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Financial crisis: Eat, spend and be merry
Topic Started: Oct 27 2008, 06:31 PM (641 Views)
ds9074
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Admiral
Quote:
 
Financial crisis: Eat, spend and be merry - this is not the end of the world

By Boris Johnson

I don't want to seem indifferent to suffering, and I don't want anyone to accuse me of minimising the likely effect of the recession, because the coming months will very probably be a lot tougher - for millions of people - than the boom times we have all recently enjoyed.

But after reading the BBC's special market crisis website, complete with its jagged red arrow pointing at the floor, and after hearing the pornographic glee with which we are told that another small country has gone up the spout, and after Mr Bean, the Deputy Governor of the Bank of England, has informed us that this could be the worst financial crisis in history, I am afraid I want to thrash my FT on the table and shout, Whoa! Come off it, folks! This isn't the Black Death. Pinch yourself. Are you still there? Got a pulse? Thought so. Look out of the window. Those aren't zombies. They are men and women engaged in the normal business of getting and spending.

This isn't some disaster movie about a virus from Mars. It's a recession, a downturn, a correction of a kind that is indispensable to any kind of human activity, and it does not require that we all go around under a special kind of credit-crunch pall. It does not mean we have to cancel all parties and talk in hushed credit-crunch tones. It doesn't mean we have to line our rooms with newspaper, get in the foetal position and live on tins: in fact, it means the opposite.

It was pretty disturbing, on Saturday, to read a hymn of hate, in this very newspaper, about the incompetence of the political class and their grossly inappropriate decisions to take holidays in July and August, just when the financial storm was gathering. Not since Earl Haig, we gathered, had there been such blithering myopia about the impending slaughter.

Well, I can scarcely complain about pieces attacking politicians, since I have made a pretty good living out of them myself. But if we ban holidays for the British Establishment, where will it end? What about restaurants? What about taxis? What about going to a film on a Saturday night? If we are not careful, a puritanical pall of disapproval will spread over the economy, vetoing consumption, nixing hope.

I am not suggesting that those in debt should add to their problems by trying to double up on their credit cards; I am thinking more of the people out there who still have dosh. There are quite a few. There are the hedge fund boys who have made a mint by shorting the banks, and then there are all the knuckle-cracking receivers who will do well from the coming bankruptcies. There are the oilmen, still awash with profits after the recent price spikes. And then there are all the people on dependable fixed incomes such as - gnash, gnash - the BBC's foul-mouthed multi-millionaires Russell Brand and Jonathan Ross, unchastened, unpunished, still laughing themselves sick on their mountains of taxpayers' gold. What is the point of asking such people to protect their loot? Whom does it help if they keep it in their Luxembourg bank accounts?

I read the other day that the credit crunch had affected the dress-procurement strategy of the Queen. Sensitive to the mood of her subjects, she had decided not to lash out on any new frocks, but to recycle the old ones. I read that with alarm. Who is giving her economic advice these days? Now is exactly the moment for the Queen - who has a bob or two - to buy dresses, now when the milliners and dressmakers of London could do with a right royal tonic. This is not the moment for dowdiness and self-sufficiency; this is the moment for a life-affirming splurge.

We should remember that the boom-slump cycle is a natural part of our history; indeed, it is indispensable to our psychological make-up. It is like love. It is a basically incurable condition, and we revert to it again and again. First. we conceive the passion - the Tulip Mania, the South Sea Bubble, the dotcom or the property boom - and then we bicycle-pump our hearts with wild hormonal elation, and every time it happens we tell ourselves that this is the big one, this time it's real, this time we have broken the paradigm; and we invest with ever more irrational exuberance, and though some people occasionally tell us that the love-object is not worth it, we don't see it that way, of course we don't, since our exuberance is irrational.

And then it turns out that we have been in some way deceived, and the bubble bursts, as bubbles do, and the irrational optimism gives way to a pessimism that is equally irrational, and life isn't worth living, and nothing will ever be the same again, and we wish we could be towed out to sea and sunk with 20-inch guns.

And that, economically speaking, is where we seem to be today. It is miserable, but it is not so miserable that we have to cease all economic activity out of deference to our misery. Some people genuinely seem to think we would be better off staying at home and growing our own cabbage and baking our own bread. This is insanity. I have just brewed 24 bottles of home-made cider, and by the time I had bought the bottles and the stoppers and the yeast and the press and the alembicks, it was the most expensive cider ever made.

