View Full Version : Financial turmoil...are you worried?
percy toboggan
18-Mar-08, 22:12
I follow financial and political news quite closely. I 'wake up to money' most mornings with BBC 5live. Things are looking precarious....especially in the States, and as we are linked so closely economically it's possible we are all going to feel the pinch.
"When America sneezes, the rest of the world catches a cold!" or so went the old expression. That's not so accurate now, with the emergenceof the Chineses and Indian economies who have the luxury of very cheap labour and a relatively non-aspirational (or more easily satisfied) workforce.
Indeed, if you have shares in any financial institutions be ready for a rough ride. Your maxi-ISA may plummet a little -if that's not an oxymoron.
Likewise if your mortgage is due to be re-negotiated it could prove tricky...or expensive. First time buyers will have little chance of a mortgage unless they have at least 10% deposit, in the medium term. This will knock on into the housing market generally and a long awaited correction, or even crash might follow...a crash less likely because of demand (immigration & family fracture).
Cash ISA's are safe enough but this is no time to be playing the market..although soon a buying opportuinity might well arise.
My own UKCoal faux pas of two years ago is certainly apparent now...the share price is holding steady amidst all the turmoil. I missed out big-time there and often kick myself...indeed it haunts me..(shares £1.49 three years ago rose to almost six quid last year) I'd been telling Mrs.T we should buy some for months but she's highly 'risk averse'.... I digress.
If you live in the house of your choice and can afford the payments then you're okay...just do not expect the notional value to rise much. Indeed expect the reverse....it doesn't matter if you wish to stay put .
The real danger is the lack of affordable money to businesses could result in increased unemployment...first casualties could be imported labour.
If redunancies rise in the indigenous population then re-possessions will rise & the price of housing stock will fall considerably.
Don't be afraid, but be concerned...and put any big credit based purhases on the back burner if you can. In four years time we'll all be ridng the crest of another wave...I hope... - my endowment will be maturing then!
Fewer than half the population has savings of more than five hundred quid...not much more than a weeks wages for many...wafer thin margins make for dreadful insecurity...the good times (fuelled by Government encouraged consumer debt) have lasted much longer than usual...they are with us no more. That rainy day you (may) have been saving for is almost upon us.
The day I take my financial advice from '5 live' is the day I start worrying.:roll:
percy toboggan
18-Mar-08, 22:24
The day I take my financial advice from '5 live' is the day I start worrying.:roll:
You are quite right...they never offer 'advice' and I wouldn't take it if they did.
Your dismissive sentence & eye rolling fizzog offers little to the subject, and that's to be expected. A heavyweight subject this...stick to trivia karia..you're quite good at it.
I deal in allsorts from farts to finance...don't offer advice (apart from the obvious) just honest, and open thoughts. Always time to deal with nit-picking snipery though. Indeed , I welcome it.
mums angels
18-Mar-08, 22:26
Nope i'm not worried as i'm delighted to say that i have just organised a new mortgage with the Halifax after leaving Northern rock ..its a fixed rate and knocked 7 years of my mortgage without paying more than we budgeted for :D however glad i did it now instead of when it was due in May
percy toboggan
18-Mar-08, 22:28
Nope i'm not worried as i'm delighted to say that i have just organised a new mortgage with the Halifax after leaving Northern rock ..its a fixed rate and knocked 7 years of my mortgage without paying more than we budgeted for :D however glad i did it now instead of when it was due in May
HBOS have been heavily exposed to North American debt and their share value has suffered as a result. I'm glad you got a good deal while you could Mums A.
NickInTheNorth
18-Mar-08, 22:30
I'm delighted, hope property prices drop through the floor, and that the 1980's "greed is good" attitude finally dies.
mums angels
18-Mar-08, 22:31
HBOS have been heavily exposed to North American debt and their share value has suffered as a result. I'm glad you got a good deal while you could Mums A.
thank you and believe i am pleased .. after some bad advice from a local mortgage advisor last year this was my first time organising one on my own ...i am quite proud of myself ...lol and the lady at the bank was really helpful and honest
Why were JP Morgan Chase not allowed to buy Northern rock as they have done with Bear Stearns?
