Black Tuesday as FTSE plummets,

[chemical-licker]

http://www.dailymail.co.uk/news/article-10...ion-months.html

Black Tuesday as FTSE plummets, bank shares tumble and Britain faces recession 'within months'

• FTSE enters 'bear market' with 20% fall from October's high

• Housebuilder Persimmon cuts 1,100 jobs
• BCC says recession coming 'within months'
• Government left with £7.5billion black hole in finances
• M&S bucks trend as shares in retailer bounce back

Britain was facing a deepening economic crisis today as the FTSE plunged into a so-called 'bear market' and a series of reports laid bare the full extent of the problems facing the nation's economy.

In a Black Tuesday for the stock market, shares fell across the board while a gloomy new report warned that a recession could be on its way within a matter of months.

A separate report from accountants KPMG shows the number of permanent job vacancies fell in June for the first time in five years.

In further bad news for the economy, shares in struggling bank Bradford and Bingley plunged 25 per cent to just 30p at one stage this morning.

A plunge in banking shares has pulled the FTSE into bear market territory

In its report, the British Chambers of Commerce describes Britain's economic outlook as 'grim' and warns the UK could slide into a recession within months.

It says it has uncovered evidence of a 'menacing deterioration' in the economic outlook.

At one stage today the FTSE 100 dropped more than 150 points to 5358.7 in early trading in a knock-on effect after a sharp overnight drop on Wall Street.

At its worst point, it had fallen 20 per cent since its last peak in October - the

standard definition of a bear market.

The previous bear market lasted from autumn 2000 to spring 2003 when share values halved.

The term refers to a situation where shares fall more than 20 per cent from a recent trading high, which then develops into a vicious circle because traders are continuing to sell, bringing prices down even further.

At one point today all 100 firms listed in the FTSE were down but a late

morning rally left the blue chip index only 70 points lower by lunchtime.

Looming recession: The number of permanent job vacancies will fall

By 12pm, the overall Index had rallied slightly, climbing back up to 5404.3, down 108.4 points.

Some of the biggest fallers included household names such as Royal Bank of Scotland and ITV, both down five per cent.

Bradford and Bingley shares also continued to plummet, with some experts claiming their shares were now worthless.

Speculation two U.S. mortgage providers might have to raise more capital and make more writedowns triggered the American sell-off yesterday.

The Dow Jones opened lower today but quickly bounced back thanks to a sharp pullback in oil prices and reassurances from the Federal Reserve.

In early trading, it had risen more than 40 points - 0.39 per cent - up to 11,275.76.

Back in the UK, the list of woes grew with beleaguered housebuilder Persimmon confirmed it was having to lay off 1,100 jobs so far this year because of the housing crisis.

The firm revealed its sales had fallen 31 per cent in the past six months as it confirmed it had cut 1,100 jobs so far this year and said the past six months had 'undoubtedly been the most challenging period' in its recent history.

Tumble: Bradford and Bingley share prices fell by 20 per cent today

Average selling prices had fallen to £181,500 in the first half of the year from £189,255 in the same period last year, it added.

Persimmon, which is one of the UK's biggest housebuilders, said half-year sales revenues were down by more than a third at £1billion.

The 1,100 job cuts come as part of an overhaul to save money amid the housing market woes.

Its announcement came after the British Chamber of Commerce had said the number of people being put into permanent jobs by recruitment agencies had fallen at its sharpest rate in more than five years.

The group's report also warned another 300,000 workers could lose their jobs over the next 18 months unless the economic situation improves.

This is equal to 550 losing their jobs every day, including weekends, by the end of 2009.

David Frost, director general of the business lobby group, said there is 'a real risk of recession in the coming months'.

He said: 'The outlook is grim. We believe that the correction period is likely to be longer and nastier than anticipated.'

Nearly 5,000 firms took part in the research for the BCC report.

Low unemployment has been a feature of recent years, but official figures have started to show that the jobless total is beginning to increase.

The number who do not have a job - but want to work - jumped 38,000 to 1.64million in the three months to the end of April.

The KMPG report, published jointly with the Recruitment and Employment Confederation, said there is worse to come.

Alan Nolan, director of KPMG, said: 'This really is a sobering set of figures proving the credit crunch has finally taken its toll and is now severely weakening the UK jobs market.

'Many employers now seem to be accepting the inevitable - they will have to cut costs by laying off people because their businesses won't be growing as much as they could have expected a couple of months ago.'

Lay-off: Persimmon Homes has been forced to cut 1,100 jobs because sales have fallen so much in the first half of the year

Thousands of redundancies in the City and the housebuilding sector are just the start, he added.

