No matter what happens at xmas, the problems run far deeper than a bit of xmas retail can fix. The cracks have been papered over in the hope of a miracle but the gloom is starting to appear. The spending of consumers is still lagging from the boom days because that is their reality but as Attila says, they may be in for a paradigm shift.
The stimulus money allowed bankrupt banks the ability to move their feet and also raise unimaginable sums in rights issues, such as the RBS 200p issue which investors are now trying to sue them for. The majority of investors still buy the short-term housing data that is spewed out by HBOS or RICS because they believe the stock bounce and the spin.
House prices fall 10%, then the obvious dead-cat bounce is labelled as the biggest rise in 5 years. It's just spinning numbers to drag in suckers. Asking HBOS and a team of surveyors to report housing numbers is a bit of a conflict of interest to say the least.
We were told there would be no bear market, no house price falls, no recession... I have zero trust in the leaders who helped to create this mess. The 'Jobless recovery' in economies which are 50-70% consumer almost makes me want to cry. From services to manufacturing to financial services the key components of GDP are losing jobs and contracts. Industries such as oil have been cutting jobs too and some firms are only clinging on due to oil prices.
To cut a long story short, I believe this mess has a lot more pain to dish out. The banks are using the borrowed time to weather future storms. We should too.
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