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Thrymheim
Thursday, July 31st, 2008, 05:15 PM
LONDON (Reuters) - House prices crumbled at record rates and consumer confidence hit historic lows, data showed on Thursday, fuelling fears that a consumer-led slowdown could tip the economy into recession.

The Nationwide building society said house prices fell by 1.7 percent this month, leaving them 8.1 percent lower than a year ago -- the biggest annual fall since the series began in January 1991.

House prices have now fallen by nine percent in nine months from the peak hit last year, an even sharper fall than during the property crash of the early 1990s.

The combination of falling house prices and rising household bills is weighing increasingly heavily on consumer morale. The GFK NOP consumer confidence index fell five points in July to -39, the lowest reading since the survey began in 1974.

http://uk.news.yahoo.com/rtrs/20080731/tuk-uk-britain-economy-fa6b408.html

So does anyone here have an opinion on if there is going to be a recession? what are you doing to preserve your finances?

BeornWulfWer
Thursday, July 31st, 2008, 05:44 PM
I'm not an economist and don't know whether the recession will be a short term thing or a long term occurrence, but I do know that I was laid off of work this Monday; the amount of people laid off as well was great; the job market is very thin for work and we have 100s of thousands of Eastern Europeans and other immigrants now vying for jobs as well as the indigenous population.


I expect this to affect the stability of the country.

Oswiu
Thursday, July 31st, 2008, 06:13 PM
Get cash and lots of it. Loans and mortgages are yesterday's business. The banks are still trying to pretend that it's not too far from business as usual, but we can see how things are going. Wait till the house prices really fall and then take your pick of the best property (though the best areas remain sought after even in such times). For the extra-paranoid, buy farmland!

Ĉmeric
Thursday, July 31st, 2008, 06:28 PM
The housing collapse in the US is near catastrophic mode. I was recently in Phoenix & defacto housing prices in many neighborhoods have dropped 30% over the last 2-years. There was a house on my sister's street that was is owned by Deutsche Bank because of the default of a $323,000 mortage, sitting vacant & listed at $240,000 but similar homes in the neighborhood are going for $225,000 at best. Indymac Bank in California failed over the summer & last Friday 3 banks in the West were closed & reopened under new ownership with the US government agreeing to back up the bad debt the new owners have acquired... and then there is the whole Fannie Mae/Frddie Mac fiasco. The US & the World are facing the worst peacetime financial crisis since 1929.

Octothorpe
Thursday, July 31st, 2008, 10:19 PM
The technical definition of a recession is two consecutive quarters of negative economic growth. In the U.S., that hasn't happened yet. We've had very low growth, about .08% last quarter, but that, again, isn't a technical recession. A bad situation, to be sure: governments spending like drunked sailors, consumers spending more than they earn, people buying homes who have no real hope to ever afford (THAT'S the real cause of the housing collapse--loans were given to people who simply could never afford to buy a house--some folks are simply renters due to their earning potential--which is their fault, anyway), et cetera; but it's not a recession--yet! Fuel costs will determine that, in the long run.

BTW, the housing crisis is ebbing, out here in the periphery. The local developer just put up three new houses in the field south of our house. A good sign, for housing.

Leonhardt
Thursday, July 31st, 2008, 11:29 PM
Some people think there will be a long recession. Two strategies to deal with a financial downturn are bonds, or gold/silver investment. I have heard that buying land can work for some people also. I think it is a good time not to have any debt. Depending on how big of a downturn it is, some may even look at it as a possibility to buy cheap.


The Mogambo's writings are good for a laugh.
http://www.dailyreckoning.com/Writers/MogamboGuru.html

Al Martin usually has some good things to say also.
http://www.almartinraw.com/

Loddfafner
Thursday, July 31st, 2008, 11:33 PM
I may be complacent but I have heard so many predictions of imminent disaster that I have a hard time getting scared about this one.

Octothorpe
Wednesday, August 6th, 2008, 03:21 PM
Some people think there will be a long recession. Two strategies to deal with a financial downturn are bonds, or gold/silver investment. I have heard that buying land can work for some people also. I think it is a good time not to have any debt. Depending on how big of a downturn it is, some may even look at it as a possibility to buy cheap.

Land is almost always a good buy. There's an apochryphal story that goes thusly: Oxford received a huge donation of money, and the dons of the college sat on the veranda, sipping port and debating the best use for the money. One said 'invest in the market,' another said 'buy bonds,' yet another called for 'capital improvements.' From the back of the group, a quavering voice said 'buy land!' The dons turned to see their eldest member, doddering with age. Perplexed, they asked him, 'why land?' 'Because they're not making any more of it,' he replied.

My major investment at this time is in land, and the structure on it: my home. It's holding well, for the nonce!

Berrocscir
Wednesday, August 6th, 2008, 05:47 PM
We're long overdue for a slump - That's capitalism.

Loddfafner
Wednesday, August 6th, 2008, 05:57 PM
There's an apochryphal story that goes thusly: Oxford received a huge donation of money, and the dons of the college sat on the veranda, sipping port and debating the best use for the money. One said 'invest in the market,' another said 'buy bonds,' yet another called for 'capital improvements.' From the back of the group, a quavering voice said 'buy land!' The dons turned to see their eldest member, doddering with age. Perplexed, they asked him, 'why land?' 'Because they're not making any more of it,' he replied.


This reminds me of another possibly apocryphal story. Cambridge was considering selling off a large amount of land that had not gained them any money since the 1700s. Some old don objected thus: "wasn't the last two hundred years somewhat unusual?"

