How bad is the credit crunch/recession

[AndrewSchofield]

I guess its getting towards 6months since things really started to be noticably 'going downhill' (financially) in Britain. Just wondered what line of work everyone is in and how its affecting your workload, are people struggling, fearing for their jobs or wondering what all the fuss is about??

I work in an architectural and planning practice. Things started slowing down a bit in July but seemed to pick up again in August and September. Oct, Nov and Dec however have been a bit of struggle with little or no new work coming in. We've still got plenty of work on but thats due in the main to the fact we had too much work on earlier in the year so we're really just clearing the back-log. Nov and Dec are always slow for us anyway so thats not really helping!! We're tending to find that we're getting planning permission for people but then they're saying they'll wait a bit before getting Building Regs and finding a builder!

Would be interested to hear how its affecting others!

 

[Shytalkz]

Touchwood, seems ok atm on the SE side of things. Bigger residential/commercial projects are a rarity atm, albeit not non-existent. Rate of enquiries became slower than last year at tail end of the summer, but the decline in rate does not seem to have accelerated over the past few months. Certainly getting some very strange projects to price up of late too, but core stuff - lofts, beams, subsidence investigations etc - holding up. So far....

 

[2scoops0406]

subsidence investigations etc - holding up. So far....

 

[Shytalkz]

Oh yeh, touch of unintentional irony there

 

[tim west]

Work sinking fast Shy?

 

[peteftw]

Ive been unemployed twice over the past 6months due purely to the fact i was taken on for a short term job and layed off when it was finished.

i always get a job by getting the phone book out, starting at painter and decorators under 'a' and go down the list until i get to 'z'. the first time i did this i had to phone over 100 people before i got a start.

i was layed off last friday and i only had phone 6 people and ive got a job for tommorow until christmas. im not saying the situation has got any better i think i just struck lucky and it is generally busier this time of year.

i think by phoning this many people ive conducted as good a survey as any into the state of P&D in northern ireland and i kept gettin the same response over and over , " i cant help you mate, theres not much out there, im barely ticking over"

some people were nearly apologetic, ' im really sorry, ive got your number, ill give you a ring as soon as i get something in.'
some people were very helpful saying that although they could take me on i could try x,y, and z they might be looking help
and my favorite were the guys that nearly laughed that i would ask such a ridiculous question as, 'have you got any work going mate?'

bad times i only hope they improve or i can atleast get something a bit more steady

 

[hermes]

I have a joinery manufacturing company in Derbyshire and it's been up and down like a yo-yo so far this year. Sept, Oct and Nov were pretty good but December is looking quiet.
There has never been any kind of seasonal pattern to our orders, the busiest month we ever had was a December!
A lot of our core product goes into new-builds and office blocks so that's not looking too good, I'm going to promote the bespoke furniture side of things to the domestic market, I hope we can pick up some work after Chrimbo.

 

[CortinaV8]

I work in marketing, in theory we should be alright the company is small with virtually no overheads excluding wages. November/December is always quiet but this year its at a standstill, guess we will have to see what happens in the next year. I've got enough savings to enable me to take two years off work and pay myself the same wage, so I am not too worried.

 

[ricicle]

But isn't this recession going to develop into a depression, where thousands upon thousands are left jobless then those left in employment will be funding those without jobs which will mean higher taxes.
Then those paying higher taxes will not be able to afford consumables so the demand will be lower so more and more manufacturing staff will be laid off. Will it be a vicious circle - where will it all end?

Shouldn't the bank's directors be held accountable????

 

[Softus]

Shouldn't the bank's directors be held accountable?

For what?

The banks are businesses. They gave their customers what their customers asked for, and they did it within the constraints of the legislation that the government created.

If the crux of the problem is that world debt is several times the sum of the GDPs, then those who borrowed the money are responsible, not those who loaned it.

And if the crux of the problem isn't that, then what do you think it is?

 

[Trazor]

The banks are businesses. They gave their customers what their customers asked for.

I walked into a chemist and asked for heroin, they would not sell it, as they are a responsible business.

If the crux of the problem is that world debt is several times the sum of the GDPs, then those who borrowed the money are responsible, not those who loaned it.

