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I’m not sure anyone really has an idea of what the economy will look like in 3 months time let alone a year from now.
The Bank of England seems to be pretty confident, a 14% drop in GDP over the year, 25% over the next 3 months and unemployment doubling. The worst since 1720, and worse than during the great depression.
Quite a few people use them to stay alive, and end up being unable to shift them
Don't be daft, they use them for irresponsible purchases like OLED TVs and the latest iPhone. They should know their place and live within their means, then all the sensible people who can afford not to use credit can continue feeling morally superior.
National debt maybe
Yes, a perfect opportunity. Most countries owe each other vast sums so a huge amount could easily be written off. Well, if it wasn't for the interest all these debts earn.
Jesus.
I'm always surprised by the bitterness on STW and the vitriol hurled at baby boomers because, apparently they had an easy life.
If all this personal debt is written off, imagine how generation Covid will be viewed by their kids and grandkids.
"All you had to do was sit at home on your arse all day and you got your credit card, student loan and mortgage paid for you. Now I'm having to pay for it"
Dazh,
So it's not going to be like the 70's after all? It's going to be like the 1720's.
Interesting facts from the 1720's;
Smallpox inoculation introduced to Britain,
Royal Bank of Scotland begins trading and extended the first overdraught.
Workhouse test established.
Calico Jack was hung. The Era was the high watermark for high seas piracy.
Loving it... the Kingdom of Northumbria will rise again and us Border Reivers shall tax you lot into the ground - bring me my sword...
Royal Bank of Scotland begins trading and extended the first overdraught.
bloody people spending money they don't have....
Bump for this thread as coronavirus economic issues cropping up a lot on other threads.
We are using funds to prop up industries in the hope (and belief) that we are going to return to normal sometime. Could money and energies be better spent supporting and promoting other areas that have better growth prospects and, as I think Frank intimated on another thread, wouldn't it be better to invest in new training rather than simply furlough staff in industries that maybe shrinking?
Where are the growth areas? You said. The Chinese word for crisis is made up of two characters, 'danger' and 'opportunity'. There will be growth somewhere, we've just got to find it and adapt to it. Let's have your ideas.
Where are the growth areas?
In this country?
-PPE
-Consumer credit
-Repossessions
I see the penny is finally dropping.
Not that I think they didn't always know what would happen, but I suspect this latest bout of honesty from Sunak is him preparing the ground for telling people there's nothing they can do and it's not their fault. All bollocks of course because there's loads more they could do, but they won't because it doesn't fit with their ideology. Or maybe they did think they could paper over the cracks by paying people's wages for a few weeks?
Sunak is stating the obvious.
If it wasn't so f'ing serious I would delight in johnson and his sycophants struggling with covid fallout and simultaneously insisting on no extension to brexit transition.
As soon as re-infection rate increases - we've had VE recently, relaxation of regs, warm weather and bank holiday coming up - we will know how deep the shit is.
We have a narrow manufacturing base; financial services are threatened by Brexit transition; supply chains, generally, are reliant on far eastern manufacturing - LCC (low cost country) sourcing. IT - has been outsourced/offshored; volume manufacturing - non existent; high tech manufacturing - small and increasingly automated; retail will shrink massively and move away from high streets/physical presence; 'leisure' - aka getting pissed in rammed pubs - is dead; restaurants depend on volume so they're stuffed; coffee shops/cafes - are being culled and not before time.
Looking at that summary, what is the UK value add?
EU and US are both applying pressure.
To be sure, we (UK) are not in a good place.
S'pose I could pop a pill and see johnson as our saviour; would take a mega-dose to get anywhere near that.
Other than all of that, I'm feeling optimistic.
Other than all of that, I’m feeling optimistic.
I'm not sure the general population have really understood the enormity of the economic effects of this. I reckon most people seriously think it's all going be back to normal in a few months time. They'll come off furlough and go back to work and it'll all be over. Total fantasy if you ask me. We need to start planning for a post-covid economy with millions of fewer jobs, less work and less consumerism. If we stick to the old rules then full on economic collapse and mass poverty beckons.
One of the few amusing things about this situation is that you can almost see the panic in the eyes of people like Ian Duncan Smith as they realise that people are getting quite used to this slower pace of life, the erosion of the work ethic, and the fact that they don't need to spend as much money on shite as they did before. It's like the victorian factory owners have suddenly realised that if the serfs down tools, they don't make any money.
I heard a (month ago) that the thinking then at the Nudge Unit was a Keynesia/TVA-type spend out of a crisis. The thinking may well have changed and I don't believe for one moment that any policy won't be designed to help what Thatcher called 'the wealth creators'. When this started the first word in Boris's mouth was 'business'. The BoE has been printing money since 2009 and has avoided inflation through pay freezes at eg the NHS but not for the top 1%. An ex-flatmate who's now a director of a merchant bank has spent years getting cheap money and lending it out dear, the banking crisis helped him make 10s of £ms whilst most got austerity. Nothing at the moment suggests that the future will be any different let alone better, the vultures are circling and the lions are being led by posh donkeys.
people are getting quite used to this slower pace of life, the erosion of the work ethic, and the fact that they don’t need to spend as much money on shite as they did before
Very much so, the question though is are they simply enjoying a holiday from that life or are they changed permanently. We aren't going to know that for a long time. It's a nice idea and appeals to me but we do have to find a way to move towards that without huge problems.
