Economic impact.

[AVB]

What’s peoples view of the economic impact of this crisis? I have a very bleak view but wondered what other peoples’ views were before I go out on a limb. 

[Farmboy91]

Hopefully the govt will pump enough money in to keep things ticking over, it's not going to be great but it could be alot,lot worse. 

[Lloyd90]

18 minutes ago, AVB said:

What’s peoples view of the economic impact of this crisis? I have a very bleak view but wondered what other peoples’ views were before I go out on a limb. 

I think the national debt will be astronomical, but I agree with the current government plan. 
 

We are better off being in debt for the rest of time, than letting the country go down the pan. 
 

If Johnson hadn’t done what he’s done so far, we are facing down an enormous global depression. I still think we are facing that down anyway, however thank god we are from the UK. I bet there are countries out there right now who wish they had our credit and ability to borrow debt like we are doing. 
 

 

I am hoping the housing market doesn’t take too much of a hit, we are 2 years into our first house 😞 I think with a lot of elderly dying, there will be a lot of empty homes that were being sat on now coming onto the market. 

 

But end of the day both myself and my Mrs are in fairly secure jobs. We are both still getting paid (for now anyway) and seem ok. I am on the front line trying to get people out of hospital day in day out, and am just praying to come out on the other side alive after all of this. 
 

I think a lot of businesses will go under, a lot of jobs will be lost and house prices could crash. A total global recession. 
 

 

 

My biggest fear however is the type of virus we are facing. If it is like other types of Covid virus, like a cold etc, and you get a few weeks / months immunity, and then just catch it again, then we are all finished. Life as we know it will be over. I don’t know what I would do in that case. 
 

Probably pack up and head back to Wales somewhere and try to live an isolated life if at all possible. Frightening stuff. 

[lancer425]

28 minutes ago, AVB said:

What’s peoples view of the economic impact of this crisis? I have a very bleak view but wondered what other peoples’ views were before I go out on a limb. 

I think that Johnson and co have tried their level best to keep work going as normal as they can so far, and try to be in some sort of Logistical state to start up and carry on once the virus is clear.

 The effect  this has had so far we can not tell, but i think it was a step worth taking, and really if everyone had obeyed the guidance we would be in better shape in every way than we are now.

I hope we have done enough to help, and that all of us do obey these guidelines. I think, we have to exercise some common sense too, in going even further as individuals if we can, if nothing else to protect our selves and as such the whole country.

  One thing i do think needs driving home good and deep is that we will not suffer fools gladly. and the ambulance wreckers and looters one hears about need serious war crime type punishments with no mercy regardless.

We need to clear our society of this **** others children or not, this can not be tolerated  in these circumstances.

[grrclark]

I am not sure that anyone could say with any certainty what the impact of this is going to be.

Even in normal times you could put 100 economists in a room, ask for a 3 week forecast and you’d get 100 different answers.

Just now I think that the measures we have taken are exceptional, but probably still safe and confirming to a bigger system.  I’m now wondering if the system will change.

There is outrageous wealth tied up amongst very few people and given that we are at a stage of effectively denying everyone their liberty, and i fully expect even more stringent measures within 7 days, i reckon that massive pool of wealth has to be at risk where it was previously untouchable.

This is also a genuine global issue that is hurting more than anything else.

Might there be an exceptional write off of debt?  Wouldn’t surprise me, in fact nothing would surprise me just now.

[TIGHTCHOKE]

6 hours ago, grrclark said:

I am not sure that anyone could say with any certainty what the impact of this is going to be.

Even in normal times you could put 100 economists in a room, ask for a 3 week forecast and you’d get 100 different answers.

Just now I think that the measures we have taken are exceptional, but probably still safe and confirming to a bigger system.  I’m now wondering if the system will change.

There is outrageous wealth tied up amongst very few people and given that we are at a stage of effectively denying everyone their liberty, and i fully expect even more stringent measures within 7 days, i reckon that massive pool of wealth has to be at risk where it was previously untouchable.

This is also a genuine global issue that is hurting more than anything else.

