smidey Posted January 14, 2009 Report Share Posted January 14, 2009 My work, who employed 38 people before xmas went into liquidation on monday. The biggest kitchen manufacturer in whangarei, about 6 times larger than the next largest & 55 years trading gone. I am fine, planned to finish in 3 weeks to go dairy farming but there are several guys who have young families, others have recently got mortgages to. That will hit them really hard & i can't see things getting better for a while yet. Quote Link to comment Share on other sites More sharing options...
Romeo Posted January 14, 2009 Report Share Posted January 14, 2009 Yeah, in my line of work we're expendable. The last thing businesses are after in the midst of a recession is web development - so I've been trying to find IT work for about a month now with no luck. A log of the IT jobs on that website have many thousands of views, and tens, if not hundreds of applicants. Here's hoping things pick up soon - but it doesn't look likely... Quote Link to comment Share on other sites More sharing options...
Stella Posted January 14, 2009 Report Share Posted January 14, 2009 That sucks I remain dubious about this recession though. Redundancies and liquidations have always happened, recession or boom. I was made redundant in October last year. I look like a statistic but it had nothing to do with it (employer leaving the country). There is a hell of a lot of self-fulfilling prophesy going on. If people believe it is a tough time and you shouldn't be investing or expanding, then people won't, and there will be a recession! (vice versa is equally true). Hopefully out of all this, all the people that lived at the end of their credit cards or worse, because spending is everything, will learn that saving is a hell of a lot better! I have been out of work for three months and, thanks to being sensible, I am fine and would still be fine in a couple of years if I don't find a job! (and I am 29 and have never earned the average income). Quote Link to comment Share on other sites More sharing options...
phoenix44 Posted January 14, 2009 Report Share Posted January 14, 2009 that does suck. with another Interest rate cut on the way.. this recession isnt even near its end..... lets hope people spend more, and with tax cuts on the way - it should help dig the economy out of the hole it is in (no matter however small that hole is). it depresses me to see so many people willingly go into deeper debt with H.P's etc. Quote Link to comment Share on other sites More sharing options...
smidey Posted January 14, 2009 Author Report Share Posted January 14, 2009 there are real facts rather than just emotion that create these situations though. for example, the banks recently doubled the deposit required. That would cut most first time home buyers out of getting a mortgage, buying a house & in my case buying a new kitchen for it. that has an effect of considerably less demand for kitchens therefore less workers to produce them which creates redundacies & closures. those workers effected then don't have any disposable income & don't buy things they want which creates less demand in other production sectors. in my case, there are know 38 people who won't be doing things like having sky tv, playing golf, riding motorbikes or spending any money on any hobbies or luxuries as all funds & in most cases more will be required to pay for housing & food for their families. this effects the people in the industries that aren't neccesaties, sky installer, greenkeepers & bar attendants, motorcycle mechanic & salesmen won't have any work so they in turn go into the cycle of survival. after a long period of time the majority will be in this cycle ratherthan the minority. Quote Link to comment Share on other sites More sharing options...
phoenix44 Posted January 14, 2009 Report Share Posted January 14, 2009 how can you win then? lol its no good this recession thing. (I personally love it cause the USD performs excellently against the NZD). but banks are becoming even more responsible with lending, which is a good thing. would hate to think what would happen if the banks had to foreclose on home loans, and were left with illiquid houses. much like what happened in the states, aside from the legalities of foreclosures. that would unleash hell on this country. Quote Link to comment Share on other sites More sharing options...
smidey Posted January 14, 2009 Author Report Share Posted January 14, 2009 to win we need to somehow "kick start" the economy with a cash injection or something. we need to spend to create demand. how that happens i do not know. Just before xmas Aussie gave families $1K for every child they had (3 kids =$3K), $2K for married couples & $2K (something like that, may not be exactly right) to everyone & told them not to use it on bills but to spend it on whatever they wanted. Don't know the results but that must have created some demand & created some jobs. Quote Link to comment Share on other sites More sharing options...
phoenix44 Posted January 14, 2009 Report Share Posted January 14, 2009 dunno.. that would have created a one off spike... its not sustainable though. they could look at paying negligible interest on deposits. it is so crazy it could just work. being able to claim tax back on luxuries would help too. Quote Link to comment Share on other sites More sharing options...
