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It Was The Best Of Times, It Was The Worst Of Times ....

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I am beginning to think that there are two recessions happening ....

It is the best of times for the small number of people with significant assets, high incomes and secure jobs. Their non-discretionary expenses have risen a bit but are not a material proportion of their income. The deflation in the price of discretionary expenses (cars, houses, expensive holidays, meals out etc), upon which they spend a higher proportion of their income, leaves them with a lot more buying power than they had even 18 months ago. This group are a happy bunch and are feeling richer.

It is the worst of times for the large number of people who have significant liabilities, relatively low incomes and low job security. For these people, the increase in the cost of non-discretionary items puts them under further pressure. They have very little discretionary income. This group is not a happy bunch at all and are feeling poorer and under a lot of stress.

I have a slightly different read on what is happening to the housing market at the moment than what might be the conventional wisdom. I think that we can see rising prices even if the mix adjustments are done properly because of the activities of the small "best of times" group.

I think that it would be a big mistake to assume that the behaviour of a small group of people who have benefitted the recession will last for long or that their behaviour can be extrapolated to the vast majority of the population who are in dire straits.

Edited by LuckyOne

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Nu Labour - Making the Rich even Richer and the Poor er! well fxxk em.

Blair multi millionaire Liar, Prescott the multi millionare cabin boy, Hoon multi millionaire BTL land lord flipper, Mandy enough said I think.

Joe the worker taxed to poverty.

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