The coming worldwide credit crunch

The worst is yet to come.

By the end of 2008 we will probably see the bottom, but then who knows how long we shall be there?

2009 I suspect will be mostly the same unless there are some really bad institutional crashes, such as more banks in trouble.

A credit crunch this size, around the world ,will not go away in 12 months.  No government is going to solve, Fuel, energy and food price problems when the recent price rises have been caused by reasons outside of any governments control.

This will be a long slow process and will no doubt be solved eventually by a series of events that will happen accidentally but governments around the world will wish to take the credit for it.

Yes, Eva, I read the financial pages of one of the Sunday papers today, and the mood seems to be more optomistic all of a sudden. Is this just a load of propoganda to try to improve confidence? Come on TJ, we need your wisom!

Not too sure why Morerosado posted a link to an exchange rate calculator?

Read an article on Marketwatch on Friday that suggests the we could be over the worst of the credit cruch and that it could all be behind us. What do you all think? Over in the UK, lenders are beginning to take risks again and lend which can only be a good thing as far as returning some liquidity to the mortgage markets. Personaly, I cant see how anythings changed, people still cant afford the monthly bills as fuel, and food are still rising and wages have not risen by the same percentage.

That is something that has always amused me about the sad British electorate.

In Council elections they vote according to how much they hate the Prime Minister???  They should really be voteing on the performance of their town hall councillors. Come a general election, they vote against the the town hall on some silly civic reason such as the amount of times their bins are emptied.

Who said the country gets the government they deserve?

Not sure about Boris for mayor either, he will cause too much embarrasment for Cameron, it could even cost the tories the next general election and they know that.

Ohh for some normal, decent, honest MP´s.

Why is it that only wan*ers seek power?

Dont need to be a city whiz kid to see whats happening now as any idiot could see what was coming with Brown at the helm.

What you have just pointed out my 15 year old could have done.

Just Dan

I said some way back on this thread that we would be seeing this as people cotton onto the fact that the governments inflation figures are a joke. Well here it is today. Quote "frustrated over pay deals they say don't match inflation."

The problem with the governments efforts to bail out the banks and to save the houseing market is that its all inflationary as they  keep expqanding the money supply. M3 in the UK growing at 13%, work out how many years that takes to half your money in the bank!

LONDON (Reuters) - Britain was hit by the most wide-ranging wave of strikes in a decade on Thursday, with more than 100,000 public sector employees, from teachers to coastguards, striking against the Labour government.


.....Driving instructors, job centre workers and employees in pension and benefits offices joined teachers and coastguard operators in the one-day strike over pay. The unions estimated that between 100,000 and 400,000 people joined the action.

Refinery workers at the Grangemouth oil refinery in Scotland are also set to strike in a dispute over pensions that could cause major fuel distribution problems.

Business Secretary John Hutton said there was no need for the government to invoke emergency powers and Britain had enough fuel stocks and imports to maintain supplies.

Thousands of striking teachers marched through central London in a peaceful demonstration, bearing placards aloft. Public opinion was divided, with many supporting their stand and many others -- largely parents -- frustrated at the disruption.

Tens of thousands of teachers and thousands of college lecturers are staging their first national strike in 20 years, frustrated over pay deals they say don't match inflation.

"We teach the future leaders, the nurses, the teachers - you can't do without us," teacher Janet Arthur told Reuters at a protest rally in London.

"It's a vicious circle and poverty will set in. We want to have families as well."

Union spokesman Alex Kenny said: "Today's strike won't be the end of it."

POLITICAL FALLOUT

Brown, who came to office last June, inheriting the leadership from Tony Blair, has seen his popularity plummet after a string of crises. He is battling to keep the economy on course and trying to keep a lid on public sector spending.

"It is regrettable for pupils, it is regrettable for parents," he said of the teachers' strike. "This a government that over 10 years has doubled expenditure on education."

The government made concessions on Wednesday to Labour lawmakers threatening a rebellion over tax changes and said it would look at ways of helping those worst affected by the abolition of the lowest income tax band.

