I’m a Pundit

I was browsing some of my blogging hangouts this morning and found what can only be described as one of the funniest summaries of the economic climate I have seen so far.

The quote comes direct from I am Livid, a fantastic British blog by the disturbingly anomynous, and scarily hairy, Mr Angry.

I have fond memories of the recent men’s 100 metres final in Beijing. Usain Bolt put in a performance that quite literally, made track and field history.

Then I look at the state of the country today, with rising inflation, falling house prices, banks on the verge of collapse, recession looming large on the horizon, and a feeling among many that things are about to take a significant turn for the worse.

Then I look back to just over three years ago to the Live 8 concerts, and I wonder if the Government completely misunderstood the stated aim of Making Poverty History. Because right now, it looks like they could be about to do just that.

written by Oli \\ tags: Depression, Economy, Funny, Government, Humor, Humour, Live 8, Poverty, Recession

For a lot of people the recession brings tidings of woe, house values are dropping like stones, business are going broke and people are suffering from bankruptcies. There is however a silver lining to the recession.

It has been more than acknowledged in passing that house prices in the UK are insanely high. Not even 60 years ago a house could be bought for 3 times annual earnings, hence why mortgages have usually been given at 3 times annual earnings. Today however people earning around £20,000 ($40,000) a year are expected to spends between £200,000 ($400,000) and £500,000 ($1,000,0000) on a home in Britain. How can people afford this?

Well quite simply they can’t, interest rates will keep increasing what is owed to such an extent that nearly a fifth of new mortgage buyers are expected to never pay off the loan themselves, instead leaving the remainder as something for the kids.

For this reason the incoming recession is a good thing, house prices should be brought back into the realm of the reasonable and affordable. Houses that once cost £15,000 shouldnt, half a century later, cost £150,000.

As recession bites strings will need to be tightened, but a lot of things that have grown in price will fall, while the basics become more expensive. It does however need to happen, for too long Britain has stood in the shadow of a false economy, a problem which has haunted it in a million different ways.

written by Oli \\ tags: Depression, Economy, Recession

Despite multiple cash injections around the globe the stock markets finally slumped as the major banking institution Lehmen filed for bankruptcy. While the global economy crisis itself is not unexpected it seems amazing to me that those in charge remain so blind as to the effect it has on the world.

Hell American Treasury Secretary Henry Paulson said today that;

“Americans could remain confident in the “soundness and resilience” of the US financial system.”

Now excuse me for just a second her, saying the American Economy is resiliant is like saying the George Bush is going to be President again, completely unrealistic.  Seriously the US economy has been floating on thin air for a long time, and it has been long overdue for a crash.

The first step to fixing problems is admitting tehm, and this seems to be something that neither the American or English Governments are willing to do yet.

written by Oli \\ tags: Crisis, Depression, Exconomy, Gobal, Recession

I can’t help but wonder to myself how Alistair Darling came into power in England, We are talking about a man who seems to have no sense of the fact that the economy rises and falls, that inflation goes up and down 

Infact Mr Darling and Gordon Brown, in true US style have spent so long shooting down the small temporary inflations and minor economic downturns, all while spending the money the Conservatives saved to keep the country afloat, that they have built up to a massive tidal wave that could quite possible be the next economic depression.

I am having trouble coming to terms with the fact that Mr Darling can refuse to talk with public sector union officials after giving them a below inflation pay rise, chiding the workers of the UK for wanting enough money to live on, when one of the major reasons for the recession is labours insane levels of taxation, which rather than fostering businesses and prosperity to bring in revenue have instead focused on taxing more for more money.  If there is any lesson learnt throughout history it’s that the damage this causes to small businesses and the vulnerable is catastrophic.

Already bankruptcies in the UK are at an all time high, this is not down to consumer spending going down, its to do with increased fuel prices, increased business tax rates and a multitude of red tape laws strangling small business.

Mean while our Gordon Brown is busy licking the old American mud rim, while George Bush is sat their wondering if Tony Blair has been at the pies a bit too much recently and had a mild heart attack.

I really wish we had a party in power that wasn’t full of privately schooled, out of touch wankers who have been trained as Politicians and seem to live in a world that is mostly constructed within their own mind.

written by Oli \\ tags: Alistair Darling, Depression, Downturn, Economy, Gordon Brown

The BBC today reported on how rent has risen by aroun 10-11% while house prices are expected to drop by 20%.  When they interview landlords on this they give reasons such as increased market (People selling houses and renting for a while)

Of course they avoid the major issue on this.

The Reason Rent is rising so dramatically in some areas is because Buy to Let investors are in serious trouble.  Many of them have found rent not covering rather significant mortgage increases, and with few other places to turn they are placing the burden on their tenants.

The Reason Property owners are admitting this to the press is that it would be an admission of their own guilt

By admitting they are raising rents to keep up with mortgage prices they are admitting it is their fault, they stretched themselves too thinly over debt and failed to keep enough money in reserve to cover high interest periods.  For that reason when times get tougher they have no choice but to massively increase rent, despite the fact it carries a significant risk of putting them out of business.

Despite the facct that there are a huge amount of unlet properties currently on the market as people return to house and flat sharing the Landlords will continue to spout their bullshit to remove any possible blame to themselves, in the end however a lot of them will go bankrupt as the market normalizes

written by Oli \\ tags: Depression, Housing, Lettin, Renting