There is a system called capitalism, by which goods and services are allocated by markets, and under capitalism I can go to the off-licence and buy five times the cider, of vastly superior quality, for a twentieth of the price, and I can use the time and money saved to buy other things and stimulate the economy in other ways; and by the time the mistresses of the bedchamber have finished trying to make and mend her clothes, I expect you could say the same of the Queen's dresses.

A deep recession may be upon us. But there is no need to go into mourning for capitalism, because capitalism will never go away, and there is nothing remotely impolite, in these circumstances, about spending money and being seen to spend money. Far from it.

http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/10/28/do2801.xml

In case you are unaware Boris Johnson, or simply Boris as he is known here, is the Mayor of London.

Boris for PM ;)
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Franko
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So what is the mood over there, DS ? Guarded optimism about the economic future ? Or a pall of gloom over everything.


I like this quote:

Quote:
 
A deep recession may be upon us. But there is no need to go into mourning for capitalism, because capitalism will never go away....


Personally, I think traditional definitions of "capitalism" and "socialism" and "liberalism" have become warped in a more complicated era. Few people these days even understand how money works. Although lately, some are learning fast about what "deficit" and "inflation" and "interest rates" are all about.

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ds9074
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Franko, the media here is tending to be either;

- Very Gloomy or
- Talking about 'austerity'

There are a lot of people who are now experiencing difficulty. At the momement the main difficulty I think most people are feeling every day is actually the effects of inflation and for those with mortgages the effects of higher interest rates. The effects of recession are not being felt yet for a lot.

That said there have started to be more job losses. I know someone who's son has just been made redundant from a well paid City job.

I think peoples fears over future job security, with the stories we keep seeing on the news, is causing concern and loss of confidence in their future prospects. Also house price falls make people feel poorers. That, together with a squeeze on peoples disposable incomes from higher prices/ interest, means they are cutting back. And so a vicious recessionary cycle begins.

Therefore while we have the cash we should eat, spend and be merry...
Edited by ds9074, Oct 28 2008, 06:36 AM.
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somerled
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I predict a very quiet Xmas season in the shops this year, particularly in the USA and the EU and UK.

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Dwayne
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Went to the movie theatre last Friday night... it was packed.

Went to Wal-Mart during the day yesterday to by some things... even during the day, it was busy.

Went driving around Saturday taking pictures of the trees, and while doing so I passed through a poor nieghborhood I used to live in... since it was such a mild day, there were people out enjoying themsevles, cooking out and such.

Anecdotally, nothing much to suggest hard times here in Wichita, but if the aircraft industry collapses, then we have problems.
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Dandandat
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Time to put something here
somerled
Oct 28 2008, 06:59 AM
I predict a very quiet Xmas season in the shops this year, particularly in the USA and the EU and UK.

Its funny, every times I go near the shops they seem to be bustling. Which makes me go home because I hate being in a crouded shop.
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somerled
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How many of those people are actually spending money ?

Malls can be full and not be selling a lot.
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Admiralbill_gomec
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somerled
Oct 28 2008, 10:11 AM
How many of those people are actually spending money ?

Malls can be full and not be selling a lot.
That's one of the silliest things I've ever heard.

People don't drive all the way to a shopping mall just to window shop. Especially with fuel prices higher.

I spent about an hour and a half in First Colony Mall today, before and over lunch. Today is Tuesday. Both the Dillard's and Macy's were crowded with upscale soccer mom types. The food court was packed. I was amazed at the number of people (aside from me) paying US$3.49 a slice for pizza, for example. I definitely got a walk in today.
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Minuet
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Actually AB - as a person who works in a mall I can assure you that not everyone shops everytime they go to a mall.

Take your "soccer moms". The ones you see at lunch on a weekday are usually there to meet each other for lunch. They are there to socialize rather then shop. They may shop but it's not the main purpose of going to the mall on a weekday. Believe me - I was a stay at home for 6 years and I know whereof I speak.

You will also find lots of mom's with baby carriages, especially if the weather is bad and they can't walk outdoors.
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ds9074
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I know from a friend that works in food retail here that while the shops are full people are choosing cheaper brands. Often the stores only make a very small amount on their cheap home brand items if anything (some are loss leaders). So a busy shop does not automatically equal a profitable one.
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somerled
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My parents , uncle and granddad had a jewellery shops on Hunter Street (main drag of Newcastle) , and on Maitland Road (main street of Mayfleld) and on Beaumont Street (main street in Hamilton) and when I was in high school I worked in these for extra pocket money during the Xmas school holidays and to help mum and dad out.
Most people who came into the shop were ONLY BROWSING and window shopping. Sometimes the same people visited the shop several times over a period of several days or weeks before actually deciding on something they wanted to buy.

