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Economic Recovery? Not From Where I Am Sitting...

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Carnage continues in the SME world for a lot of our customers and competitors.

In marketing and business data, we're 30% down on last year. After speaking with competitors (this business is quite incestuous as we all supply each other as well as compete), some are reporting a 50% slump in business YOY.

Strangely, business is slightly down over the traditional slow period of Summer. A number of companies in this sector are now offering massive freebies and some are even offering money-back guarantees to bring in business - the latter is unheard of.

We're going to do the same. It's a risky business calculation that we can re-inflate turnover to last year's figures and also keep refund rates to an acceptable level.

Notices of administration from customers are still coming in at high frequency. Companies are even running away from investing in marketing to the public sector - not because they don't believe they can get the business necessarily, but because of the upfront investment costs.

I think there's another 6 months before the leg down becomes the next part of the slump as lending continues to fall, unemployment continues to rise and the public realise that the election is rigged and we're screwed either way.

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Carnage continues in the SME world for a lot of our customers and competitors.

In marketing and business data, we're 30% down on last year. After speaking with competitors (this business is quite incestuous as we all supply each other as well as compete), some are reporting a 50% slump in business YOY.

Strangely, business is slightly down over the traditional slow period of Summer. A number of companies in this sector are now offering massive freebies and some are even offering money-back guarantees to bring in business - the latter is unheard of.

We're going to do the same. It's a risky business calculation that we can re-inflate turnover to last year's figures and also keep refund rates to an acceptable level.

Notices of administration from customers are still coming in at high frequency. Companies are even running away from investing in marketing to the public sector - not because they don't believe they can get the business necessarily, but because of the upfront investment costs.

I think there's another 6 months before the leg down becomes the next part of the slump as lending continues to fall, unemployment continues to rise and the public realise that the election is rigged and we're screwed either way.

Did you go ahead with doubling your cold-calling staff?

p-o-p

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Does this mean you hold out little hope for the jobless recovery??

Interesting reading that your sector is in big trouble judging by your comments. We appear to be approaching brown trouser time.

I am of the opinion that the depression will last between 2008 and 2012 at the earliest.

I'll define "depression" by a 10% fall in nominal GDP over that time. Obviously, that'll be more when inflation-adjusted (or less if deflation-adjusted - take your pick).

Without wishing to court unpopularity, most of the actions carried out since the crisis began have been successful. As Hugh Hendy said on Newsnight this week, had it not been for that intervention, we'd look at a 20% drop in UK GDP over that time.

However, using the word "successful" is difficult. It's not a sign of success to hock the world (or the UK) to the hilt to prevent a catastrophic slide in GDP. It's nothing more than a "Firstplus Carol Vorderman" debt consolidation exercise with an extra £10,000 for a Carribean cruise on top.

We've a difficult few years ahead of us. The best evidence I have for that is the local paper's job section. The Newcastle Evening Chronicle has its job section every Thursday - for years, in peak recruitment times, it would advertise around 1,000 jobs, around about 30% of which was public sector.

This last Thursday, there were 420 jobs advertised, and nearly 70% of them were public sector. Some of my staff (and they are well-paid in comparison to similar posts in the area) are looking for Christmas work to pay the bills. Seems strange in a so-called deflationary era.

In the real economic world, as an employer or employee, this is turning into a nightmare. I am genuinely scared.

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Did you go ahead with doubling your cold-calling staff?

p-o-p

That decision has been postponed for 3 months while we recce the situation.

Either the economy has taken a massive leg down and we'll have to cut our cloth or the telesales staff have become complacent and they need a rocket up their collective ****. Maybes a mixture of both

We're doing a big retraining over the next two weeks on understanding "the difference between features and benefits" and how to close a sale. A couple of weeks after that, p-o-p, I'll be in a better position to understand whether to grow and sign for the new office (rent down from £28,000 to £8,000 after negotation for 3,000 square feet) or be ruthless with staff in the current location til we find the right team to expand with.

