You know you are suffering a recession when you begin to see companies like Google, Intel and Ebay all losing jobs and suffering their worst figures ever.

These darlings of the internet age might have been expected to ride the credit crisis and recession pretty well. I was particularly surprised at Ebay not doing better since everyone is looking for bargains at this time. I wrote about finding bargains on eBay here. I don’t do anything with Ebay myself but I have heard grumbles from people who used to do a lot of selling on Ebay that they have changed a lot of things in recent months and that has made sellers less enthusiastic about eBay.

Nevertheless, when people are trying to save money you would expect them to use the websites that are well known for offering good value so this must surely be a sign that people have finally decided to stop buying stuff.

We have all been busy buying new gadgets, equipment and toys for several years now and even apart from the credit crunch it might be we had got to a point where we just didn’t need any more stuff.

With things as they are perhaps what we should be buying now is gold coins to store under the mattress.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

The news that Marks & Spencer has had reduced turnover this last quarter should come as little surprise to most financial watchers. There can be little doubt that consumers are at last starting to think that maybe the party is over and it’s time to grab their coats and head for home.

We have all had a great time. The party atmosphere has been most enjoyable and we all danced the nght away. Now it’s nearly dawn and we are starting to feel a little the worse for wear. ‘Never again’, we cry, knowing full well that it could so easily happen again. It may, however, be some time before we next go to the consumering party.

The period of Spend, Spend, Spend, has almost certainly come to an end now. It has had a good run but since it has been fueled by borrowed money there always was going to be an uncomfortable end to it all. You can only borrow so much before you get to the point where it just has to stop. If it did not stop then we might all have run ourselves into bankruptcy. For some it may well be too late already and they face great hardship in trying to come to terms with their repayments.

Many people have been borrowing against the growth in the value of their homes wanting to spend now and pay later. Some have remortgaged many times as they they felt the extra borrowing was money safely gained from their homes increase in value and they will be stuck with fairly high repayments now.

Interest rates have come down a little and there is every likelyhood they will fall further as the Bank Of England has little need to worry about consumer inflation now. Prices of fuel and other raw materiels have risen considerably which creates pressure on manufacturing businesses but the consumers are now staying at home and hiding their credit cards away.

So what can we expect in 2008? It’s all about people’s confidence in the future and borrowing ability. My view is that house prices will continue to slowly drop back for a few months. Maybe have a couple of months where they drop a few percent at once. My guess is that house prices will be at least 10% down at the end of the year and maybe they will stabalise and stagnate there for a year or so but I could so easily be wrong in either direction. The truth is that nobody really knows.

There are bound to be job losses across most sectors, some more than others. With less financial business going on the finance industry will surely cut back on employees, retail and manufacturing will suffer too. It is a pretty gloomy outlook for most of us. The good news is that oil prices may come down a bit as manufacturing demand reduces

We are in new territory here. It has never been quite like this before because the period of easy credit is still relatively new. 30 or 40 years ago credit was difficult to come by and interest rates were high. People just didn’t borrow money like they have recently. It may be that if we all tighten our belts a little then we will mostly struggle through but the debts we have built up will last for a good while yet, for most of us.

Retails stores are bound to struggle in this new era of cutback consumerism. They have had a great run but it is very hard to see how they will all continue to survive in the current climate and it may well be that the high streets will be displaying a lot of ‘Shop For Sale’ boards in the future. I will be happy to be proved wrong about all of this but I cannot see how it can be prevented and if the powers that be do manage to prevent it then it can surely only be for a short while. Maybe long enough to get the government through the next election?

Sooner or later the piper must be paid and that time may well be now. Welcome to 2008 and welcome to reality.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

I spend quite a bit of time browsing the internet, particularly financial blogs, looking for interesting information and articles about money and personal finance.

I was astonished to read on the Personal Finance Advice blog about American stores offering double discounts. It sounds good at first. The product is marked down in price in the store and they offer an additional discount at the till. It might be something like 25% off on display with an additional discount of another 25% when you get to the checkout. It sounds a good discount and maybe it is but it isn’t what it appears to be.

The reason is that the additional discount is 25% off the discounted price not off the original price so it isn’t the 50% off that it appears at first glance. I haven’t seen this tactic used in the UK as yet but I have no dounbt that if it works in America then we can expect to see it here soon.

For a better explanation of the maths involved and how it works take a look at the Personal Finance Advice blog.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)