How long before the bubble bursts??

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He means we're all going to be bankrupt...living in a post-what-sit world (anyone seen Children of Men ?) with no money, food, House more less than we paid for it, or credit cards ! ( I think).

Happy thoughts for a Monday.....
 
It means there is a worldwide recession looming, triggered by the USAs sub prime mortgages.

The american banks re-sold the debts around the entire world, but re-packaged them with other "good debts" to make them look appetising (for financial gain) to those who bought them.

End result is that the banks and other financial institutions around the world who bought the debts, are still trying to unravel the hidden portions which are the sub prime mortgages. Hence there will continue to be a few more months delay before the start of the downward spiral of a recession.

It's been a long time coming - but come it will.
 
He means we're all going to be bankrupt...living in a post-what-sit world (anyone seen Children of Men ?) with no money, food, House more less than we paid for it, or credit cards ! ( I think).

Happy thoughts for a Monday.....

It will happen - and many houses are truly worth less than we paid for them . Watch the Gazettes for bankruptcies in your area.
 
For those of you who ever wonder where all the money comes from...i.e. Northern Rock had to Borrow £25 Billion from the BoE....but where does that £25 Billion actually come from.

A leading Economist put the following documentary together that makes all this a little more understandable. But do remember this is trying to explain a very complex industry in laymans terms.

It goes some way towards explaining the mess we are currently in.

It's 45 minutes long.

http://video.google.com/videoplay?docid=-9050474362583451279
 
Mudster; its not hard to explain at all;)

People have been living beyond their means. at some point it needs paying for. I look at some of my friends and their credit card debts and think "i hope you enjoyed it" because 15K, 20K 30K+ in cc debt is a significant burden. unfortuntely too many gullible idiots believe marketing hype that "you can have it all".

Look what is valued in this society - entertainers and footballers - hardly real jobs providing safe employment for the masses.

Look at the sub-prime market. Some bright sparks make a fortune (only they do not make money-they simply get idiots to give them their money) from re-packeged debt. At some point it becomes apparant to the masses that the proverbial emperor has no clothes on and you have been sold a pup. Confidence dissolves in the wind like last nights curry and there is a problem of Northern Rock proportions. only this is not the end of it-the real shake down is yet to come.

It all comes to greed. People want to get rich with no real effort - its unsustainable and the sooner everyone realises this the better.

right, i am coming down off my soap box and going to put all my toys back in the pram:eek:

Matt
 
I am disgusted by what has happened to Northern Rock (NR), it is fundamentally the fault of the Governments obsession with transparency and a media with too little grasp of what happens in the real economy of countries.

The NR loan situation has been happening for years with various banks, yet up until recently we''d seen no reason to publicly announce it to the Daily Mail and The Sun et all. The ordinary man in the street simply does not comprehend how economies work and where this money comes from. It was completely unnecessary to publicise it in this manner and this publicity was directly responsible for the run on NR.

If NR went bust (which it won't) and the guaranteed £35,000 minimum is required to be paid out, that comes from a fund that all banks are required to pay into - call it an insurance policy of you will, this will not be taxpayers money. Why the press continue to peddle it as much I don't understand.

Without doubt there is an unprecedented worldwide credit crunch and there are only two ways out of it, there is a recession (depression/crash) or we enter a period of hyper inflation - neither are particularly appealing, but at the moment we seem to be half way between the two.

An economic correction is now about 4 years overdue, the longer the powers that be try and postpone this even the harder it will hit when it finally arrives.
 
You are right Mudster; a correction is long overdue. Northern Rock is just a sympton; not the cause of the problem.
 
Excuse my ignorance, but what really happenned to Northern Rock? As far as I am aware, all their investors, who participated in the run on the bank, got their money back. From the information I can glean, Northern Rock, untill recently, were one of the biggest in the remortgage field. Now the money they lent out, was borrowed from the funds of other banks which dried up with the threat from the US sub prime market. Now they had a choice, tell all their potential clients, sorry we can't lend any more money, or try to borrow from elsewhere. They chose the second and went to the BoE. The press seem to have done the rest of the damage to NR. I am not convinced we are heading for a recession, neither do I think we are heading for a boom either. I am of the impression the world markets are currently fairly static and will remain so for at least the next year or so. I work in the building trade and that market is usually first to go into recession and last to come out. At present, the building trade in going quite well.
 
what really happenned to Northern Rock?

Fair point - but if u had shares, they would be worth much less than u paid for them; that money wont come back:(

the dot.com bubble came and went (v.fast) some got out, others lost loads.
speculative trading in oil futures???? whats that all about???
It boils down to a simple fact (correct me if i am wrong please) - we are floating about on paper money....
i very much hope that it does'nt all go belly up (seems very far fetched) but for how long can it last??

rob
 
At present, the building trade in going quite well.

It's going very well!! there is a heck of a lot of work out there to the point where Quantity/project Surveyors (thats me :rock:), contracts, project and site managers are in high demand and the financial rewards are great.