EDIT: Replaced "yards" with "feet".

Edited by Pacific State

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I am of the opinion that the depression will last between 2008 and 2012 at the earliest.

I'll define "depression" by a 10% fall in nominal GDP over that time. Obviously, that'll be more when inflation-adjusted (or less if deflation-adjusted - take your pick).

Without wishing to court unpopularity, most of the actions carried out since the crisis began have been successful. As Hugh Hendy said on Newsnight this week, had it not been for that intervention, we'd look at a 20% drop in UK GDP over that time.

However, using the word "successful" is difficult. It's not a sign of success to hock the world (or the UK) to the hilt to prevent a catastrophic slide in GDP. It's nothing more than a "Firstplus Carol Vorderman" debt consolidation exercise with an extra £10,000 for a Carribean cruise on top.

We've a difficult few years ahead of us. The best evidence I have for that is the local paper's job section. The Newcastle Evening Chronicle has its job section every Thursday - for years, in peak recruitment times, it would advertise around 1,000 jobs, around about 30% of which was public sector.

This last Thursday, there were 420 jobs advertised, and nearly 70% of them were public sector. Some of my staff (and they are well-paid in comparison to similar posts in the area) are looking for Christmas work to pay the bills. Seems strange in a so-called deflationary era.

In the real economic world, as an employer or employee, this is turning into a nightmare. I am genuinely scared.

I think we can only apply the word successful with hindsight. It's too early to say if they have pulled the rabbit out the hat again, however I can't possible see how you can solve a debt crisis with more debt.

History will judge whether the policy decisions have been successful or not.

However if your staff are relying on Christmas (bonuses?) to pay the bills I find it hard to believe that you are saying current actions have been successful.

Pity your not a banker you could have a big wad of taxpayer cash and payout big bonuses to your staff. Your in the wrong business.

Edit spelling.

Edited by interestrateripoff

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I think we can only apply the word successful with hindsight. It's too early to say if they have pulled the rabbit out the hat again, however I can't possible see how you can solve a debt crisis with more debt.

History will judge whether the policy decisions have been successful or not.

However if you staff are relying on Christmas (bonuses?) to pay the bills I find it hard to believe that you are saying current actions have been successful.

Pity your not a banker you could have a big wad of taxpayer cash and payout big bonuses to your staff. Your in the wrong business.

Quite right, IRRO. How do you define the word "successful" to the current economic mess?

When I was a child, I remember watching Final Score on Grandstand. In the Scottish Cup, the announcer said "Stirling Albion 20 - Selkirk 0". I recall that as if it were yesterday because of the incredulity in the announcer's voice.

If Selkirk had scored 10 against Stirling Albion's 20, would that have been considered a successful day for the Selkirk's attack? Maybe, but in the round, it was still a humiliation and an embarassment.

Fast forward to 2009, is the UK the new Selkirk and are foreign investors the new Stirling Albion?

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I am of the opinion that the depression will last between 2008 and 2012 at the earliest.

I'll define "depression" by a 10% fall in nominal GDP over that time. Obviously, that'll be more when inflation-adjusted (or less if deflation-adjusted - take your pick).

Without wishing to court unpopularity, most of the actions carried out since the crisis began have been successful. As Hugh Hendy said on Newsnight this week, had it not been for that intervention, we'd look at a 20% drop in UK GDP over that time.

However, using the word "successful" is difficult. It's not a sign of success to hock the world (or the UK) to the hilt to prevent a catastrophic slide in GDP. It's nothing more than a "Firstplus Carol Vorderman" debt consolidation exercise with an extra £10,000 for a Carribean cruise on top.

We've a difficult few years ahead of us. The best evidence I have for that is the local paper's job section. The Newcastle Evening Chronicle has its job section every Thursday - for years, in peak recruitment times, it would advertise around 1,000 jobs, around about 30% of which was public sector.

