Credit Crunch....getting scary now!!

[mrsew]

Sorry to be (perhaps!!) boring & serious but is anyone else getting scared about the CC?? I know all of us have been worried with rising costs (OF EVERYTHING) but watching the news now I'm scared....is that too dramatic? I realise it's out of our control but that's what makes it worse. Am I the only one feeling like this? I keep trying to be up-beat and think that by being careful with pennies it will all go away but it doesn't seem to be. Do you think the media coverage is adding to the problems? Sorry to be so serious!!

xx

 

[LCobby]

We aren't yet back to 15% mortgages, double figure inflation and the redundacies of the 80's. So yes, it could get a lot worse. But more Governemnt intervention in USA and UK this time.
An added factor is the world demand for food and fuel has increased so much, causing the price rises.

 

[mrsew]

I think the thing that scares me is the banks going under...that didn't happen before did it? We say there is more demand for food, yet we waste so much.....do we only have ourselves to blame? When we look into fuel I was suprised to see that prices have increased as people actually invest in fuel (as in buying wine & I suppose gold)....what happens to this fuel? Is it held like a bond?

 

[SpruceRI]

Yes, I'm worried.

The fact that if you need extra money you can't sell your assets because everyone else is selling theirs too.

Mortgage costs are one of the things you can't halt the rise of. You can use less fuel if you have to, eat less, go out less, but if the Banks raise the interest rates there's nothing you can do about it.

Definately makes you think about the savings you've got, or the debt. To save more or pay off that debt quick.

 

[rockinghorse]

I bought my house in 1991 and I got a fixed interest rate for 2 years at 13.84%. After the first year the interest rate dropped but not for me!!!!!!!!

Can't imagine the interest rate ever getting that high agian.

 

[Rambo]

Yes; things are looking pretty grim at the moment and for me today is going to be an 'interesting' day at work.....

But....

For the average person on the street while prices may be going up a bit; and there is plenty of scaremongering going on in the press; the reality is that the vast majority will just pull their belts in a little tighter and get on with life.

The price of fuel is already starting to fall as world demand decreases.

People on variable rate mortgages can look to tie themselves into fixed rate or tracker rate deals to cushion themselves from interest rate fluctuations.

Simple cost saving measures like turning your heating down 1 degree or setting it to come on an hour later will have a big impact. Likewise the hot water system.

If you shop in Waitrose; start looking at Sainsbury's instead...or Tesco's...or dare i say it...Asda

Try and be less wasteful with what you eat...and keep an eye out in the supermarkets for the stuff they're selling off cheap because it's going out of date. Most of it will freeze...

Just little things but they all add up and might just help to keep you afloat when times are tough

 

[Sooty]

The thing is Rambo, in this household we already economise. I just do not understand the way people buy food and throw it away, or think they have to have a new car every two years, or replace things before they break just because a newer one is available. We are a society which has become incredibly consumerist and wasteful, and if the credit crunch changes that, then that can only be a good thing. There is only room for so many tv's in landfill!

I'd be very interested in your take on the US Congress' decision not to bail out the banks to the tune of $700bn. Surely if US banks start folding, the whole world is going to feel the fallout?

Oh, and I have to say how delighted I am to now be a shareholder in not one, but two British banks. I guess at least there is now somewhere safe to put your money...

 

[H's mum]

Got to agree with you Rambo - It's a case of the press trying to do what the government need them to do - (ie cut national borrowing) - In order to get ourselves out of this mess and to reduce further damage on a national basis the key will be for government to both reduce its borrowing (by following more efficient spending policies), directing monies to where it can do most good (to ensure that the economy doesn't shrink too much) and this will mean doing two things, not cutting taxes and keeping borrowing down - This is why borrowing has been made so difficult for so long - and why the press have been following the "scare mongering" route (which I feel has worked as I don't know anyone who has opted to spend money - people I know have started saving instead) it's been a case of measures taken to try to stop the bolting horse!

Strangely enough, through times of recession - more people save than spend!

Kate x

 

[Orangehorse]

Well food shouldn't increase in price any more. As above, fuel is coming down and with global economy slowing there will be less demand for fuel so the price should drop.