[quote=percy toboggan;360893
Your dismissive sentence & eye rolling fizzog offers little to the subject, and that's to be expected. A heavyweight subject this...stick to trivia karia..you're quite good at it.[/quote]
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Like we should listen to financial comment from someone who starts a thread about 'farting'
Yer blowing wind all round man..and none of it pleasant.
But if hating me keeps ye off someone elses back..:lol:
I've a stout heart..and you've a loud .....fill in where applicable but rhyming is good.
It is patronising of you to suggest that we Scots don't follow such matters as investments and pensions...we are canny folks and can aye spot trouble.
Nuff said!
I have heard the American sneezes the world gets a cold quote, perhaps it is time for the other countries in the world to realise they didn't always follow America's lead.
Just in the news Americas interest rates have been lowered 0.75% to 2.25%. With the problems we are hearing about people struggling to pay for day to day expenses will the Bank of England follow and reduce rates further? IMO it should have been done 6 months ago (and more than they did recently). Even if there isn't a real "credit crunch" with the media talking it up the way they are there will be a knock on effect.
martin macdonald
18-Mar-08, 23:14
if you worry you die. you die anyway so why worry?:eek:
I'm delighted, hope property prices drop through the floor, and that the 1980's "greed is good" attitude finally dies.
That sounds pretty selfish to me. Maybe you own your house with no mortgage, have no intention of ever moving and have enough money saved for a comfortable old age. For many that is just not the case and through no fault of their own. How many people will be in negative equity if prices plummet? How many older people have only money from the sale of their homes if they need to be looked after and cannot sell?
The craziest thing done by governments was to allow mortgages of more than 75% of a property's value. If this had not been done prices would not be sky high and banks would not be in this mess. Seems to me obvious that borrowing 125% of value is asking for trouble but if it's on offer then people will be tempted and forget that prices don't increase for ever.
Even our former Chancellor could not see that endless borrowing was a bad idea when times were good and he should have been saving. Now things look bad and he has nothing in reserve.
Margaret M.
19-Mar-08, 00:17
I was getting ready to type a response but I see Badger did it for me. I'm glad I don't intend selling any time soon. If one needs creative financing to buy a home, they should not be buying.
That sounds pretty selfish to me. Maybe you own your house with no mortgage, have no intention of ever moving and have enough money saved for a comfortable old age. For many that is just not the case and through no fault of their own. How many people will be in negative equity if prices plummet? How many older people have only money from the sale of their homes if they need to be looked after and cannot sell?
The craziest thing done by governments was to allow mortgages of more than 75% of a property's value. If this had not been done prices would not be sky high and banks would not be in this mess. Seems to me obvious that borrowing 125% of value is asking for trouble but if it's on offer then people will be tempted and forget that prices don't increase for ever.
Even our former Chancellor could not see that endless borrowing was a bad idea when times were good and he should have been saving. Now things look bad and he has nothing in reserve.
100% PLUS mortgages should never have been permited - Save for what you want.
The good news at the moment is that housing prices seem to still be strong in Scotland compared to England.
As to the chancellor, if you don't need to borrow why do so? Maybe I am being naive but why borrow if you don't have to. Good times or bad you should always try to be in the black I would think.
percy toboggan
19-Mar-08, 18:56
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Like we should listen to financial comment from someone who starts a thread about 'farting'
Yer blowing wind all round man..and none of it pleasant.
But if hating me keeps ye off someone elses back..:lol:
I've a stout heart..and you've a loud .....fill in where applicable but rhyming is good.
It is patronising of you to suggest that we Scots don't follow such matters as investments and pensions...we are canny folks and can aye spot trouble.