Might there be an exceptional write off of debt?  Wouldn’t surprise me, in fact nothing would surprise me just now.

Yes I would go with that, unprecedented times indeed, we are hopefully working to get through this crisis and out the other side to revert to what was our normal lives.

[Newbie to this]

We have roughly 32,000,000 people in work in the UK

If the Government pays everyone of them just £50 a day (I pulled this figure out the air) then the cost per day is - £1,600,000,000.

[Walker570]

In 1950 my mother was delivering milk around villages and a rabbit in the skin was 2/6p and she had a dozen or more in the van every Friday ready for Sunday lunch. Often a woman would ask for just a 1/4 pint of milk because they couldn't afford more.  By 1960 a few people where able to afford a car and things where starting to look up and by 1970 the Prime Minister at the time told the country it had never had it so good.   Four years of war which killed tens of thousands was just a little bit more extreme than having to shut down and basically hold your breath for three weeks and the people then had the back bone to see it through. What worries me is, do the present molly coddled population who have had everyhting NOW are capable of such a feat.

[oldypigeonpopper]

hello, it is going to be difficult time, i suppose if you have the financial back up your ok but many millions will just not have, we have yet to hear if anyone has been paid through the government scheme but maybe a bit early, BUT THE MONEY NEEDS TO BE FAIR TO EVERY ONE

[oldypigeonpopper]

hello, Michael Gove has just made a statement on the BBC for those who work outside, not sure on full details but worth checking out, just follow the Government rules, maybe someone will link the video, cheers, and keep safe

[AVB]

OK I’ll go out on a limb with my worst case prediction. It does all hinge on how long this goes on for.

There were c.32 million people in employment in the U.K. before the Coronvirus crisis. During the Great Depression unemployment hit 25%. I see no reason why this would be any different. 

That means c. 8 million unemployed. I fear it will be worse as we have become a service oriented country rather than manufacturing and with mass unemployment the services come under pressure. We also have significantly more people employed by the state than we did in the 20’s and the state will be unable to afford them. When this all kicked off I thought of 10 million unemployed. I’ve seen some forecasts by some of the banks that predict it could be 12 million. 

You also have a massive crash in house prices (50-90%) Pensions and savings (if you had them) wiped out, many Banks failing, rationing and soup kitchens for many and potentially martial law in place (if we had the troops to enforce it) 

I hope I am very wrong but it will likely be a very different country in 12 months time. 

As Trump said “the cure can’t be worse that the illness”. 

[SpringDon]

There will be a depression based on the 10% rule and it will probably be for more than 2 years. Central bank stimulus is active on the way down meaning there is nothing credible to restart after its “over”.

A debt amnesty and/or currency reissue is a possibility but would be devastating to savers and pensioners. I think the world will be very different in a year.

[Lloyd90]

My mate works in car finance, across several show rooms around Wales. 
 

He said they have been flat out the past few weeks, people phoning non-stop trying to give / sell their cars back to the garages.

They can’t afford the monthly payments. 

 

 

Im glad me and the Mrs bought older cars outright with no debt. I’m still worried about the housing market though. 
As some on here suggest, if it wipes out 50% as a minimum, it will be devastating.

[AVB]

40 minutes ago, Lloyd90 said:

My mate works in car finance, across several show rooms around Wales. 
 

He said they have been flat out the past few weeks, people phoning non-stop trying to give / sell their cars back to the garages.

They can’t afford the monthly payments. 

 

 

Im glad me and the Mrs bought older cars outright with no debt. I’m still worried about the housing market though. 
As some on here suggest, if it wipes out 50% as a minimum, it will be devastating.

Trying to hand the car back is the first futile step. Then people just stop paying. Yes they can repossess the car and your credit rating will take a hit but that will be the last of people’s worries. You won’t be able to get credit in the future as the banks won’t have any money. Cash will go back to being king. 

The value of your house will to some extent be meaningless. Just be grateful that you have a roof over your head. 

