"The Mental Recession."

I think half of the problem with the credit crunch over here is the media.
Without the panic on the news nightly, the situation wouldn't be half as bad.

I personally have noticed the petrol prices going sky-high and I do think people waste far too much food, but I also think that the media are making the situation worse.

Tallulah; Schechter:

I think half of the problem with the credit crunch over here is the media.
Without the panic on the news nightly, the situation wouldn't be half as bad.

I personally have noticed the petrol prices going sky-high and I do think people waste far too much food, but I also think that the media are making the situation worse.

I 100% agree. They tend to do that with everything. It appalls me that these people would create such a state of panic, knowing that they are making it worse than it really is, just for ratings. I mean, of course they're selfish, but I'm disgusted with how the media takes things too far.

Every Christmas the news runs the same story. The shops have had record lows in spending, the consumers are not spending enough money, there is a risk of bankruptcy from the major retailers etc etc etc. It creates this whole ethos of panic.

The first week after Christmas every year the news programmes run the same story. The consumers have spent billions more than last year, best year ever etc etc etc

It's really hard not to be cynical over the whole thing.

It's been coming. It's what happens, the economy is a cycle and it doesn't boom forever.

What complicates the situation is that most of the UK is in quite a big debt so it's going to hit everyone hard if the Bank of England whack up the base rate.

tila tequila.:

We're having a recession too in the UK *surprise surprise* But our PM, Gordon Brown said recently we could stop buying so much food, as we waste half of it. The majority of it goes in the bin. He's now blaming supermarkets for "bogof" deals (buy one get one free), etc and we need to cut down on how much we buy to save money.

Let it be known I believe Gordon Brown to be a complete idiot.

Where not even in a real recession.
The GDP is still rising, very slowly, but it is going up.
It's more like an 'economic slowdown'
Things are balancing out.
Of course the way we are headed, though we might have another great depression.
I don't think it's all in our heads. What with the inflation and the housing market...
But it's not as bad as everyone thinks.

I'd blame the so called "recession" on speculation and bank loans. If our banks hadn't given out such high-interest loans to people they knew would never be able to pay back, then we wouldn't be having this "problem."

Honestly, it's all bs, at least, mostly. We're not any poorer and we aren't about to head into a Great Depression. I'd blame half of the worry on sensationalist press.

The trouble is the economic slowdown will lead to a recession and lowering interest rates will just cause rising inflation and debt.

We may not have had a recession yet, but we will. Construction firms are already cutting back their workforce and slowing production in anticipation of low sales in a recession. Unfortunately the actions a firm takes to protect itself in a recession will serve to further that recession in the long run. With less houses being built and sold, banks will start to reduce lending which will reduce disposable income and thus decreasing sales in firms producing luxuries thus leading to more unemployment as these firms seek to cut costs or simply collapse. More unemployed leads to even less spending, and you can see where this is going.

It's not as bad as everyone thinks right now, but when the recession does hit we won't be debating it.

^so it's basically a viscous circle?

Yep, that's about right.

It's not so bad, on average a depression lasts something like 17 months and I'm guessing business from China and India will drag us out of trouble if it heads towards a depression.

Zimbabwe is where the real economic trouble is.

Shiny!:

It's not so bad, on average a depression lasts something like 17 months and I'm guessing business from China and India will drag us out of trouble if it heads towards a depression.

Zimbabwe is where the real economic trouble is.

Hopefully it won't be.
I keep hearing things about Zimbabwe....

I know a lot of what is fueling the recession rumors, around here anyway, is the housing market. So many people refinanced their homes (including me and hubs) a few years ago when the market was flush. We chose a fixed-rate mortgage while others didn't look past the first few years and chose an inflatable-rate mortgage. So yeah, they saved a few dollars every month for a while, but since the job market crashed with the layoffs, now that people are having their interest rates grow to up to 16%, their income didn't rise to meet it and they are having their homes foreclosed because they can't make their higher mortgage payment -- not with gas at $4+ per gallon, milk at the same, and the prices of all food going up.

If people would learn to spend wisely on food, and put time into preparing a good meal rather than throwing processed whatever on the table, they would save a lot of money. But convenience wins out and so kids get fed junk while nutritious meat (meaning the stuff that *doesn't* end up at McDonald's) and fresh fruits and veggies go bad.

Americans are so used to the biggest and best of everything -- why drive a car when you can have a Hummer or giant SUV? Why have a 24 in television and watch local channels, when you can have a 70 inch plasma with 500 channels (even though 499 of those channels are junk)? We super-size our "value" meals and skimp on our fresh foods. We spend thousands on gadgets to entertain ourselves and our kids rather than driving to a state park and taking a picnic lunch and enjoying our family and our world. Our values are sorely misplaced.

[/soapbox]

I agree, especially about food, but fresh fruit and veges are more expensive too, at least where I am.
And the American dollar losing it's value is helping at all.

Good news!

It seems Santander still believe there's profit to be made in the UK market. If some other banks follow their lead it could be quite a turnaround.

Faye Merci:

I'd blame the so called "recession" on speculation and bank loans. If our banks hadn't given out such high-interest loans to people they knew would never be able to pay back, then we wouldn't be having this "problem."

Honestly, it's all bs, at least, mostly. We're not any poorer and we aren't about to head into a Great Depression. I'd blame half of the worry on sensationalist press.

Oh god.
I saw this segment on The Daily Show with Jon Stewart where the explained how banks are basically selling debt to other banks, by showing a little cartoon of a man 'lifting' an exponentially increasing number of banks until the man falls over and all the banks crash down to the bottom.

I think that's going to happen sooner than we think, unless we do something about it.

People keep complaining that gas prices are so high (about $4/gallon in Jersey right now), but In the UK, it is near £2 a liter in some places. One Gallon is about 4 and a half liters. That is silly money. My mom's flat wasn't worth much when we bought it, and now we couldn't sell it if it was the last place on earth. If you do want to buy a place, hell yeah, it's good, but if not, it's bad.

It might not be officially a recession yet, but if you aren't the richest person on earth, you certainly feel it. Yes, the media are blowing it out of proportion, and right now, we aren't heading for a new Great Depression, but it does need to be sorted out. If not, then yes, we might end up in Recession.

In theUK, this is the problem:
Ministers cannot cut tax because of their fiscal deficit, and they cannot increase public spending because they have already spent that money.

Yes, the Great Depression was a lot worse than this, but it was fixed by a huge world war, so it would be nice if we didn't get to that point.

ChipmunkOnKetamine:

Yes, the Great Depression was a lot worse than this, but it was fixed by a huge world war, so it would be nice if we didn't get to that point.

Which is pretty sad, because America is at war right now, and it's not helping our economy at all.