Jump to content
House Price Crash Forum
Sign in to follow this  
Leonard Hatred

Debt Forces Shoppers To Rein In Their Spending

Recommended Posts

http://www.guardian.co.uk/business/2009/ja...s-consumer-debt

Featuring

The crisis facing the British high street was laid bare yesterday by results from quoted retailers which confirmed that margins are being squeezed at the leading chains amid growing evidence that shoppers are cutting spending because of huge debts.

Plus

However, in a development that could have a dramatic impact on high street sales, there is growing evidence that Christmas was the last hurrah for consumers as December's credit card bills force them to confront their debts against a backdrop of rising unemployment.

Despite bumper Christmas sales of 8.8%, home-shopping group N Brown said more shoppers, especially younger ones, were failing to settle bills, and that debt collectors were too busy chasing bigger overdue payments, such as mortgage and credit card arrears, to be interested in its far smaller bad debt book.

Share this post


Link to post
Share on other sites

Watched BBC World Buisness News Report this morning and there was a report from Gavin Hewitt on a street in a Birmingham suburb - Handsworth, I believe. The local chamber of trade was reporting that 50 -100 small shops and businesses on the high street tehre could go under. One shop had gone from an average of 50 customers per day to just 12, and even the pound shop was in difficulties. :o

Share this post


Link to post
Share on other sites

Well, who would have thunk it?

Amongst my friends and relations nearly all of them are :

1/Skint.

2/Staggering under the weight of a huge mortgage.

3/In hock to credit card companies to the tune of five or ten grand.

4/Crapping themselves.

And this, mark you, is after a period of growth.

The recessions of the 80s/90s were bad enough. The situation we're in now is just horrible - bordering on the grotesque.

I'm not trying to be melodramatic, but god knows how this is going to end, or how many people are going to be wiped out by all of this.

After all of this has unwound things must, and will change, surely? I hope people become angry and tear the whole lousy system to shreds - and demand something better.

But thats probably wishful thinking....

Share this post


Link to post
Share on other sites
I'm not trying to be melodramatic, but god knows how this is going to end, or how many people are going to be wiped out by all of this.

The trouble is it's not just those in ridiculous amounts of debt that will go under, even those with savings will struggle as there will be no where safe to put your money and even if you do find somewhere safe to do the central bankers can easily wipe it out with a bit of nice hyperinflation.

Everyone is screwed, we are all in the shit together.

Share this post


Link to post
Share on other sites
Guest theboltonfury
Well, who would have thunk it?

Amongst my friends and relations nearly all of them are :

1/Skint.

2/Staggering under the weight of a huge mortgage.

3/In hock to credit card companies to the tune of five or ten grand.

4/Crapping themselves.

And this, mark you, is after a period of growth.

The recessions of the 80s/90s were bad enough. The situation we're in now is just horrible - bordering on the grotesque.

I'm not trying to be melodramatic, but god knows how this is going to end, or how many people are going to be wiped out by all of this.

After all of this has unwound things must, and will change, surely? I hope people become angry and tear the whole lousy system to shreds - and demand something better.

But thats probably wishful thinking....

5 to 10k on a Credit Card? I reckon most would be delighted to have that as their amount....

Share this post


Link to post
Share on other sites

Store closures, layoffs, and bankruptcies among British retailers underscore the seriousness of the economic downturn

"All told, says insolvency and restructuring consultancy Begbies Traynor, nearly 2,000 retailers already are in bankruptcy proceedings in Britain. The carnage is likely to get worse. By yearend, predicts credit researcher Experian, some 135,000 storefronts -- one in seven across Britain -- may be vacant. And up to 135,000 retail workers could lose their jobs by the end of 2009,"

Link

Share this post


Link to post
Share on other sites
After all of this has unwound things must, and will change, surely? I hope people become angry and tear the whole lousy system to shreds - and demand something better.

But thats probably wishful thinking....

Sorry, but were people forced at gunpoint to take out huge loans/buy tat/splurge like they are WAGs?

Did M&S kidnap their children and only give them back after they took out a store card?

The only system that needs tearing to shreds is the one that preaches conspicuous consumption and materialism above all else, that success is measured only by possessions, if you haven't got it, borrow it, and if you can't borrow it, whine like an unfed dog until the government bails you out.

