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Spanners*
Misses his big brother :(
Tue 7th Oct '08 8:21PM
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Bit of a rhetorical question there but meant to illustrate a point about media hype and the dangers it creates. A couple of years ago the world was going crazy about bird flu - we were all about to catch it, all our native bird species were about to be wiped out and then suddenly.... nothing.

Now I know there are some serious concerns about the credit crunch at the moment - banks in danger, the housing slump etc but we have to ask ourselves how much we all need to worry on a personal level and how much it is the media going crazy about a bit of a shift in the business markets.
I'm getting rather tired of the media hype to be honest - we all know there are serious things happening but the best anyone can do is try to be sensible with their money, avoid all these loan agencies and ambulance chasing b**tards who are (in my mind) the real danger to the economy, and wait out the storm.
Getting freaked out by every single news report is doing no-one any good.
    

General*
Windows Bob - the best!
Wed 8th Oct '08 11:03PM
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I get your point, but the government have just agreed to bail out banks to the tune of 2,000 for every single person in the UK. That's all money that the tax payer has to stump up not to mention money that ain't being spent on schools and hospitals.
You can also expect a huge number of small companies to go under causing unemployment to rise quite sharply.

In a worst case scenario if India and China continue to do well while our economy goes to the dogs it could be the end of the dominance of the West which would be a nothing less than new world order.
    

Spanners*
Misses his big brother :(
Thu 9th Oct '08 8:47AM
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But surely India and China's improved economies are, in a major way, due to to the West's massive investment in them for manufacturing, call centres etc. Our economies are now tightly bound together - if our economy slumps then we will be less able to invest in Asia and their economy will most likely end up slumping too.

And the government bail out money is firstly optional - it's not being given to the banks like an allowance, they can apply for it if they feel it is necessary. So if the economy picks up a bit then nowhere near the amount you said will be used. Also it is not just a free gift - it's a part nationalisation deal which, down the line when things stabilise, could actually see us all better off as profits would be fed back directly into the economy.

We really aren't as screwed as the media want us to believe.
    

Swoop*
CHIMPO
Thu 9th Oct '08 11:08PM
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::All of the following comes from my head and no financial knowledge or background reading whatsoever...


That implies that the media want us to belive a specific thing. I think that the media are latching onto this, as they did with birdie flu and Madeleine McCann. They just the archetypal attention whores. The more they look interesting, the more people buy their papers.

Unlike the other scares however, this one (and I'm not blaming the media for the whole financial howsyerfather) can actually be influenced by people. A change in attitude either by the big investors or by the small fry can lead to major financial upheaval. Which continues the heaving.

I'm pretty sick of the constant bombardment of vague warnings and dire flim-flam too, but I think this actually a serious threat. Not a Oh Lordy Back the Stone Age threat, but a bit of a knackering of our happy fun time. It's weird that there's a chance that the best thing to do is actually brush it under the carpet and forget about it.

Also


it's a part nationalisation deal which, down the line when things stabilise, could actually see us all better off as profits would be fed back directly into the economy.


Fed directly back into whichever dogbreath scheme the government of the time think they want us to pay for more like. ID cards? Oh they're free now wink wink.
 

General*
Windows Bob - the best!
Fri 10th Oct '08 8:28PM
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I'm afraid I can't agree with you at all.

A huge slump in the economy will make almost everyone in the counties life worse in a multitude of smaller and bigger ways.

It will be harder to get a mortgage, or a loan, or an overdraft people who recently bought houses will have negative equity. You will almost certainly get a smaller pay rise, pay more council tax and pay more pension contribution than if this hadn't happened. For people like me who work for small companies there is a much increased risk of your employer going under or in a big company announcing lots of redundancies.

In terms of the world at large less money in peoples pockets means fewer people will buy fair trade or organic product and governments will invest less in education, sustainable energy and science.

People like myself who are approaching their 30's have been lucky enough to live all of their adult life in a period of unprecedented wealth and prosperity, but if the party is over and it looks like it is then the next 10 years are going to be very different from the past decade in the same way as the 1960's were to the 1970's.

EDIT: This article is an interesting recap of past American financial meltdowns.
http://www.neatorama.com/2008/10/08/10-american-financial-meltdowns-in-the-past-century/
    

Xander
The panda is the evolutionary equivalent of living off benefits.
Sat 11th Oct '08 11:48AM
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I agree with General life is going to be very crap for a while tanks to the economic melt down.