Amazing how the UK is leading the world in all the wrong metrics. The OECD is based in Paris though so no doubt the idiots will dismiss this as anti-UK propaganda.
See also how Sweden not going into “Lockdown” is effecting their economy, as neighbours open up trade and borders with each other, but have to leave Sweden out of that economic liberation because they haven’t controlled the virus.
Cancelling credit card debt is a silly idea.
People have spent the money out of their own choice.
Where there is merit is reducing the amount max credit card rate to, let's say, 7%, and rebating the interest paid in excess of that for them last 5 years.
This would mean that banks would be far less willing to pay lend on "plastic" than previously before and would be take more stock of credit ratings and security. This would be a good thing.
Canceling the whole debt? No, and it's not the "fairness" argument, I'm all for cancelling student debt, it's about personal responsibility for your purchases. Where there is an issue is that people don't understand the interest rates and gave been gouged by banks.
I had quite a lot on my CC ~15 years ago, all through my own fault of buying stuff I couldn't afford. Very little would of been essential (eg. car repairs etc).
I slowly but surely paid it all off. Now it gets cleared each month if it's been used. I don't see why people life the old me should be rewarded for having no sense with money.
So, the furlough scheme is slowly being withdrawn and yesterday was the last day companies had to give notice of redundancy if they're not keeping jobs after the end of July.
Some big numbers in the news today, and it's not even 9am yet:
Heathrow cutting 25,000 jobs
Centrica cutting 5,000 jobs
guitar - only the start.
Add in debenhams, bentley, bp, monsoon/accessorize, ovo energy, the restaurant group (frankie & benny's) in the past few days.
Next Monday will be interesting - how many/few high street shops will remain closed; some will open at a later date, some will never re-open.
Yes, some elements of the media railing against the OECD because they're based in Europe and it's some sort of conspiracy. Our exceptionalism knows no bounds as when we're hopefully just about to turn the corner on this fiasco, we'll self-inflict a no deal Brexit on the economy.
The reality is that our economy is too-exposed to sectors like retail and hospitality and an over-dependence on cheap, low-skilled labour (immigrants or not). There are a few things we do well as a nation like Pharma, high-tech engineering, financial services but these simply aren't enough to keep us out the do-do.
It's also worth noting that we've had decades of Governments who have failed to invest in our infrastructure in preference of tax cuts funded by privatisation of public assets. The pandemic has highlighted a lack of resilience in a lot of our critical infrastructure, particularly the health service and social care.
dove biker - agree with all of that; would add that we will not have a strong and sustainable economy without volume manufacturing.
Infrastructure is likely to be the only construction sector with growth prospects; housing - no, commercial development - no.
My gloomy forecasts and glass half empty attitude to the economy appear to be well-founded.
Share prices are divorced from reality with an ever-increasing risk of a major correction.
guitar – only the start.
Add in debenhams, bentley, bp, monsoon/accessorize, ovo energy, the restaurant group (frankie & benny’s) in the past few days.
Next Monday will be interesting – how many/few high street shops will remain closed; some will open at a later date, some will never re-open.
At the start of all this it was a pretty fair bet our only real chance of a quick rebound was a 3 month lock down and back to business as normal.
We're 2 week away from that now, and there seems very little chance we'll be back to normal by then. The retail and tourism industry is going to take a battering - clothing retailers are going to dump a whole seasons worth of clothes into the bargain bin for pennies, Restaurants that were barely viable with X number of customers per Y floor space are not going to be worth opening with half that. The rest seem to be taking the opportunity to clean house.
It would seem an ideal time to announce to the public that the world has changed and the price of sovereignty is now too high and we need to try to cancel Brexit, but it won't happen. We're likely to stumble dazed and confused out of the hell of Covid and take Brexit square in the face, or maybe we'll do both at the same time, that'll be fun.
I can't imagine for a moment how Boris plans to win the 2024 election, he must at least think it's possible. The early Covid goodwill is long gone, and the facts stark. They were told to lock down 2 weeks earlier, they were begged to do so, but they didn't. It cost the lives of 25k people and extended lock-down by at least 6 weeks which is going to cost hundreds of thousands of jobs.
Cancelling credit card debt is a silly idea.