Ĉmeric
Wednesday, August 6th, 2008, 07:50 PM
Longterm land is the best investment, along with gold, but it's best to buy during a bust instead of during a boom. And it helps if you can minimize your debt.

Carl
Thursday, August 7th, 2008, 11:17 AM
IMF warns that UK is on the brink of recession

Telegraph 06/08/2008



The International Monetary Fund heaped more misery on the Chancellor Alistair Darling by slashing its growth forecasts for the UK economy and warning a recession was not out of the question.

It said the British economy would grow by just 1.4pc this year and 1.1pc in 2009 which would be the slowest rate of growth since 1992. "We do not have a negative number for growth forecast in coming quarters, but when growth is skating so close to zero, it doesn't take much of a shock to see it turn negative," said Ajai Chopra, deputy director at the IMF.

"A lot of the economic data that started coming out were much more grim than we had expected. The outlook has deteriorated markedly in recent months."

The forecasts are embarrassing not just for the Chancellor but also for the IMF itself, which actually raised its growth forecasts for the UK less than a month ago.

At the time, it said the UK would grow 1.8pc this year and 1.7pc in 2009 - predictions that many commentators said at the time looked far too high.


In its annual "Article IV" health check of the economy, the IMF also warned that Gordon Brown was likely to break his own fiscal rule of keeping public debt below 40pc of gross domestic product, and said that "given the outlook for inflation and the stance of fiscal policy, directors saw little scope for monetary easing at present."

The Bank of England's Monetary Policy Committee announces its latest interest rate decision today and is likely to keep rates on hold, economists say.

There was more negative news on the economy with fresh data showing that the cost of food is still spiralling while the economy is slowing faster than official estimates suggest. Consumers were hit with a 9.5pc jump in food prices in the year to July, as retailers passed on their costs. Overall shop price inflation was 3.2pc in July, according to the BRC-Nielsen Shop Price Index.

In another report, the National Institute of Economic and Social Research said that the British economy grew by just 0.1pc in the three months to July and said that growth was likely to slow further.

Meanwhile, the number of people in permanent jobs fell last month at its fastest rate since the 9/11 attacks in 2001, a report by the Recruitment and Employment Confed-eration and KPMG showed.

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Well done Labour, for sqandering Britains oil reserves when they were once such an asset! Where did it all go?

SwordOfTheVistula
Thursday, August 7th, 2008, 12:07 PM
I'm baffled, I thought all these new immigrants were supposed to fuel economic growth :confused:

Cythraul
Thursday, August 7th, 2008, 01:23 PM
I'm baffled, I thought all these new immigrants were supposed to fuel economic growth :confused:
I'm baffled too. It's incredible isn't it. In order to combat our understandable objections to open-border policy, the Government have kept up their incessant retorting of "the immigrants are good for the economy". WE knew it was a lie and hopefully, now many more people will put 2 and 2 together. The only change mass-immigration has made is to fill our roads and emergency wards to the brim with foreigners. Goddamn I can't wait 'til we have a Government that recognises this.

Elgar
Thursday, August 7th, 2008, 02:37 PM
I'm baffled, I thought all these new immigrants were supposed to fuel economic growth :confused:

As I understand it, real economic per capita growth (ie. growth that increases living standards) is fuelled by technological advancement or perhaps by discovering a valuable resource like oil, but not through immigration.

http://www.guardiancockups.com/#1 - is a good website which discusses the economic implications of immigration.

Carl
Wednesday, September 10th, 2008, 11:17 PM
Britain is in grip of recession, EU warns


Telegraph 10/09/2008

Britain is in the grip of its first recession in almost two decades and its overall growth will trail that of Germany and Spain this year, the European Commission has said.

In the latest sign of the deep impact of the credit crisis, the EC has predicted that the economy will contract this quarter and for the final three months of the year.

Britain's economic output will shrink, as the country experiences a recession.............

Britain will see its economic output shrink by 0.2pc in both the third and fourth quarters, the EC said today, as it slashed its estimate for annual growth to 1.1pc from 1.7pc.

Growth in the UK this year will, according to the wide-ranging EC's forecast, trail that of Spain, Germany and the Netherlands. However, UK expansion is still expected to eclipse that of France and Italy.............:(

The forecast comes amid continuing gloom in the UK housing market. Graham Beale, the chief executive of Nationwide, has said that house prices could fall by as much as 25 per cent from their peak and that he does not expect to see any sign of recovery until 2010 at the soonest.

Analysts have estimated that about 2.5m homeowners would slip into negative equity if Mr Beale is correct.


Meanwhile Barratt Developments, the country's second-largest housebuilder, announced a 68 per cent drop in annual profits due to weak demand for houses. The builder was also forced to write down the value of its land holdings by £208m and scrap dividends for shareholders.

The EC forecast comes in the week following a report by the Organisation for Economic Cooperation and Development (OECD), which also predicted Britain would slide into recession in the second half of this year.

The OECD report said the economy could contract by as much as 1.2 per cent in the third and fourth quarters.

The latest figures are likely to increase pressure on the Bank of England to cut interest rates in an attempt to stimulate the economy.................

However, cautious members of the Bank's Monetary Policy Committee are likely to continue to argue that to do so would be reckless at a time of 4.4 per cent inflation - a 16-year high.

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See what happens when Labour is in control. Sooner or later, their spending breaks the bank - and there is little left to sustain the viability of the economy. Don't go there!!