets and consumers perform is on confidence. If confidence is being erroded because the media is constantly telling you bad news and hyping it up then even if you are okay, your job is safe etc you will still take notice, loose confidence in the situation and tighten your belt - put off buying things which means some poor soul will loose his job at the end of the day. Once confidence returns then investors will start to buy shares again thereby setting off the accelerator which then pulls us out of recession and into an upturn. Maybe if the media just reported the facts instead of getting everyone into a panic frenzy then the situation might resolve itself quicker. The media being the head Leeming ready to jump off the cliff with the nation following behind! Tammy - glad you all had a gret time and felt the recci was the right thing to do! Once again good luck with the house sale. |
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| Thebears | 15 Nov 2008, 06:54 PM Post #10 |
 
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If the media reported the facts there would be blood on the streets. |
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| Christchurch Kiwi | 15 Nov 2008, 07:47 PM Post #11 |
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Is anyone out there snapping up 'bargain' shares? Has the market bottomed? Good news on mortgage rates, not so good if all your money is in cash! Fi |
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| Malecc | 16 Nov 2008, 09:54 AM Post #12 |
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There are some bargains out their, however you really need to do some research. Some companies have had theis share values plummet for no reason, they have good liquidity and are trading well. The only reason for the down turn is following the market. People are out there buying but it's only in small numbers. Personally, am I buying, well that would be telling! However as an executive director of a infrastructure trust I'm watching infrastructure shares. People will always need electricity, gas and water. Steer clear of those that are highly geared such as B&B and Macquarie, the worst is still to come for these I fear. |
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| mojo | 16 Nov 2008, 01:41 PM Post #13 |
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It's an unfortunate thing that the supply of such things are linked to shares, shareholders and the whole fat-cat boss thing. Especially water, but all of these should be in the public ownership. |
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| Thebears | 16 Nov 2008, 03:26 PM Post #14 |
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Would be interesting if public ownership provided any better certaintly of supply at lower cost? |
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| Malecc | 17 Nov 2008, 08:24 AM Post #15 |
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It's a known fact that utilities that are privately owned are better operated & managed than those that are Public owned in most cases. Some of the infrastructure trusts, B&B for example, have been borrowing debt to pay dividends. Having worked in both the private and public sector, I know first hand how much money is wasted in the public sector. There's no accountability and people hold on to their jobs no matter what. In the private sector you are held accountable and if you under perform, it's goodbye. I worked for BNFL in the UK for 16 years, I tried on many occassions to get rid of under performing managers and was not allowed. Being state owned it was nearly impossible to prune the 'deadwood', they just got moved to another department. Public owned utilities still pay fatcat salaries. The CEO's of the NSW & QLD utilities are all earning over $1M a year, that's actually more than some privately owned utility CEO's. |
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| gary 'n' wendy | 18 Nov 2008, 07:41 AM Post #16 |
AUSSIE INTERNET IS FUBAR
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I'm afraid were going to be seeing more stories like this in the coming years 75,000 jobs to go in banking This might not effect Australia directly,but anytime a huge boulder hits the still lake,the ripple effects stretch wide. Wendys been chasing some high profile manegerial jobs in travel.On two occasions,jobs she's put in for have been withdrawn,because the companies themselves have imposed a recruitment freeze. Ive always been an optimest,but this whole thing really scares the hell out of me :tartan: Gary :tartan: |
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| RobN | 18 Nov 2008, 10:38 AM Post #17 |
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Here's the corresponding article in The Age - shows that there will be some job losses in Citi Group in Australia (not that they have a huge amount of staff here) There was also a report about a week or so ago saying that in Australia it's expected that 10,000 jobs across the big banks will go over the coming months. |
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| kevin07 | 18 Nov 2008, 04:43 PM Post #18 |
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The UK and Aus will probably both suffer. I was surprised how many jobs in Aus are in retail and manufacturing. China's economy is slowing The drought is Australias big problem though and will kick in economically quite soon |
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| OzTennis | 19 Nov 2008, 01:28 AM Post #19 |
