[planemad]

Are we heading for another recession over the next year or so?

The thoughts of a global recession seem to be gaining momentum with the media and financial analysts predicting another crash.

Whilst none of us have a crystal ball, what is the general consensus of us on here?

[Tengocity]

You're looking for a consensus on here?... good luck!

Definitely a recession ahead, that's as certain as death and taxes, but as to exactly when, impossible to say.

There's a lot of debt in the system, but more with big corporations and nations than with consumers, relative to 10 years ago.

I'd say it depends on the trigger.. for the UK it could be how Brexit plays out, globally it could be anything from trade war escalation, emerging market collapsing under its dollar denominated debt, increasing geo-political strife between US, Europe, China and Russia.

Too much cheap money has undermined the effective and efficient allocation of resources, creating asset bubbles and keeping weak companies going. Governments and central banks have little in their arsenal to deal with it, so when it goes I think it'll be huge.

[Wills2]

Well the issue is many people have an on going recession for the last 10 years since the crash, the UK average wage is £850 lower than it was back then.

We have summarily failed to grow the income of the population and that's a terrible position for the economy and you can't keep expecting people to put it on a credit card, we've got record employment numbers but the wages paid are poor, whilst we've seen an asset price bubble that's not something the vast majority of people have benefited from.

I do think the music will stop again but this time it will be consumer led rather than market liquidity (although what starts with the consumer will feed into the banks), we have a consumer economy and therefore we need consumers with cash in their pocket for it to be sustainable we do need some kind of income redistribution in the form of better quality more productive jobs.

We need a new deal, we need a massive infrastructure plan both digital and physical we need to balance the economy and revive the northern cities and allow them to create jobs but good ones not serving coffee in yet another costa or picking goods in a warehouse for Amazon etc....

[JustChris]

Maybe.

Mindsets of consumers after Brexit will be key. BoE have set the scene with the mini rate rise...ready to give some room for a drop come the day.

[Tengocity]

Originally Posted by Wills2

Well the issue is many people have an on going recession for the last 10 years since the crash, the UK average wage is £850 lower than it was back then.

We have summarily failed to grow the income of the population and that's a terrible position for the economy and you can't keep expecting people to put it on a credit card, we've got record employment numbers but the wages paid are poor, whilst we've seen an asset price bubble that's not something the vast majority of people have benefited from.

I do think the music will stop again but this time it will be consumer led rather than market liquidity (although what starts with the consumer will feed into the banks), we have a consumer economy and therefore we need consumers with cash in their pocket for it to be sustainable we do need some kind of income redistribution in the form of better quality more productive jobs.

We need a new deal, we need a massive infrastructure plan both digital and physical we need to balance the economy and revive the northern cities and allow them to create jobs but good ones not serving coffee in yet another costa or picking goods in a warehouse for Amazon etc....

I agree wholeheartedly. I do think salaries for board level at big companies has got way out of hand. They're the pigs from animal farm lining their own pockets.

I'm all for entrepreneurs who build great companies getting the spoils of what they've built as they've often taken great risks along the way.

But massive stock options just incentives financial engineering not value adding, wealth creating enterprise.

That lot at Persimmon being a prime example.

And doing so while others make very little further down the chain, all adds to the feeling in inequity.

[Watsey]

Originally Posted by Wills2

Well the issue is many people have an on going recession for the last 10 years since the crash, the UK average wage is £850 lower than it was back then.

We have summarily failed to grow the income of the population and that's a terrible position for the economy and you can't keep expecting people to put it on a credit card.

I do think the music will stop again but this time it will be consumer led rather than market liquidity.

Originally Posted by Wills2

I do think the music will stop again but this time it will be consumer led rather than market liquidity.

Arguably its already started, for the reason you mentioned.

Car sales are down. High street spending us down. Housing market is arguably flat.

Disposable income is down or being preserved and the effects are very evident.

[Wills2]

Originally Posted by Tengocity

I agree wholeheartedly. I do think salaries for board level at big companies has got way out of hand. They're the pigs from animal farm lining their own pockets.

I'm all for entrepreneurs who build great companies getting the spoils of what they've built as they've often taken great risks along the way.

But massive stock options just incentives financial engineering not value adding, wealth creating enterprise.

That lot at Persimmon being a prime example.

And doing so while others make very little further down the chain, all adds to the feeling in inequity.

Yep, I have no issue with the self made men and women but these corporate boards that have never risked anything other than other peoples money have been taking the piss over the last 10 years.

[Jeff123]

Originally Posted by LobB

No.

Not within five years.

Agree, the people talking this up generally came out badly from the last one and in many cases, played a part in creating it. Nobody thought it would happen last time, but it was obvious in hindsight that people can’t afford mortgages of 7x their salaries. It generally started with the sub-prime lending and spread from there. Time moves on and we have hopefully learned from the mistakes of 10 years ago.

[Abdul Karim]

Originally Posted by Watsey

Arguably its already started, for the reason you mentioned.

Car sales are down. High street spending us down. Housing market is arguably flat.

Disposable income is down or being preserved and the effects are very evident.

Incorrect. The technical definition widely accepted is two consecutive quarters of negative growth

[R0B]

The High Street is being crippled by Amazon. Would be the same whether consumer confidence was high or low. It's just a change that isn't going to revert.

