Really? Are we in a recession?

[TheAnimus]

You got any free financial advice for me then?

I'd never do that, and if I was somehow drunk enough too, you should know better than to listen!

I am also kind pissed off I closed my sugar posistion this year in a place that landed me a tiny 10% when I could have really done well (bought in the summer)

http://www.bbc.co.uk/news/business/m...elve_month.stm

I like food stuffs, but its not a safe hedge with pharamecuticals because most of the time those who die are just too poor to buy the drugs anyway.

[oolon]

Property is likely to tank massively in 2011- I reckon 10% minimum. You should be getting out, not in.

First this is the London market. Second 10% is not a massive tank, 50-70% of value is. If we have a drop like that I think I will buy a second one! If I didn't own the place I would still need somewhere to live and rentals are at an all time high, bank is asking for little in interest, so long as you have the capital for a large deposit. Where do you invest your money if not shares or property? Bank accounts pay less than inflation, so your losing cash leaving it there. The big gains have been made on the market. 3 years ago you could have bought mining companies now costing 8-10x the amount now. We are not going to see those kind of gains again any time soon. Gold right!... No you put your money in a sector that is unloved (and hopefully undervalued) by others with a 3-5 year time scale.

BTW this is not advice just my personal logic... Advice is normally worth less than what you pay for it, and everyone giving it has a vested interest in you agreeing with their point of view. (I would also like to say I still own shares, however I only have invested the money I have gained from other people (profits) rather than my original stake so it is now self financing, 0 leverage)

[Bugbait]

Property is likely to tank massively in 2011- I reckon 10% minimum. You should be getting out, not in.

Sorry but blanket “predictions” like this always make me chuckle. The statistics and pretty charts are usually UK wide which makes little sense to discerning investors since it fluctuates greatly depending on region. Comparing London, especially the inner, good W and SW areas to anywhere outside of Greater London is like apples and oranges.

There seems to be consensus that there are far fewer buyers than before (we noticed this when we considered selling our flat). Genuine buyers are very discerning and will still pay good amounts for the right properties, as we noticed when we placed an offer on (hopefully) our new house.

People who are adequately financed should take the opportunity to buy while the prices are less likely to spike due to bidding wars and more desperate sellers are willing to let their properties go for less. Even if prices are dropping it’s a good time to buy as the interest rate is still low and a drop in capital while rental demand increases is a win for anyone with a decent deposit.

Assuming a 10% deposit (which is too little for most lenders these days) and 3.5% interest, someone could buy our flat and pay less in mortgage repayments per month than it would cost them to rent. The problem is, most lenders want more than 10% and that’s hard for first time buyers in London. In turn this forces rental up as more people fight for nice properties to rent while they try to save more for a place for their own.

From an investment perspective it’s always better to diversify anyway. Never wise to keep it all in one form.

[matthab]

Sure doesn't look like it.

Over the last couple of days, the sales have been in full force with the usual crowds pushing and shoving to get their deals (Selfridges have once again reported record sales). My uncle put it succinctly when the BBC showed the rush - "where's all the money coming from?". For all the people that say times are tough, they're being made redundant and they have to tighten their belts there are a lot of people who are happy to grab a "bargain" HD telly. Given that most of the sales are more hype than substance and most of the actual deals are on things that are out of most people's spending budgets (sure, you can save a grand on a sofa, but it was £10k to begin with...), it seems a little odd. Scratch that, it's not odd. It's frankly grotesque that in a time where (alleged) students are rioting over fees increases and the budget is being slashed left right and centre, stores are still willing to cajole people into wasting their money.

One thing we both noticed, during the videos, was this: the people rushing into the big name stores were predominantly foreigners (or at least residents of non-British nationality). This is merely observation, besides my above opinion of spending habits, it's nothing personal. Perhaps we should narrow our focus a bit, it seems that the people with money in Britain aren't Britons. On balance, it would seem that most of the money that's being spent isn't being spent by us.

Maybe it's a good thing that the money pouring into Oxford Street isn't coming from us, but it's a stark contrast to the state of the country.

(PS: The Steam sale is still as epic as usual!)

Theres a difference between people having no money and people complaining of no money. I predict the next coming months being a struggle for retail.

[Saracen]

I'm late to this thread, so it's probably already been said, but ....

- no, we're not in recession. We came out months ago. I know that has been said. We might go back in, but right now, growth is modestly healthy.

- what we are, is in serious debt, and rapidly getting deeper in it by virtue of a flaming great deficit.

- all the hype do far is about cuts, and most people aren't feeling the pain because of of it hasn't started yet.

- we have to distinguish between governmental debt, and individual debt. Both are huge, but the cuts are about the former. Lots of people have been reducing the latter for a couple of years, either 'cos they got scared into it, or because with low savings rates, it's hardly worth having it in the bank, so they've diverted savings or unspent income into debt reduction

- if you do have a personal debt, it's not a problem provided you can afford to service it, and your circumstances don't change (business failure, redundancy, ill and unable to work/earn, etc.)

- as long as you're not one of the relatively few (but growing) unlucky ones that did lose their job, there's a decent chance you're feeling quite comfortable, because mortgage rates mean repayments are pretty low. But that could change in a downright hurry is pressure to start raising bank rates is acted upon.

In other words, all the cuts (most of which is still to come) are because governments have spent themselves stupid for years and, yes, bailing out the banks cost a fortune (or several fortunes) and most people aren't aware enough to understand what's coming at us down the track, because they've been hearing all the talk for quite a while, and so far, unless you've lost your job, haven't really felt the impact. My worry is that it's a bit like a big explosion causing a tidal wave .... you might hear the bang, and feel a rush of air, but you've just decided it was nothing much, when the deluge arrives. The deluge of effect from cuts hasn't yet arrived. But it's getting closer.

[Saracen]

.... I predict the next coming months being a struggle for retail.

Agreed .... except I'd have said probably years, not months.