This last Thursday, there were 420 jobs advertised, and nearly 70% of them were public sector. Some of my staff (and they are well-paid in comparison to similar posts in the area) are looking for Christmas work to pay the bills. Seems strange in a so-called deflationary era.

In the real economic world, as an employer or employee, this is turning into a nightmare. I am genuinely scared.

I spend a lot of time reading these posts and little time reading MSM.

The gloom and doom on here has been ratcheting up over the last few week and taken me with it.

I had a bit of time to read the "market reports" that come with my various investments today and was amazed how upbeat they all are. They are all saying the gloom was overdone and the recovery is underway. Not just in the UK but in Asia and US

It took me by surprise.

Pacific State- are you looking back at the last year or is the situation still getting worse at present? As Peter Schiff himself says - you can't see where you are going by looking in the rear view mirror. Genuine enquiry - not being cynical.

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I spend a lot of time reading these posts and little time reading MSM.

The gloom and doom on here has been ratcheting up over the last few week and taken me with it.

I had a bit of time to read the "market reports" that come with my various investments today and was amazed how upbeat they all are. They are all saying the gloom was overdone and the recovery is underway. Not just in the UK but in Asia and US

It took me by surprise.

Pacific State- are you looking back at the last year or is the situation still getting worse at present? As Peter Schiff himself says - you can't see where you are going by looking in the rear view mirror. Genuine enquiry - not being cynical.

How many of your investments have cut jobs which have boosted profits? Are sales holding up for those companies.

Wouldn't your "market reports" naturally be up beat to stop you from cashing in?

If they are trying to manipulate sentiment they are hardly likely to send out a report saying we are up sh1t creek without a paddle but keep your money with us? More likely your going to get happy clappy reports telling you how wonderful it all is.

As you noted you can't predict the future, especially from the past but what's going to drive growth if it's not debt?

Crossroads we are at.

Can the magic economic genie pull off another miracle and keep our wonderful debt expansion based global economy going again?

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I spend a lot of time reading these posts and little time reading MSM.

The gloom and doom on here has been ratcheting up over the last few week and taken me with it.

I had a bit of time to read the "market reports" that come with my various investments today and was amazed how upbeat they all are. They are all saying the gloom was overdone and the recovery is underway. Not just in the UK but in Asia and US

It took me by surprise.

Pacific State- are you looking back at the last year or is the situation still getting worse at present? As Peter Schiff himself says - you can't see where you are going by looking in the rear view mirror. Genuine enquiry - not being cynical.

From my POV our september sales profits are on track to be est. 68% down on september 2008 figures (commissions on Caribbean hotel bookings and website/marketing work).

Resort clients are running out of money for marketing and even those with the cash have realised that there just ain't no business out there to be had. The Jamaican tourist board is a classic example of how things are failing rapidly - huge multi-million $ super slick ad campaigns on the web, TV, global. They are subsidising several new charter flights into the island (even BA has been bribed to fly to Montego Bay from later this year) - even with the massive increase in airlift, the huge ad campaign, and several thousand brand new luxury hotel rooms newly on-stream, arrivals and revenue is down and hotels are closing.

As with Pacific State's clients, there just isn't the money to pay for the marketing, and where the money exists, marketing is yielding nothing.

Everything is rapidly closing down - it's palpable. Even the Caribbean tourism chat forums I monitor are seeing hardly any posts from potential or past travellers - and there are fewer and fewer Google Adsense pay per click ads appearing in their margins.

The gloom is justified - I do not foresee any meaningful recovery in consumer demand until 3 years after unemployment stops rising (which I reckon will be circa 2012 when the public service cuts are done) - ie 2015. And it will be slow and steady, no booms for many years

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I spend a lot of time reading these posts and little time reading MSM.

The gloom and doom on here has been ratcheting up over the last few week and taken me with it.

