Meridian Unplugged - Powered by MrTechGuy.co.uk Forums Discussion Meridian - Systems Job losses at Meridian Huntingdon (and the state of the economy)

You are not alone Chris.

+1 But I nearly got caught out, just bought a 5000C before they went off sale because of the time to save.

Regards I

I am changing over from being a "buy stuff you can't afford on credit" person to a "buy stuff with money you actually have" person which is a very painful process...

I had great problems getting a mortgage a couple of years back - no credit history but having other mortgage free properties didn't count. My IFA came good in the end finding a mortgage based on affordability rather than salary but with today's proposals I fear that I would not qualify for a mortgage ever again in the future. Still, if it prevents people less able to manage their finances from getting into difficulty, then that can only be good.

Me too.
I am in massive 'pay off all debts as fast as you can' mode at the moment.

I'd like to thanks the mods at this point for letting the broader discussion run!

Cheers,
George

I did that about 15 years ago now. I had loans when interest was high and now I have saving when the interest rates are low
But seriously I'm so glad I switched to the �saving then spend� model, it nice to not have a mill stone around ones neck.

Regards,
Carl

I'm a save up a lot and live on it person. The last 10 years rates were too low to keep the credit bubble growing and get Blair re-elected. Musn't grumble. Now for the last two years and for the foreseeable future interest rates are zero, whilst inflation is at 5%. I'm paying a huge price for the excess I didn't participate in. Still, I've got two arms and two legs and a full belly (and some nice hi-fi).

Tintin

Well, when I have paid my Corp tax bill, I will be basicaly skint again, but to some people, being just skint is a goal, I keep positive.
Well done all you who are changing the habits of a lifetime. It's not easy but well worth it when you are bad dept free.

In the meantime, enjoy your Meridian system at whatever level, it will sound just great.

Cheers Chris

I was sent this the other day regarding the financial crisis and it made me smile:

Understanding Derivatives

Hedi is the proprietor of a bar in Detroit ...

She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar.

To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later.

Hedi keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

Word gets around about Hedi's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Hedi's bar. Soon she has the largest sales volume for any bar in Detroit .

By providing her customers freedom from immediate payment demands, Hedi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages.

Consequently, Hedi's gross sales volume increases massively.

A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi's borrowing limit.
He sees no reason for any undue concern because he has the debts of the unemployed alcoholics as collateral!

At the bank's corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS.

These "securities" then are bundled and traded on international securities markets.

Naive investors don't really understand that the securities being sold to them as "AAA Secured Bonds" really are debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb - and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.

One day, even though the bond prices still are climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Hedi's bar. He so informs Hedi.

Hedi then demands payment from her alcoholic patrons. But, being unemployed alcoholics -- they cannot pay back their drinking debts.

Since Hedi cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes and Hidi's 11 employees lose their jobs.

Overnight, DRINKBOND prices drop by 90%.

The collapsed bond asset value destroys the bank's liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.

The suppliers of Hedi's bar had granted her generous payment extensions and had invested their firms' pension funds in the BOND securities.

They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds.

Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings attached cash infusion from the government.

The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never even been in Hedi's bar.

Now do you understand?

:-)

Bar Stool Economics

Suppose that every day, ten men go out for beer and the bill for all ten
comes to $100. If they paid their bill the way we pay our taxes, it would go
something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do. The ten men drank in the bar every day
and seemed quite happy with the arrangement, until one day, the owner threw
them a curve. 'Since you are all such good customers, he said, 'I'm going to
reduce the cost of your daily beer by $20. Drinks for the ten now cost just
$80.

The group still wanted to pay their bill the way we pay our taxes, so the
first four men were unaffected. They would still drink for free. But what about
the other six men - the paying customers? How could they divide the $20
windfall so that everyone would get his 'fair share?' They realized that $20
divided by six is $3.33. But if they subtracted that from everybody's share, then
the fifth man and the sixth man would each end up being paid to drink his
beer. So, the bar owner suggested that it would be fair to reduce each man's
bill by roughly the same amount, and he proceeded to work out the amounts each
should pay.
And so: The fifth man, like the first four, now paid nothing (100% savings)
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to
drink for free. But once outside the restaurant the men began to compare
their savings.

'I only got a dollar out of the $20,'declared the sixth man. He pointed to
the tenth man,' but he got $10!'

'Yeah, that's right,' exclaimed the fifth man. 'I only saved a dollar, too.
It's unfair that he got ten times more than I!'

'That's true!!' shouted the seventh man. 'Why should he get $10 back when I
got only two? The wealthy get all the breaks!'

'Wait a minute,' yelled the first four men in unison. 'We didn't get
anything at all. The system exploits the poor!'

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down
and had beers without him. But when it came time to pay the bill, they
discovered something important. They didn't have enough money between all of them
for even half of the bill!

And that, boys and girls, journalists and college professors, is how our
tax system works. The people who pay the highest taxes get the most benefit
from a tax reduction. Tax them too much, attack them for being wealthy, and they
just may not show up anymore. In fact, they might start drinking overseas
where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics, University of Georgia

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.

I have to confess to using a credit card for virtually all my transactions but pay them off in full at the end of each month. (That 1% cash adds up to a tidy sum at the end of the each year ).

I also used to dabble with derivatives but only to protect my investments. I used to sell traded call options on shares that I owned. Never did understand why somebody was prepared the gamble and buy those options. Not once in over half a dozen transactions did the shares ever reach their strike price and all the options expired worthless to the buyer. There�s an investment fund that uses the same strategy now so I invest in that � much less work.