Is there a crisis?

Is there a crisis in this country or are the politicians fooling us?

We are told that all families are feeling the crunch and are pulling in their purse strings, Are they?
I have never spent as much everytime we go out so I am certainly not feeling any crunch.

I have not felt any problems be it cash or otherwise apart from seeng the price of fuel going up and the odd food price rise. This is what happens normally throughout life so I question the reality of the politicians claims.

What do you think?

Re: Is there a crisis?

Many people are insulated from the major effects of the country's ills at the moment, but too many are not.

Too many people working in the private sector followed the government's example of taking on unsustainable levels of debt during the longest boom in history, and then lost everything in the crash when their jobs disappeared. Even people who didn`t lose their jobs are seeing huge cuts in salaries just to keep their jobs. All this coupled with raging inflation which no savings can hope to keep up with and the recipe is there for misery for millions.

I have some good friends who are hard working and honest and who have been nearly bankrupted by the credit crunch. It is arrogant and hurtful to thousands who, through no real fault of their own, have had their lives virtually destroyed financially and from which they may never fully recover.

But hey, I'm all right Jack, are you?

Re: Is there a crisis?

You are probably one of the lucky ones AB and you are out of the rat race now as I am. I am certain sure that a lot of people, (young, old and middle) are feeling the pinch. Life for many has become very precarious indeed, not necessarily brought on by their own actions. I am not poor, but I am not rich either and we have felt quite a bit of change and we are becoming a lot more careful how we spend the money we have.

Re: Is there a crisis?

Barry, Aerolor, this was posted with 'tongue in cheek'.
I know some people are short of cash, O.A.P's who rely on interest from investments, small business people who are having trouble getting paid from councils etc, youngsters who have to pay over the odds for insurance, but dont say people are stuggling to pay mortgages with the interest rates being at there lowest and have been for yonks. I know a few friends who have money to spare because of the drop in morgage payments.
Wherever I go shopping I see queues and queues of people more than I have ever noticed before so someone must be spending money, where is it all going to. Are the large company's hiding some of their profits to avoid tax, are people saying there is a recession to try to get people out spending on the increasing number of sales that we see every day.
Things do not balance up when you look deeply into the financial world.

Re: Is there a crisis?

Sorry if I misunderstood you AB, I thought you were serious.
On mortgages, yes (if you can get one) rates are at their lowest ever. However, if you lose your job it becomes a struggle (if not impossible) to pay a mortgage no matter how low interest rates are. There are now always several repossession houses advertised regularly - more than there ever was. Also auctions have become a lot more the norm for quite modest houses - not just the expensive ones. This is telling me that a proportion of people are struggling. Negative equity is now also back again. If you have had a house for years (as I think both ou and I have) then negative equity is not an issue, but for some poor souls it is a harsh reality.
If someone comes out of work these days - has a family and committments, then I really feel sorry for their situation and I believe most will struggle to find another job to pay all the bills.
There will be people who are still making a lot of money - that's nothing unusual, and I imagine those in a position to do so will avoid paying taxes and declaring profits, but generally I believe a lot of people are really starting to feel the pinch. People are still going to the shops (it is a national passtime these days) but I think there is a lot more "looking" than there was a while back.

Re: Is there a crisis?

AB - Unfortunately the cuts that were announced last year are only just beginnig to be implemented, so it matters not whether you were writing 'tongue in cheek' or if you were serious, the fact is that it will get worse before it gets better, sad 'tho that is.

As Aerolor and Plantman have said there will be many good hard working and loyal people made redundant, but as well as blaming the banks let us not forget all the people who borrowed like there was no tommorrow in the years up 2008 I worked in an office in London in 2002 and there were a couple of 20 something young women who spent hours discussing all the partying and boozing and clothes and, well the list goes on, one had a credit card with £21,000 owing and I know for a fact that she only earned £27K per year and there were millions like her.

In America it is now becomming clear that people were taking out loans on which they couldn't even make the first paymentIf that isn't fraud I don't know what is. I'm not sure if it was the same in UK but probably was.

So, while it is easy to direct our anger at the bankers, and they were certainly 50% responsible for the mess we're in, it is not so easy to find and publicly harass all those irresposible people who have now made millions unemployed and who have likely opted for personal insolvancy and thus avoided paying any of their excessive loans back.