I'm a business owner and so hope the markets in general keep moving. I am particularly keeping an eye on house prices as we are planning a move, and I'm not about to spend half a million quid on something that'll be worth 350 if it all goes to shit next year. A price crash could equally work for us, though, as we'll retain our current property and buy independently.

[Tengocity]

Originally Posted by Jeff123

Agree, the people talking this up generally came out badly from the last one and in many cases, played a part in creating it. Nobody thought it would happen last time, but it was obvious in hindsight that people can’t afford mortgages of 7x their salaries. It generally started with the sub-prime lending and spread from there. Time moves on and we have hopefully learned from the mistakes of 10 years ago.

We don't learn though, that's why we have economic cycles of bust and boom.

The folk saying it's going to happen are those that have seen it all before.

[Tengocity]

Originally Posted by LobB

No.

Not within five years.

Bold prediction, given we are just about in the longest period of growth in history. If you were right then that would make it 15 years between recessions, which would be fairly unprecedented.

Talk me through the thinking... I'd genuinely love you to be correct!

[....,,,,..,,..]

Depending where you live in the country or the area of society you are from, some would say the recession started a while back.

Some areas have never really recovered from the last recession(s).

I do believe however the UK in general is not as resilient was it once was to handle a recession.

We are too much a consumer society, recent phone threads show this.

We are (specific areas) exceptionally vulnerable to house price fluctuations.

If Carney is correct, could any of those with £500k (or more) houses handle a 35% drop in price?

It would be a sort of big reset button.

(Ironically, watching Mega Yachts on Ch4 lol)

[Abdul Karim]

Originally Posted by Brigand

Depending where you live in the country or the area of society you are from, some would say the recession started a while back.

Some areas have never really recovered from the last recession(s).

I do believe however the UK in general is not as resilient was it once was to handle a recession.

We are too much a consumer society, recent phone threads show this.

We are (specific areas) exceptionally vulnerable to house price fluctuations.

If Carney is correct, could any of those with £500k (or more) houses handle a 35% drop in price?

It would be a sort of big reset button.

(Ironically, watching Mega Yachts on Ch4 lol)

Carney has been consistently wrong. Negative growth of 35% is merely him not wanting to change the habit of a lifetime.

[Broncho]

Originally Posted by Brigand

Depending where you live in the country or the area of society you are from, some would say the recession started a while back.

Some areas have never really recovered from the last recession(s).

I do believe however the UK in general is not as resilient was it once was to handle a recession.

We are too much a consumer society, recent phone threads show this.

We are (specific areas) exceptionally vulnerable to house price fluctuations.

If Carney is correct, could any of those with £500k (or more) houses handle a 35% drop in price?

It would be a sort of big reset button.

(Ironically, watching Mega Yachts on Ch4 lol)

I could if that scenario happened but I’d lose an awful lot of equity, some of my friends would be absolutely shackled.

New builds made of cardboard and sold at outrageous prices because you get the keys and sit back in a shiny new house that evening and order a domino’s pizza, no effort required, I have 3 or 4 friends in this position if a recession comes then they’re knackered.

ETA Carney is a doom monger and always seems to be a page behind.

[teaston]

What we really need is this ridiculous Brexit thing to go away and everyone will start spending again!

[Abdul Karim]

Originally Posted by teaston

What we really need is this ridiculous Brexit thing to go away and everyone will start spending again!

Not long to wait, just six months and it's over.

[rich100]

Originally Posted by Count Bernd Von Ottovorde

Carney has been consistently wrong. Negative growth of 35% is merely him not wanting to change the habit of a lifetime.

Agree, Carney is little more than a fortune teller in a sharp suit... opposite of what he says is likely to be correct.

How fortunate we are that he's volunteered his services until 2020 fek knows where we'd be now without his "forward guidance"

[teaston]

Originally Posted by Count Bernd Von Ottovorde

Not long to wait, just six months and it's over.

Unfortunately unless there’s a vote to stop it happening, in six months is where the real problems are going to start!

[Wills2]

Originally Posted by Jeff123

Agree, the people talking this up generally came out badly from the last one and in many cases, played a part in creating it. Nobody thought it would happen last time, but it was obvious in hindsight that people can’t afford mortgages of 7x their salaries. It generally started with the sub-prime lending and spread from there. Time moves on and we have hopefully learned from the mistakes of 10 years ago.

Played a part in creating it? You mean we lent money to home buyers in the US that couldn't pay it back and then packaged it up into cdos and then got that trash rated aaa and then sold it on?

I very much doubt anyone on this thread did that.

[Jeff123]

Originally Posted by Wills2

Played a part in creating it? You mean we lent money to home buyers in the US that couldn't pay it back and then packaged it up into cdos and then got that trash rated aaa and then sold it on?

I very much doubt anyone on this thread did that.

I didn't mean the people in this thread, i meant the ex-Lehman Bros guys etc...

[MashinBenzin]

Originally Posted by Count Bernd Von Ottovorde

Not long to wait, just six months and it's over.

It's over....Ah, reality bites and you are finally coming around to the remainer's viewpoint on what is likely to happen