But I think Spanners reason for initiating this thread was to discuss the illusionary nature of the media.

In respect to the econmic crisis we have going on the media does nothing but make the situation worse. In some ways it would be best for the world if the media did not report on the crisis. People are panicked because of it and as such the crisis will only get worse.

I therefore predict: when the media is distracted by something else the world economy will imporove.

Ironiclly banking itself if highly illusionary. Everything was fine until someone suddenly pointed out that the subprime morgages wee worthless. When someone spots the emperor has no clothes is when the problems start.

Look at the (much more minor I know) dot com bubble burst. Thats a brilliant example. All those companies not making any money at all, and everyone knew it. Even then people carried on for ages ignoring that fact until someone finally did something about it. Same with Enron.

What's amazing is that our lives and well being is entirely governed by a system that is almost entirely illusionary. As long as the banks felt confident everything was ok.
 

Spanners*
Misses his big brother :(
Tue 14th Oct '08 1:45PM
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The stock markets are back on the up and the Icelandic stock market has reopened, encouraged by the successful nationalisation of it's troubled banks.
As the media starts reporting all this I would bet good money that confidence starts returning to many business sectors, the markets continue to rise and the economy will begin to improve again.
    

General*
Windows Bob - the best!
Tue 14th Oct '08 4:41PM
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I'll take that bet!
    

Xander
The panda is the evolutionary equivalent of living off benefits.
Tue 14th Oct '08 5:43PM
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16th Jul '08
I think everyone will be depressed for a while then things will look up. People love a crisis.

Interestingly I heard a sociologist talking on Radio 4. He was saying the suicide and depression rate is very low at the moment. That's because everyone is currently enjoying being in the same boat. Nothing brings people together than a crisis.

However, if things continue to go pear shaped we enter the bad phase. We start to get an imbalance and at that stage people start killing themselves or suffering from depression.

Not the most uplifting of posts I know and a bit grim. Just found it interesting. When you hear about the great depression the famouse thing was guys throwing themselves out the windows of the NY stockexchange.

Apparently the lift operators in the 30's had a joke that they ran an only going up service. Also investers used to joke that concrete umbrelas were a good investment round the stock exchange.
 

Mrsham
I lost my toes in a game of blackjack
Tue 14th Oct '08 7:01PM
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It'll take a long time for confidence to fully recover, but we're through the worst a lot quicker than we might have been I reckon.

I suspect the following chain of events has something to do with it:

- Influential NY Times column writer and economist Paul Krugman last Friday praised Brown and hurled damnation at pretty much every other world leader:
http://www.iht.com/articles/2008/10/10/opinion/edkrugman.php
- He then won the Nobel prize for economics hours later (for previous work!) and hence his column became even hotter property and good media copy
http://www.ft.com/cms/s/0/8dd88ed2-9942-11dd-9d48-000077b07658.html
- He wrote another piece yesterday praising Brown:
http://www.nytimes.com/2008/10/13/opinion/13krugman.html?_r=1&em&oref=slogin
- the international community are this week falling over themselves to implement the Brown/Darling rescue plan round their way and capital is being injected into every available financial orifice across the EU and now (most importantly of all) in the US!
http://www.ft.com/cms/s/0/395a0fa6-99f2-11dd-960e-000077b07658.html

Sure the media are often guilty of exaggeration and fabrication but not this time I think. This was serious, it wasn't media-generated (it had to happen: the collapsed system was FUBAR and everyone was just pretending it wasn't; ignoring the reality wasn't going to work long term), and radical change is now required. To the extent that media coverage is helping to force the crisis through to resolution they're helping i reckon.

(disclosure: I now "work for the media", sort of )
 

General*
Windows Bob - the best!
Thu 16th Oct '08 10:02PM
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http://www.guardian.co.uk/business/2008/oct/16/marketturmoil-wallstreet-ftse

I think what they did was put a band aid on a severed head.
    

Mrsham
I lost my toes in a game of blackjack
Fri 24th Oct '08 7:21PM
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5th Jan '07
Quite a lot more than a band aid I reckon. The banking system's safe now, and we're probably heading for at worst a prolonged recession rather than total financial meltdown and The Great Depression 2.0, which would have been disastrous, not least for the climate change and development agendas.

Recessions of course are not at all nice -- my dad lost his job during the last one -- but they are manageable. The jury's still out as to how bad this one will be -- whether it'll be deep/shallow, long/short. Best guess seems to be mild and longish (til 2010), as long as its managed right by the government / Bank of England.
 

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