Can anyone remember the 2008 crash?

[Camouflags]

I was too young but can anyone tell me what it felt like before it crashed? Why did it crash? What crashed?!
Personally how did it affect you? Is this worse so far?

This is so much worse

They're not remotely comparable imo, OP.

The 2008 crash had a lot to do with greedy bankers in the US lending money to people who would never be able to pay it back, and it all coming in top. The fallout was essentially economic, as were the remedies, although I concede it was a worrying time.But for a lot of people in the UK, life went on as normal, job losses were relatively low (approx 200k, iirc) and the vast majority of those (in the UK, at least) were in the financial sector, so the impact wasn't as great.

It was also a long time coming. There was a lot of talk and (iirc) one or two former building societies collapsed early in the year, then it all kind of quitened down around budget time, and all the talk and anxiety was more about what was happening in the US financial sector. But it wasn't until much later, late summer or early autumn, that things really went tits up. We were also very lucky in having Alistair Darling as chancellor, he turned out to have balls of steel beneath his unassuming demeanour.

This is more akin to a natural disaster, that feels like it may be beyond our control, and that could cause a huge number of deaths. It's unpredictable, it makes us scared in a much more primal way.

We can't carry on and leave it up to others to sort out, we have make decisions that could turn out to be critical, several times a day. Our survival could depend on whether the person who gets in the lift with you has taken their sore throat and temperature seriously, or thinks they're too important to self-isolate.

So much depends on the science, if an effective treatment and/or vaccine can be developed, tested, manufactured and used before the numbers affected overwhelm the health care services across the whole planet.

And it can totally fuck the economy while it's happening, so it's the worst of double whammies.

And the other big difference was that the 2008 crash came at a time when our public services and infrstructure were in relatively good shape and our social welfare provisions were more or less adequate. This is happening after 10 years of cuts in public spending, when the system is groaning under the strain and barely able to meet normal demands, let alone exceptional ones.

In 2008, I felt philosophical, and understood that things would be tough but confident things would be ok in the end. Now, I feel pretty scared, and really anxious for friends, family, colleagues. My DSS could die, ffs, he's type 1 diabetic and is a bit laissez faire about monitoring his levels, and he does a demanding, physical outside job that brings him into contact with a lot of people. He's 29, with a 4 YO daughter - I'm worried for him, and for DP, who would be beyond heartbroken.

This could take people I love. The global crash never made that likely.

Sorry for the essay.

TL:DR: not similar in any way, at least for UK citizens.

We realised we couldnt move out of our unsuitable house due to housing market th
My husband lost his job
Then i lost my job
But we both found work quick enough and 7 years later moved anyway.

This is worse.

It was bad. Home value dropped by a third

I suppose it's all relative.

I'd seen the value of my house fall by nearly 50% in the early 90s crash. Thankfully, I had significant equity, and what I bought when I finally sold had also fallen by a similar amount. But it taught me not to remortgage every time I got a decent bit of equity in the house.

I don't recall the prices falling anywhere near as much in 2008, but there may well have been local factors where I live that helped prices hold up better. And interest rates were much lower than I'd been used to in the 80s and early 90s, which helped.

My house was repossessed - it was awful

Yes, remember it well. This is much worse. I think it will make 2008 look like a cakewalk.

Problem with financial crash 2008 is we had to have 10 years of austerity in government spending as a result. Gov bailed out the banks so got into huge amount of debt to save the banks. lf they had not done that, there was a possibility of banks crashing and people actually losing money in their accounts which would have Been awful. But as a result afterwards in order to reduce debt, the government had to massively cut back on spending on welfare, health, education and especially police etc for next 10 years. Though health protected to some extent. So financial crisis had huge implications because gov made spending cuts over the next ten years as a result so rise in homelessness, possibly crime all arose from financial crisis. So actually we all still feel the impact of the financial crisis in 2008 today. Though it might not have felt too bad at the time And not too many people lost their jobs. Though obviously financial services were hit. This crisis might lead to more immediate unemployment and people will feel it more. However govt will give help to businesses to keep employing staff. And do things help low paid. In Budget, Govt was going to massively invest in new infrastructure etc, as finances looked better after 10 years of cut backs, but now may not be able to do this now cos has to spend loads to support business during corona.

@housepicturesqueclub, what an astute observation about us still having the "hangover" from 2008. A great way of looking at it.

I think that's partly because governments are scared to do anything that might cause house prices to slide, for fear it will be electorally disastrous.

Of course, back in the days when there were council houses readily available, and secure private rented tenancies, people weren't so desperate to buy. It was easier to get a home that you weren't likely to be asked to leave at 2 months notice, now your only chance of that is to buy, if you possibly can.

@achainisonlyasstrong, do you happen to know how much of the debt from the bailouts has been repaid?

Conservatives very cleverly blamed government cut backs on Labour government mismanagement. But in fact the financial crisis started in US and govt under Gordon brown acted quickly to bail out the banks and this is what led to the huge spike in government debt. Govt actually pumped billions into the banks and effectively renationalised them. Have also just sold off the last of their shares in them. But we actually all feel the impact today. Education and health and police would be much better funded if we had not had the financial crisis. Also prob universal credit could be more generous.

