Are we half way through yet?

[Enjoy Kalkan]

Hi Everyone,

I know its probably a topic we all wanted to avoid but I thought it could be a discussion point - Having read other forums there seems to be some debate about the recession and are we nearing the end, or are will still nowhere near the middle.

No doubt everyone has opinion on house prices, the economy, shares etc......... whats yours? When do you think there will be light gleaming through the tunnel?

Linkback: https://www.enjoykalkan.com/forum/index.php?topic=3154.0

[Cuddles]

What tunnel? We''ve got to get out of the hole first.

[Enjoy Kalkan]

Has "the hole" affected anyones holiday plans this year?

How are owners finding booking enquiries?

[misty]

Two years before we can say thinks are starting to pick up....two very difficult years!!!! I''m neither a qualified stockbroker or financial adviser but its my humble opinion.

[Enjoy Kalkan]

Interesting opinion Misty, I think many people may well agree with you on that one

[misty]

I also believe we will see unemployment peak at over 3 million and a record numbers of repossessions, companies go bankrupt and interest rates back up to at least 6-7%.

People who may well benefit from this period....those brave enough to play the property market !!!

[Enjoy Kalkan]

Agree with you there Misty....... he who dares wins springs to mind!

[misty]

Absolutely......and be brave....   

[MartynE]

Well, there seems to be a light at the end of the tunnel... or is it the headlight of a train heading our way?

My firm has a number of clients in the construction industry... the consensus seems to be that those companies that are still surviving in 2011 will clean up.  The trick is going to be surviving, of course. 

Personally, I think the general election next year may be the catalyst for a change in outlook. I''m not being overtly political, but it''s a fact that markets always tend to bounce back after an election - whatever the outcome.

Not that the outcome of next year''s election is really in doubt....

[Blue Lizard]

thats only the UK..it''s a world recession!!

[Hummingbird]

With the enormous budget deficit, the consequent reduction in public services and  raising of taxes, the possible strong rebound of inflation due to the artificial stimulus in demand and the increase in money supply (and the resulting increase in interest rates).   With little prospect of house prices returning to previous levels in the short/medium term, especially if lenders restrict mortgages to a proper 3 times salary multiple………surely its going to continue to be a rocky ride for sometime yet??

What confuses me is that the terrible mess has been caused by the credit bubble i.e. too much money available at too little cost and what are we doing to treat the symptoms?  Inject further massive amounts of extra capital into the system at even lower cost!

Its unlikely that 2 wrongs make a right isn’t it??

[rat2]

I agree with ABBO but would add that UK is probably the least able and worst led nation to recover from the world recession mess. MEP Daniel Hannan summed up the situation very well here: http://video.msn.com/dw.aspx?mkt=en-GB&vid=bfbf6d2f-a043-4fa1-8312-38a977de036f&from=money . That''s what happens when a vote-seeking socialist government tells the great unwashed they can have everything they can''t afford and are not prepared to work for; after all, honest hard-working tax payers will eventually foot the bill won''t they?
I believe the last time things were this bad was under a previous labour government in the 70''s when the IMF were called in. The sad difference today is that successive labour administrations have destroyed UK''s industrial base; we no longer have the vehicle required to rise from the ashes. Most of those non-productive jobs in the service ''industries'' will go and the next government will have an incredibly difficult, if not impossible, task ahead. John Stepek of MSN money says that ''...the Debt Management Office (DMO) will have to sell £147.9 billion of gilts during the 2009/10 tax year to finance the public sector'', and others reckon more like £200 billion. Brown couldn''t even auction gilts last week so where is the money coming from? Expect much higher taxes to pay for UK borrowing. I don''t see any light at the end of this tunnel, just a continued slide into the bog of depression as the IMF are called in again and UK slips into the 3rd world.
On a more cheery note, the rain seems to have left us, the sun is shining in Kalkan and I''m thinking about diving into my unheated outdoor pool for the first time this year.

[Pete]

Your absolutely right Abbo. If your haemorrhaging vasts amounts then you do not open up another wound.
I believe that the UK hit a tipping point some time during the last two months and the economy is teetering on the brink of national bankruptcy.
To me its simple, we (as a country) are still living way above our means. The current job losses are all in the private sector, the sector that actually creates the wealth for this country, I have not noticed any job losses in the public sector, in fact they are still recruiting and dishing out pay increases. Every person put out of work is one less paying income tax, NI, employers NI, producing goods upon which VAT can be levied, a fall in corporation tax etc etc., and then they actually sign on and become a nett drain on the benefits system. Did anyone notice that the unemployment figures for last month were forecast as being a predicted rise of 84000 and in fact were 140000, and the predicted tax take was down by 10%, this then had the knock on of a further £9 billion of public borrowing.

