“Woollies” - that great high street institution - in receivership. I can’t believe it!
November 27, 2008 | 1 Comment
I don’t know about you, but I was shocked yesterday by the announcement that Woolworths was going into liquidation with an enormous £385 million of debts that have been prevented from getting any larger and have forced them to look at their options.
Everywhere I went this morning, people were talking about it. Generations have bought their pick and mix and bargain toys there as well as those weird and wonderful household items that you just didn’t seem to be able to find anywhere else. I salute you Woolworths for all that you have been over the years. You will be a sadly missed presence in our town centres!
As the news was announced last night, there were other casualties of the credit crunch fallout looking like they were heading the same way - MFI, Dolcis, Ethel Austin to name but a few AND THIS IS BEFORE CHRISTMAS!!!! If businesses that have weathered out many a recession are going to the wall now, where will it all end as the post Christmas slump in spending comes around.
I don’t know about you but I think the enormity of this global financial crisis is starting to sink in. Yes. I have been watching the news. I know about the extent of the financial crisis. It is the hidden depths of its impact that is starting to reveal itself….and, as I meet people in the North of England who have been laid off from different jobs more than once in the last few months, I don’t think I’m alone in wondering where it will all end.
Can the Credit crunch be reversed by central banks?
November 23, 2008 | Leave a Comment
The last few weeks have seen a whole lot of negotiation by governments with central banks in the hope that the huge cash injections that were eventually forthcoming would avert the worst effects of the credit crunch. Wold leaders have been discussing together how they can work together to save the world from the horror that the subprime crisis has revealed.
How can central banks reduce the impact of the credit crunch?
The federal government and their opposites across the world have been pumping more money into the financial markets in hope that this will allow funds to move more freely so easing the credit crunch. Basically, this allows more banks to borrow more money more cheaply. These lower borrowing rates will also be secured against lower value collateral.
Will the central banks be sucessful in reversing the credit crunch?
What these arguments for federal cash injections into the banking system are ignoring is that the money is being used to try to patch up the injuries to the system caused by bad lending decisions. It now seems unlikely that a major recession can be avoided. I also suspect that inter-bank and bank-customer trust has been so badly impaired that we will never quite go back to the “good old days” of freely available credit quickly supplied. Nor should we.
The economic backdrop in the U.S, the U.K and Europe is appalling and worsening too. Suddenly all the lenders are a bit skittish and yesterday’s good risks for lending are now not looking so good a risk…especially with possible redundancies around the corner as the recession deepens.
This means that, whilst there is already a lot of bad debt out there, there will be more bad debt looming as jobs get lost and spending is cut back. Even other banks will take a long time to look like a good credit risk as nobody seems to know what dark secrets lurk on eachother’s balance sheets. It will take at least a year before that kind of information becomes publically declared and so the decision to lend to other banks can be made based upon transparently declared facts.
Everyone is starting to hoard money ready for any surprises in their own financial affairs…consumers, banks and businesses. I wouldn’t hold your breath that these cash injections are going to be made available to customers too quickly. All the banks have had a major scare and need time to catch their breath, see the impact upon their own financial stability, work out what on earth happened and try not to do it again.
Saving money on fashion (Part 4)
November 21, 2008 | Leave a Comment
When saving money on fashion, there are lots of small tricks that can make significant savings but still leave you looking a million dollars.
Use luxury fabrics to create a top dollar look
Using those luxury fabrics like chiffon, satin, silk, cashmere etc can make an outfit look as if it was expensive. Buy these items from discount stores and you will save a fortune whilst looking great.
Find those unusual items cheaply abroad
Whilst on holiday you can pick up some amazing bargains in markets that have a unique style that you won’t find anyone else wearing where you live. Use these to emphasise your individual style. Fabrics and silks, leather shoes, bags and belts etc can all provide stunning and unique outfits to wear back home and remind you of your travels.
Ebay…the home of the great fashion bargain
Ebay is a great resource for those of us who do not travel much….fashions and accessories from all around the world are up for grabs from the comfort of your own computer. There are serious bargains to be had…including designer items. If ordering from abroad, be aware that some items may need duty paying on them …so check that out with the seller first.
Supermarkets have some great fashion items too
Mix and match your wardrobe with items picked up at the supermarket whilst doing your food shopping. There are some amazing up to the minute items that will save money of fashion too.
Yard sales / Car Boot Sales / Charity Shops
If you want to pick up bargain designer items, car boot sales, yard sales and charity shops in the more affluent parts of town can be a real goldmine. Even if they are not quite the look you were after, consider whether they could be re-modelled into a new item of clothing.
