Have you felt the "GFC"??

At a family thing today and they were talking about the "GFC"

Hubby and I are the only ones in the family who do not believe that ACA and Tody Tonight (or Home and Away etc :) ) are gospel :rolleyes:

Talk came around to "the terrible GFC" (not that any of them have been affected at all) any how sad it is that sooooo many people cannot afford to live "now a days".

So it got me thinking...I have not seen any talk here about a higher than normal level of people struggling to pay rent. Has anyone had an increase in rental payment problems??
 
Struggling to pay rent? The GFC hit the group who never expected to be paying rent. If you don't know anyone who has had to delay retirement or, worse still, were using Storm to finance their retirement, get out a bit. There's a big world out there populated by hard working people who have never heard of SS.
 
I'm not sure about struggling to pay the rent but at a party early on in the year nearly every one there was on reduced income and just paying the bills. Everything else was cut back. Most had there husbands cut down to a 4 day week. Our income also has dropped significantly this year, but no we are still paying all of our bills so none of us would show up in any bad debtor records. It seems that is is often people on good to higher incomes that seem more affected.
 
The extent of the financial trouble is reported by the same experts who missed its occurrence

Ex - used to be, has-been, was
Spurt - drip under pressure

expert : Noun: (eng, Ex spurt ) has-been drip under pressure

Why trust an expert who works for wages
If they were really good at >this< they would be the Warren Buffet of >this<
 
I can't remember where I read it but rent was somewhere around 23% of persons wage where as people buying is around 30-35%.

Looks to me there is plenty of room for rental increases.
 
I can't remember where I read it but rent was somewhere around 23% of persons wage where as people buying is around 30-35%.

Looks to me there is plenty of room for rental increases.

Or for house prices to come down relative to wages and rental prices...
Shouldn't it be a given that it would be cheaper to rent?
 
I have, but I'm in the UK.

I work as a freelance software developer, and that sector virtually shutdown in October (shortly after Lehman Brother's went down) until April or May of this year, and has been slowly improving since then. Rates have fallen by somewhere between a third and a half.

I spent just about a year out of work as a consequence, and I'm probably earning a third less than I was last autumn.

Ironically, the banking sector has been largely unaffected due to the government stimulus being focused on it. In fact a friend was telling me that some of the contract developers he works with at JP Morgan were looking to move job because they could get another 15% elsewhere.

The sensible thing would have been for me to work in the City. The trouble is that it's a case that most jobs require previous financial sector experience.
 
hi all
the gfc was some thing that most people thought was a banking thing well its not
there are alot and would even say heaps of people out there that have lost both invest money and jobs
the biggest hit are the ones that have invested for retirement
these have not been liquidated thou I think a few have but are the ones with there money in funds that are frozen or are going backward
and here are a few and they are not in any order
challenger
aust unity
suncorp
capital finance
mfs
over fifty group
city pacific
city pacifics manage funds and there where 3
allco
and there where 23 funds under this group.
grenfells
hanover
and the list goes on
there is about another 15 or 20 some are frozen some closed and some just hanging on
You can't get your money out or back.
there is a heap of problems for these guys in that they have to sit and watch as there money goes out the window and nothing they can do about it.
not only that but this is the money they were hoping to retire on.
so every day you see your dreams disappearing and you see the real gfc arriving.
I will quote from a fund and its a very interesting quote as I think it sums up the gfc and for most people holding money in these funds it will go to the heart of their issue
I can't cut and paste as it names the fund and I don't think that should go on a open board
we refer to the above loans (the client) and adivse that following the stratigic review by ----- it was announced in april 2007 that any new commercial mortagge lending and related funds management activities would cease immediately accourdingly the loans to ==== will not be extended beyond june 2008.
the mortgagor had funding approved until end 2009.
in or around april 2007 you will find alot of funds did the same.
this stratigic review was very little to do with the funds
but was this gfc
and for those with money frozen in your fund have alook at this date
and you will see this is around the date your fund wsas frozen.
and its a very interesting date for people frozen in these funds
but also for builders and developers that had there sites stopped and no more funding.
we have not seen the true impact yet.
until these funds unfreeze and say the true position of the funds.