Nuff said!
I did not say Scots didn't follow financial matters.
You are barking. Up the wrong tree.
As for 'hating' you. You flatter yeself. I don't hate anybody, but scarcely give you a second thought either way.
Cheer up---unscrew a cork..mellow out.
Enough said indeed. You remind me of a sad case.
percy toboggan
19-Mar-08, 19:00
Blimey! HBOS shares siuspended briefly on the stock exchange today due to a plummet !
Bulk of uz money is in there but there's little to concern ourselves with at the mo....Insider shennanagins.
I can't claim insider knowledge...just fortuitous doom mongering which struck lucky.
Highland Laddie
19-Mar-08, 19:58
Many many thanks folks for cheering me up :(
I plan to start my new build in about 4 months :eek:
NickInTheNorth
19-Mar-08, 20:04
That sounds pretty selfish to me. Maybe you own your house with no mortgage, have no intention of ever moving and have enough money saved for a comfortable old age. For many that is just not the case and through no fault of their own. How many people will be in negative equity if prices plummet? How many older people have only money from the sale of their homes if they need to be looked after and cannot sell?
The craziest thing done by governments was to allow mortgages of more than 75% of a property's value. If this had not been done prices would not be sky high and banks would not be in this mess. Seems to me obvious that borrowing 125% of value is asking for trouble but if it's on offer then people will be tempted and forget that prices don't increase for ever.
Even our former Chancellor could not see that endless borrowing was a bad idea when times were good and he should have been saving. Now things look bad and he has nothing in reserve.
Until sense prevails and people stop seeing a house as an investment opportunity, and realise it is a means of shelter, a home, then we will continue to suffer this ridiculous boom and bust cycle in house prices.
Why is it that in all other spheres of our national economy inflation is the greatest ill of all. Yet when it artificially inflates our perception of our wealth it is a good thing?
I would be delighted to see house prices reduced to 10% of current values.
percy toboggan
19-Mar-08, 20:13
Until sense prevails and people stop seeing a house as an investment opportunity, and realise it is a means of shelter, a home, then we will continue to suffer this ridiculous boom and bust cycle in house prices.
Why is it that in all other spheres of our national economy inflation is the greatest ill of all. Yet when it artificially inflates our perception of our wealth it is a good thing?
I would be delighted to see house prices reduced to 10% of current values.
Wise words...twenty per cent would do me. The true value of a house is in the home it provides...not in some notional value which climbs ever skyward.
Our own house is band A for council tax, so despite being of an ample, well thought out size and design it's relatively modest...and was originally council owned (& built) it has been hugely over-valued in recent years...and so has any 'better' house we may have liked to move to.
Houses at the lower end of the spectrum will lose less value relatively speaking.
I see Scotland is currently bucking the trend, and holding firm.
(((We have begun to turn our attention to France...as good as our home has been these thirty odd years we do not want to grow old here...a change of scenery is required.)))
Nick and Percy - you're not getting it. Yes house prices are crazy and I've explained what I feel about the reason - stupid levels of lending. The point is we are where we are and if prices suddenly tumble a lot of people are going to be homeless if they can't keep up their payments. You may have been sensible and only ever borrowed against a percentage of your house value, or maybe you don't have mortgages. I'm old enough to have had a foot on the housing ladder when it was possible to only borrow a reasonable amount and it gives me no pleasure that my present home is worth so much more than my first one. Anyone wanting to start buying now doesn't stand a chance without plunging into far too much debt.
Obviously there are people who see houses as an investment but I'm sure most just want to own their own home and with prices the way they are that's only possible with massive borrowing. I have no sympathy for those who have loans secured on their homes to buy other things - that's plain reckless. But I don't want to see the kind of situation they have now in the US - masses of empty houses and homeless families.
Penelope Pitstop
19-Mar-08, 21:02
I wouldn't say that I was worried yet...but I'm certainly not being extravagant at the moment. Personally I think we are in for a recession, if indeed it hasn't started already.