This whole collapse has been caused by people "demanding something better". :angry:

p.s. I may have misunderstood your point, Simpleton, but in any case, please excuse the rant.

Share this post


Link to post
Share on other sites
Well, who would have thunk it?

Amongst my friends and relations nearly all of them are :

1/Skint.

2/Staggering under the weight of a huge mortgage.

3/In hock to credit card companies to the tune of five or ten grand.

4/Crapping themselves.

Obviously we are looking at an ever increasing number of individuals who cannot service their debt in the coming year, from credit card to mortgage.

Can anyone older & wiser than me throw some light on what has historically been done by the government in previous recessions to tighten rules on bankruptcy (and IVA) during times such as these? Presumably there are tabled plans or options that can be brought into action to make it more difficult for people to walk away from their debt, otherwise the increasing numbers of bankruptcies will surely drag the system down further during 2009 to catastrophic effect?

Seems to me with there no longer being any stigmatism attached to bankruptcy there will be many people out there right now hoping to just easily wipe the slate clean and sit things out for a year hoping to start the borrowing cycle again once their credit record is clean - just wondering what moves from the government are likely to stem this tide...

Share this post


Link to post
Share on other sites
Well, who would have thunk it?

Amongst my friends and relations nearly all of them are :

1/Skint.

2/Staggering under the weight of a huge mortgage.

3/In hock to credit card companies to the tune of five or ten grand.

4/Crapping themselves.

And this, mark you, is after a period of growth.

The recessions of the 80s/90s were bad enough. The situation we're in now is just horrible - bordering on the grotesque.

I'm not trying to be melodramatic, but god knows how this is going to end, or how many people are going to be wiped out by all of this.

After all of this has unwound things must, and will change, surely? I hope people become angry and tear the whole lousy system to shreds - and demand something better.

But thats probably wishful thinking....

But we have had a period of real growth! Growth in debt and not wealth :blink:

Share this post


Link to post
Share on other sites
Obviously we are looking at an ever increasing number of individuals who cannot service their debt in the coming year, from credit card to mortgage.

Can anyone older & wiser than me throw some light on what has historically been done by the government in previous recessions to tighten rules on bankruptcy (and IVA) during times such as these? Presumably there are tabled plans or options that can be brought into action to make it more difficult for people to walk away from their debt, otherwise the increasing numbers of bankruptcies will surely drag the system down further during 2009 to catastrophic effect?

Seems to me with there no longer being any stigmatism attached to bankruptcy there will be many people out there right now hoping to just easily wipe the slate clean and sit things out for a year hoping to start the borrowing cycle again once their credit record is clean - just wondering what moves from the government are likely to stem this tide...

Well I don't know if I am older or wiser, but I can see where you are coming from.

Going bankrupt is easy and encourages reckless behaviour. If I was up to my neck in debt, I daresay there would be a big temptation to walk away because there are no real consequences, or at least that is the perception.

And this is going to be another big problem for the banks. People who know they are going under will have one last big splurge, hide the goods and then go bankrupt.

And who would blame them? They have seen all the money that could have been used in tax repayments so they could clear their debts, used to bail out the institutions who hold the debt, so effectively, they would probably argue the reason they couldn't pay back the debt is that the govt gave their money to the banks, so that they have already paid them off.

Unfortunately tackling this moral hazard is not going to be easy because it would require a government who is not looking at clinging desperately to power in 18 months time.

Share this post


Link to post
Share on other sites

Well I'm actually buying quite a lot at the moment!

Mainly seeds and equipment for subsistence gardening, and survival equipment.

I figure that if the government is going to make my money worthless, I might as well spend it now on something that can give some kind of return further down the line.

Share this post


Link to post
Share on other sites
Sorry, but were people forced at gunpoint to take out huge loans/buy tat/splurge like they are WAGs?

Did M&S kidnap their children and only give them back after they took out a store card?

The only system that needs tearing to shreds is the one that preaches conspicuous consumption and materialism above all else, that success is measured only by possessions, if you haven't got it, borrow it, and if you can't borrow it, whine like an unfed dog until the government bails you out.

