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What next for the UK Economy - 2020/21 - Recession? House prices? Unemployment?

Companies generate cash from sales. If they are not generating sales, or if sales (and therefore revenues) are reduced, then they have very few options open to them:
  • Burn reserves
  • Reduce costs
  • Raise money
Cash is returned to shareholders in dividends (private company or publicly tradable on the FTSE or on AIM in the case of the UK). Shareholders can sell shares where a company is listed or at IPO (Initial Public Offering) or realise their investment on sale of the company they have invested in in an M&A situation.

If you look at the companies going to the wall or in trouble, their revenues are down which means they need to raise cash - either from issuing new shares or from loans. Debt is generally considered preferable to equity. No-one likes to burn reserves and any company with more than three months cash reserves is doing OK - irrespective of size. Three months minimum is what your CFO/FD should look to have in the bank.

The moment a company is in trouble, the vultures descend - it is not pleasant to watch. All shareholders know that shares can go down in price as well as up. Investing is a risk. Everyone is happy when its 'make hay' time, and the moment there is a sniff of trouble, everyone wants their money out and they piss and moan. There are many factors influcing share price.
You’ve missed my point.

Irreducible cash burn is irreducible. There are no costs left to cut.

Raising debt is near impossible if your turnover has crashed by 90%. Selling equity is near impossible if you are approaching insolvency.

When the cash runs out, it’s run out. That is the situation in which many companies find themselves.
 
The UK government has probably condemned many to poverty through splashing out money as if there was no tomorrow. We're now over £2 trillion in debt. The last time government debt was this high was in 1961.

Yet vanity projects like HS2 is ongoing, with a final cost way above £100 billion. The furlough scheme has cost hundreds of billions, to name but two items.

IMHO, the country is going to go into an economic depression like nothing seen here since the 1930s.
Which seems a stark contrast to life here. Whilst not the best the unemployment rate is down to 8.4 percent. Not the boom times of last year, but it doesn’t feel like we have quite fallen off a cliff yet.
 
You’ve missed my point.

Irreducible cash burn is irreducible. There are no costs left to cut.

Raising debt is near impossible if your turnover has crashed by 90%. Selling equity is near impossible if you are approaching insolvency.

When the cash runs out, it’s run out. That is the situation in which many companies find themselves.

Indeed - which is why the Government is offering bail out loans. The issue is with no sign of return to revenues that will support the cost base, its becoming a stark choice for businesses in that position. If there are no further bail out loans and furlough is ending, then companies will go off a cliff edge into administration.

Grim
 
I took my manager up to Paris CDG last week to catch a flight home to DK.
En route we went past the Dassault engineering airport at Chateauroux right next to the A20.
All I could see was BA and Air France aircraft parked up like on an aircraft carrier, no parking space to be had there.
It is an engineering base, not a working airport.
Whilst at CDG I only saw two flights take off in half an hour, and numerous terminals shut.
That is not hitting the news here either.
There is quite a lot that we are not being told at the moment.

You're bang on the money, there.

Today Air France announced the following extensive cuts to their winter European timetable,


With tighter restrictions announced in the UK, it can only be a matter of time before BA announce the same level of cuts.

Edit,

No sooner said and this is announced,


Forecasts for the lottery numbers available for the usual fees paid into my Cayman Islands account.
 
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