If you read the thread you'd see the debate isn't really about credit cards, it's about avoiding deflation via a massive debt write-off. It seems though that's not going to happen. The govt have all but given up an any plans to support the economy beyond what they have already done, and the result will be inevitable I think. If we continue thinking within the narrow parameters of neoliberal economics then a depression or even full collapse is on the cards. We're beginning to see the early stages of that in the job losses which are now accelerating. The hospitality industry alone employs something like 3.5M people, and most of those jobs only exist due to the furlough scheme which is being scaled down. Mass unemployment is going to cause a tsunami of bad debt, property and asset prices will collapse, and then the banks will need bailing out again. We can either think of a new way to run the economy, or go down with the ship.
Going back to one of my first economics lectures one of the issues I see is that "injections" into the economy are being rapidly transformed into "withdrawals" because money isn't cycling as fast as it normally would in these Corona times.
Some countries are reporting record levels of savings (a withdrawal from the circular flow of income) which the banks are making little attempt to reinject into the economy. Indeed they're doing exactly the opposite by putting more stringent conditions on borrowing and raising interest rates. The ecomomy is being stangled because however much money central banks print it spends very little time working in the economy before sitting as a stagnant number on a bank statement somewhere.
Whole sections of the economy are Corona immune or even benefitting, but they're sections that are low paid with almost zero withdrawals in normal times, and even if the people in those sectors wished to benefit from their security and low prices (cars, some types of housing) they can't because the banks won't lend. So even in those sectors people just save.
So whatever solutions you propose, they need to attack the withdrawals, the big ones, the fat cats.
I wonder what's going to happen in the US. They are lifting restrictions despite still rising cases in some areas. So either they ignore it to carry on with the economy or they have a severe lockdown when it gets out of hand in a few months, which could last ages.
In the first case, that could a) be horrific and b) even the deaths alone could significantly dampen the economy. In the second, that could really damage the US economy if other countries start trading with each other and they are still trying to suppress the disease. But the potential for serious civil unrest in that case is significant. US could be in big trouble.
And if the US slides, it could seriously affect the rest of the world too.
Where there is merit is reducing the amount max credit card rate to, let’s say, 7%, and rebating the interest paid in excess of that for them last 5 years.
there is £70bn credit card debt in the uk. assuming the average interest rate on that is 20%, you're suggesting a £45bn refund to consumers. Where would that kind of money come from?
banks take a very good view of credit ratings when lending on credit cards - the impact to them is just the same as when someone defaults on a loan or CC. At the moment, most banks are taking cuts to profits to plug the gap that these defaulting consumers will have on their bottom line, this will probably continue for the next few years. Capping interest rates would simply limit credit accessibility to consumers, and essentially end the use of credit cards in this country (as they stop being cost effective to issue). That might be your aim, but I quite like having protection when I buy online
Where there is merit is reducing the amount max credit card rate to, let’s say, 7%, and rebating the interest paid in excess of that for them last 5 years.
I'd look at the example of where the FCA investigated Overdrafts and told the banks to implement a better model.
Broadly everyones charging 40% now.
Out of those £70bn credit card balances, what % was used for essentials?
I'd guess its single digit figures?
Why would Centrica be shedding jobs. Surely we're using the same amount of utilities?
Its because they need to restructure having lost market share.
Using Covid is a useful excuse to shed jobs and divert attention elsewhere.
The economy bouncing back is all to do with public confidence.
If someone has £100 in there pocket and is confident that their job is secure they'll go out and spend it. If theres insecurity they may keep it in their pocket and thats where a recession starts.
I wonder what’s going to happen in the US. They are lifting restrictions despite still rising cases in some areas. So either they ignore it to carry on with the economy or they have a severe lockdown when it gets out of hand in a few months, which could last ages.
It's a bit of a mess for sure.
The Trump in charge, who acts like a Dictator and has roughly the intelligence of a used tissue, tackling Covid with one hand and re-election with the other.
Conventional thinking at the start of the Covid crisis was you either locked down and took the economic hit until it passed, or you ploughed through and accepted the (much) higher death rate.
He was always going to Plough through, even Democrats have a fundamental dislike of paying people when they're not working and all their hyperbole about how they're the only 'free' country on Earth really comes down to Individual freedom, which is a hell of a double edged sword. The centre ground in the US seems to be against forced lock-downs, they would prefer to learn the facts about the virus, buy their own PPE and go back to work until it passes, or they achieve herd immunity.
Even in the hardest hit, most left-leaning, liberal NYC, many people simply ignored lock down (or Shelter in place as they call it) to go to work, or pick up casual work because the only stimulus they got was a one-off $1200 payout.
He's doesn't really care about health issues because he knows he could kill half a million Americans and blame the Chinese for it and Republicans would re-elect him, I guess he's planning on all the 21M people who claimed unemployment in April returning to work soon, remarkably even with their infection rate so high, 10% of them did in May.
It has more to do with business confidence than consumer confidence.
When businesses reduce spending the knock on is faster and goes further than the consumer. And as Molgrips hints, it's international not local.
Take Airbus. Airlines aren't flying and won't be flying as many routes post Covid (a condition of the rescue package for Air France/KLM). Airlines cancel options. Airbus needs less components. Subcontractors need less staff and some look like going bankrupt. All the subcontractors suppliers lose orders, the workers are laid off or on short-time working.