When will the credit crunch end?
November 19, 2008 | 1 Comment
What do we need to know when assessing when the credit crunch will end?
The credit crunch is essentially the constriction of available credit available in the global economy for institutions to lend to eachother as well as the public. A important part of how banks earn money is by lending to eachother as well as predicting exchange rate fluctuations and buying and selling currencies in order to profit from those fluctuations in currency value.
The way in which banks assess how much they trust eachother in the UK is measured through something called the Libor. Fluctuations in the Libor rate tell us how much banks trust eachother at the moment….as a result, this figure is a good way of assessing the extent of the credit crunch.
The Libor and swap rates between banks are used to work out how much they should be charging for new mortgages and loans. When everything is running smoothly in the financial markets, we would expect the 3 month Libor rate to average between 0.1% and 0.2% above the bank rate.
At the start of the credit crunch (August 2007) the Libor rate soared higher than this signalling problems ahead. By the summer of 2008 it was recovering a bit but the collapse of Lehman Brothers in September 2008 caused the Libor rate to spike again as financial markets panicked.
In the UK the $700 billion bailout of banks in the U.S had a negligable impact (it was more than 6% above the basic rate by then). It wasn’t until Gordon Brown arranged a similar cash injection into the UK banks of £40 billion has improved the Libor rate in the UK (modestly). The significant drop in interest rates has also made modest improvements as well.
So, when will the credit crunch end?
It is important to consider the knock-on effect of the recession, redundancies and cautious spending when answering “When will the credit crunch end?” All of these factors will have an impact upon how how long it takes banks to start trusting eachother as well as customers to be able to repay monies that they have borrowed. There are slow and cautious signs of banks re-building their trust in eachother following these major cash injections by U.S, U.K and European governments. However, the financial world nolonger feels like a safe place for most people and businesses as everyone seems to know of poeple who have been badly burned by the fallout of the credit crunch.
The credit crunch will end….but we may need to wait several years for the full fallout of the credit crunch to work out of the system and trust levels to be restored to where they were in 2007 before it all began.
Saving money on fashion (Part 3)
November 16, 2008 | Leave a Comment
Fashion is one of those luxuries in life when the cash flow is tight….you don’t actually need it…but it sure makes you feel a lot better knowing you look good! Today we consider how to save money on fashion through researching and choosing carefully selected items.
Try to shop only when you really need something
If you consider yourself to need a specific item, plan the shops that you will visit that are most likely to stock it. When you get there go directly to the specific section of the store you need.
Resisting traipsing around other departments and stores will reduce the likelihood of not saving on fashion by making impulse buys.
Trying to buy staple fashion items on special offer will save money on fashion
We all need those items like underwear, tights, rollneck tops, leggings etc that tend to wear out quicker than other items in the wardrobe. By cultivating a habit of making use of 3 for 2 offers of buy one get one free (BOGOF) deals, a lot of money can be saved on fashion items that are essential and disposable leaving spare cash for the fashion items that bring you joy.
Save money on fashion by buying items at discount that have long term fashion appeal
We’ve all done it….been seduced by the sale rail and bought an item that turns out not to suit us as well as we thought …or even does not fit right (because we loved it but our size wasn’t left in the sale). These are the main behaviours that waste a lot of money on fashion.
Top tips:
- Arrive at sales early so that you can get the pick of the best items.
- Have a clear idea in your mind about which items you need in your wardrobe and try to resist looking at other items (you’ll only need to get the needed items in addition to them).
- Don’t but something just because it’s a bargain….will it still be cool to wear next season or does it have a limited fashion lifespan?
Save money on fashion items that will hold their value
If you need an expensive item like a coat, boots or a handbag, it is always best to buy something stylish but with a long fashion lifespan rather than something quirky that will be out of date next seaon. In this way your purchase will hold its calue and appeal and you will get better value from it.
Use fashion accessories to bring your image up to date and save money
In this way you will save money on fashion by not needing to discard such large and expensive items when that look has gone out of fashion. A few accessories can bring your wardrobe staples up to date without spending a fortune.
Who is to blame for the credit crunch?
November 14, 2008 | Leave a Comment
Are the banks to blame for the credit crunch?
During the economic boom, banks became ever more lax about who they were lending to. The credit bubble was huge and there seemed to be plenty to go around. The huge profit margins on lending eventually lending institutions to get greedy and less discerning about who they loaned money to. They were starting to gamble and consumers lapped it up. Eventually, with 100% mortgages, cheap loans and cheap credit cards, people were going to find it hard to repay debts and the bubble burst.