In answer to the question how long? I think back to the last recession, it really started to bite in 1989 and we bumped along the bottom untill 1992/93 and then slowly started to come out of it, that was three to four years. In my opinion this one is far worse as it is more global, I think that it is impossible to predict how long. The big difference this time is that it has started in the financial sector and we as a country have always relied on the City of London as the main wealth creator, the jobs that are being lost in the city will never come back and with the new regulations they will disappear even faster to the Far East at the flick of a switch.

The one thing that really makes my blood boil in all this is Gordon Browns total lack of contrition and refusal to accept any responsibility for the mess we are in. It is not as simple as blaming American Bankers. 125% mortgages, irresponsible credit card borrowing, easy cheap credit to buy goods these are all things that this govenment allowed to happen when our ''wonderfull'' leader was at the helm of the treasurey. Anway, what the hell, he''s going to save the world at the G20 meeting, praise the Lord salvation is at hand.

Just seen Rat 2''s Post. Totally agree with him.

As far as I am concerned this Government should stand trial for what they have done to this Country.

[Blue Lizard]

i think what gets up peoples backs is also the fact that the CEO''s of these institutions award themselves hefty bonuses and payments and whopping pension deals and feel they are justified!!  it''s no wonder people get angry

[Roxie]

Hi
With regard to bookings, Jon, we have been fully booked for weeks. No haggling on price as in previous years and all new business.
Cheers Steve

[Hummingbird]

I am not so bearish as that Pete and Rat2.  However I share your general points.

With all the coordinated worldwide effort to put matters right this should reduce the downside.  I do not see Armageddon but I do see years of a low growth environment as people’s pockets continue to be hit. 

Tax Revenue has been decimated, did you know that RBS was the country’s largest tax payer and now of course they are not even making a profit.

The Govt also used to rake in £8 Billion from stamp duty on Property Purchase…........used to!

Hopefully we can keep a lid on it and most ordinary families will be OK but it will be very tough.

Just to end on a less cheery note – the demographic issues within our society and the burden of looking after the older generation for less and less workers potentially makes the credit crunch look like a stroll in the park!

For example I believe 25% of our Council Tax goes straight out as Pensions to Local Authority workers.  I don’t know what proportion of our direct national taxes are redirected to retired Civil Servants, Teachers, Services etc (and good luck to them) but it will only get larger and they need to do something about it urgently.  When they tried to cap the liability and deny entry to the gold plated schemes for new staff they were bullied by the Unions into changing their mind.  I am sure very few if any new entrants in the  Private sector have access to these Final Salary schemes.  We cannot afford such weak Govt (I am a Union member by the way!).

What does our resident IFA think….MartynE??

[Hummingbird]

By the way… the answer to all this is save, save save and look after yourself. 

The State won’t be able to in 30 years or less and that’s where MartrynE and his IFA colleagues come in.

[Enjoy Kalkan]

Interesting points Abbo

...... or is now the time to buy buy buy as no doubt property prices will increase again in the next 10 years giving a better return than savings?!

[misty]

I agree with the commment about after an election in my view the sooner we get this inept corrupt goverment out the better. The change may be slow to take effect but if nothing else it might lift peoples heads up.

The biggest worry I saee is the massive burden of the public sector....

[ScotsinKalkan]

It appear to me that there are a few sectors that are suffering badly. Housing and Automotive being the main ones. These however are high ticket items and therefore people are just keeping there cars longer as they are still perfectly ok or not moving because they are waiting for the house prices to reach a corrected level.

Other sectors such as retail and tourism are marginally down or even up on previous years as there is still plenty of day to day cash around. A lot of people will have more money that ever before due to mortgages for some people dropping by over 4.5% in the last 6 months thus giving them more everyday spend.

If this period of adjustment makes everyone waste less food, gas and electricity, buy more efficient cars and generally look after the environment more it is a good thing that this time has caused us to look at ourselves and what we do.

You can also be sure that somewhere someone has made and will continue to make a lot of money out of the current economic situation.