It's a vicious circle that has continent wide repercussions, and beyond. Airbus buys lots of bits in Asia.
Whilst I'm delighted to see less planes flying we can't expect the same level of wealth, employment and economic activity without them.
It has more to do with business confidence than consumer confidence.
Agreed, for example I know of Business' that have taken grants, and multiple covid loans interest free, but they're not planning to use that money to keep people employed that they don't need, it's either for redundancy payments or to go on their bottom line.
So whatever solutions you propose, they need to attack the withdrawals, the big ones, the fat cats.
Simple solution to that. Negative interest rates and wealth taxes. Encourage people and businesses to spend their money rather than saving it.
Business travel will be way low and stay way low for a long time. If you decide to go on holiday that's one thing, but your employer has a duty of care, so will be much more cautious making decisions on your behalf. And if they offer you the choice most people being reluctant business travellers will choose the stay at home option. And people will become used to staying at home, so companies will want to save money by not travelling and for things like services clients won't see the need to pay for consultants expenses as their belts will also be tight.
Good for the environment (and us) but I wouldn't want to be an airline right now.
Even in the hardest hit, most left-leaning, liberal NYC, many people simply ignored lock down (or Shelter in place as they call it) to go to work, or pick up casual work because the only stimulus they got was a one-off $1200 payout.
NYC didn't have shelter in place, they had a stay home order (there's a difference)
i was there mid march, just as the measures were coming in, the place was like a ghost town pre stay home order, i flew home on Monday 16th, where were the people going to pick up casual work, iirc everything closed Monday night as the "irish" pub we were in on the saturday were saying they couldn't even open for st patricks day on the tuesday
NYC didn’t have shelter in place, they had a stay home order (there’s a difference)
i was there mid march, just as the measures were coming in, the place was like a ghost town pre stay home order, i flew home on Monday 16th, where were the people going to pick up casual work, iirc everything closed Monday night as the “irish” pub we were in on the saturday were saying they couldn’t even open for st patricks day on the tuesday
My SIL lives there, by her account "Stay Home" effectively lasted a few weeks or so before people started to get let go and started to seek work elsewhere. In her case she's a Gymnastics coach, she took to doing 1-2-1 sessions in homes and a bit of PT work in parks, as well as the odd Zoom sessions with her usual kids. Others found work where they could. They're very hot on social distancing and PPE etc, you wouldn't dare work into a shop in the city without a mask on, but it's work or starve in the US for the most part.
But the potential for serious civil unrest in that case is significant. US could be in big trouble.
We've already seen how that could pan out. The BLM riots weren't just about one man and a racist cop, they were also about how the black population have effectively been left to the mercy of coronavirus. There are millions in the US with nothing left to lose, and when that anger becomes more of a class issue than race, it'll explode. The only hope is Trump being kicked out in November, and I reckon that's the only thing preventing more widespread civil unrest. If somehow he's re-elected then I shudder to think what will happen.
but it’s work or starve in the US for the most part.
very easy (ie cheap) over there for firing and hiring.
Over here, spaffing out months worth of salary per employee in exchange for no work just to get rid of them is going to look very stupid when they need to re-hire or replace those people - although cash poor companies will have no choice.
whats the likely longer outcome for us versus the rest of europe and the us when we get going again?
our furlough is one of, if not the, most generous in the world is it not?
(compared to our unemployment benefit which is probably a shambles compared with some of europe.)
slim hope here that this is what saves us...
Like 9/11 and the finance crash, Coronavirus will be this decades pivotal event and lots of businesses will be taking serious stock of the situation and re-assessing themselves as a consequence.
The fact we have a no-deal Brexit hard on it's heels means UK businesses are going to be seriously disadvantaged / cash-flow impacts as many are going to need to put 3 months of stocks in place for January - I expect many businesses owners are simply going to pull the plug as they're already bearing 3 months of lost business and can't afford to finance the same again.
I also expect many speculators will be holding huge short positions against many British companies in order to profit from their misery.
I suspect a lot of traders will have covered their Corona and even Brexit short positions by now. Part of the post Corona peak rally could be short covering. You take a short position when you anticipate a fall and cover it ASAP when the fall happens. Long terms shorting is just too risky.
I also expect many speculators will be holding huge short positions against many British companies in order to profit from their misery.
Really not sure why some on here talk about the US as if we're that much different. In many respects we're worse. We won't bounce back as fast due to the cost of hiring and firing and of course brexit. The only thing preventing chaos here is the furlough scheme, and they're getting rid of that. Boris could be gone by christmas if and when the second wave hits.
When you look towards the next 12 months economically, its bloody scary
Whats increasingly obvious is that its now full steam ahead with a no deal Brexit, and damn the consequences. They're insane! They actually subscribe to the Cummings philosophy of destroying everything in order to rebuild it to your own advantage. And given that a no-deal was always going to be financially catastrophic, to pursue it on the back of the huge-scale redundencies that are presently in the post is absolute madness.