In America, subprime mortgages were being widely made to people with a poor credit history who would find it difficult to pay. This has been a major factor in banks now being wary of lending money and so is a major cause of the credit crunch.
In the United Kingdom house repossessions are up by 40% but U.K. bankers still largely blame the collapse of the subprime market in the U.S. The subprime loans were billed as being Triple A star safe loans. Mortgage companies selling these loans played a huge part in the credit crunch as over confidence lead to complacency and less discerning lending decisions being made.
How far are consumers to blame for the credit crunch?
Consumers need to carry some blame for taking out loans that they could not afford to pay back. However, they were also encouraged into inappropriate borrowing by aggressive sales by lenders, inappropriate loan sizes and too high a credit card limit. The lenders were keeping their eyes more on the huge potential profits to be made out of interest payments and took their eye off whether consumers could realistically repay their debts if they kept being added to.
The old trick of 0% interest for 6 months was a good one for getting people to transfer lending companies…but the ides was that the original loan would be repaid with the new one. As consumers’ budgets got squeezed by interest payments, credit cards were still being used rather than paid off and the acount being closed.
Agressive mortgage lending made it easier to buy a home. This forced realty prices unnaturally high meaning a 100% mortgage could easily leave a buyer with negative equity when the bubble burst.
Are estate agents to blame for the credit crunch?
All estate agents are guilty of is encouraging people to buy at the peak of the housing boom. Realtors who had commission arrangements for selling particular lenders’ mortgages will have played a lesser role in the credit crunch and they encouragesd a housing boom. However, this could not have happened without mortgage lenders making the money available in the first place.
Is the government to blame for the credit crunch?
Many argue that the government should have ensured that the central banks controlled the situation more tightly and prevented irresponsible lending. The fallout of the credit crunch has shown that a lack of central control can have massive implications.
Further questions arise over whether banks should be bailed out by governments as this partly exonerates them of the moral responsibility for their actions and places further financial stress at consumers and businesses doors.
Saving money on fashion (Part 2)
November 12, 2008 | Leave a Comment
In addition to keeping the neutral essentials of your wardrobe (smart jacket, cardigan, jeans, tailored trousers, little black dress etc) in neutral colours, there are ways to save money on fashion whilst getting an up to the minute individual look.
Discounted catwalk looks at the mall.
All the main shops at the mall take their styles and derive them from that season’s best catwalk looks. High fashion items, therefore, do not always need to be with a high price designer price tag. Look around at the mall for high quality seasonal looks to bring your wardrobe up to the minute at budget prices.
Charity shops can save money on fashion
Whilst charity shops generally deal in second hand clothes, many also bring in discount labelled stock that are sold much more cheaply than at the mall. Add to that vintage looks or items that can be adapted (with your sewing machine) and you will soon create a unique statement of the current fashions and the confidence that you will never be in the same clothes as anyone else at an event.
Where possible use cash instead of credit cards to save on fashion
Credit card payments cost huge amounts of money by the time you have paid them off. Also, in times of impending recession, the last thing anyone needs is to increase their debts when job security is uncertain. Many banks are also suddenly reducing peoples’ credit limits….so make sure you can deal with that my not racking up debt.
Payment by cash is a great way to really appreciate what you are spending on an item and to reflect on whether it really is the bargain you thought it was.
Set a monthly clothes budget
That fashion item to cheer us up on an off day (and, lets face it, with the credit crunch and recession a lot of us are having bad days!) can make a real hole in the month’s budget. Despite this, clothes do wear out or get shabby so its not realistic to cut right back on the family clothes budget.
When people enter an Independant Voluntary Financial Arrangement with creditors or, worse still, go bankrupt, the type of budget that is ofetn set for all clothes and shoes is $50 per month per adult and £25 dollars per child. It is possible to be clothed and shod on that budget from discount stores…but not easy. This will help to focus the mind if you feel that your debt levels are too high and you are considering spending a lot of money on a clothing item. Better to save money on fashion now by setting a clothes budget than to face these restrictions if made bankrupt.
Saving Money on Fashion (Part 1)
November 10, 2008 | Leave a Comment
Out with the old and in with the new..saving money on fashion exchanges
Many of us have items in the wardrobe that we never wear yet fancy some item from this year’s trends instead. If you can’t afford to spend money on fashion, dig out those unwanted items and, with the better quality items, log on to either www.ebay.com or www.whatsmineisyours.com. By either selling your unwanted items of exchanging them you can save money on fashion and clear out unwanted clutter.