The report involved interviews with 400 recruitment and employment consultancies. The official definition of a recession is two or more consecutive quarters of negative economic growth.

David Kern, economic adviser to the British Chambers of Commerce, said he is expecting negative growth for the rest of the year.

He does not expect growth to return to normal levels until 2010 at the earliest.

The deepening economic crisis has also left the Treasury facing a £7.5billion black hole in its Budget next year, according to a respected research body.

The figures, collated by the National Institute of Economic and Social Research, will increase anxiety among Labour MPs that they are heading towards a general election with the public finances in turmoil.

Such a deficit - if proved to be that large - will mean that Chancellor Alistair Darling will either have to put up taxes, cut spending or borrow more.

The black hole is the equivalent of cutting 57,000 teaching jobs, cancelling two giant aircraft carriers ordered by the MoD and closing five hospitals.

There was some good news amid the gloom today. Marks & Spencer share values soared amid talk of a possible bid for the retailer.

M&S has been hammered since a shock profits warning last week, with around £1.7billion wiped off the value of the business.

But the firm rose as much as seven per cent to the top of FTSE 100 Index after rumours of possible takeover candidates including supermarket Sainsbury's, Delta Two - the Qatari fund which attempted to buy Sainsbury's last year - and billionaire retailer Sir Philip Green.

its all part of the agenda. order out of chaos is the goal

[stevewinn]

so what does recession mean for JOE public?

[questionmark]

so what does recession mean for JOE public?

Depends...if he's got no shares, his retirement is not invested in stocks and he does not work for a bank: glee....

[chemical-licker]

average joe, on the street begging for food, having no interent access

[stevewinn]

Not to worry we'll be alright, when you've been through two world wars, what's a recession,

[bee]

Depends...if he's got no shares, his retirement is not invested in stocks and he does not work for a bank: glee....

So if you've just got money in a bank would it be ok?

What about Premium Bonds?

[questionmark]

So if you've just got money in a bank would it be ok?

What about Premium Bonds?

In the long run, the best investment was always a type of real estate that is capable of feeding you in a crisis.

Money in a bank is OK, as long as you don't have more than what is guaranteed by the government against loss in a single bank. That way, if the bank bellies up you will get your money back. If you have more than that you should spread it over various banks.

[GreyWeather]

Not to worry we'll be alright, when you've been through two world wars, what's a recession,

Well... The last recession was one of the reasons we entered the second world war... Along with women getting all violent for the vote and equality and the recessions depresion hitting home hard.

So, I suppose in the next few months we'll go invade Iran?

[Sockmonster]

Premium Bonds are quite a good short - term investment as you have a monthly chance of winning a million. However they don't earn interest so the more inflation there is over a period of time the less the bonds are worth in real terms. I have kept £200 Premium Bonds that I was given for my b-day and occasionally "store" money there that I am saving for a certatin purpose and collect it later. it's good that way because you have to "apply" for the money back through the post so it stops you spending it. the prizes I have won over the last ten years work out at about the same as I would have made in interest

I thought the recession was already here and have cut back on food shopping and leisure to stay within my budget - thought I was doing ok ... but it seems things are gonna get worse!!!!!!!!!!!! Eeks!!

Also my partner is the main breadwinner in our house as I only work part time and look after our daughter. He works in construction and his work have made many poeple rendunant in the last few weeks and he has been told his job "cannot be guaranteed".

Good luck to everyone in making it though this recession and lets hope it passes quickly without too many people's lifes being ruined!!!!

[corporatepunishment]

Not to worry we'll be alright, when you've been through two world wars, what's a recession,

Armageddon.Think 70% of the population unemployed,soup kitchens,repossesion of properties,homeless families,starving children and the way crime is in the uk gangs storming your house and robbing everything you own.

This is time round its a perfect storm.life will get very hard for many.Imagine all those staffies and pitbulls when they are thrown onto the streets starving cos the teenage gangsters can,t feed them.this could get very naughty.Every body has been living on credit.Money that doesn,t exist.Banks will crash. Expect to take a wheel barrow full of cash to a dodgy guy on a street corner for a loaf of bread. Party like its 1931. Hold tight this is the start of stage 1.where it will end nobody knows.China being the new world power possibly.This will get naughty stevie,VERY NAUGHTY. Heres alink to a site that have predicted this for a few years. http://www.housepricecrash.co.uk/forum/ind...er=all&st=0

[bee]

In the long run, the best investment was always a type of real estate that is capable of feeding you in a crisis.

Money in a bank is OK, as long as you don't have more than what is guaranteed by the government against loss in a single bank. That way, if the bank bellies up you will get your money back. If you have more than that you should spread it over various banks.