This time next year the banking crisis will be looking like a bit of a hicup in comparison. And these lot don't actually give a toss! Everything must be sacrificed on the altar of their ideological zealotry
How many hedgies are shorting the UK market? I cannot imagine Soros or Odey passing up the chance to make mega-bucks.
As for companies getting rid of people and then having to re-hire or replace them; if only.
For those companies with a viable future this has been a perfect opportunity to review size of workforce and remove the surplus. A lot of companies have become bloated over the past few years; now they are reviewing operations and structure - and culling.
Take any sector/industry and map the supply chain as far back as you can to see how far the impacts of an economic downturn will spread.
Does anybody think that this time next year we won't be looking at late-80's levels of unemployment?
I think its a dead cert. It might actually be even worse. And, of course, its exactly the same places who got clobbered last time that are about to cop it again
Binners - I think what's coming will make late-80's look like the good old days.
Does anybody think that this time next year we won’t be looking at late-80’s levels of unemployment?
I reckon that's a best case scenario! If a second wave hits and needs a second lockdown, and I don't see how it won't, we'll be looking at depression level unemployment of 20-30%, mass bankruptcies and foreclosures, and potential collapse of the banking system and with it supply chains in every industry, including food production and distribution. And that's before thinking about brexit.
Binners – I think what’s coming will make late-80’s look like the good old days.
I think you're right and I think this lot knows, full well, what's coming and they simply don't care. Just like they didn't care back then. For these disaster capitalists, this is an 'opportunity' to remodel our society completely and tear everything up. Its why they're hell-bent on a No Deal Brexit even on top of Covid
I think the end results will be the same as last time as well too...
How many hedgies are shorting the UK market?
Lots I expect, weak £ against foreign currencies, UK uncertainty means suppressed share prices and many companies succeptible to leveraged buy outs as debt is cheap. Poor employee protection means it's easy for a foreign take-over, strip all the assets / IP, stick the debt on the balance sheet, declare insolvency, dump the employees, leave pension liabilities to the UK taxpayer and move most of it overseas.
Interesting that Steve Mnuchin has said the US cannot afford to shut the economy again.
Given the rising R number in some states that's quite some statement to make and we're still to see the effects of protestors in close proximity to each other.
So that's the US marker - wealth before health.
I wonder how much/little of the Fed's support has worked it's way through to businesses.
binners
SubscriberDoes anybody think that this time next year we won’t be looking at late-80’s levels of unemployment?
I think its a dead cert. It might actually be even worse. And, of course, its exactly the same places who got clobbered last time that are about to cop it again
The only glimmer of hope I can really see is that so many big economies are effected, and so many of the countries that have done well are relatively small. So it will depend who is making the decisions and on what basis- and of course, it's right to be cynical about that. But there's no specific reason why we have to tackle this on the usual self-defeating negative-sum game, using the economics that we already know don't work to try and fix everything. Just maybe, enough of the world and enough of the major players and enough of the voters and enough of the employees and enough of the employers won't be served by that.
I think it's more likely that There Is No Alternative gets rolled out again and people get convinced fixing things so that money can continue to go upwards and get pulled out of the economy in order to make everyone poorer is the right way forward. Maybe it'll come down to how much media and tribalism holds sway, vs how much of america and europe gets set on fire.
Very much back to the 80's and then some with regards unemployment and resulting civil unrest. Further up the thread I said how things felt like the 70's and whilst we're still under the spell of furlough that remains the case.
Once furlough stops well be crashing into an 80's type situation with bells on. The major growth will be in the black economy, those anticipating a cashless economy are in for a bit of a shock.
The major growth will be in the black economy, those anticipating a cashless economy are in for a bit of a shock.
what exactly is in this black economy?
-tax free items that are supposed to be taxed sold for low cost like cigarettes
-items in short supply resold at higher cost to those who can afford it - potentially luxury foodstuffs
-low quality fake copies of expensive items bulk imported from the far east - clothing, electronics
No, paying for services in cash, in part or in total. The infamous cash deal. It happens everywhere there is high unemployment - see Spain with it's x% unemployment and lots of people scraping by with black work of one kind or another.
Indeed. What we’ll see is the opposite of what we’ve seen recently. Services will be paid for in notes with nothing going through the books and no tax paid.
Back to the 80’s in every way
wealth before health
If only it was that simple.
Nice - I have the skills and equipment to make high quality "moonshine"*
2020 could be my year!
*untaxed single malt whisky
stumpy - in essence, that's exactly what it is; in the US wealth will always take precedence over health.
johnson is being pushed to do the same but, having tied himself to '...following the science', there is some control over what he and his clown circus do.
Back to the 80’s in every way
Can you walk straight binners?
Damn you avadave, I had money on binners being the one to post that clip.
Incedently your foum name auto corrects to 'average.' Sorry about that...