I think trading insolvent does come to my mind
now can you be insolvent if the fund is frozen.
we have seen a couple of very interesting cases at the moment on this very point.
the best way to look at the real hurt in the market place is to look at a very interesting indicator
and thats the charities and see the drop in there income levels and where those drops are
people can't give out money they don't have.
we are in the eye of the storm not out the other side yet.
my indicators are saying that there is more to come.
when these fund unfreeze
they are hoping to stay frozen until the market changes.
the trouble is what happens when the capital base is less then the run costs

thats when the korda mentha, kpmg, ferriers, number appears on the screen.
and then the guy that was hoping on his nest egg just hit the dust and the big bird of disaster hits the tarmac.
these planes are in the air they are hoping to circle the airport and land after the storm
trouble is I think alot are out of fuel and are gliding at the moment and that road is comming up fast.
that stratigic view was from a fund with 2 bil in the fund with legals at them from all sides and no way out as I see it
that 2 bil is mums and dads that have it there for there retirement
do I think they will get 10cents in the dollar
no
thats real gfc
or lfc
local financial crisis.
 
Hi moyjos, most definitely I felt GFC.

It brought my interest rate down from 10.45 in Aug 08 to 5.09 in April 09 and it is currently 5.95

I still have loans totalling 7 figures so I say 'Long live the storm & may the eye of the storm continue infinitely' I'll deal with the other side as & when it emerges.

KY
 
As a small business owner the last 18 months have been the hardest year of our lives, and we have been around a long time with a great many hardships faced before, but the GFC has been the mother of all of them. As Sunfish said, so many people are struggling, especially those who just retired and saw their retirement savings disappear, and no chance of recouping their losses. The low interest rate means that self funded retirees saw their income stream vanish. And many of them can't get their money out of frozen accounts - as GR mentioned. Getting a bank loan or business loan is extremely frustrating. House sales are being delayed because of finance issues. People are being laid off - but the media are not reporting it; either that or they are being under-employed. Housing developments are not happening. How can you not see how bad it has been for people?
 
expert : Noun: (eng, Ex spurt ) has-been drip under pressure

Why trust an expert who works for wages
If they were really good at >this< they would be the Warren Buffet of >this<
Sorry, AB, but I find this really small thinking. There are plenty of worthy endeavours in which it's possible to have a high degree of expertise yet not achieve enormous wealth. There are also plenty of people who are very knowledgeable about the operation of the market but temperamentally unsuited to participating.
If you don't know anyone who has had to delay retirement or, worse still, were using Storm to finance their retirement, get out a bit.
I'm with you on that front.
there are alot and would even say heaps of people out there that have lost both invest money and jobs
the biggest hit are the ones that have invested for retirement
Agreed. I know people whose super funds have halved in the last year, many of whom are 55+ and don't have time to make it up. Or who got margin called and thus didn't have the opportunity to "ride it out". Yes, yes, I know, they shouldn't have leveraged, and/or should have had stops etc, but that's not the point. The point is that plenty have been affected, even people who weren't doing anything considered particularly aggressive or risky.
As Sunfish said, so many people are struggling, especially those who just retired and saw their retirement savings disappear, and no chance of recouping their losses. The low interest rate means that self funded retirees saw their income stream vanish. And many of them can't get their money out of frozen accounts - as GR mentioned.
Absolutely. I know of somebody in retirement who had a net worth approaching $10M. He got a margin call and lost everything. The kids are now trying to find Mum and Dad somewhere to live. :(

We've been *relatively* unscathed, and like kum yin lau have been delighted to have interest rates drop, but that doesn't mean I haven't seen that this has been a financial disaster for many people. The main impact that we've felt is that when we had a cashflow problem (tenant disaster), whereas a couple of years ago we could easily have gotten a business loan or overdraft to "tide us over", in 2009 a relatively small problem (about 1-2% of portfolio value) *almost* sent us under this year, as the lenders wouldn't come to the party with more funds. Thankfully we've just kept our chins above water, but I confess it's been very challenging and stressful.
 
Hi Pushka, are you seeing any increase in rent in Adelaide?

I flipped through the ads in the weekend & there's a creep in the more expensive houses.

Still too low in my opinion.

So, an interesting observation. Rents have to go up or prices have to go down. Which do you think?