This whole collapse has been caused by people "demanding something better". :angry:

p.s. I may have misunderstood your point, Simpleton, but in any case, please excuse the rant.

No that's OK, I know what you mean... I guess amongst the ones I feel sorriest for (up to a point) are people in their late twenties/early thirties who've never known any environment other than the easy money whack-it-on-your-credit-card-and-don't-worry-about-it culture of the last decade or so.

Yes - many of them have made some really dumb financial decisions, but people can be like that - especially when they lack experience. They've also been royally shafted by pathetically high house prices before they've even had a chance to get going.

How many of our politicians have pointed out that we've been heading in completely the wrong direction for the past ten years? None of them. All been too busy feathering their own nests.

Edited by simpleton

Share this post


Link to post
Share on other sites
Obviously we are looking at an ever increasing number of individuals who cannot service their debt in the coming year, from credit card to mortgage.

Can anyone older & wiser than me throw some light on what has historically been done by the government in previous recessions to tighten rules on bankruptcy (and IVA) during times such as these? Presumably there are tabled plans or options that can be brought into action to make it more difficult for people to walk away from their debt, otherwise the increasing numbers of bankruptcies will surely drag the system down further during 2009 to catastrophic effect?

Seems to me with there no longer being any stigmatism attached to bankruptcy there will be many people out there right now hoping to just easily wipe the slate clean and sit things out for a year hoping to start the borrowing cycle again once their credit record is clean - just wondering what moves from the government are likely to stem this tide...

If they tightened the bankruptcy laws, then people would walk away. No forwarding address. Imagine a million families doing the proverbial moonlight flit. You can't force people with nothing to pay their debts.

Share this post


Link to post
Share on other sites
Obviously we are looking at an ever increasing number of individuals who cannot service their debt in the coming year, from credit card to mortgage.

Can anyone older & wiser than me throw some light on what has historically been done by the government in previous recessions to tighten rules on bankruptcy (and IVA) during times such as these? Presumably there are tabled plans or options that can be brought into action to make it more difficult for people to walk away from their debt, otherwise the increasing numbers of bankruptcies will surely drag the system down further during 2009 to catastrophic effect?

Seems to me with there no longer being any stigmatism attached to bankruptcy there will be many people out there right now hoping to just easily wipe the slate clean and sit things out for a year hoping to start the borrowing cycle again once their credit record is clean - just wondering what moves from the government are likely to stem this tide...

I don't think the govt has done anything previously, however they have not needed to because:

* Bankruptcy used to last longer (5 years?) rather than now for only about 1 year.

* There were not all the 'light' alternatives, such as IVAs.

* Less people owned their own home I think, more were still in council houses.

* Lending was a lot more prudent, lenders in the past did not throw unlimited credit cards or 5X 'fast rack' mortgages etc.

I think this will be the interesting thing, as prices come down, people with large debts on cr cards and car loans lose their jobs etc how many are just going to declare bankrupt, or just move overseas leaving all their debts? The bank right offs could be massive, far in excess of anything experienced before.

Share this post


Link to post
Share on other sites
Guest sillybear2
Well, who would have thunk it?

Amongst my friends and relations nearly all of them are :

1/Skint.

2/Staggering under the weight of a huge mortgage.

3/In hock to credit card companies to the tune of five or ten grand.

4/Crapping themselves.

And this, mark you, is after a period of growth.

Of course there is no paradox in that, the growth was merely an illusion created by all that debt.

Share this post


Link to post
Share on other sites

Putting the financial context aside, the negative moral stigma that once was attributed to going bankrupt is almost gone.

A good example for all to see can be found over to the MSE bankruptsy board where there is even a club going where members can congratulate each others, as if it was a job well done.

Not a lot of remorse.

Share this post


Link to post
Share on other sites
Debenhams are claiming its their last weekend of the sale, wonder when the next one starts!!

Sale ends at midnight.

New one starts at 00:01 AM.

Share this post


Link to post
Share on other sites
Sale ends at midnight.

New one starts at 00:01 AM.

A potential replacement car I have my eye on has been up on Autotrader with a 'Special Deal Until This Sunday' ahem reduction. Renews every week. Bet I wont buy it, but I bet he cracks and drops to an even lower special price sometime ;-)

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.