A few couple of points:
The number of Mystic Meg level predictions on here is laughable. Pretty much everything anyone, economists et al, has predicted over the last hundred years has been wrong. I wouldn’t have any faith in anyone who claims to know what’s round the corner.
Every thread like this also seems to result in several forum members (you know who you are) thinking it’s their big chance to do some left wing proselytising, which is very tiring. The Tories have many faults, and I would never vote for them, but the oft-repeated notion (on STW) that they’re part of some sort of capitalist conspiracy to enslave the poor is the sort of thing I’d expect to hear from a sixth form Socialist Worker seller, not a sensible adult.
That is all,
JP
JP - in case you don't know, if you laid all the economists in the world end-to-end they wouldn't reach a conclusion.
I usually categorise your posts alongside chewkw, the well known malaysian (?) geordie (?) troll, which means I ignore them but I agree with your observation about capitalist conspiracy bollocks - johnson's controllers etc.
The hedgies and similar are not influenced by and do not influence johnson and his clown circus.
They make their money by speculating; who, notionally, governs is a complete irrelevance to them.
They will always find an edge.
If you have the funds, take a risk - make more money.
Tory gov may make it 'easier' for them to profit but, I suggest, they are generally apolitical; donations to a political party are for the optics.
All this talk of the 80's reminds me of when I moved into the Hulme Crescents in Manchester in 86. It was beyond the reaches on law and order and normality in general, think of films like 'Escape from New York' or Taroskvy's 'Stalker' It was also a bit like Christiania in Denmark, though maybe a bit more purgatoria if truth be told.
The anarchic (and they were) conditions that existed in Hulme and Moss Side back then were in large part due to the previous generations failure in urban planning, policing and economic decline. It made for a wonderful cultural Petri dish though.... good times.
When I look at how Manchester's city centre has developed this century, I wonder if they haven't designed a city of steel and glass that is as unsuitable for the coming times as the labyrinth of deck access 'Alphaville' type developments that went up a generation before.
The new Manchester city centre is like Logan's Run, everyone under 30, no older people, no families, no doctors surgeries, no green space. Quite simply a temple to consumerism, trendy bars and restaurants. Under lockdown this vision has become only more pronounced. Without all the locals coming in from the surrounding districts the city looks as un cosmopolitan as can be, every person you see is middle class, in their 20's or early 30's at best, and dressed as they are in their ath-leisure wear they resemble the sandmen from the aforementioned movie.
Bit dramatic I know, but the new city does now look like a place made for a different world than the one were moving in to.
Ah yes, chrome and glass palaces of our future.
Come see our stunning development (built on the old gasworks site which we didn't fully remediate), with panoramic views of adjoining high-rises; a *community* where your neighbours are ignorant, noisy, inconsiderate arseholes; open your windows and breathe in those fresh brewed diesel fumes; spacious - really?; zero sound insulation.
Denizens of these 'luxury developments' have run home to mummy and daddy in the suburbs or countryside to escape the shit existence which, until March, they could't get enough of.
Shit becoming real
https://www.bbc.co.uk/news/business-53015467
Hope donny remembers that as he claimed credit for Wall Street rising he also owns falls; what a dick.
A couple of good things might come out of this - I reckon Trump and Johnson are both toast. People change governments when their bank balances look worse, regardless of why.
I saw an ordinary family (parents and kids of about 4 8 and 12 respectively) going for a ride on their bikes up Deansgate yesterday. As they bumped up and down the kerbs pooling around like they were in a country park it reminded me of those images of a deer living in the shadow of Chernobyl.
It wasn't just the emptiness and lack of traffic that stuck me, it was more just seeing a normal family, visiting this alien, domed city that existed on their doorstep.
Looking out of the windows of my flat on the edge of the city centre I can see 20 residential tower blocks going up. Back in 2008 worked was stopped on a few that were under construction then and they stayed as half built relics for a few years before eventually being demolished but they haven't stopped working on them this time.
I wonder who will end up living in them? The Hulme I moved into years ago hadn't ended up being populated by the people they were intended for. Why would it be different this time?
inkster - good analogy with Chernobyl.
I think high rise resi developers are well and truly stuffed.
In addition, estate developers are also facing significant problems; short term blip in interest/demand but harsh economic reality will kick in - redunders, short time working - then prices will fall.
Unemployment rising; no new markets/technology to take up the slack.
Lots of talk about green technology but, that's it - just talk.
Furlough, in too many cases, is nothing more than deferred redundancy.
Talking with colleagues in my nationwide construction network confirms that.
A common observation is that sites cannot operate safely even if social distancing was reduced to 1 metre.
Increased prelims to cover costs of enhanced PPE or changed working arrangements are generally being rejected by clients.
Clients are forcing essential safety costs and consequent reduced margins onto their contractors as they won't accept cost increases.
Contractor margins have been too skinny for too long even before this.
Clearly, this is not viable.
