The Credit Crunch merri-go-round.

, posted: 16-Mar-2009 08:17

Recession, depression, credit bubble, credit crunch. I don't know what you want to call it, but it seems to be the latest bogey man to upset to the world. Yes there are businesses affected, and some (or is it many?) will have noticed a downturn. But how much of this is real and how much of this would be self imposed based on media speculation.

Case in point- I'm looking for a video camera at the moment. Do you think I can find one? I went to Wellington photographic supplies yesterday in the vain hope the might have some working cameras (don't get me started on that policy of non working cameras in the store so you can sell it later). Now as I looked through the shelves I noticed they had no or very little Canon or Panasonic cameras. When the shop assistant came over I asked him about it...

"We can't get any, because of the (insert noun for the crunch here) so the manufacturer isn't manufacturing as many as they think "people are not buying".

So surely if there is no stock then people can't buy either? Which means the manufacturer doesn't meet their sales targets which they them blame on the credit crunch which means they start laying off jobs.

Sounds like a flawed business model to me where the manufacturer cares more about the profit sheet than any real result like the number of sales.  If you fudge around with the numbers enough then you can make whatever story you want. It doesn't even have to be the truth. And what is worse is that this manufacturer will cut jobs of good people just to drop their wage bill to keep their net profit a similar number to last year, therefore the CEO will meet his numbers and be given a bonus so large that he could of paid the wages of the aforementioned jobs losses.

And round and round it goes......

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Comment by kinsten, on 16-Mar-2009 09:49

yea, thats pretty much my take on this situation as well.  Although, I supose there are actual issues out there as well, but quite possibly up-to half of the business problems caused but *credit crunch* are superficial.

Comment by Mozart, on 16-Mar-2009 11:04

There certainly is the reality of businesses using the recession/depression as an excuse to "right-size" their businesses and streamline their businesses.  This in turn negatively impacts employment figures, which in turn reduces spending, which in turn makes the recession deeper and more protracted.  Not all businesses will handle the situation as they should - that's life. 

However, the global meltdown that we're seeing is NOT purely because of our collective responses to media coverage.  It is because the global economic model currently in place is ultimately unsustainable.  To understand this, you need an understanding of where money actually comes from and where its value is derived.  Ever wondered where all the money actually comes from?  Where it's all gone?  Who creates the stuff anyway?  Is there some central bank in each country physically printing money and distributing it?

Jump on YouTube and search for "Money as Debt".  Watch the 5 documentary style cartoons (takes about 45 minutes) and bear in mind that this was produced in 2006, I think.  It's worrying stuff, but at least gives a very clear and easy to understand explanation as to what's going on. 

Hopefully this will help answer some questions!  It'll probably just prompt a whole load more though...

Comment by tonyhughes, on 16-Mar-2009 11:11

Ha - LIES. The manfacturers still manufacture - its the retailer CHOOSING not to buy the goods in.

Shop elsewhere!

Comment by wmoore, on 16-Mar-2009 11:24

So is the shop assistant saying that they are in short supply...Maybe they need to do some heavy discounting to get people in the door.

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davidcole Cole
Lower Hutt
New Zealand

Been thinking it would be nice to have a blog but not sure if I have enough to say.

I'm an I.T worker from Wellington New Zealand.

I like my toys so this will probably have posts about my dealings with those.

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I run a NextPVR based PVR at home to replace my video recorder, DVD player and to host all my music. I'm also really big on Plex, for centralising all my music, videos and I've written a plugin or two for it for accessing live TV and for storing recordings with metadata.

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