And to hear Ed Balls saying that the previous government was borrowing excessive amounts to invest in Britain really makes my blood boil, he and Gordon Brown and Alister Darling were borrowing money to hand out in social security and keep people from having to work, that is NOT investment, that is charity.

Re: Is there a crisis?

Aerolor, sorry I have to disagree with you about negative equity.

The main reason why people have negative equity is because they either over stretched themselves when buying the property or were looking through rose coloured glasses.

Negative equity does not enter the equation unless you have to sell your home. iIf you just want to sell it then it is stupid to do so if it is not worth the same or more than when you bought it.Hold onto it, the house market always bounces back.

Yes I bought my home 40yrs ago for a pitance comparing todays values, but I did so knowing that it would sell for more than I paid even if I sold it the next day.

People out of work will struggle to find jobs!!! maybe but it does depend on how proud you are. I would have done any job when I was made redundant (three times )to keep family and home together. People these days are to fussy about the type of work they will do because they may look lower to their social cliche.

Losos, I do not blame the banks. I blame Gordon Brown Full stop.

If he had not sold off our gold reserves fo a bag of peants the recession would not have hit as hard, but not only did he get rid of our 'rainy day' money he borrowed more than we could afford plus he ecouraged people to go into debt.

Having said that people really are gullible, if someone say you can buy something and not pay anything fo 12months then they must be thick. You start paying as soon as you buy, it is just that the interest will not be shown until you make your first payment.
Like the girls in your quotation, blindless does not mean that you have no eyes.

There is a saying:-
' Never a lender or borrower be ' it is oh! so true.

By the way I am now richer because the hard cash strapped Government have given me and my wife a £10/week pay rise on out pensions.

Re: Is there a crisis?

I do largely blame the world banks (particularly America) for the situation many people are in today. Sub-prime lending I think it was called. Naïve people were encouraged to over-extend and people in America who would never have normally been able to buy a house suddenly found they could and were irresponsibly encouraged to do it without a lot of questions being asked. The banks were throwing money around like confetti and what was affordable or sustainable went out of the window.. Yes some borrowers are to blame for being gullable for over-extending and taking a very short-term view, but I think the bankers (who are the ones with the expertise) were very greedy and irresponsible.

Regarding negative equity, of course if you don’t have to sell you hold on until things are favourable, but if you have to try to sell because your circumstances have changed and re-possession is knocking, then negative equity can become reality. If you remember there was a scramble to buy a property a while ago because every day folks saw houses increasing in price and getting further out of reach.. A 10% deposit for many starting out is/was a good deposit - and that 10% is hard to find when you are buying for the first time and is easily wiped out when prices begin to fall. I don’t think it is always because of over extending initially and wearing rose coloured glasses; it is a world recession - many people’s circumstances have changed and the housing market has all but collapsed.

I definitely do hold the bankers largely responsible for what happened - If you look now a 30% or 40% deposit is being asked if you want the lower rates of interest and banks no longer lend willy nilly.

As always the banks call the shots, whether you are a borrower or an investor. They can’t be allowed to go under so they don't care, they never get burned because of their irresponsibility - its not really their money - they just have the control and should have responsibility - its always the small people (the small savers and borrowers that suffer - and yes we are most of us “small fry”)
If everyone took the attitude of “neither a lender or a borrower be” then the financial world would stop turning. I think those of us who have got our property secure and safely under our belts, with our families grown, often become smug and forget how hard the struggle is initially.

Re: Is there a crisis?

Aerolor, I have never forgot the struggle we went through when we first got married.
Came home from the honeymoon my calling up papers were at the back of the door.

Wife going in hospital for her 29th op, at the same time I was going into the RAF, new house, well two up two down in need of modernisation, mortgage to pay, that was just the start, the next ten years was a real struggle.

I suppose I was lucky in the fact that I got a lot of finacial advice before I got married and retirement was in the initial stages as I got married.

Yes, I agree there are people who are desperately trying to struggle through and I admire them. The ones who get my goat are the ones who cry poverty because they cant have a holiday or a new car.

The largest item of debt is a mortgae and people who can not see that and blindly take on a larger one that they can afford because someone says you can have as much money as you want(not explaining the interest rates) and despite having worked through (if they have sense) the finance have no-one to blame but themselves IMO.

Re: Is there a crisis?

I have noticed that my bills have all gone up and my income hasn`t. But I`m on a very low income so there isn`t any leeway. I have started to cut back on little luxuries.
It`s nice that you haven`t noticed, but I think it will catch up with you eventually.