As for food - last year set-aside was removed in the EU so immediately there was a 10% increase in the cropped area, plus all over the world, except Australia, there has been a bumper harvest - Russia, USA, Eastern Europe and the EU and despite the awful wet harvest, yields in the UK have been huge. There is so much wheat around it is difficult to sell and the price has dropped from a high of £180 last year to under £90 (the fact that this is below the cost of production is, well, back to normal). So this means that pig feed, dairy feed, chicken feed etc will be less. The fact that there are very few pig and dairy farmers left in the UK is another story of course.
But we don't mind eating foreign pig, poultry and milk so long as the price is low.

The big input rise is in fertiliser, which has about tripled in price from last year, but if the farmers can't get a proper price for their produce, why bother to grow it, so even the fertiliser manufactures might have to bring down their prices.

 

[AmyMay]

I think that anyone who isn't genuinly concerned about what's going on is wearing some serious blinkers.

It was very scary watching the DOW crash last night after the vote was lost in the US Houses last night. And daily we are hearing of banks around the world going belly up.

Fuel prices on the rise, with absolutely no sign of comming down - and the average household allready struggling.

Manufacturing will be affected, having a massive impact on our economy - and around the world with import and exports being affected globaly.

People may think the press are scaremongering - I don't think they are, and very few people realise the extent of the problem imo.

Watch out folks, it is going to be a very, very difficult next few years.

 

[VLHIEASTON]

I agree AMYMAY.

 

[Stoxx]

The Chancellor, PM and B of E Governor are meeting today, which we can only assume will be to discuss cutting rates.
The DOW future and FTSE have rallied massively off their lows already today, as it is being said that the US will get this $700bn bailout through somehow.
Personally I can see why some members of congress voted the way they did however I am of the belief that this needs to be passed.

I do know of people that are completely unaware of everything going on, they speak as if it is 'what's going on in London'! But I'd say the majority are feeling it, or if they aren't feeling it now then they are cutting back in order to prepare for a day when they might.

For me this whole situation has taken away my livelihood.

 

[H's mum]

[ QUOTE ]
Fuel prices on the rise, with absolutely no sign of comming down

[/ QUOTE ]
But the price of oil has already started to drop?

Kate x

 

[Stoxx]

Yes, and yesterday it had it's biggest drop for 'x' amount of years. It fell $10.

 

[AmyMay]

[ QUOTE ]
[ QUOTE ]
Fuel prices on the rise, with absolutely no sign of comming down

[/ QUOTE ]
But the price of oil has already started to drop?

Kate x

[/ QUOTE ]
But it's going to have to drop a lot for it to make a difference to the likes of you and I.

When I'm paying 75p a litre again for petrol, I'll breath a little easier.....

 

[Weezy]

But I will bet that although we have seen decreases at the fuel pumps (13p down already in my area), the elec companies who have raised their prices by 22% don't pass this on to their customers

 

[Stoxx]

Of course not! They are a law unto themselves.

I had a letter the other day from the elec company to say our rate (in the office) was going up by 53%

I have negotiated a better deal than that but it's ridiculous. It's what is driving inflation up.

 

[H's mum]

This is definitely an area where the government needs to step in to ensure prices are fair

Lets face it - for the past ten years this country has lived in a bubble of rising house prices, easy consumer credit and spending beyond our means... which in turn has resulted in a weak economy - brought to ahead by the credit crunch which started in the USA
Kate x

 

[Sooty]

Despite the fact our electricity comes from France, and is nuclear, not fossil fuel, generated. Apparently the Senate are expected to push through the bail out, as otherwise the alternative is unthinkable.

 

[Sooty]

Why? The government lost any control over utilities when they privatised them. These are private companies, answerable to their shareholders, and they can do what they like. I think most people saw this one coming, and as for the trains...

 

[Weezy]

[ QUOTE ]
Despite the fact our electricity comes from France, and is nuclear, not fossil fuel, generated. Apparently the Senate are expected to push through the bail out, as otherwise the alternative is unthinkable.

[/ QUOTE ]

OK well I have just learnt something! I though the UK still generated electricity and I had no idea ours is nuclear...I will start paying more attention to these things!

