F0ul Thought

A lot of these indicators are red herrings - It is assumed that big companies are run properly and so only go bust if an outside influence - like the state of the economy - gets against them. The point is, this isn't actually true. There are plenty of examples of companies who were just run badly who eventually run out of money. Think Enron, Northern Rock, etc You also have examples of industries which run out of steam for one reason or another. Think about the PC manufacturing industry. Its practically dead in the UK but that doesn't mean that it was the economy that killed it. This could be the case with Pendragon - I don't know enough about the background to this company to comment. I would be very wary of adding 2 and 2 in this example and coming up with another other than 5! What was that saying involving swallows and summer?

There does seem to be some sort of glee in these reports The point is that if you are buying a home, then NE doesn't really matter. If you follow the trends, then you are going to be living there for a good 5-7 years, and by that time, the price will have at least recovered to the original prices. Just think about people who bought their flats in London in the late 1980's for a whopping 50K. Im sure they were not so worried about the NE they had to suffer for 3 years - it all turned out nice in the end! Same thing here. The only people who will suffer are those who buy to sell - and this is just one of the risks.

I'd agree with that assessment! Airbus wouldn't be able to survive without the huge grants they get to keep the business local! It far outweighs the costs of the Dollar v the Euro!

I like his point about affordable housing! Every house is affordable if you have the money - and vice versa!

The IT sector is huge so pointing at certain sections of it and saying everyone who can move a mouse unaided is knackered is stretching a point a little far! For those in IT, retraining is part of the career path. One year everyone is a java expert, the next its C++, the next its Cobol making a return - the point is, quality is always in demand. If you are good at your job, and give the employer what they want, you'll stay in employment. The other issue is that it is very easy to become 'something in IT'. Learn to use MS Frontpage, and you can get a job. These though are the first people to be deleted when the going gets a little tough. These are the jobs that get offshored. Where there is a real shortage in IT is slightly higher up the scale. Good project managers and business analysts will always be in demand - because their skill makes money! As a poster said earlier, you can't just stop spending on IT because it is integral to how most businesses operate. I guess the problem is that we are still looking at the dot com boom and Y2K times and thinking that how the IT industry should always be.

Thought I would add my 2p to the thread seeing I've been lurking for a while. The first post was a great explanation of the theory, but it doesn't take into consideration what causes the demand - only how that demand effects the market. Secondly, everything from the DIY sector to the pensions market have a vested interest in the price remaining high and as such, the formula requires these demands to be taken on board as well. This is not the case with simpler products like cars or furniture. I guess the problem lies with all economic theories being based on historical data and seeing patterns in them. However, most forecasts are only correct after the effect, and all the wrong ones are forgotten! That is why you will always get 13 opinions from 12 economists!

Hello I followed the instructions and have posted my first post here! I work in the business advisory business so need to know what is happening on the ground floor - and this is the place to find out. The one thing that really interests me is the total misunderstanding people have for how the economy actually works. It is as if some members of this forum will be disappointed if there isn't a 1930's style depression in a few years time. Anyway, I will carry on lurking in the background and only popping out when someone says something really stupid! Not sure when I first heard of the forum, but I have been reading it, on and off for a few years! Look forward to chatting to you.