Hi Guys. The credit crunch is beginning to have serious effects here, how's it affecting you over there?

What I cannot understand is how financial institutions are turning away cash! I've finally manged to donate to S@H & the fun in trying to do so was hilarious!

One of the regular S@H posters gave me a good tip regarding prepaid credit cards, so looked into it. Spotted Andrea's bank on the list & popped into her branch to enquire. Yes they do them but do not provide them at branches, only through the net. GUESS WHAT? you have to have a credit card to apply for a prepaid one - doh!

Went back to surfing the net & spotted another one that I thought worth looking into - Virgin Money - the rates looked great so applied. Card delivered within a week & she's up & running.

Since then, found no end of bargains on the net - a lot cheaper than they usually are, so maybe the crunch is starting to affect business'es badly. I know worldwide, it has caused several airlines to fold. Rather than a recession, are we looking at a severe depression?

Been very busy for the past week or so. This credit crunch is handy in a morbid way (so to speak). One of my regular suppliers in London hasn't been seen since mid-June & I desperately needed some more sata backplanes. Managed to find a manufacturer in the UK & contacted them. They do not deal direct but gave me the name & address of one of their resellers here. it's only a 10 minute walk away so popped in to see them on Tuesday & I've now got a new supplier & to cap the day off, not far from their location was another supplier & I'm now also on their books. Won't be long at this rate that I won't need to travel to London.

To cap off the week so far, just returned from the IP 08 Expo at Earls Court in London with my brother. It was more his territory than mine (heavy networking/virtualisation/unified communications), but I managed to speak to Microsoft (Partner program). Also managed to get quite a few freebies - IT books etc & a load of exhibitors pens for Andrea (She must eat them, because every time I want a pen, we seem to be out of them!)

Without seeming to be nasty, I look forward to the day when we return to the days when cash was king & people lived within their means - To me at least, things seemed much simpler then even though they may have been harder.

Hi Sirius,

Our banks here in Canada are much more regulated than the U.S. and don't grant mortgages to unqualified applicants. Some banks took a hit because they have interests in U.S. banks and our markets are way down. Layoffs are likely in several areas of the economy and our Central Bank has injected money into credit markets.

I've read a couple reports that suggest we are likely going to suffer the effects if the U.S. (or the whole world) goes into resession but we'll fair better than both the U.S and Europe.

BB

That's great BB. The banks over here are in a turmoil & I think things are going to get a lot worse. As long as several countries can maintain their financial markets, we may avoid a worldwide depression. However, I think the US & the UK are going to get well & truly stuffed.

I have to agree with BB. I read our Canadian banks are (if this is a good thing) are makeing millions still, and will not be hit like the American banks and other lenders. On a small side note my boy who just turned 19 was able to go get a loan all on his own yesterday for 15g to buy a new streetbike. Our banks have to be doing OK, cuz on a good day he cant get 5 bucks out of me.

Germany's not in great shape either: http://money.canoe.ca/News/Sectors/Bank ... 36-ap.html

The harder it is to get money, the harder it is to spend it. We have a gazillion export based jobs and export commodities that will be affected. No country's immune.

I heard recently that some Canadian banks are buying smaller U.S. banks...

Not sure if this is true or not but one bank here bought a small U.S. bank, looked at all of the loans that bank gave out and forced the companies to pay back the loans. Apparently a book distribution company in the U.S. went under because they couldn't pay the loan back.

It's starting to spread.

I really hope not. I can remember the old days of "Labour" here in the UK. The official figures put unemployment at just over 3 mill but the actual figures were closer to 4. As I was in my early 20's, I had no problem securing work, but now????

I'm beginning to worry here - Some time ago, I approached several suppliers but they seemed to look down their noses at a small builder like me. In the past week alone, 4 of them have approached me for business - Unfortunately for them, I've managed to secure a good supplier who has already started to discount my orders as they have been regular with cash up front. So far, he hasn't let me down. I'm just hoping that he can survive the crunch.

I'd like to dedicate this to all US Financial Institutions who were recently bailed out by the American Tax Payers.

The whole situation makes me sick to be honest. The banks take a risk in giving away FREE mortgages, fail and are bailed out. The American Taxpayer takes a risk at buying a house they can't afford (but at zero down who wouldn't), fail and get foreclosed upon. THe little guy getting it in the end again .... as usual.

Nice one Pawly Don't forget the UK - They're just as bad here, unfortunately & we're the ones who will suffer.

I have personally seen my expenses drop due to a few factors... Gasoline is way down saving me some cash. Also, with the interest rate hikes my line of credit and car loan are both going to be pushed lower, saving me some interest charges. My retirment account most likely will take a large hit but since I am 40 years away from retirement I am honestly not too worried about it at this point.

Greed at work.............At the beginning of the month, I wanted to get the complete series of Babylon 5 as I managed to get Season 1 last Xmas at a very reasonable price from Woolworth's. Checked their website & it was out of stock, so checked HMV & got seasons 2 & 3 for £13.99 each - Great Value.

Topped up my prepaid cc at the weekend which takes 2 days to appear on the card. Early this morning, I visited Woolworth's website & each season is now £46.99. Went to Tesco's website (Tesco Jersey) & ordered the last 2 seasons for £14.00 each.