KY
 
My employer cited the GFC in order to skip the annual pay review (hiring freezes and layoffs were attributed to reorganisation). My super took a hit too. I'd guess my personal damage at about $35k.

I consider myself extremely lucky. My retirement-age parents were among the countless others that took a much bigger hit :(
 
My shares dropped a bit, and I was hit with 2 margin calls in 6 months (which I covered with cash - yay risk management), so I would say I took some small hits but in the longer term it's not much really.

With a long enough time frame, it shouldn't be a huge issue. Regarding retirement, I have some fat built into my target numbers, so if something similar happens when I want to retire, I'll at least have some options.
 
I'd say efficient risk management is not having the margin loan in the first place.
Not being bale to cover it with cash.

My shares dropped a bit, and I was hit with 2 margin calls in 6 months (which I covered with cash - yay risk management), so I would say I took some small hits but in the longer term it's not much really.

As for the GFC, what is that? Seriously, i havn't been affected whatsoever due to efficient risk management and not over extending myself.

I've actually had a great year on the stock market.
 
I've been hit on the super front and other friends have taken about 50% drops - supposedly off AAA investments. I think there's a large case of fraud to answer from this 'GFC', but I just know that the multimillionaires who lied about the value and safety of investments will never be brought to account. Madoff is just a scapegoat. There's likely a thousand more where he came from.

Although he's described as somewhat lunatic fringe, I think Barnaby Joyce's call for some attention and prevention in the financial markets, and a bit of self suffiency and preparation in Australia is long overdue. We may not be so lucky next time and some serious attention to financial disaster management will save our children a lot of pain.
 
both hubby's and my super took a big hit - but both have bounced back. fortunately we're not at retirement age yet.

my private shares dropped to less than half, and have recovered slightly. but nowhere near back to what i paid for them.

hubby had to forgo his annual payrise (no review) and did not get his annual bonus which is usually a given. i was annoyed by him not getting the bonus considering he'd just received an internal award for saving the company $10mil thru his research and development actions! he's on track to save them another $1mil/yr by mid next year - but is doing the work of 3 guys, two of which were laid off, so is pretty stressed. he's still on good money so the gfc hasn't really affected us that way.

we did have to sell an ip earlier this year to pay for the reno's of where we currently are ... and made a loss on the sale due to the market being in the doldrums - but it was a bit of a dog of an investment (made before i found ss) and the money is now put to a faster return use.

a friend was laid off which was pretty sad. he's the father of two young kids who both have medical problems (so enough stress as it is). he got a redundancy for enough to "almost" pay out his debts (mortgage, leased car etc) but that doesn't leave anything for day to day living. he's managed to pick up some contract work with his former employer - but not a very conducive stability environment for his family.

friends who are retired and on super are doing fine as they also have 6 fully paid rentals and only spend the dividend money - they don't need to cash in their shares for funds.

another person i know who owns a private IT business is doing it really tough and recently sold their inner city house to buy something cheap in the suburbs. they went from 100 employees, government awards and really flash inner city offices (big christmas bashes, international travel etc) to an upstairs/opposite the brothel/less than 10 staff in less than 5 years. most of this decline was within the last 12 months ... although how much is caused by overcapitalising and competition, and how much from the gfc, i don't know not being intimate with them.
 
Thanks all for your honest replies.
Originally Posted by Sunfish
If you don't know anyone who has had to delay retirement or, worse still, were using Storm to finance their retirement, get out a bit.

:eek: Perhaps I do I don't know anybody who lost $$ with storm and none of my immediate friends are close to retirement

I do apologize if I have offended anyone with my head in the sand...but the only effect that the GFC has had on me is my ING interest is down, but so is my mortgage. (we have diddly squat in super so 25% drop in diddly squat is not much to be concerned about)

Our business has boomed this year but that is a whole other story.

Obviously I(we) have just been the lucky ones and I do appreciate that.
 
affected - yes and no.

yes - no one want to lend to me, where 18 months ago i was

" borderline not needing lo-doc"

to

"show me 3 year's financials + BAS + outstanding commissions + letter form accountant + 40% equity + a legal team to assess your application with no guarantee of an outcome"

but, i still have my house, my business, my health.
 
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