Barrie Posted January 14, 2009 Report Share Posted January 14, 2009 the problem has been caused by people borrowing to buy rather than save. 30 years ago, we needed 20% deposit for a home but up untill about 6 months ago, you could get one on no deposit. Thing is we all need to budget and save for things rather than just borrow. People will spend thousands on say a car and as soon as you drive it away its devalued what sense is that? When your set up and secure and can save for that car, great go get it and enjoy it but dont pay too much for it and have to pay the interest. Same with a house, If you save 20% (and you can by going without) and buy a "beginner"home you would need $60,000 deposit. The interest alone over 20 years is a huge saving meaning you can pay of your mortage sooner and have the finer things in life. Go with out the over the top stuff now so you can enjoy your life later on Quote Link to comment Share on other sites More sharing options...
Stella Posted January 14, 2009 Report Share Posted January 14, 2009 I am not saying that there is not going to be a recession, I am saying that recessions are in part created and deepened by the belief that there is a recession. How does a recession end? By people starting to invest and spend again. Why do they do that? Because they believe it is safe or necessary. My economics teacher had her own theory: the way out of a recession is a war or large natural disaster. Both create the need for spending to fix the problem. Phoenix - No way is paying negligible interest on deposits going to make me spend it! My savings are my way be being responsible for myself, of not relying on someone else (govt etc) to look after me when I need it. Smidey - Weird. I hadn't heard about the Aussie govt doing that. I guess it could have some effect, but it only fuels this idea that INFINITE GROWTH is not only REQUIRED for for the economy to be healthy, it is POSSIBLE. It is not. Never will be. For one, there are only so many resources on the Earth. The other is that people start to go beyond what is real. Boom and bust. People are horrified because house prices are dropping. They were overinflated to begin with, they weren't really WORTH that much and the buyers finally stopped buying. Some people had over-invested and are now paying mortgages above what their house is actually worth. People think they NEED to have that fabulous brand-new house as their first home (also car, tv, etc etc). Ridiculous. And it leads to people borrowing more and more, so if anything changes in their earning power they have debts they can't possibly manage and everything falls over much faster. Renting a house is NOT a bad thing. Not being able to buy a house is NOT a bad thing. It is a hell of a lot cheaper to rent than buy, and if you are careful with those 'savings' and actually save them, people can come out as well off. You might own your own home, but you have to sell it in order to be able to live off the value of it. Quote Link to comment Share on other sites More sharing options...
Caryl Posted January 14, 2009 Report Share Posted January 14, 2009 You are so right Barrie. We had to pay over 20% deposit. Plus, once we had the house we didn't have fancy new carpets throughout (in fact we had bare floors for several years) and no curtains, just sheets tacked up for privacy. These days people borrow more than they can afford, buy more than they need, then complain when they can't make the payments! We are now mortgage free after many years working and saving hard and have reached a time in our life where we can enjoy the fruits of our labours. Everything in our home we have cos we saved up for it and paid cash, that includes cars. Do not get sucked into the "buy now pay later" or "5 years interest free" cos they are a crock! Quote Link to comment Share on other sites More sharing options...
phoenix44 Posted January 14, 2009 Report Share Posted January 14, 2009 recessions don't end if ppl invest... they have to spend. (investing is saving - contractionary monetary policy). stella if every one saved then it would take tooooo long to get out of the recession. so we need to spend spend spend. ive spent over 2k over the last 4 months on my pets alone; and have justified it as being for the greater economic good ha ha :lol: we need to balance savings with spending. i like saving personally... and if there are other countries where the interest rates are high, well then my monies shall have to travel there! lol Quote Link to comment Share on other sites More sharing options...
reef Posted January 14, 2009 Report Share Posted January 14, 2009 for example, the banks recently doubled the deposit required. That would cut most first time home buyers out of getting a mortgage, buying a house To good clients Banks will still do 95% lending. The problem the world faces is that we live in a credit world where we live for today and dont worry about the future. Its going to take some time for things to get better and lowering the interest rates does not help. all it does is stuff our currency and prices will keep going up. who knows how to fix the problems we face. Quote Link to comment Share on other sites More sharing options...