Also, had a customer come to me on Monday & complained about the net & asked if I could get him a dual core cpu cheaper. On checking myself, have found that the net companies have been increasing their prices between £2.00 to £5.00 per day. Checked for an AMD X2 6000 & originally spotted it for £57.99, the same company is now charging £69.09. I've heard of inflation, but that's taking the mickey

Sirius,

I'm sure people will take advantage of the situation but some of the price rises are due to the rising value of the U.S. Dollar. Seems strange that the currency everyone is running to is from the same country that started this domino collapse. The Canadian $ was equal to the U.S. $ during the summer and has now lost 20% against it. Part of that is due to energy and mineral prices and I saw on the news one store that is changing prices weekly for goods imported from the U.S. This whole thing is crazy. My daughter just bought her first new car for a great price just before all this hit. The only thing I'm going to buy soon is winter tires for her. Other than that, I'm just going to pay down a couple of debts.

Even China is starting to hurt. Who would have believed that a few months ago?

BB

WTG BB. That's what I've been advising people here. If they can, try clearing some of their debts. I can still remember the last bad recession we had back in the 70's. I think this one is going to be a lot worse. I'm just grateful that Andrea & I are clear of debt. We just need to increase our cash reserve.

Just having purchased a home last year, and with the balance still close to the original price I paid I am nervous but not worried. I am with a fairly stable food company so I hope to weather the coming storm with marginal impact. I need to work at paying off my consumer credit, and this crisis has probably directly resulted in me not buying a new vehicle this year or the next. That money will be put towards paying off current debt instead.

Actually a large part of our economic demise is apparently directly associated with energy and mineral prices. Canada is still very much a third-world country in terms of manufacturing and the back bone of our economy is largely based on our exports (minerals, oil, timber, etc). The current big drop can be mostly attributed to the falling oil prices - it's economically unfeasible to extract oil from the oil sands at less than $80 a barrel or so; therefore when oil drops below this, our oil exports essentially stop and our economy takes a big hit. The mortgage fiasco in the states certainly doesn't help our economy as a whole, but the dollar drop is more closely linked to oil prices than anything else at the moment. I'm no economic expert myself, but hanging around so many of my "economic" friends (aka financial analysts, accountants, etc) I can't help but get hit over the head repeatedly with this "fact" when I talk to them. When you look at the rise and fall of the dollar vs. rise and fall of oil prices it's kind of eerie. I did the following quick anaylsis just because I had nothing pressing to do and was somewhat curious to see if my friends actually knew what they were talking about:

pre-Apr 2007 --> Oil <60> Oil $60-70; dollar $.95
July-Sept 2007 --> Oil $70-$80; dollar $.95
Oct 2007 - Mar 2008 --> Oil $80-$100; dollar peak @ $1.05, generally closer to $1.00
Mar - July/Aug 2008 --> Oil peak $145; dollar stays around $1.00
Sept 2008 --> Oil $100; dollar $.95
Oct 3 --> Oil $93; dollar $.90-.95
Oct 17 --> Oil $71.85; dollar ~$.85
Oct 24 --> Oil $64.15; dollar ~$.80

All in all, not a direct correlation, but when oil prices are above $80 the dollar is pretty much 1:1 with the US. Speculative buying/selling can take care of some of the "correlative error" and other factors come into play as well, but there is a general trend that seems to be apparent. If you want to do your own analysis you can check out crude oil price histories here:

http://www.nyse.tv/crude-oil-price-history.htm

Dollar histories are easy enough to find through google...

Well, it's really starting to bite here........2 major retailers have just gone into administration - Woolworths & MFI - Expecting quite a few more to join them. The big financiers are getting very worried & starting to call in their debts. Unfortunately, most of the big companies are not doing well & cannot afford to repay.

One of the problems now is that Woolworths wasn't just a retailer - it was one of the biggest Wholesale Divisions supplying retailers like WH Smiths, Zavvi etc & these are now worried about their Xmas supplies.

Without seeming callous, I'm going to London at the weekend to increase my stock level as there are many coming to me for value for money. At the same time, I'm going to try & get a new workstation mobo & cpu to upgrade my server as the Asus A8N SLI 939 board is really not up to it.

Been advising people to try & live within their means & to purchase goods with cash, as I believe it will go back to the old ways where cash was king & you could barter to a reasonable degree.

The government here has reduced V.A.T (equivalent to your sales tax) by 2.5% from Dec 1st for 13 months, however, I personally think that is too little too late!

On January 1st 2010, I bet they increase it to 20% (it's currently at 17.5%).

Have I spoken too soon? Ordered some more kit from my local supplier with one of the orders being another 4 port KVM which is badly needed. Told that it would be in on Tuesday morning, so popped round in the afternoon - shop closed, so popped around again this afternoon - shop still closed, so called him on his mobile - no answer - I hope he's ill & not gone bust

I don't really know the process of applying a Prepaid Credit Card. But I have heard that you really have to have a Credit Card before you can apply one. Maybe it is because they wanted to check first the payment situation before they will approve if the prepaid one.

Some do & they are many that don't. if you're after one, check out Virgin Money. They cover the US. Check it out...

virgin money worldwide