The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Falkland investor = Gabled
I think you need to take a look at SMEs Theo. Not all have millions in the bank and most are run on a shoestring due to margins, minimum wage going up etc.. Its disingenuous to say that they are Zombie Companies as most have a part to play in society.
I see your point but many small businesses do trade from month to month...two close friends have a small estate agency and a dance/ fitness studio... absolutely nothing coming in.. the dance studio is under a year old so no Gov help at all and the agent employs 3 people.. help may arrive in June but if this goes on longer then by the time the housing market is open again it takes 3 -4 months for pipeline to start flowing... that's at least 6months with nothing coming in buy plenty going out..there are 10's of thousands of these up and down the country... most with families.
The Banks have to play ball or it will be them who comes off worse..... I hope the Gov lets any bank that refuses to lend and help at this most pressing of times go under... Might seem pie in the sky but the Gov pot is not bottomless and those banks refusing to help will have a self inflicted run on them.
and what will the SP be in a few months time?
Thank you Italian - just wish I could give a brighter forecast but just cannot see it. Most businesses shutting down for months with no income coming in will become short of cash and the banks wont lend as they want to keep themselves afloat. This 80% scheme for PAYE people sounds really good but doesn't come into play if the business closes. Then the Government will have to start paying benefits - with what though?? its a vicious cycle and one that people are not talking about and perhaps cannot see. People will start seeing this playing out sooner or later and will take a very brave soul to invest in equities at the moment....
If the banks hold back on lending the money the Gov has put into the system (all £350B of it) and people have a choice of feeding their family or paying mortgages or loans then the banks will be in real trouble... they cant repossess everyone and so what if you default on a loan for a few months... I'm sure many a legal case will be going in against banks if people can prove they asked and were rejected, therefore pushed into hardship by a faceless corporate monster who was told to lend!
They would probably win £££££ in compensation from the bank if the Judge wants to set a precedent... it will be PPI all over again so I hope the Banks are listening.... news just said 800'000 businesses are just weeks away from folding due to cash flow. Hmmmmm
not invested here but completely agree chinch.i simply don't think the economic consequences have been fully appreciated yet. im not suggesting they should have taken precedence over the health care restrictions etc,but as someone who has been through all the crashes including 1987 imo this of an entirely different order I'm afraid.
Absolutely Bench - if this lasts well into 3 months plus the whole economy will go into meltdown and there will be 5 million plus unemployed which will then lead to civil unrest. Whilst the Government seemed to enjoy popularity initially they surely can see what's coming?? The banks hold the key to lending and there is not a lot that the Government can do about it unless they underwrite 100% on any lending which I assume they cannot afford...
Interesting times to say the least and 2008 will seem like a small ripple in the pond compared to this.
The govt has instructed banks and other financiers to give 3 month moratorriums on mortgage payments and other loans - shades of the 2008 USA sub prime mortgage lending which put the world into recession !
Plus ca change c'est encore le meme chose ! The more things change the more they come back to the same thing !
Regards
The Gov should have done it directly but they don't have the banking network... I can see a big back lash with many refusing to pay loans, mortgages...
Interesting article to confirm that banks are not loaning to businesses
https://www.bbc.co.uk/news/business-52114414