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Realistbear

Prolonged Economic Misery Forecast

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http://uk.news.yahoo.com/pressass/20080325...-6323e80_2.html

Prolonged economic misery forecast
Press Assoc
. - Tuesday, March 25 06:07 amThe UK faces prolonged economic misery from the impact of the credit crunch, a leading business organisation has warned.
The CBI said the effect of the tighter lending conditions on households and business "was yet to be fully felt" as it slashed growth estimates for this year and next.
Its latest quarterly forecasts now predict UK growth of 1.8% in 2008, weakening to 1.7% the following year....../

For Brown to accept that his miracle is about to end in tears is a very bitter pill for him to swallow. WE are 12-18 months behind the US in the credit meltdown and subsequent HPC. Things should start to get rough by late Spring-early Summer of this year.

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The CBI also warned the squeeze on consumer spending would be sustained for much of 2008 with disposable income under pressure from soaring energy and food prices, while wage settlements and earnings are not expected to rise in response.

For me, this is the real story :blink:

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When the sheeple wake up to the fact that the ONLY BENEFIT* they have received from 10 years of Broon's miracle is an assett that is quickly turning into aliability they will turn from sheep into very angry pit bulls. It is because of HPI that they have not noticed everything else they have given up to keep Broon in power: reasonable taxes, affordable cost of living, personal freedom, pensions, education, NHS...................................

When HPI is no longer apparent the sheeple will start to notice the downside to Broon's miracle.

__________________

* Tempoirary and illusory as it is.

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http://uk.news.yahoo.com/pressass/20080325...-6323e80_2.html
Prolonged economic misery forecast
Press Assoc
. - Tuesday, March 25 06:07 amThe UK faces prolonged economic misery from the impact of the credit crunch, a leading business organisation has warned.
The CBI said the effect of the tighter lending conditions on households and business "was yet to be fully felt" as it slashed growth estimates for this year and next.
Its latest quarterly forecasts now predict UK growth of 1.8% in 2008, weakening to 1.7% the following year....../

For Brown to accept that his miracle is about to end in tears is a very bitter pill for him to swallow. WE are 12-18 months behind the US in the credit meltdown and subsequent HPC. Things should start to get rough by late Spring-early Summer of this year.

Of course Realistbear is correct in pointing this out. Forgive me in pointing out the obvious:

1. We have had a speculative housing boom of unprecedented proportions based on cheap money, unrelated to RPI. This will lead to a massive loss of personal wealth. The only unknown is the time scale. Buy to Let buyers are not buying, first time buyers can't afford to, and banks are unwilling to lend (to anyone). A simplistic solution would be for houses to revert to a sensible mean. If the avarage UK household income is 30K, then an old fashioned morgage formula would seem to indicate that houses will have to fall to about 105K!

2. We have a worldwide Credit Crisis. Banks are unwilling to lend to each other, let alone businesses or home buyers.

3. Business needs the lubricant of cash to function normally. At the present time, this lubricant has been withdrawn. The effect in the City is immediately apparent, with increasing Banking related redundancies, which will almost certainly spread to Retail, Leisure, and other sectors.

4. Oil is hovering around the $100 mark, which is like a huge tax on business generally. The recent dramatic fall is, I suspect, not related to fundamental factors, but to private equity, hedge funds and investment banks selling their positions because their normal source of borrowed cash has dried up.

5. The stock markets are all dramatically down this year, because of the general gloom, which has not passed unnoticed.

The only question is where next?

DEFLATION

Without government intervention, the world economy would soon resemble the West in the 1930's, or Japan in the 1990's.

INFLATION

1. Central Banks are lending huge sums to banks in return for Government Bonds, in an effort to "ease the liquidity crisis".

2. Interest rates are being lowered both in the US and the UK, which will bring down the USD and the GBP against a basket of currencies, notably the Euro and the Yen.

Both of these are obviously inflationary.

We seem to be on a knife edge, with Helicopter Ben in charge!

Best wishes,

Housing Bear

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  • 295 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%



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