The credit crunch...Debt and the federal reserve

So News at Ten tonight open with the story Bank of England leave base interest rates at 5%. The News at Ten lady reporter tells us that the problem is, if people keep mentioning recession we'll talk ourselves into one. So have a guess at what the next ten minutes have been about?
 
flixton blues said:
deco said:
i dont think it is, its just another news story that fills the headlines. its like sars and bird flu and all that shizzle thats died down now aint it.
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Sorry mate,cant agree-i work in construction, its on its knees-fact,firms like Barratt,Wimpey etc are on the brink of going out of buisness,its going to have a knock on effect on the whole economy
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I agree with barryo and flixton. I work for a supplier to the construction industry and whilst the govt funded work on hospitals/schools etc is continuing, the housing sector has died.

Over 4000 construction workers laid off by Barratt's, Taylor Wimpey, Persimmon and Bovis because they aren't building houses anymore - simple as!

The banks have made it almost impossible for the first time buyer to get a mortgage at current property prices (max 75% mortgage on a £150k house means a deposit of almost £40k!) and so houses aren't selling. Gone are the days of builders throwing up housing estates in double quick time because these houses will be standing empty for months if not years - houses are now only being built when "the plot" is sold and as a result, entire sites are being mothballed.

So what's the solution? Some people say that the only solution is for property prices to come down so that they are more affordable, however this will leave a lot of people in negative equity which has its own knock-on effects.

If you are looking for someone to blame, I would suggest you take a look at the banks who have spent the last 5 years or more lending money hand over fist so that more and more people were taking on multiple mortgages for buy-to-let properties (which also drove up the property prices) before getting scared, over-reacting and pulling the rug from underneath the market by making it near impossible to get a mortgage.

I think the country is in for a rough ride for the next 5-10 years!
 
On the news today it said Porn shops are doing a rip roaring trade as people are having to trade in there goods as most are finding it hard to get credit, not sure myself that this is down to the credit crunch as they were claiming on the news,
I would of thought that most people that use porn shops would not be able to get credit what ever the financial state of the country is.
 
NQT said:
The News at Ten lady reporter tells us that the problem is, if people keep mentioning recession we'll talk ourselves into one.
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There is an element of truth to that.
 
the thing is recession is coming and its gonna be hard to avoid!! even if people just stop being worried this is going to make it worse because they will buy more and because they cant supply enough the price goes up! which is similar to the inflation rate as soon as that gets above 4/5% we get worried and its right to be because the government target which over the last few years has been 2.5% has not fail to be met if not very close.

if people dont ignore it and stop borrowing money but still spend money eg using there own this is probably the best scenario because not too much money is being spent in the economy!!

if people stop borrowing but stop spendin and start to save the inflation rate will go up anyway due to inflated prices to meet costs of running a business.

they really need to be putting a message across of dont worry but dont borrow!! and to assure this happens they need to stop places giving money so easy! this has started to be done by the companies themselves but it needs to be made law at this time!! people need to ration themselves and maybe 1939 to 1945 rules need to be partially put across have rations but not have people living on nothing because money needs to be in the economy

sorry for boring you but this is what i had studied over the last year and this is how i see it!!!!
 
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