[Teal]

I'm not as doom as most. This will pass, and when it does there is going to be an almighty bounce. Albeit from a much lower base. But once that bounce starts everything will be heading in the right direction. 2-3 years stockmarkets will be higher than they were before this all started - all the money the Govt (the US esp) has pumped in, has to go somewhere. They have put in trillions of $, they propped up the world in 2008 and they are trying to do it again. Money worth less of course, so also don't count on genuine assets going down in value.

QE is not capitalism but it's all the Governments know. Someone wrote on another topic when to start investing, and the answer is when everyone stops reacting negatively to bad news, then you can be confident you are near the trough.

[Lloyd90]

9 minutes ago, Teal said:

I'm not as doom as most. This will pass, and when it does there is going to be an almighty bounce. Albeit from a much lower base. But once that bounce starts everything will be heading in the right direction. 2-3 years stockmarkets will be higher than they were before this all started - all the money the Govt (the US esp) has pumped in, has to go somewhere. They have put in trillions of $, they propped up the world in 2008 and they are trying to do it again. Money worth less of course, so also don't count on genuine assets going down in value.

QE is not capitalism but it's all the Governments know. Someone wrote on another topic when to start investing, and the answer is when everyone stops reacting negatively to bad news, then you can be confident you are near the trough.

I pray your right  

[AVB]

3 minutes ago, Lloyd90 said:

I pray your right  

Me too. Who knows. 

[Mice!]

Obviously things are going to be tough, but once this passes people will still need and want the things they had before,  so you would expect an uplift 

[Danger-Mouse]

10 hours ago, Lloyd90 said:

My mate works in car finance, across several show rooms around Wales. 
 

He said they have been flat out the past few weeks, people phoning non-stop trying to give / sell their cars back to the garages.

They can’t afford the monthly payments. 

 

 

Im glad me and the Mrs bought older cars outright with no debt. I’m still worried about the housing market though. 
As some on here suggest, if it wipes out 50% as a minimum, it will be devastating.

Can you imagine the state the German economy will be in? Not many people will be buying new BMWs and Mercs for a while.

 

[AVB]

BBC reporting that between 800,000 and one million companies are soon to go bankrupt (a normal year is c.100,000) as money supply dries up. I am afraid to say my forecast on the devastation  this will cause hasn’t changed. 

And I also believe that the governments instruction to banks not to pay dividends is because they know how likely this lockdown will go on for and want to try to keep the banks alive for as long as possible. 

I am very depressed this morning. 

Edited April 1, 2020 by AVB
Added comparator for normal year.

[millrace]

Depression....

When this clears,the economy will prob be down but stable for first few months until existing contracts are finished but there will be no new work and it will be so cut throat as not worth tendering for there will always be someone in a car to do it for less by not being insured traceable or all that goes with being a proper buisness,,,weve all ceen it before,,

A lot of the coffee shop culture will bite the dust,,,these goverment loans etc all sound good but who in their right mind is going to take a loan to pay wages to have to pay it back hopefully in future risking their home for a furloughed wage package for employees,,,, this is the reality of the scheme and many will find it just easier to bust now and possible keep their own roof over their  head....

There will be a massive fallout from this,,my only hope is unlike the last time when banks were given all the money and this just disappeared it ceems they want the people to have the money which then actually goes back to the buisness and banks via a partially stable economy......if they keep it this way their may be somd hope......

[blackbird]

One thing is certain China is now the world superpower as the US is on its knees, this could get very messy especially with a mad man in the White House.

[grrclark]

1 hour ago, blackbird said:

One thing is certain China is now the world superpower as the US is on its knees, this could get very messy especially with a mad man in the White House.

I don't think it is certain at all that China is now the world superpower.  Effectively 90% of the world's wealth is now in lockdown, while China is coming out of lockdown.

[blackbird]

I can see it now.

WORLD WAR 3 started by a bat 🦇
 

😂😂😂

Edited April 1, 2020 by blackbird

[Wb123]

We will be ok, secure work, comfort room between income and expenses, the other half handed notice in on her job a week before this all kicked off but her next employer is still chomping at the bit to get her going. 

 

I do worry about the sudden discovery of how many people can work from home though. All those people now have employers who just discovered who can be outsourced...