However, the construction industry is one of the first to be hit when times are hard so I'll enjoy riding the wave while it continues but am doing plenty of Mattress-stuffing for that long over due rainy day.

And according to some of the guys at work they are predicting a rainy day just before or may be just after 2012!...certainly in the construction industry anyway.
 
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Here is a good explanation of what went wrong with Northern Rock. Its quite a long read and the series of articles hasnt finished yet but I'm finding it very interesting.
 
I'm more worried about Northern Soul than Northern Rock.. :D

And if Richard Branson takes over will it named after that mythological creature Northern Virgin.
 
Construction going well!!

maybe where you live. here in Birmingham i see masses of urban city living apartments empty. i have seen the first of the repossessed BTL apartments on the market at knock down prices. i see current projects put on hold. all on speculative greed that has seen the market dry up. this stems from a lack of confidence this is what has killed NR over what the last 18 months (god help you if you had shares in them a few years ago)

maybe the big ticket items such as 2012 - financied by the lottery (get rich quick any one!) and T5 at heathrow are still supplying well paying jobs but the Poles, Bulgarians and Romanians will be building the next round of public money backed projects (Matt lights blue touch paper and retires;) )

I could go on but whats the point - most people out there in Lah lah land will carry on regardless.

can anyone tell I get a bit hot under the collar about this topic:rolleyes:
 
maybe where you live. here in Birmingham i see masses of urban city living apartments empty. i have seen the first of the repossessed BTL apartments on the market at knock down prices. i see current projects put on hold. all on speculative greed that has seen the market dry up. this stems from a lack of confidence this is what has killed NR over what the last 18 months (god help you if you had shares in them a few years ago)

I can only really comment on the industry down n London and the surrounding areas, and even then I'm talking private commercial rather than the housing market. I'm guessing there have been plenty of property developers that have got their fingers burnt by greed!!!!

maybe the big ticket items such as 2012 - financied by the lottery (get rich quick any one!) and T5 at heathrow are still supplying well paying jobs but the Poles, Bulgarians and Romanians will be building the next round of public money backed projects (Matt lights blue touch paper and retires;) )

You don't get many Eastern europeans in consturction management but You make a very good point. Those Bulgarians can go home again when all the work drys up here. However, as with everything one of the most important cogs in the wheels of the construction machine are the labourers and the grafters. I've found, when procuring subcontractors that the Eastern Europeans work bl00dy hard and its not as if they are taking jobs from the Brits, quite simply the brits don't want to do the jobs in the first place :( .
 
I can only really comment on the industry down n London and the surrounding areas, and even then I'm talking private commercial rather than the housing market. I'm guessing there have been plenty of property developers that have got their fingers burnt by greed!!!!

This is interesting, I moved into a new (well a newly developed old building) warehouse by Gatwick Airport in April. It had been on the market for over a year at £9 sq/ft + service charges. I took it earlier this year at £5.50 sq/ft. They just can't get anyone through the door here, they've now dropped to £3.50 sq/ft for year one on some of the units here (5000 sq/ft) and they are desperate.

Rents (commercial) peaked about 18 months ago at quite ridiculous levels, I'd never seen warehousing at £10 sq/ft before and they seem to have dropped substantially.

What bit of commercial are you in? Is it retail commercial?
 
Things seem to be slowing down around these parts as mattc pointed out (Birmingham).

Certainly restaurants in and around Sutton Coldfield (nice suburb of Birmingham) are noticably quieter than they have been for a while, as are the shops, estate agents and car dealerships - which just isn't the done thing here.

I have no hard facts to back it up - just my observations. In fact we've been out for dinner tonight (Chinese). During the 2.5 hours we were there we were the only people eating, and only two take-away orders.

Houses seem to be taking longer to sell - especially in the middle-ground. The very, very sought after houses appear to be turning over quickly, but nice 4/5/6 bedroom houses in nice areas appear to be taking an age to move on. Maybe a reflection of the fact that the very wealthy still want to leap on the very best properties, but those people that just work to pay the mortgage are being more cautious?

Again as mattc pointed out, apartments have popped up all over the wider West Midlands - and many stand empty after extended periods.

We had a 5p Tesco fuel voucher which I used tonight - and I commented to the lady at the counter that it's shocking that it costs £70 to fill the tank. She even said the average fuel purchase has reduced over recent months. Suggests that cash flow may be a problem for increasing numbers of people?

A fairly random collection of thoughts, but there certainly seems to be a noticeable change in behaviours, which is making me tread with more caution. We had been undecided about changing cars - but I'm fairly sure that we'll hold fire for a while longer and see how things pan out.
 
Have to laugh Bobby. clearly i live in the area and have never been one to keep up with the Jones's. I just hope the Jones's can keep up with their mortgage, the fuelbills, the cost of food, ad infinitum.;)

what did Dillon sing "the times they are a changing"?:devil:
 

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