My previous glass half empty attitude has changed; I'm now 3/4 empty.
From someone who's seen market turmoil and made money from it.
http://investorfieldguide.com/jeremy-grantham-an-uncertain-crisis-invest-like-the-best-ep-177/
His view is the market is (massively) over-priced.
Twist or stick?
Economy shrinks by I've 20% in April. We all knew it was coming but written down...
https://www.bbc.co.uk/news/business-53019360
Predictions for how this will affect the lay person in the October and April budgets?
Surely tax increases, fuel duty will go on I reckon as it comes back in use but the prices are low, Beer and Spirits a little bit not too much to revive things and produce some kind of feel good factor, but what’s the betting of a opposing comparison with a C19 Chart, a massive decline followed by a long slow haul back to economic normality paving the way for high taxation and cuts during the conservative reign...
I think the only response is to take an approach similar to post war. Basically huge direct investment by Government in infrastructure and industry to keep the economy going and improve productivity - tax increases will be necessary but mainly massive borrowing. Need to grow ourselves out of this crisis, even the most ideologically hidebound Tories must see this...
Every thread like this also seems to result in several forum members (you know who you are)
And you're always around to do some dissing without any kind of informed comment. How are you doing, JP? Business OK? Did you see this coming years ago and make sure you had the financial resources to ride the storm? Did you live modestly is the boom to prepare for the inevitable bust? Did you go cash rich when it was clear the virus was out of China?
If you can answer all that positively then congratulations and keep gloating. I can but I'm not going to gloat because I've survived being poor, finishing school before the Winter of discontent, graduating in 82 with 3 million unemployed and being dealt a poor economic hand. All those economic lessons have paid dividends, because I was lucky enough to have ten years of being in the right place at the right time in a period of relative prosperity - the 90s.
Junior and his contemporaries are right in the thick of the economic fall out, what they are living now will change the world down the line and I reckon ultimately for the better.
The New Austerity, pay cuts, evictions, bashed heads will all be done in the name of 'saving the economy' with the tentative (but polite) support of Sir Steir Karmer*. Robert Adam Crescent 1980 exemplified how if you treat people like dirt they are more then likely to become it, if they weren't already. It was such a desperate dystopia they put students (!) in to civilise it. Awful circumstances polarise, witness all that and you're either a serious socialist or a fascist. Or today, you'd want to pull down reactionary icons or tug your forelock and venerate imperious statues of your social superiors.
Already on the news we're getting claims of conspirators exploiting the innocent demonstrators, it's all about wrecking shops, Floyd was a bum who didn't deserve a dignified funeral, police being trained in the latest wack'em techniques in the occupied territories. 'Saving the economy' actually means saving people who own businesses (not you, muppet). Forget about CV numbers, get back to work and 'stay alert' meaning 'take your own risks'. I know a lot of self-employed who play the tax system, they won't have had a good time. Despite wanting a bit of work doing, I'm not stirring it all up with employing anyone for quite a while yet. At least Blair's taken one sheet from the Corbyn hymnbook on providing the outrageous, commie pipe-dream, ridiculous, free internet (that the French did through the Metro tunnels years ago). The saddest thing is, I think many people will take it on the chin if they're not already flat on their back.
*shamelessly nicked from an interview with Tariq Ali on FB Counterfire.
We really have to invest and grow out if this - austerity has slowed recovery and increased wealth inequality since the financial crash + and that was nothing compared to this.
Austerity measures taking the money out of the pockets of normal people through pressure on public sector pay, in and out of work benefits is massively short sighted.
The only period of sustained growth in modern UK history is the post WW2 period and that was linked to massive Govt investment in infrastructure, introduction of universal benefits NHS etc. Policies that persisted after the 45 Labour Govt went out of power.
The bullshit about balancing the books and reducing debt will hopefully be exposed as the nonsense they are. No credible economist has thought this for 20 years.
National debt is not to be feared, interest rates are historically low, its time ( or will be when lockdown eases a bit more) to invest and grow our way out of this hole
it’s their big chance to do some left wing proselytising, which is very tiring.
So discussing anything that doesn't fit within the extremely narrow constraints of neo-liberal economics is left wing? That's just plainly ridiculous. Put it this way, if the existing economic and financial system was capable of dealing with the pandemic, would the US and UK governments be rushing to abandon efforts to contain the virus resulting in hundreds of thousands of deaths?
capitalist conspiracy to enslave the poor
There's no conspiracy, just the plain reality that those at the top will do anything to protect their wealth and power, irregardless of the impact on everyone else. Do you deny this is the case?
I wonder who will end up living in them? The Hulme I moved into years ago hadn’t ended up being populated by the people they were intended for.
You're familiar with the term Hulmeosexuals? Hulme is now host to Manchesters gay population.
I'm old enough to remember the urban hell that was the crescents. We used to score weed in the Spinners in Mossiside. I remember James Anderton (Gods Cop) coming on telly to state that there were no 'no-go' areas for the police in Manchester. As someone living next to Ordsall at the time, my, how we laughed.