The popularity of Brown, when spent 10 years as finance minister before rising to prime minister without winning an election, has slid as the effects of the global credit crunch dented his reputation for sound economic management.

Local elections next Thursday will be the first polls Labour will face with Brown at the helm and prospects are looking dim. Voters will also go to the polls in London to elect a new mayor. The capital has traditionally been a Labour stronghold, but polls suggest that the Conservative challenger could now win.

Hi Pitby

Point made and taken buy those with the common sence to see through it.

Poor souls however do believe everything they read if its a city or newspaper financial report.

How stupid is that and some even believe everything they read on a forum .Now that is reeeally stupid . So Reagan farted ,what happened then

Dan

Hi

Thats very much what I am saying and the Banking sector is doing that right now.

How easy it is to buy a competitor at a fraction of the price its worth than to get the city to say its in trouble,panic sets in then go for the kill.

Just Dan

Dan

Hi

Excellent and informative post with one small reservation.

"Remember that its the city's and market's job to predict the future,"

WHEN DO THE CITY GET IT RIGHT

Is that the same city job that predicted that the F,T.S.E would finish this year at over 7,000.

Is it the city that posts negative lies on markets and companies so when share prices fall and get into trouble it makes a perfect buying opportunity.

GET REAL , IF THE CITY POSTED THE TRUTHS AND COULD PREDICT THE FUTURE WE WOULD ALL BE VERY WEALTHY AND NEVER LOOSE MONEY.

 Just Dan

100% agree with you TJ - and the banks have closed the doors. Only buyers I am seeing are 2nd homers or holiday homers or moving here - like it used to be in the good old days in fact! Just a normal market - no reason to panic

Theres still more work then when I first came here 13 years ago so Im optimistic(ish!) Last few buyers actually had thet funny stuff called money - and dealt hard.

Some good prices now to be seen on nice properties, Ive been quite impressed the last few days - and a twist on the exchange rate - whilst buyers will have to fork out a bit more - if they are getting a mortgage they WONT have to, obviously, so its only on the excess bit. Things can be arranged to do a sterling/sterling deal for all or part of the money but also I am seeing further decreases due to sellers getting more for thie euro and a couple of spectacular drops too

So, not all doom and gloom

And its SUNNY today, hood down on the car woohoo!

Thanks alot guys, but I said I wouldn't post here on this thread, not that I wouoldn't post atall.

I still have lots of opinionated views, its just that I do feel for the folks who are in trouble in this market and I didn't want to add to their woes. I think I have made my point now, however the credit crunch rolls on unfortunately.

I think in particular my forecasts in the mortgage market are going to come true, so that should stop anyone naieve getting into trouble. I think we will soon see a minimum of 25% down, no exceptions. Then we are going to find out how important ezy credit was to Spanish prices. The only people who wil then be able to buy will be folks who have serious cash, this will reduce the number of qualified buyers to a trickle and they will have all the power. Gone are silly bank valuations or per sq metre vals, it will be what the more savvy buyer wants to pay or no deal. People with serious cash are usually, or tho not exclusivlely, a little wiser and with their own cash at stake and an obviuos falling market, they will want to drive a hard bargain. With so much supply its hard to see anything but dramatic falls from here.

One of the reasons the pound is so weak against the euro was due to the recent houseing report which admitted that prices were down in March 2.5% for that month alone - the biggest monthly drop for 15 years. This is a big blow for sterling as the market is aware how much the UK economy is dependent on consumer spending and high house prices. Infact the UK is starting to look like  a mirror copy of the US, something that I predicted right at the start of the thread. Keep your eyes on the unemployment numbers in the UK as these are critical.

Finanly good luck to anyone trying to sell here in Spain. I am told property is still selling if you are realistic on price. My advice would be not to hold out - I'm sure things are only going to get worse for the next few years.

TJ, we'd miss your seagull so much if you decided not to continue posting here, you know we would.