Britain's Credit Crunch

[AmyAnn]

What are your opinions on this?

To be honest, I don't understand why this has occured, but I overheard that it was because people were over-using their credit cards too much or something. So far, many stores have closed down, including WoolWorths who closed their last store yesterday. Alot more are supposed to close such as Adams and alot of anime/manga stores in Glasgow.

WoolWorths were so desperate to get money that they were even selling their stacking shelves and check-out desks here in Greenock. I bet you could have taken the windows and they wouldn't have bothered.

[Menchi]

Yeh our Town Centre won't feel the same now without a WoolWorths, heh

And places like Zavvi now in Administration and I heard PC World have cut quite a few jobs too

As long as Poundland and play.com still exist, it's all right with me XD

[Russ]

It's more the result of a lot of bad loans, especially mortgages, having been made over the past decade or so - many of those defaulted or threatened to do so, costing banks lots of money. As a result, they don't have as much to lend now, and are very leery to lend out what they have.

[ig.]

Hey, who knew that giving enough money to enough people who weren't able to pay it back would eventually fuck up the economy? Huh, everyone did?

And they did it anyway? Huh.

Hey amy, how about revising the original post to reflect the meltdown from the global credit crunch? This thread has the potential to be quite popular for folk from many a land as the bitterness of this wintery economic climate cuts deeper...

[exdevlin]

Yeah, that's basic economics there. In a bid to encourage more spending to help economic growth, they said 'hey, let's give out more loans!' Of course, that more or less resulted in a lot of people not being able to pay back those loans after a while, so now you're going into an unbalanced money supply, etc etc etc etc. Oh lord, Macroeconomics.

[fthrll]

I think the biggest problem, beyond irresponsible loans & credit (which were wrong, but petty in terms of money for banks) was in housing.

There was a real push for people to own their own properties - seen as an investment, not as a place to live - and the prices soared.
As an example, about 30 years ago, it was possible for someone to buy a smallish house for about £2,000-£4,000. Their annual combined salary might be about a third to half that. That same house now costs about £160,000 - £180,000. People's salaries haven't gone up so much. They may now have a combined salary even of £40,000 (before tax) if they have pretty well-paid jobs, but that doesn't begin to pay the same percentage.

It was fine for people who had property to begin with, but for young people, it's absolutely impossible to buy a home - which even now is still being sold as the ultimate ambition.

To get new people into the housing market, banks started giving 100% or even 110% mortgages. People were being lent more than 5, 6x their salary.
Now they're not spending in shops because a lot of people are struggling to pay their mortgages & also heating bills.

Generalising a lot, obviously - it's not the same for everyone, but it's absolutely crazy. :cry:

[~*Melancholy-Of-Scheris*~]

Here woolworths where selling the cash registers o.0

All the prices are going up too on everything!! :sweat (evilness)

So basically the future:
-Internet Shopping/TV Shopping
-Loaf of bread £5.50 < actually i saw one for £4.00 in my bakery i was disgusted!! I,d pay £1.99 at my local!!
-None of us can afford a new home < my house is a two bedroom house, small as heck, 1 kitchen, 1 bathroom, a living room and a cloak room as you walk in. A MINUTE cloakroom at that. and how much is the mortgage i ask?? £400,000+ (thats all my mom would tell me <.<)
-Also, the gas and electric keeps running out! How much do these people want us to put into that meter? We are getting less gas/electric for our money every year.

Yep..who knew that giving enough money to enough people who weren't able to pay it back would eventually fuck up the economy?

[Russ]

Yep..who knew that giving enough money to enough people who weren't able to pay it back would eventually fuck up the economy?Ah, but you see, it was all for a good cause - refusing to loan to people who couldn't pay it back disproportionately hurt minorities, so of course such behavior had to be forbidden.

[fthrll]

Ah, but you see, it was all for a good cause - refusing to loan to people who couldn't pay it back disproportionately hurt minorities, so of course such behavior had to be forbidden.

Well, that certainly wasn't an issue in the UK, anyhow.
But there was huge pressure to take out loans because they got commission.

My bank sent me a credit card through the post TWICE even though I have never had one and absolutely refuse to have one (and legally you have to sign something to get one), so I had to go in twice and hand it back to them in pieces. They weren't happy & said I 'should think again' as it was 'more sensible than saving up'. I swear. I was furious.

They also used to hassle me all the time to take out a loan I wouldn't have been able to afford every time I went in there.

[exdevlin]

My bank sent me a credit card through the post TWICE even though I have never had one and absolutely refuse to have one (and legally you have to sign something to get one), so I had to go in twice and hand it back to them in pieces. They weren't happy & said I 'should think again' as it was 'more sensible than saving up'. I swear. I was furious.

They also used to hassle me all the time to take out a loan I wouldn't have been able to afford every time I went in there.