In answer to your question about who will live in the new city centre apartments, they fall into two categories
1. Students. A lot of those developments are being fuelled by the relentless expansion of the Universities. How that will work in a world of online learning and Brexit, who knows?
2. Nobody. Last year 85% of the non-student residential apartments were bought 'off-plan by foreign investors who have moved on from London as it was overpriced. Again... what happens to them in a post-Brexit country in the midst of economic collapse?
I doubt either is going to go well. I suspect a lot of those gleaming glass and chrome palaces are going to sit empty
A question of interest rates.
We're currently historically low.
The '80s saw some high rates, I remember my parents battling a mortgage cost increase.
Back to the start of the thread.
As well as unemployment and stagnant economy, will we see interest rates rise?
As someone due a mortgage renewal next year, I'm borderline cost wise remortgaging early and tying in for 5 years at a lower rate than I've currently got...
I was astonished that all those blocks got planning permission. Some are in each others' shadow and there's little infrastructure in the area to support the occupants. I've read that most of the occupants of 1 Deansgate have had mental health issues arising from their 'life changing' increased debt arising from them having to pay for removing the combustible cladding.
The people who bought the flats off-plan must have assumed there would be sufficient numbers of wealthy people to occupy them. The average income in Manchester is £26k. There's plenty of homeless and people unsuitably accommodated in Manchester and there's new blocks going up. Nah, no chance. They will be derelict before they ever meet people's needs.
2. Nobody. 85% of the non-student residential apartments were bought ‘off-plan by foreign investors who have moved on from London as it was overpriced.
This. After the last recession an acquaintance who was a manc city centre estate agent told me one of his jobs was to go into places like Beetham tower every evening and turn on the lights in empty apartments so potential tenants and buyers wouldn't be put off at the prospect of living in an empty tower block.
Manc city centre is f**** quite frankly. As inkster says it's devoted entirely to consumerism and has precious little function in a world of social distancing and economic deflation. The restaurants, bars and coffee shops will soon be boarded up, the offices will be empty and those who live there will either be trapped by collapsing property prices, or will flee to the suburbs if they have the means. What's left behind won't look like anything that exists now.
Binners in the Spinners eh.
That used to be my local when I first moved to Manchester. I think our paths may have crossed many times sir. (Didn't you say you used to work at the hacienda? I did too though quit in 89 when the 'Hit Man and Her' came to the gaff so we may have missed each other on that occasion.)
The initial, Urban Splash led redevelopment of the city was exciting and innovative. Post millennium the council rolled over and allowed developers to do whatever they wanted. They sell the city as an oasis of urbanity when in truth they've created a monocultural, cultural desert.
Ordinarily, when faced with an economic downturn developments like these would remain unoccupied. However, I think things will be different this time. The homeless problem was more or less solved instantly when empty hotels were temporarily used to house street sleepers. We could see a rise in squatting as well. Whilst these developments arent as easy to squat as an old Victorian house, It wouldn't surprise me if you see a 'squat the block' campaign start up.
One thing about the old Hulme Crescents and similar properties around Manchester was that although the properties were sub standard, they provided plenty of surplus capacity for housing the homeless. You either popped down the Moss Side housing office and they would give you a key on the spot or you just squatted the first empty property that took your fancy.
To have thousands of empty city centre flats alongside a housing crisis will be intolerable under the new normal.
Faisal Islam on Five Live now has just given an overview of what he thinks, as an economist, needs to happen as a reaction to a fall in the economy of 20% and what he thinks will actually happen:
What needs to happen:
Brexit needs to be immediately put on hold and the government should immediately apply for an extension on the withdrawal agreement. The government should then take advantage of record low-interest rates to borrow for a Keynesian response of investment to boost the economy.
What will actually happen:
The Brexiteers running the show have become even more entrenched in their refusal to extend the withdrawal period so we're full steam ahead for a no deal crash out in December and the huge detremental impact that will have on an eceonomy already on its knees. They will not borrow or invest but will instead go for an even more severe version of George Osbournes austerity programme
In short, we have the very worst people we could possibly have in charge at the moment. They are idelogical zealots who will pursue their agenda no matter the untold misery it will inflict on millions and millions of people
The next few years in this country are going to be grim! And this lot couldn't give a shit
Inkster - I did work in the Hac in the early 90's. Our paths must surely have crossed on plenty of occasions by the sound of it. Did you used to go to One Tree Island and the parties in the Crescents that the Hulme Hippies used to put on?
One thing about the Crescents and the general grimness around Manchester at the time was the reaction it provoked in creativity. A lot of which have massively contributed to making Manchester the City it is now, culturally.
I wonder if the same will happen this time around. Because we're in for a carbon copy repeat of the 80's, where the economies of Northern towns and cities will be devastated once again, and a Tory government in power who genuinely couldn't give a toss about us and will simply leave us to our fate. Again