The banks above all, should have behaved in a responsible fashion.
Offering 125% mortgages and up to 6 times salary was irresponsible to say the least.
And yes, customers were foolish to believe that the bubble would never burst, encouraged by a profligate chancellor.

 

[Softus]

I walked into a chemist and asked for heroin, they would not sell it, as they are a responsible business.

Nonsense - it would be illegal both to sell it and to buy it. Try another analogy.

If the crux of the problem is that world debt is several times the sum of the GDPs, then those who borrowed the money are responsible, not those who loaned it.

The banks above all, should have behaved in a responsible fashion.

Why? Which law requires banks to behave "in a responsible fashion"?

Before the crunch, every man and his dog would readily whinge about money-grabbing banks, interest rates, charges, class action law suits, and single-minded pursuit of profits.

Now that there's a debt problem - sorry, I'll correct that - now that the mounting debt snowball has hit everyone - you'd have to be a mentalist to be surprised that the banks didn't act in anyone's interests other than their own.

Offering 125% mortgages and up to 6 times salary was irresponsible to say the least.

D'ya wanna know what's irresponsible in that scenario? Well, it's applying for a 125% mortgage, that's what.

Who's the bigger fool - someone who borrows beyond their means in the blind belief that property prices will outstrip inflation for ever and ever Amen, or the lender who provides the dosh?

And yes, customers were foolish to believe that the bubble would never burst, encouraged by a profligate chancellor.

Ooh, it's someone else's fault, not mine. I can't think for myself, so the government should be doing it for me. It's not my fault if I toss a match under a wooden escalator - if people don't want to get burned alive then they should run faster.

 

[Trazor]

But this is what your Demigod wrote Softus.....

"But it’s quite hard to hard to mount a convincing argument against the notion that most at fault were the banks and bankers.
Because they systematically failed to do what they were handsomely remunerated to do, which was to properly assess the risks of all that lending."

Has he now fallen from grace?

 

[Softus]

...they systematically failed to do what they were handsomely remunerated to do, which was to properly assess the risks of all that lending.

I don't see any evidence that they failed to do that. A cynic could easily argue that they assessed the risks perfectly, and decided to proceed with the callous expectation of being bailed out by the BofE and/or the Treasury if things went tits up.

Has he now fallen from grace?

I never said that he was perfect - I launched that [other] topic to stimulate debate. And if you can't stick to the topic in hand then perhaps you should be kept back for another year.

 

[Blasphemous]

Have people AND organisations borrowed more than they could realistically afford? The answer is obviously yes. Are they to blame for that? Yes. They went in too deep and got stuck. Should we also hold the banks responsible for lending that money to individuals and companies whilst knowing, or indeed Not Knowing, that those customers were going in too deep? In my opinion, Yes.
I know Softus is an admirer of Robert Peston. Mr Peston is very eloquent. His recent Blog can be read in full on Softus' post regarding the man. I have read the full blog. I'd like to present a few quotes from it here.

The New Capitalism

There's next year, and then there's the next decade.

Economic conditions in 2009 will be treacherous. There'll be a formal recession in most developed economies, and the economic contraction is highly likely to be more severe in the UK than almost anywhere else.

He goes on to say...

The trigger of the closing down of wholesale markets was the horrifying realisation by financial institutions in every country that hundreds of billions of dollars lent to US homeowners in the form of low quality subprime loans – and repackaged into putatively high quality investments as collateralised debt obligations – were going bad. This undermined trust within the financial system, in that none of the players could be confident which of them had been poisoned beyond rehabilitation by subprime. And this trust disappeared altogether in September of this year, when the US Treasury chose not to rescue one of the world’s biggest investment banks, Lehman Brothers.

Further on...

Who's to blame? And where will all this taxpayer support for banks - and probably, before long, for real companies and the real economy too - lead us?

It takes a whole book to assign culpability. But the short answer is that we’re all at fault to varying degrees.

Further...

But it’s quite hard to mount a convincing argument against the notion that most at fault were the banks and bankers – because they systematically failed to do what they were handsomely remunerated to do, which was to properly assess the risks of all that lending.

My wife used to work in the Financial Services Industry. She is of the opinion that the FSA have failed in their duty here. I am not knowledgeable enough to provide any insight into their duties.