Ant N Posted January 14, 2009 Report Share Posted January 14, 2009 Barrie, you have the wisdom of your age...Stella, how did you get so wise, so young? LOL We bought our first house with a 100% loan (deposit was borrowed from same bank) $90K, now the mortage is over $200K , With ACC,GST and other Tax , plus growing teenagers I spend everything ,and then more, that I earn. Going backwards ...and down hill! (we dont have Sky...we have pets instead) The kiwi way seems to be..work..spend...borrow...party..borrow..holiday..borrow..then die..let someone else take care of the debt. Sad maybe? Quote Link to comment Share on other sites More sharing options...
Insect Direct Posted January 14, 2009 Report Share Posted January 14, 2009 Just before xmas Aussie gave families $1K for every child they had (3 kids =$3K), $2K for married couples & $2K (something like that, may not be exactly right) to everyone & told them not to use it on bills but to spend it on whatever they wanted. Don't know the results but that must have created some demand & created some jobs. handouts dont help anyone imo - speaking to a mate in aus a few weeks after this and media over there was saying that most just paid debt/bills which govt didnt want Best thing for a recession is positive thinking and just getting on with life imo Quote Link to comment Share on other sites More sharing options...
alanmin4304 Posted January 14, 2009 Report Share Posted January 14, 2009 It has always been hard to buy a house. I bought my first house at an auction and it had been lived in by street kids for three yeers. Worked 65-70 hours/week to pay it off and the interest rate was 12% and then went up considerably after that. One of the problems has been the speculators who build shoddy houses on all borrowed money then go broke and take all the subbies with them. It is not unsimilar to the share crash in the 80's when people were paying $10 for a share with a capital backing of 20c and then wondered why they went broke. A lot is about greed and is absolute proof that the capitalist system is not as clever as often thought to be. It encourages speculation and that by its very nature has big risks. We are now paying for those who speculated with other peoples money and lost. House prices have been grossly inflated and may now return to normality. It is crazy that banks were lending 100% of the valuation for houses when the values were grossly inflated. 80's share market all over again but we still believe that "the American way" is a great thing. Quote Link to comment Share on other sites More sharing options...
David R Posted January 14, 2009 Report Share Posted January 14, 2009 Which company Smidey?? Quote Link to comment Share on other sites More sharing options...
reef Posted January 14, 2009 Report Share Posted January 14, 2009 It is crazy that banks were lending 100% of the valuation for houses when the values were grossly inflated. Banks have only lent 100% to selected clients and only for personal clients. Borrowing 100% to buy a house is not a problem if you can service the loan. I doubt at the time house prices where grossly inflated. That was the market at the time and that was the valuer of the home. The recession is not all about house prices etc, its also human nature to want everything cheap which in turn drives cheap products from china which puts pressure on nz businesses. On top of that employees want better wages?, how can you give employees better wages if business's have to drop their margin to compete with cheap chinese imports. Basically you cant so you close the doors or reduce staff. Quote Link to comment Share on other sites More sharing options...
alanmin4304 Posted January 14, 2009 Report Share Posted January 14, 2009 That is what I was saying. It is human nature in our society. Employees want more wages and so do employers. "The market will sort it out" means employers and employees buy the cheapest stuff from overseas and therefore in the end no one has a job to even buy the cheap stuff. Capitalism and market forces are in the end self destructive. Quote Link to comment Share on other sites More sharing options...