Get creative to save money on fashion
Making your own clothes is not as hard as it might seem. Sewing machines start at around $40 for a very basic but adequate model. This will give you the chance to accessorise your existing clothes so as to bring them up to date, re-work them into new garments (or clothes for the kids) or even make new items from scratch. It’s worth a try as many sewing pattern cmpanies provide patterns with detailed instructions for complete beginners. It’s a new skill for you repertoire and a very satisfying way to save money on fashion too!
Designer clothes on a budget
Visiting designer outlets can be a great way to save a lot of money if you really must have designer brands. Often you need to set aside a good chunk of time to hunt through the clothes so that you can pick up the best bargains that will suit you….but it could be worth it for a 50% plus saving on fashion.
Avoid hidden costs like dry cleaning
Dry cleaning can really bump up the cost of maintaining a fashion item. make sure you check the labels and avoid items that will be costly to clean so that you save money on your fashion items…..particularly if it is for kids as they will need their clothes cleaning more often than adults might.
Discount vouchers can save a lot of money on fashion
Discount vouchers can help you to make significant savings on fashion (provided you don’t allow your self to buy extra unwanted clothes that will stay at the back of the wardrobe unused. You need to be really hard headed to save money on fashion as those tempting sales offers and discount vouchers encourage spending against our better judgement. Be 100% sure the items suit you and you will wear them before parting with your hard earned cash.
It looks like a recession is looming….
November 8, 2008 | Comments Off
<h3>Is recession looming or has recession loomed already?</h3>
They’ve been talking about “Is recession looming?” for the last couple of months. However, anyone running a household and working (or even made unemployed already) could have told these world leaders and their financial advisors that recession has started….let alone looming!
In the malls, on the high street and in the supermarkets, most of us are adapting our spending behaviours. This year, for the first year, my extended family have had a present amnesty at Christmas….ignoring gifts for adults and giving something small to the kids. I don’t think we’re unusual in that respect….we have seized an opportunity to arrest a trend for excess at thanksgiving and christmas and to get back to the roots of the reason for the season. If we’re not unusual though, the shops are going to feel recession soon enough this year.
Its all spin and propaganda from the world leaders. Let’s see what today’s Central Bank interest rates cut yields for borrowers in the U.K….will we all run out spending money to boost the economy for Christmas. I don’t think so. Globally, we are all suffering as a result of decisions made by lenders and commerce. Reductions in oil prices are not being passed down to the consumers so retail prices continue to be elevated by stores.
I personally believe that the changes in behaviour by consumers is going to become a deep seated rather than a transient recession provoked behaviour. We have all learned hard lessons about borrowing, cost of borrowing and cost of living….it will become part of the psyche of a generation.
Obama choosing team to turn the U.S economy around
November 6, 2008 | Leave a Comment
Obama wins the Presidential Elections
Well, unless you were living in a bubble these last few days, you couldn’t fail to notice Obama’s stunning election result.
He has already set about selecting his team that will handle his transition to power….particularly his new Treasury Secretary and Wall Street continues its turmoil of recent months. Possible names for this role include Clinton’s last Treasury secretary Larry Summers, former Federal Reserve chief Paul Volcker and investor Warren Buffett. Another possible candidiate is Timothy Geithner (president of the New York Federal Reserve) who has been executing the US central bank’s sudden explosion of market activity.
Has he inherited a poisoned chalice with the current financial crisis at the start of his presidency?
In his acceptance speech, Obama reasurred voters whilst warning them that this was going to be a long haul with no quick fixes. He also stressed that he would listen to people’s opinions and move the U.S back into economic growth, whilst stressing that this process may take longer than one term.
It is easy with a great orator such as Barack Obama to imagine that those rousing words can translate to action as quickly as the image of a brighter future for America is planted there. He was, however, right to be reticent. The severity of the shock due to the credit crunch that the world has faced and the fallout from that cannot be erased by a magic wand. It will take hard work. It will leave scars. Painful lessons will be learned about national as well as personal financial management. Obama was right to warn the American public that this would not happen briskly.
Obama has been feted by the media as his key accomplishment to dae being that he is the first black American President. Whilst, with looking at the history of the country, this is remarkable, I feel that we need to put that to one side and see the man that he is….he has shown so many facets to what he can offer the U.S public during this campaign.
I wish him well with the work ahead and pray that at the end of his term he goes down in the history books as not only the first black American President, but the President that turned around the U.S economy and made great strides towards peace and freedom from terrorism.