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How much will GDP drop?


Dave Bloke
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France, electricity consumption is down 15%. If we are locked in for 3 months, then we've got to be looking at -5% I would have thought (not the -1% suggested by the govt).

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4 minutes ago, Dave Bloke said:

France, electricity consumption is down 15%. If we are locked in for 3 months, then we've got to be looking at -5% I would have thought (not the -1% suggested by the govt).

I’m going for more than 5% other than food most will be reigning spending in would you want to be buying a new car or house in the current climate 

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TheCountOfNowhere
7 minutes ago, Dave Bloke said:

France, electricity consumption is down 15%. If we are locked in for 3 months, then we've got to be looking at -5% I would have thought (not the -1% suggested by the govt).

It'll go up, along with the stock market, the wealth of the rich and of course the house prices

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Hail the Tripod
Just now, stokiescum said:

I’m going for more than 5% other than food most will be reigning spending in would you want to be buying a new car or house in the current climate 

More than 50% of all spending is government directed in our fake capitalist economy. They’ll spend like drunken sailors to offset any rational prudence in the general population.

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Sucralose Ray Leonard

I plan to have all double glazing replaced if I can get a good deal. I have a feeling that my savings will be worthless by the end of this so might as well use them productivily. 

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3 minutes ago, Hail the Tripod said:

More than 50% of all spending is government directed in our fake capitalist economy. They’ll spend like drunken sailors to offset any rational prudence in the general population.

They may well spend like drunken sailors, but I'm not sure it will help. 

The demand destruction out there is intense. Think of all those companies whose value was was based on income streams that will never return. All those assets worth zilch now. 

 

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The Generation Game
27 minutes ago, Dave Bloke said:

France, electricity consumption is down 15%. If we are locked in for 3 months, then we've got to be looking at -5% I would have thought (not the -1% suggested by the govt).

 

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Somewhere between 5-10% is my guess. The more interesting thing is how quickly it bounces back (or not). Some parts of the economy are very elastic and can survive this if they have some cash buffer, other parts will disintegrate. It’s also possible that this will finally kill off a load of companies that should have gone bust back in 2008 and allow better and more productive ones to take their place. That might mean a very rapid and strong bounce back. 

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Roger_Mellie

OK,

Money velocity (M2) = GDP/(spending + saving)

Right now what is the velocity of money? About as close to zero as it's possible to get. Therefore what is GDP tending towards? About as close to zero as it's possible to get. This is utterly fucking biblical. In 6 months no one will be able to pay the mortgage, which bank is going to dare repossess? 

We're going to end up with some really weird stuff happening in the economy - government backed/guaranteed mergers/buyouts, relaxation of anti-competition laws globally, maybe the end of cash as everything becomes rationed electronically and we move to a centrally planned and controlled economy.

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Southmartin
4 hours ago, Roger_Mellie said:

OK,

Money velocity (M2) = GDP/(spending + saving)

Right now what is the velocity of money? About as close to zero as it's possible to get. Therefore what is GDP tending towards? About as close to zero as it's possible to get. This is utterly fucking biblical. In 6 months no one will be able to pay the mortgage, which bank is going to dare repossess? 

We're going to end up with some really weird stuff happening in the economy - government backed/guaranteed mergers/buyouts, relaxation of anti-competition laws globally, maybe the end of cash as everything becomes rationed electronically and we move to a centrally planned and controlled economy.

I bet we'll get to see subsidised mortgages via Neg IR - e.g. "take on £500k of debt and we'll pay it off at a rate of £100 a month for you) - anything to keep the sterling value of houses the same

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Green Devil
1 minute ago, Southmartin said:

I bet we'll get to see subsidised mortgages via Neg IR - e.g. "take on £500k of debt and we'll pay it off at a rate of £100 a month for you) - anything to keep the sterling value of houses the same

How about your house cost you 500k, your mortgage is 450k. The house is now worth 300k so the governbankment will pay the mortgage company the 150k. 

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9 hours ago, stokiescum said:

I’m going for more than 5% other than food most will be reigning spending in would you want to be buying a new car or house in the current climate 

I have some insight into the used car industry in this country, nowhere near as much as @Chewing Grass probably, but while used private sales have dropped a lot they are still happening. I think about 60-70% down from 2 weeks ago but hard to get the full picture so far.