 

[StefDua]

I agree it's getting scary now. I've recently found out I'm going to be out of a job thanks to the credit crunch and now have to give up my loan horse because of this. Petrol has gotten better I agree but it is still expensive.

Don't know how much worse it's going to get but it's global and it doesn't sound good to me

 

[Sooty]

We do generate some, but very little, and most of that is from coal powered stations. In this area our electricity now comes from EDF, which is French. I think the UK has one remaining nuclear power station, possibly two. Not enough anyway! There are something like 64 in France, which has something like the same population as the UK.

 

[The Voice]

even if they cut morgage rates, the banks are increasing rates on mortgages because the inter bank rates have increased because the cash flow has stopped between them. I was looking at a mortgage that was pulled on the Friday and went up by 0.6% on the Monday to 6.49%

Whether people like it or not the buy to let and property investors having been underpinning the housing market in what in reality are secure 'mortgages' (unless they were dealing with apartments as they are over supplied due to developers trying to make as much as possible and poor planning control) as the house is either rented or sold, as well as supporting the economy. But what this meant is that people were investing in property rather than 'money markets' such as pension schemes, shares etc, so I suspect that the financial institutions have now run out of money to support them selves. The banks were greedy lending out more than they can afford (thinking there was a bottomless pit of cash) to cover there own costs and investments. Basic housekeeping mistake.

The cash flow has got to start again to kick start the economy. I deal with alot of medium to small companies and they are all struggling because the money is not filtering through on orders and work done and they are having to lay off people. If action is not taken soon to get the cash flow back then the recession we have already will explode

 

[Rambo]

The UK nuclear industry is owned by a company called British Energy:::......which was bought two weeks ago by a French company called EDF....so there is no British nuclear energy anymore

 

[Firewell]

The whole thing is really unnerving. In fact A back and white picture from the recession in the 1920's springs to mind, where bankers are jumping out of their office windows commiting suicide... It just shows that nothing is stable and perfect.

I agree that its going to get a lot worse. I read somewhere that its not going to be untill about 2012 that things will be better.

People think that the press are scaremongering, if anything I think they are almost playing down the effects to stop panick. I know a lot of people who have been catastrophically affected. These huge banks, the back bone of our economy are failing one by one its really bad. MY OH said he was talking to a finance friend of his and he said hes never heard the voice of such a broken man.

It will pick up eventually but I dont think its going to be for quite a while and im pretty sure its going to get worse first.

 

[Sooty]

Super!

Is there anything else we can sell? I understand we get the majority of our water in the UK from an Australian owned company...

 

[Sooty]

As I understand it, the housing market in the US is nothing like the UK one. There is lots of land there, so property has nothing like the value it does here, and does not appreciate in the same way. Also, apart from in large cities, houses are often poorly built and not expected to last in the way that a UK property is. Massive lending on this sort of property is where the rot set in.

 

[The Virgin Dubble]

[ QUOTE ]
I think that anyone who isn't genuinly concerned about what's going on is wearing some serious blinkers.

It was very scary watching the DOW crash last night after the vote was lost in the US Houses last night. And daily we are hearing of banks around the world going belly up.

Fuel prices on the rise, with absolutely no sign of comming down - and the average household allready struggling.

Manufacturing will be affected, having a massive impact on our economy - and around the world with import and exports being affected globaly.

People may think the press are scaremongering - I don't think they are, and very few people realise the extent of the problem imo.

Watch out folks, it is going to be a very, very difficult next few years.

[/ QUOTE ]

Agree with that, but will also add that the rate of inflation being bandied about in the press, is way lower than the reality imho.

I buy my fresh food from the local supermarket - mainly stuff that gos in the fridge and needs replenishing weekly ie butter, cheese, eggs, cold meat etc.

I was spending around £25 per week on these items, but the figure for exactly the same items is more like £40 one year on.

Also pasta has almost doubled in price, and cheese, bread etc have seen significant price rises.

I already budget as it is, and we are really feeling the pinch. There are no more corners I can cut to save money.

 

[Tinkerbee]

19p pasta in Morrisons

and a roast dinner in a handy microwaveable pack from Lidl/Aldi for £1 Giant yorkshire pud, roast beef, roast spuds and veg

My helpful input