So debt levels are still really high and we have not got it down as much as gov wanted. But it has stabilised. What has changed is we are not running huge deficits anymore so in a year gov spends as much as it receives in taxes. It is no longer spending a lot more than its taxes. But this will change with corona. Our deficit will rise again hugely and debt will go up again. But does not matter hugely maybe as interest rates are so low so govt not paying a huge amount of interest on its debt. Also govt is not like a person running into debt. As individuals we can lose our job etc and lose our income. Govt to a certain extent can always tax its people so revenues guaranteed. Also a relatively rich country like the Uk can borrow from abroad. But if Govt gets into too much debt then companies and other countries start to not want to lend to it too much and then it gets into trouble eg Greece

But def agree people will prob feel this crisis more than the one in2008. We all felt the one in2008 through the spending cuts afterwards though but not maybe when it happened

I worked in Financial Services, was up for redundancy but redeployed in a slightly different role. A huge number of colleagues were made redundancy, it was horrible. Many of my colleagues has partners that also lost their jobs too.

Across industries jobs were lost, I remember hearing about partners in law firms working in call centres part time as it was the only job they could find. Many people realised they were in homes they could not afford as they had self-certified their income.

Huge changes in the underwriting of mortgage and other lending after that. Many people and businesses felt angry at lending criteria being tightened up but frankly much of the lending prior to that was irresponsible.

I was very young at the time so not long out of Uni and paying into a pension. But for many people savings/investments and pensions plummeted.

I'm in a farming area and comparisons have been made to Foot & Mouth year (2001) when many farming families isolated themselves to prevent the spreading of the disease. Obviously the current crisis is much much bigger and more serious for people, but I can see what they mean.
The crash of 2008 had wide repercussions, but I think this is indeed much worse than that ever was.

Should I be taking out some money and keeping it in the house just incase?

£10k is still going to be £10k if it's in sterling, regardless of whether it's in the bank or under your bed. And god only knows what currencies are safe atm, unless you have enough to open a Swiss bank account.

They used to say that gold was a safe haven in uncertain economic times, perhaps that still holds true.

You can trade in gold online, you don't actually get to have it in your possession, it just sits in some vault somewhere. DP did it a few times, and made a few quid on it.

Yes this is much worse as it impacts everyone young and old, all walks of life and all sectors globally.

"Austerity" was an ideological choice, not an economic necessity. Taking from the poorest to prop up the richest is a political act.

I agree, @SerendipityJane.

The poor, the sick, the vulnerable are the ones footing the bill for the bankers' bunfight.

Yeah. I had a toddler and a newborn baby when my husband lost his job. Was horrible.

Didn’t affect me in the slightest. Bizarrely my DH had a pay cut prior to that but it increased at the time and after. I was working as a teacher
This is completely different, the whole world slowing down so much is unprecedented

Finally, the banking systems overall are much more robust than they were in the 2000s

lol

They will be more robust once the thieving fuckers have to move their HQs to Europe, especially as Europe have said 'non' to them retaining British banking regulations.

This is worse.

The 2008 crisis involved fear at the top of the financial markets (i.e. the lenders to the lenders, the insurers to the insurers) that they wouldn't get paid if they lent money to each other. The money stopped flowing, commercial paper (what the next tier of busineses e.g. GM fund their day to day with) dried up and it appeared that the entire financial system may grind to a halt. Huge underwritings and cash injections as well as central bank interest rate reductions got the engine running somewhat smoothly again just in the nick of time.

This is different. This comes from below. People, who both make, sell and buy the goods, the essence of the primary economy, are so afraid that they are spending less, withdrawing their investments, staying home. Soon those same people - as well as their boss and their bosses bosses boss - will be terribly ill dying, not producing, serving, spending.

The entire economy is about the grind to a halt and it's harder to solve because it can't be solved with meetings, handshakes (eeek!) and quantitative easing. The cause of the problem, the virus, will have to be fought once the economy has already collapsed.

The people are angry and will be moreso. Have no doubt, those at the top - East and West - are absolutely terrified. Which is why all the war talk. Tell the peasants that "they" did this to you and maybe the peasants won't turn on their Master.

TLDR: This time won't be reviving an ailing economy. It will be bringing a dead economy back to life. Plus war.

2008 economic crisis, this is an economic and health issue no comparison.
Thousands lost their homes, negative equity many their jobs.

Our house halved in value, we were left on a fixed price deal paying over the odds as interest rates crashed and had a stressful few months thinking either or both of us could be out of a job.

This is much worse. DH could well be out of a job soon, slightly longer term I have no idea what will happen with mine. And of course millions of people will definitely be unemployed, businesses are going to go into administration, and a lot of people are going to die.

The 2008 crash resulted in us being unable to sell our flat so our lender gave us permission to rent it out while we bought our house. We then turned it into a B-T-L a few years later after DH’s pension became worthless. During that time a number of his friends bought flats in cash to rent out as a replacement to pensions.