Penelope Pitstop
19-Mar-08, 21:08
Many many thanks folks for cheering me up
I plan to start my new build in about 4 months :eek:
Don't be despondant Highland Laddie. Your new build will be a good secure investment for you and your families future....be positive.
You can usually make good savings on a new build if doing some/all the work yourself. Are you doing some yourself? It always helps if you can buy a piece of land at a reasonable cost too.:Razz
Doesn't bother me, I'm minted. :Razz
Doesn't bother me, I'm minted. :Razz
Obviously not married then!
percy toboggan
19-Mar-08, 21:45
But I don't want to see the kind of situation they have now in the US - masses of empty houses and homeless families.
You might see that in Scotland, but in England squatting is almost legal and in the kind of climate a recession would bring anything might pertain.
I have a very small mortgage with fewer than four years to run....I regret not having sold up and moved (allegedly upwards) ten years ago when I was messing about with bikes and beer....we'd be better placed now, but we didn't. We have been able to save a reasonable amount by thrift and hard work...none of which is at risk with shares.
I remember two recessions very well, the first took my job - a good one too.
I don't think we are there yet, but if it happens it will cost the government it's governance.
Hey, Percy, you seem to know stuff!
Should we all be buying gold and keeping it under our beds? (I'm not joking, by the way!)
Just that it doesn't seem like banks or shares are safe any more either in the long term or the short.
What do you think, Percy?
I have nothing so have nothing to worry about...............life is pretty stress-free!
percy toboggan
20-Mar-08, 18:03
Hey, Percy, you seem to know stuff!
Should we all be buying gold and keeping it under our beds? (I'm not joking, by the way!)
Just that it doesn't seem like banks or shares are safe any more either in the long term or the short.
What do you think, Percy?
Given my faux-pas with UK Coal shares I'm not the person to advise anyone..however, the time to buy gold was a year or so ago ..the price currently is at record heights I think. If you do purchase an ingot or three keep them in your bank...under the bed is not safe enough.
When the cycle of financial downturn begins to recover itself the gold price will slip back again, though it's fair to say most of the worlds gold is now out of the ground. In fact, someone did say that recently, but I'm beggarred if I can remember who !:confused
Highland Laddie
20-Mar-08, 18:37
Don't be despondant Highland Laddie. Your new build will be a good secure investment for you and your families future....be positive.
You can usually make good savings on a new build if doing some/all the work yourself. Are you doing some yourself? It always helps if you can buy a piece of land at a reasonable cost too.:Razz
Hi Penelope, no i am doing none of the work myself
i told the builder, all i wanted to hear was
here's your front door key, you can move in.
Penelope Pitstop
20-Mar-08, 19:38
Hi Penelope, no i am doing none of the work myself
i told the builder, all i wanted to hear was
here's your front door key, you can move in.
I'm sure it will be fantastic when it's finished. Just sit back and wait for the keys......:Razz
Given my faux-pas with UK Coal shares I'm not the person to advise anyone..however, the time to buy gold was a year or so ago ..the price currently is at record heights I think. If you do purchase an ingot or three keep them in your bank...under the bed is not safe enough.
When the cycle of financial downturn begins to recover itself the gold price will slip back again, though it's fair to say most of the worlds gold is now out of the ground. In fact, someone did say that recently, but I'm beggarred if I can remember who !:confused
I read that about 150,000 tonnes of gold is above ground and that some 50,000 tonnes are estimated to remain in the ground. However, it is estimated that it would cost about $300 per ounce to mine what still exists. I dug out some old broken gold chains recently and got nearly £5 a gram for it as scrap. Some "shark" in St Andrews was offering just £60 per OUNCE. Miserable beggar!!
NickInTheNorth
20-Mar-08, 22:41
Current price of gold is around the $1000 per ounce mark. Can't be bothered checking, but it was at record levels a week ago.
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