It's not QUITE so bad here in Canada, but they do dangle a lot of these "extra money" options in front of us. I've got one credit card, and only one, and last year alone, I received over 30 letters staying "YOU'VE BEEN PRE-AUTHORIZED TO RECEIVE THIS PLATINUM CREDIT CARD" with a form already filled out with half of my information. I ignored these of course, but I've never had banks actually just GIVE me a credit card. That's a bit ridiculous.

Interest rates have dropped insanely as well. We're below 1% interest now, which is great for people who are mortgaging their houses on floating rates already, but not so good for anyone my age who wants to move out and buy their own place. Housing prices have dropped a bit, but it's still a monstrous leap from where it was 6 years ago.

[Menchi]

My bank sent me a credit card through the post TWICE even though I have never had one and absolutely refuse to have one (and legally you have to sign something to get one), so I had to go in twice and hand it back to them in pieces. They weren't happy & said I 'should think again' as it was 'more sensible than saving up'. I swear. I was furious.

I got a credit card, my building society just leaves me alone ..........until I forget to pay 'em xD

[TheCrimsonPig]

You know.... times are tough.... but... we'll all pull through one way or another. I'm sort of looking forward to the challenge. Although I do very much envy some of the previous generations who just burned through money like it was nothing and I am particularly appalled at the sheer number of nimrods who are on food stamps but still buy stuff that is way beyond their budget, even in these hard times. Seriously, if you want a flat-screen HDTV, earn it! Don't put it on plastic and ask the government to pick up the tab.

[exdevlin]

LOL Nikkita -- it's TRUE. We're practically racist, and still ARE. If you're an immigrant trying to make a start, GOOD LUCK finding someone to give you a credit card if you aren't going through Visa. My dad had that issue, and has a massive HATE towards Mastercard because they wouldn't give him a credit card when he first came to Canada. Visa, on the other hand, is more fair. Dad's first mortgage had to be obtained from a government program that helps immigrants find and mortgage their first home.

But yeah, in general these days, the Banks are more willing to lend out money, now that they fear recession. Just as long as they don't put us over into inflation.

Speaking of businesses folding: the porn industry just asked the government for a bail-out of $5 billion!

[exdevlin]

I like that our government is actively regulating things like interest rates and such. They ARE trying to keep things in check after all...

And as for Mastercard, the limit on my Visa usually doesn't go up unless I ask for it. They usually don't just randomly up your limit unless you need it, which is nice. I hear MC likes to just raise it whenever though, and one day you look and realize your credit limit is twice what it used to be.

[exdevlin]

"LOL, U QUALIFY TO SPEND WUN MEEEELLION DOLLARZ!"
Good luck with paying THAT back on a regular basis O_O

[exdevlin]

Indeeds! Congrats on getting it all paid off and becoming a responsible consumer again lol. I know it can be tough on people when they don't realize just how much of a hole they've dug themselves into.

[Koneko Nya]

Gaow... I was very upset when the woolworths in my town closed down, me and my friends were like "Where will we get our Pick a Mix now" :(
I've already lost my part time job because of this credit crunch, the company had overspent money and had to get rid of some part timers, it sucks!

[MaNa Shuffle]

Yeh our Town Centre won't feel the same now without a WoolWorths, heh

And places like Zavvi now in Administration and I heard PC World have cut quite a few jobs too

As long as Poundland and play.com still exist, it's all right with me XD

Woolworths's demise saddened me. Now the shopping centres look empty without it.

Zavvi (and music stores before that) always shutten down. As long as we still got HMV,GAME, and Gamestation. I'm happy.

This whole credit crunch is making me worry about jobs since theres been alot of cuts due to closed stores :(. I know someone who now is jobless.
It wasn't even a known store I think but still...It sucks and I fear that job hunting just got a little more cramped.

WHSMith also recieved stuff from woolworths also. I couldn't order a game for that reason (Then how did I get that Dir En grey CD from then? The Sky? XD).
Didn't Zavvi did that? Oops.

I blame fraudsters and people who constantly use credit cards (which lead people into debt) for this (kinda). It's called budget and save. use it!

[Jackthequestionable]

yeah it pretty much sucks, my mall is practically empty and the county just declared that its out of unemployment money in a county thats half unemployed.

But im doin okay, for now:crap

[dominoprincess]

I actually hate the term credit crunch so much that it has gone beyond hate.

I dont feel the effects of the credit crunch. Well, apart from we're not doing a tour of the USA again this year for vaykay because the whole dollar/pound thing went down the crapper. But, really, we're going on a nicer holiday this year than we would have without the credit crunch. My dad said in the car today, he might as well just keep on spending more money, because banks are so crappy. Its not the best theory, but its sure making us happy........for the moment.

Anyways, people are losing their jobs, and thats just not fun. It should frigging stop, end of. Not sure how thats ever going to happen though XD!

[MaNa Shuffle]

The amount of jobs that are cut is getting ridculious!

The phrase GET A JOB is getting pointless now.

more shoe shops are shutten down now. >;(