I had a bit of time to read the "market reports" that come with my various investments today and was amazed how upbeat they all are. They are all saying the gloom was overdone and the recovery is underway. Not just in the UK but in Asia and US

It took me by surprise.

One of the things I love about this place is the "doom and gloom". Not because I am a pessimistic person, but this place has prepared me for the worst macroeconomically but made me hope for the best microeconomically. If this lot of guys and girls can help me understand what's coming, I can prepare for it.

For that, housepricecrashers, you have my eternal gratitude.

I am no stock market expert. Let me make that absolutely clear. I can look after my own house (I hope) but not after anyone else's. From my understanding of the stock market though, the types of 50% bounces we have seen only occur after a depression-level event. Of course, it might be different this time, but what is the evidence to suggest that it is?

It *feels* like individuals, companies and financial organisations going on a massive binge to try to repair their balance sheets. The fact that the economy has been flooded with funny money may account for most or all of the rise.

Pacific State- are you looking back at the last year or is the situation still getting worse at present? As Peter Schiff himself says - you can't see where you are going by looking in the rear view mirror. Genuine enquiry - not being cynical.

The "recovery" feels led by financial institutions investing their government-granted funny money in any type of market - equities, gold, oil etc etc. It feels like they are using the rise in prices to repair their balance sheets but once everyone heads for the exit (just like the MBS market two years ago), normal market pricing will resume.

On a microeconomic level, for my company and for my competitors/suppliers, it feels like there is going to be another massive leg down and it is those companies (hopefully including my own) who will survive by fighting tooth and claw for every potential order out there.

Without wishing to sound ambigious, ask me in a year's time, sir.

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Let`s look at this rationally.

Q. Are banks going to need more cash to shore up their collapsing balance sheets as commercial loans and loans to unemployed home owners further impact them?

A.What do you think?

Q.Is unemployment likely to rise due to massive public sector job cuts?

A.Well if we want to avoid punitive borrowing rates on govt gilts which will eat more of govt budget then the answer is yes.Under Labour they created at least 800,000 more public sector jobs cand we are a lot poorer than before they came to power so common sense dictates that the job losses required (even allowing for generous efficiency savings) are going to be mammoth.

Q.Impact of £175billion of q/e is going to make cost of imports dearer or cheaper?

A.Dearer and as a net importer that means our cash wont go as far on many items of household expenditure.

We are all going to have to accept a sensible weeks wage for a sensible weeks work.

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The recession has been smeared across the whole spectrum of the mass population, it would have done so partially but the QE/debt spending (to be paid for in much higher taxes) and the raping of savers (who coincidentally do spend - or did as the case may be) + currency crash is going to make this situation a whole lot worse in the coming years.

Hence (I suspect) the appalling figures being presented by Caribbean Beauty - those without money stuffed, those with money stuffed, result, catastrophic drop in spending in discretionary spend.

On the stock market. The only thing I can see in this stock market rally is the levelling of dividend yields to totally manipulated gilt/bond yields and interest rates, that is it.

We are all going to have to accept a sensible weeks wage for a sensible weeks work.

We are not going to be given the option. The Chinese are not going to pay us over the top for goods and our own population are not going to be able to afford to do so either. The gamble is that collapsing the currency will make the trade worthwhile and rebalance exports. It won;t. The skills have gone, anybody looking to go into manufacturing needs their heads testing - raw material costs will be even higher, floated prices for premises are still obscenely expensive and any half decent employees need wages that will allow them to afford obscenely high house prices. This is not going to work. We'll get the inflation, no real pick up in trade and be totally ******ed as a result.

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They kicked the can a little further down the street, it's now sitting in a cul de sac called General Election 2010...the can will soon be back at it's original position!

The wealth was destroyed a long time ago, they cannot print and borrow forever and sooner or later pay back time will be upon us.

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From my POV our september sales profits are on track to be est. 68% down on september 2008 figures (commissions on Caribbean hotel bookings and website/marketing work).

