Stock Market

[Samdy Gray]

All this doom and gloom on the news this morning, markets down 5.6% yesterday, expecting even more today, we're going into a reccession, it's all America's fault and the world is going to end.

And within an hour of trading this morning shares are back up 2.4%.

Fucking media scaremongerers.

[Sippo]

If we went it reccession what does that actually mean?  :?

[BANGKOK RED]

The media are responsible for much of it anyway and should be more responsible. When investors see headline' stating recession ect. they are obviously going to consider selling.

[janaage]

That's where decent advice should come into play though.

Recently me and the Mrs have been looking into moving, it's starting to get annoying when the estate agent pulls a disapproving face when I tell them our current mortgage is with Northern Rock

"what's up with that" I ask

"oh, nothing, nothing at all"

"why pull that face then"

"oh no, no, Northern Rock's fine"

It's about time estate agents were regulated properly as currently they seem to have no more knowledge than the average person on the street.  If I was someone not up to speed with what's going on I think I'd have had a little element of doubt in my head regarding the biggest debt in my life.

[Samdy Gray]

If we went it reccession what does that actually mean?  :?

Technically, its a decline in Gross Domestic Product (GDP) or negative economic growth over two or more succesive quarters.

[Batch]

And within an hour of trading this morning shares are back up 2.4%.

A couple of hours doesn't prove anything either way though.

[janaage]

It happens the economy works in cycles, if it's time for a recession then we'll have to tighten the purse strings til we come out the other side.  

Anyway isn't the fear (that has caused this market decline) due to the possibility of the Americans heading for another recession, we're just heading for a slow down in economic growth?

[Sippo]

If we went it reccession what does that actually mean?  :?

Technically, its a decline in Gross Domestic Product (GDP) or negative economic growth over two or more succesive quarters.

And in English...

[janaage]

The economy for two succesive quarters (so 6 months or more) produces a loss.

Interest rates may be cut to encourage spending, although that could cause inflation which goes against the Governments targets.  I think.

[BANGKOK RED]

If we went it reccession what does that actually mean?  :?

Technically, its a decline in Gross Domestic Product (GDP) or negative economic growth over two or more succesive quarters.

And in English...

In laymans terms, more businesses close than start up, and people spend less money.

The drop in spending can be started by a number of thing's, and this has an effect of decreased revenue for producers. Profit's drop, the business is forced to close leading to the loss of job's. Exponentially the loss of jobs leads to an even sharper drop in spending and so on.  Usually a recession can be nipped in the bud by the government stepping in and spending big, usually in the form of tax cuts to encourage people to start buying again, but sometimes it spiral's out of control.

[Bushey Boy]

Estate Agents are a nightmare, went to view a house for a mate who posts on here, £135k would of taken about 130k but needed 10 - 15k being sold, I asked him how much the done up one achieved next door, he replied 145k one quick phone call and it was found out 130k was sale price, needess to say my mate found a lush place elsewhere

As for a recession, the banks are tightening however the markets should all be fine by the first quarter of 2008/9.

[land_of_bo]

Jan - fuck all wrong with having a mortgage with NR, you owe THEM money. If anything happened to them and they went bust then wahey, debt written off. If they are bought out by another lender then the debt is just transferred to the new lender. (I just moved my mortgage away from them, but not 'cos I was worried but my fixed deal had come to an end and I got a better deal from Abbey).

[Samdy Gray]

In laymans terms, more businesses close than start up, and people spend less money.

The drop in spending can be started by a number of thing's, and this has an effect of decreased revenue for producers. Profit's drop, the business is forced to close leading to the loss of job's. Exponentially the loss of jobs leads to an even sharper drop in spending and so on.  Usually a recession can be nipped in the bud by the government stepping in and spending big, usually in the form of tax cuts to encourage people to start buying again, but sometimes it spiral's out of control.

That's pretty much spot on, but I suspect it's a cut 'n paste job  

Although in this current case it's not so cut and dry, spending is quite low but inflation is still reasonably high because of property prices and mortgage payments. The BofE have cut interest rates which should lower mortgage payments and ease inflation in that sense, but then it's making cheaper credit available to people which will increase spending and force inflation up again. Vicous circle really.

[Sippo]

Our mortgage is with Northern Rock....very very unlikely they would go bust tho  

[janaage]

Exactly NR will not go bust, and therefore the debt won't be written off.  Like you Bo I'll be changing mortgage provider when we move, not because I have a problem with NR just that we'll now be able to get a much better IR elsewhere!