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Just to spark the debate. :Grin: "It's a known fact" also that the world economy would have imploded without the injection of public sector funds. The need for this was due largely to the reckless and increasingly risky decisions and new derivates, loans and hedging invented over the last decade in the private sector (is this because of pure greed for bonuses or to please bosses when you don't have this job security you mention in disparaging terms re the public sector?) One point to consider when lauding private ownership of utilities is whether it is desirable from a strategic point of view to have them owned in Spain, Germany or wherever? If utilities were still in public ownership the spectacular increases in gas and electricity bills over the last year or two (yet to see them plummet along with the cost of oil and gas) might not have occurred? Wastage is also not the sole domain of the public sector. eg the average bonus for every employee worldwide of a well known US merchant bank with a heavy presence in London was going to be £315,000 each - but then the credit crunch bit and 10% of them have lost their jobs and the bonuses have been reduced for those remaining. When it is in the public sector one may call a salary/bonus waste but when it is the private sector presumably it is a reward for talent or risk taking or it is deserved? Having had a lot of dealings with private sector businesses I can tell you there's a lot of 'dead wood' still employed in them too. |
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| Petals | 19 Nov 2008, 05:36 AM Post #20 |
A phenomenon
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I think there has to be more control on business as if they are going to put their hands out all the time from tax payers then there has to be some accountability. Oh and I were discussing the privatisation of the power industry the other evening and apart from one gas fired power station we cannot think of any new infrastructure that any of these companies have instigated. With our rising population this is something that needs to be addressed. I preferred it when the SEC was the electricity company. Talk of dead wood, yes of course there was dead wood but they were employing people, training apprentices and paying taxes no matter what they were doing. Now we get a phone with a multitude of messages and are so confused as to who is who we cannot remember our power company. I do not think that is progress. Its all about keeping everyone employed and not everyone has the intellect or capability to work in high powered jobs. Unfortunately these people will probably lose what jobs they have no with the downturn and more expense for the government to support them. Business is like a child when it goes bellyup its help me mummy and the mummy gov often steps in. |
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| Amanda & Simon | 19 Nov 2008, 08:23 AM Post #21 |
Braiiiiiinnnss
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But assuming we're not going in for Mugabenomics here and simply printing a load more money those public sector funds are of course forcibly taken from the private sector and private individuals. Is it not possible that the private sector and private individuals in general might have been better able to weather a financial storm if significantly more of the money that had become public sector funds had been left in heir pockets to begin with? I see it as being like the biggest kid in school demanding half their lunch money from all the other kids - naturally by Friday he can afford to buy 'em all lunch if some lose theirs on the way to school. :yeap: Probably the best argument for public ownership of utilities, regardless of any waste or inefficiency. The essential ones probably do need to be kept close to home and that can never be guaranteed if they're in the private sector. You may need to have a stiff drink and a lie down OzT, but I tend to agree with you here :Grin: Of course, we could go on to talk about which ones are essential and which ones aren't... :wink: Well, a tank of fuel cost us a hell of a lot less yesterday afternoon than it has recently, perhaps less than it's been in the year since we've been in Melbourne. So that at least has come down. Not sure about the gas and leccy though. But I'm not sure how public ownership would prevent spectacular increases unless the power source is also publicly owned. If country A has to buy much of its gas from country B surely it's going to make little difference whether the gas company in country A is public sector or not. A little will be achieved because there's no need to be profit driven, no shareholders expecting dividends etc, but if the raw materials cost more then they just cost more, end of. True, wastage is not the sole domain of the public sector but bonuses aren't a symptom of this IMO. To take your example it would certainly have been wasteful for the bank to have paid all it's employees an average bonus of £315K regardless, but to reduce both the bonus and the workforce seems more an exercise in prudence than wastage. Whether all those who kept their jobs were worthy of both that and their reduced bonuses, and indeed whether the bank was profligate with bonuses last year is another matter of course. Without knowing any more than that it's a US bank and the average salary it's hard to say, but presuming it's a large company I admit it's almost inevitable that there's at least a handful of clowns who've been promoted beyond their competence and are getting bonuses beyond their worth. Still, it's the company's money and I don't see why anyone outside should dictate what's done with it. We can always bank/shop elsewhere if we don't approve. The public sector on the other hand is supported by taxes, and as I said above you don't have a choice about it. So it's annoying when a government pisses away a huge amount of money on something and the papers (particularly the opposition supporters of course) like to have a rant about the costs. On top of that there's the low level stuff (e.g. the inability of a dozen or so different UK government departments to do something as simple as buy post-it notes at anything like the High St cost - IIRC it was between twice the price and ten times as much), and because the public sector is so vast a few quid or dollars here and a few more there all adds up to a vast amount of money coerced out of taxpayers that for all practical purposes might as well have been set on fire. |