My wife often goes into town or to Charlestown Square or Kotara Fair , to meet her sisters, or to meet friends (who are also stay at home wives) , or to meet her mum, they might buy a milkshake or something light and cheap for snack, but they rearly go there to shop. My mom-in-law is on a single age pension so she has to watch her pennies, and my sisters-in-law don't have a lot of money to waste frivilously either (especially Michelle who has 6 children (13 yo to less than 12 months old)) and only a roadworking labourers' wages coming in.
Even when my wife is there to spend - it's the weekly grocery shop only.

The big malls are extremely popular with people here in summer , not everyone here has an airconditioned home , and they go to the mall (which is nice and cool inside to cool off and will sometimes stay there just window shopping and browsing for many hours , many aged pensioners are do this).
And we all know how kids like to hang out in malls too , just to get up mischief , or just to hang with their mates .

So - just because a mall is packed with people does not mean all or even many of these people are there to actually buy anything.
Edited by somerled, Oct 28 2008, 09:14 PM.
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somerled
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Admiral MacDonald RN
Admiralbill_gomec
Oct 28 2008, 04:48 PM
somerled
Oct 28 2008, 10:11 AM
How many of those people are actually spending money ?

Malls can be full and not be selling a lot.
That's one of the silliest things I've ever heard.

People don't drive all the way to a shopping mall just to window shop. Especially with fuel prices higher.

I spent about an hour and a half in First Colony Mall today, before and over lunch. Today is Tuesday. Both the Dillard's and Macy's were crowded with upscale soccer mom types. The food court was packed. I was amazed at the number of people (aside from me) paying US$3.49 a slice for pizza, for example. I definitely got a walk in today.
Maybe you should visit a mall in a less affluent part of town.
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Admiralbill_gomec
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Minuet
Oct 28 2008, 05:51 PM
Actually AB - as a person who works in a mall I can assure you that not everyone shops everytime they go to a mall.

Take your "soccer moms". The ones you see at lunch on a weekday are usually there to meet each other for lunch. They are there to socialize rather then shop. They may shop but it's not the main purpose of going to the mall on a weekday. Believe me - I was a stay at home for 6 years and I know whereof I speak.

You will also find lots of mom's with baby carriages, especially if the weather is bad and they can't walk outdoors.
Actually, the weather has been stunning lately, and all those soccer moms had shopping bags.

Sorry.
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Admiralbill_gomec
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somerled
Oct 28 2008, 09:16 PM
Admiralbill_gomec
Oct 28 2008, 04:48 PM
somerled
Oct 28 2008, 10:11 AM
How many of those people are actually spending money ?

Malls can be full and not be selling a lot.
That's one of the silliest things I've ever heard.

People don't drive all the way to a shopping mall just to window shop. Especially with fuel prices higher.

I spent about an hour and a half in First Colony Mall today, before and over lunch. Today is Tuesday. Both the Dillard's and Macy's were crowded with upscale soccer mom types. The food court was packed. I was amazed at the number of people (aside from me) paying US$3.49 a slice for pizza, for example. I definitely got a walk in today.
Maybe you should visit a mall in a less affluent part of town.
Why would I? It was the closest.


Another silly thing.
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somerled
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Admiral MacDonald RN
Admiralbill_gomec
Oct 30 2008, 12:35 AM
Minuet
Oct 28 2008, 05:51 PM
Actually AB - as a person who works in a mall I can assure you that not everyone shops everytime they go to a mall.

Take your "soccer moms". The ones you see at lunch on a weekday are usually there to meet each other for lunch. They are there to socialize rather then shop. They may shop but it's not the main purpose of going to the mall on a weekday. Believe me - I was a stay at home for 6 years and I know whereof I speak.

You will also find lots of mom's with baby carriages, especially if the weather is bad and they can't walk outdoors.
Actually, the weather has been stunning lately, and all those soccer moms had shopping bags.

Sorry.
Quote:
 
Dillard's and Macy's were crowded with upscale soccer mom types
upscale ?? = ?? rich or trying to look rich ? :rotfl: who are you trying to impress ?

Probably find if you checked that most the ladies were buying what ever they were buying on never never (credit cards).
Or could it be that the shopping bags were full of the weeks or fortnight's groceries ? you've given no evidence they were full of unnecessary consumer goods and luxury goods :rotfl:

We only really have your word for it , and since you can't be bothered going to other malls (in underprivilaged areas or poor districts (snobbery ??)) then your claimed observation is worthless.
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