firenzenz Posted January 14, 2009 Report Share Posted January 14, 2009 As said before housing is part of the issue. In a bullish market where capital gain were daily people and banks were speculating. A 100% mortgage was given because in such a market the bank was secure that they would recover funds with that gain. Your ability to repay it had nothing to do with the equation. Years ago I needed 25% deposit because I was buying bare land. I wonder what will happen when all those Xmas bills on Visa's and the like are due, when the surplus of property's bring prices back even more and those with high percentage mortgages are fighting to get anywhere near they price they paid and are hamstrung with debt. How many wide screen plasma's and fancy electronic gadget are sitting in homes because the perception was they weren't costing anything. It's not just New Zealand where consumerism has run rampant. At least in NZ the banking system is regulated enough. In the US countless of those who paid $20,000 down payment have just walked into the bank with the house keys, then the bank goes down, because it has no money, just a whole lot of houses in desserts they can't sell. We need countries to trade with and buy our goods, yet Fonterra is procuring more and more space to store stock they can't sell. I know too many people who have lived beyond their mean, driving cars that they couldn't really afford. We aren't good saver's. Many in this country fit into the realm of cash poor but asset rich. And where many have thrown cash at liabilities rather than assets Perhaps rather than asking a Govt to give you something ask them for an incentive to save, ask them for an incentive to provide for your future in a way that suits you. Ask them to get out of the insurance business which they clearly have no justifiable reason to be in as the ACC situation would suggest. Perhaps the long held view that people will abuse privatized schemes will make way for the view that smart people can make smart decisions and should have the right to do so. Too many people looking over too many fences. Recession?- I personally don't think it happened here yet hence a lot of rhetoric of "self prophecy". I started my business in 1990 and while that "recession" might only be a blip compared to this one I still think that if you are good enough, strong enough and have the intestines to make things happen then such a time can be good for you. I make no apologies for a lot of the dead wood that might and will be swept away. Too many trees planted in unsuitable soil for too long, unprepared and unskilled to do much about it. NZ is a place where we said " She'll be right mate". I wonder if somewhere it has become a place where the edict has become "she'll do mate". Perhaps this is the time to reassess. Quote Link to comment Share on other sites More sharing options...
shadowfax Posted January 15, 2009 Report Share Posted January 15, 2009 well they said it over & over again that alot of people were spending more than they make every week & its catching up with people. i lost my afternoon work just before christmas now we are finding it tough but its just like everyone... Quote Link to comment Share on other sites More sharing options...
dimebag Posted January 15, 2009 Report Share Posted January 15, 2009 there are people out there far worse off than the majority of new zealanders. sure it sucks for people to be laid off but it happens. there is plenty of other jobs out there for people, maybe not the kind of jobs they would like, but hey, any job is better than no job. we have just had the best christmas for years, has taken best part of five years to become debt free (mortgage aside). in that time however i have started my own business from scratch, bought a house, two vehicles, and managed to keep sane whilst raising three kids. mincie has the right attitude here, stay positive and get on with life. a friend of mine moved back to nz from aussie a couple of years ago, with a nice deposit for a house. in his mind the houses were far too expensive at that time. also in his trade there was little to no work available. instead of getting work elsewhere, and saving his deposit for the right house in the future, he refused to do any work that wasnt his line of work, and basically existed, using nearly all the money he had saved for his deposit paying rent and bills while he sat on his butt waiting for some work to come up. 4 months ago he spent the last of his savings to relocate beck to aussie to start again. :roll: if we all had that kind of attitude no one would get anywhere. Quote Link to comment Share on other sites More sharing options...
Luke* Posted January 15, 2009 Report Share Posted January 15, 2009 4 months ago he spent the last of his savings to relocate beck to aussie to start again. :roll: if we all had that kind of attitude no one would get anywhere. complacency ay... "i can so i will" attitude....sums up well the attitude of many out there today.. quite amusing i still hear hyped up ads on the radio for noel leeming, harvey norman etc ranting on about so many days interest free... i'm only 25, have good savings, went 6 months without work (voluntarily) and spent very little. now i'm working again i just spend more. it is good to have cash coming in so i can start to buy outlandish things like the 2 amps for my flash car. yes, all bought cash, even the average-sized student loan is nearly paid off. maybe it is cyclic and the next generation will not be so "now now now" and give in to temptation. bear in mind the peer pressure too.. i had an old granny car for years and years so i could save for a better one. that of course did not stop derogatory comments from various people about it at the time. alas, they'll be the ones hurting now in the credit crunch. Quote Link to comment Share on other sites More sharing options...
smidey Posted January 15, 2009 Author Report Share Posted January 15, 2009 Which company Smidey?? Kitchens by Pat Gavin. Quote Link to comment Share on other sites More sharing options...
Luke* Posted January 16, 2009 Report Share Posted January 16, 2009 i just thought of that vodafone ad "make the most of now" lol.....i wonder what other subliminal tactics marketers have employed out there? i guess there's been a large rise in (seemingly?) long periods of interest-free hire purchase items Quote Link to comment Share on other sites More sharing options...
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