Don’t Believe a Word Of It
I suppose that this article in the Belfast Tele is getting in first where a lot of the week’s papers are going to follow. A good day for the FTSE and good results for the banks might mean the end of the banking crisis.
Not at all.
In the UK this is the end of the credit crunch wave of the banking crisis. The next wave, I’d guess at year’s end, will come when all those newly unemployed people run out of money and default on enormous credit card (also here), mortgage and sundry other debts. In other words, the financial banking crisis may be coming to a close, but the retail banking crisis is yet to kick in.
Welcome back to blogland, Ciaran!
Interesting thought, though surely a lot of people have been unemployed for some time and should have reached that point by now? In any case: a lot of people are being bailed out by friends and relatives; banks may be rescheduling mortgage payments rather than repossessing; some of the unemployed are making money through the black economy. Whether the next crisis will be a retail crisis is hard to say.
Thanks guys. Nick, That might be true, but still people (and the banks) can’t delay a financial reckoning for ever. My guess is that things will turn downwards again at the end of the year or in early 2010. And that’s before the inflationary effects of more expensive credit kick in in retail markets!
Of course, I’m the planet’s number one financial eeyeore (voted three years in a row now), so hopefully I’m wrong!