Resort clients are running out of money for marketing and even those with the cash have realised that there just ain't no business out there to be had. The Jamaican tourist board is a classic example of how things are failing rapidly - huge multi-million $ super slick ad campaigns on the web, TV, global. They are subsidising several new charter flights into the island (even BA has been bribed to fly to Montego Bay from later this year) - even with the massive increase in airlift, the huge ad campaign, and several thousand brand new luxury hotel rooms newly on-stream, arrivals and revenue is down and hotels are closing.

As with Pacific State's clients, there just isn't the money to pay for the marketing, and where the money exists, marketing is yielding nothing.

Everything is rapidly closing down - it's palpable. Even the Caribbean tourism chat forums I monitor are seeing hardly any posts from potential or past travellers - and there are fewer and fewer Google Adsense pay per click ads appearing in their margins.

The gloom is justified - I do not foresee any meaningful recovery in consumer demand until 3 years after unemployment stops rising (which I reckon will be circa 2012 when the public service cuts are done) - ie 2015. And it will be slow and steady, no booms for many years

It also doesn't help when you rob, rape and kill your customers.

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It also doesn't help when you rob, rape and kill your customers.

True. In the boom times the iffy or dodgy service dished up in Caribbean hotels by indolent staff did not greatly impact bookings - first world tourists were in a spending frenzy, desperate to notch up their 3-5 new foreign destinations each year and the Caribbean was a natural choice amongst them due to decent flight links. So UK etc HPI kept the islands afloat.

Now the recession has hit consumers are being much more choosy as to where they spend their (much reduced down to 1) long-haul trip each year - and the islands are losing out to destinations where people know they will get better, smiling service and cheaper food etc, eg Thailand.

Bizarrely, many more Brits are murdered, raped, robbed etc in Spain, Thailand and India etc than in the windies (as a % of visitor numbers) but they are seldom as well publicised as the odd attack in a Caribbean villa. Not sure if this is a sub conscious fear of black people hard-wired into white folks (and let's face it, a 6'5" tall crack crazed rastaman whirling a machete will look scarier than a 5'1" skinny little Thai fisherman whirling a small knife even though both are equally dangerous) or iif it is a bi-product of the islands own "tiny island paradise in the sun" marketing product - a serious crime against a young honeymoon couple in a tiny "paradise" island seems somehow more surprising or shocking than a sleazy old guy being strangled by a Thai drug dealer or hooker after some deal goes wrong, for instance.

Either way, the recession = global death-knell for all tourism comapnies which deal bad service (including Ryanair etc).

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Sounds like it could be a once in a lifetime experience

The once in a lifetime experience would have been to get in on the ground floor of a 40% stock market rally.

My own thoughts are that the economy remains in deep doodoo but government policy is creating a dash for assets and the stock market has benefited.

Crucially it might also affect property. What is holding it back is the lack of credit since most property is bought on credit. The reason it is crucial is that unlike the Gt Depression which was started by a stock market crash this one was caused by a property crash so I don't think rising property prices will be a lagging indicator of recovery but a pre-requisite of recovery.

Whether the rise in property prices is due to improving fundamentals or easy credit and more debt makes little difference IMO so waiting for the UK (and USA) to return to sound economic growth may be a very long wait.

Just my opinion. Feel free to disagree.

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From my window on the world I am seeing large differences depending on market sector.

Companies selling to markets supported largely by the UK consumer.. things are not looking very good, little or no improvement.

Companies selling to international markets seem to be picking up a bit.. semi-con is on the up (although still miles off 2007 figures) and other areas related to tooling for consumer staples seem to be doing ok (although again, I think a lot of the demand is comng from abroad).

I have no idea if this is a blip or the start of a long term trend. Neither, aparently, does anybody else (except the market analysts who's reports keep telling us we'll all be millionaires next year.. just like they were in 2007 :rolleyes: )

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