Thanks.....my Dad died a couple of years ago and I inherited half a house, that me and my

brother sold. I have made sure that I don't have too much, ie over the goverment compensation

limit, in one bank......but with all the talk of recession and banks going bust etc....I was getting a

bit wobbly about it....seeing as I've never had a large amount of money before.

What if the banks go down like dominoes...I surpose we're ALL stuffed if that happens....

Premium Bonds are quite a good short - term investment as you have a monthly chance of winning a million. However they don't earn interest so the more inflation there is over a period of time the less the bonds are worth in real terms. I have kept £200 Premium Bonds that I was given for my b-day and occasionally "store" money there that I am saving for a certatin purpose and collect it later. it's good that way because you have to "apply" for the money back through the post so it stops you spending it. the prizes I have won over the last ten years work out at about the same as I would have made in interest

I recently got quite a few Premium Bonds......and I won £50 in the first month (last month) I was really chuffed.

Good point about inflation.....hadn't thought of that....I WAS thinking that I'd probably scrape enough

winnings to more or less equal bank interest. And being in 'the draw' for a larger amount is a bit of

excitement.

[questionmark]

What if the banks go down like dominoes...I surpose we're ALL stuffed if that happens....

The government still would reimburse you. The question is: What will money be worth then? On the other side: If heaven falls we will all be crushed under it....

And, at least the Bank of England won't go bust....

[bee]

Armageddon.Think 70% of the population unemployed,soup kitchens,repossesion of properties,homeless families,starving children and the way crime is in the uk gangs storming your house and robbing everything you own.

This is time round its a perfect storm.life will get very hard for many.Imagine all those staffies and pitbulls when they are thrown onto the streets starving cos the teenage gangsters can,t feed them.this could get very naughty.Every body has been living on credit.Money that doesn,t exist.Banks will crash. Expect to take a wheel barrow full of cash to a dodgy guy on a street corner for a loaf of bread. Party like its 1931. Hold tight this is the start of stage 1.where it will end nobody knows.China being the new world power possibly.This will get naughty stevie,VERY NAUGHTY. Heres alink to a site that have predicted this for a few years. http://www.housepricecrash.co.uk/forum/ind...er=all&st=0

I have had a feeling that something quite nasty is on the horizon...and the way electric/gas is going up

by silly amounts...as if they're trying to get as much money in while they can.....

I like to keep a decent amount of petrol in my car....so I'm not trapped in a built up area if the

****hits the fan.

A couple of years ago when there was a petrol tanker drivers strike.....the supermarket shelves were

nearly empty.....almost straight away.

[bee]

The government still would reimburse you. The question is: What will money be worth then? On the other side: If heaven falls we will all be crushed under it....

I surpose the sensible thing to do is buy something before money looses it's value

by too much........but then, if everyone did that, it would bring about what we don't

want......ie bank crashes and economic colapse.....?

[questionmark]

I surpose the sensible thing to do is buy something before money looses it's value

by too much........but then, if everyone did that, it would bring about what we don't

want......ie bank crashes and economic colapse.....?

The question is: How many have cash VS how many have mostly debts?

Those with cash should be in a minority, so going out spending the money now is maybe not a good idea.

[bee]

The question is: How many have cash VS how many have mostly debts?

Those with cash should be in a minority, so going out spending the money now is maybe not a good idea.

I need to think about that.......

[Dowdy]

So if you've just got money in a bank would it be ok?

What about Premium Bonds?

Money in a bank isn't a good idea unless you have high interest.

ie. Say you have $50k in the bank in a low interest of 1% and the inflation rate is 10% a year. That means that your money is worth 9% less then last year. So if you invest in a bank make sure the interest is higher then the inflation rate.

I reckon real estate would be a good investment in the long run, if you buy at the right time. Also if you can keep it safe and insured, then art and coin/note rarities are good.

[questionmark]

Money in a bank isn't a good idea unless you have high interest.

ie. Say you have $50k in the bank in a low interest of 1% and the inflation rate is 10% a year. That means that your money is worth 9% less then last year. So if you invest in a bank make sure the interest is higher then the inflation rate.

I reckon real estate would be a good investment in the long run, if you buy at the right time. Also if you can keep it safe and insured, then art and coin/note rarities are good.

Right now real estate in the UK is going through a major price adjustment....downwards (like 14% minus since last year...bottom not yet reached) .... very bad idea.

And right now, the medium interest on 6 month fixed is 1% above the inflation rate. Some banks offer up to 1,5% over inflation rate at this point.