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| bradybunch | 19 Nov 2008, 10:04 AM Post #22 |
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Bradybunch
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I was chatting with my friend this evening who, along with her partner, works for British Energy (formerly Nuclear Electric) and they are just waiting for the company to be taken over by the French. Not sure how it's going to work out, but it would appear likely that her partner will be made redundant next year. Also, they only moved into their house about 18 months ago and are now in negative equity. Mind you, one economist was predicting house prices will plummet by 70%, so we're probably all going to be in the same boat over here anyway. We're all doomed (couldn't resist a Dads Army tribute there!). Lorraine |
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| Gail.C | 19 Nov 2008, 07:47 PM Post #23 |
A phenomenon
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I don't think it's really started in Australia yet. I estimate we're about 12-18 months behind the UK in terms of recession. The housing market has slowed like the UK did at the beginning of last year. I took the afternoon off to do xmas shopping today in Chadstone. It was packed so there's no indication that it's going to hit this side of christmas. I'm keeping a close eye on the economy as I have to for my job. At the moment I'm doing sensitivity analysis for an expected recession starting next year for my company. With China starting to decline it is inevitable we will be effected. The question is when and how bad will it be. The government recognises it's coming and are planning to start closing the migration programme for certain jobs to protect Australian workers. Although it hasn't hit us directly, as we don't have our money tied up in the stock market, I do know some Australians that have been effected badly already. OH works for a bank as an IT contractor so I'm expecting him to lose his job next year. We've cancelled our plans to visit the UK in September as I think we'll be in a bad way by then. We're saving every penny right now and are battening down the hatches to try and weather the storm. I feel so sorry for everyone in the UK but think thank god we made the decision to come here this year. Fingers and toes crossed that it doesn't get too bad here. Gail |
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| OzTennis | 20 Nov 2008, 03:01 AM Post #24 |
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Yeah, surprised you agreed with me on one point (the strategic argument). Is that a first? :Grin: Let's take a look at these privately owned utilities. They were gifted billions of pounds of infrastructure and they are like that ice cream man selling to schoolchildren on a hot day - how can you go wrong with a licence to print money selling gas and electricity? As someone else pointed out they've hardly added to the infrastructure since privatisation - the odd wind turbine here and there. Public financing is unique and unlike private financing, governments are continually borrowing and issuing government bonds as well as using taxation. The national debt grows and grows, it doesn't have to be repaid in a sense, today's bonds sold pay for repayment of yesterday's bonds as they mature. The difference of course between the UK and Zimbabwe is that UK government bonds are safe, desirable investments, Mugabe bonds aren't and the UK won't therefore have only a last resort of the printing press to create more money which spirals and then there's hyper-inflation. Indeed Brown used the 'D' (i.e. UK could be in for a period of deflation soon) word recently - Mugabe can only dream of prices actually falling. ;) Brown has admitted that tax cuts, particularly for lower income earners with a high propensity to spend, today are needed to provide the stimulus (the private sector is in sack, cut back mode) and that tax rises in future will be inevitable. No-one is under any illusions, there is bitter medicine to come - public spending cuts and/or increases in taxation burden? I don't agree with the minimalist government, low taxation, low public spending, leave it to the profit motive, put more money in private individual's pockets utopia. Surely we're paying for the private (and to some extent public) excesses of the last decade now? Without going into the demand for utilities and fuel being price inelastic (put the price up and people still buy much the same; reduce the price and you don't stimulate demand enough to put more in your till) suffice to say that the price of crude has more than halved since earlier in the year, pump prices are down about 25%; BP and Shell report record profits for the last quarter despite falling pump prices. |
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| tam_n_brett | 20 Nov 2008, 07:53 AM Post #25 |
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Actually...... it has been reported that there has been a slight up on house sales in the last month. We have 2 viewers booked in this week and our EA have said the phones have really picked up this week. Apparantly Phil and Kirsty from LOcation Location have been on TV and Radio this week saying now is the time to buy if you can. They recon the first upturn will come with the housing market as the money that has been fed into banks from GVT is to start the lending off again??? They said that although it's doom and gloom at present there is still a huge shortage of homes in the UK and as soon as mortgages become more available there will be a bidding war. I don't know, but it was nice to hear something a little more positive for a change!!! Seems odd that since these comments have been made we have viewers. I so so hope they are right. |
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