It's a good time to be buying though, or will be soon - a buyer's market, as loads of desperate sellers will appear. Plus if bankruptcies go up - unlikely now Mother Government has stepped in I know - but that will mean much more stock flooding the market.

Edited by spunko
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6 hours ago, TheBlueCat said:

Somewhere between 5-10% is my guess. The more interesting thing is how quickly it bounces back (or not). Some parts of the economy are very elastic and can survive this if they have some cash buffer, other parts will disintegrate. It’s also possible that this will finally kill off a load of companies that should have gone bust back in 2008 and allow better and more productive ones to take their place. That might mean a very rapid and strong bounce back. 

That would be significant, a quick step up to more productive businesses would suggest less workers needed overall? Or are we of the view that the economy will invent more pursuits not yet conceived that would allow productive work to be undertaken? Either way it does feel like it won't be business as usual in the aftermath of this one. Politically or economically. May give Labour a chance to get back in for starter. No government can really manage something like this unscathed imo.

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21 minutes ago, spunko said:

I have some insight into the used car industry in this country, nowhere near as much as @Chewing Grass probably, but while used private sales have dropped a lot they are still happening. I think about 60-70% down from 2 weeks ago but hard to get the full picture so far.

It's a good time to be buying though, or will be soon - a buyer's market, as loads of desperate sellers will appear. Plus if bankruptcies go up - unlikely now Mother Government has stepped in I know - but that will mean much more stock flooding the market.

The car sales industry has been on its arse for a while but held up by (pretend) cash flow. Unemployment will decimate the PCP market as the people who use PCP tend to be the poor or the economically illiterate. OK it makes sense to some savvy people but most are the "shiny thing I want it now" brigade.

A new Merc for £299 a month may look cheap but the running costs (especially servicing) are expensive and part of most of the contracts.

I forsee lots of "stolen" car  and "arson" claims and in the near future 

Edited by Option5
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I think it'll be a different world on the other side of this and no countries are escaping the devastation. There's no paying this back in any timeframe and the only way forward is to dump the past. Hang on to whats important to you but I think a complete reset is the only cure. I don't know how its done or who loses or gains but I cant see another way without decades of pain.

Just my humble opinion. Happy to be corrected.

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23 minutes ago, bobo said:

I think it'll be a different world on the other side of this and no countries are escaping the devastation. There's no paying this back in any timeframe and the only way forward is to dump the past. Hang on to whats important to you but I think a complete reset is the only cure. I don't know how its done or who loses or gains but I cant see another way without decades of pain.

Just my humble opinion. Happy to be corrected.

No reset for the elites though

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Roger_Mellie
11 hours ago, spunko said:

I have some insight into the used car industry in this country, nowhere near as much as @Chewing Grass probably, but while used private sales have dropped a lot they are still happening. I think about 60-70% down from 2 weeks ago but hard to get the full picture so far.

It's a good time to be buying though, or will be soon - a buyer's market, as loads of desperate sellers will appear. Plus if bankruptcies go up - unlikely now Mother Government has stepped in I know - but that will mean much more stock flooding the market.

Agree. I'm not buying the 'worthless cash' scenario. Cash is going to be in huge demand.

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21 hours ago, Sucralose Ray Leonard said:

I plan to have all double glazing replaced if I can get a good deal. I have a feeling that my savings will be worthless by the end of this so might as well use them productivily. 

Yeah.  I just dropped 6k on a home improvement that will last 20 years.  Ordered last friday, installed tuesday.  some risk in having a workman on site for one day, but cases in my area this week gone were still 1-2, so hopefully minimal risk.

we would have done it in the next 3 or so years, and researched some more to get the best deal, but I am very worried about an aussie bank collapse now.  That, and shortages of options for good quality kit. 

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Uptherebels
21 hours ago, Sucralose Ray Leonard said:

I plan to have all double glazing replaced if I can get a good deal. I have a feeling that my savings will be worthless by the end of this so might as well use them productivily. 

I'm planning this year....to have a total rewire done on Our house. Getting a gas supply to the house from the main rd. Getting Central heating installation. Getting new doors and windows all round. Whole house re decoration. New carpets. New kitchen fitted. Possible new bathroom too. 

That was the plan , and still is, depending on whether I can get the relevant companies to do the work.

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