I’m a Pundit

Whether you are in the Uk, USA or mainland Europe chances are you will have seen some aspect of the financial crisis in the guise of troubled banks being bailed out by the government.  But what exactly does this mean, why does it happen and more importantly why shouldn’t it happen?

We have seen on many occasions banks being given tens to hundreds of billions of dollars.  These staggering sums keep banks in business, allow people to spend more.  But at the same time people are taking the money out of the banks they are paying more in taxes, all for it to bail out yet another bank.

It is infact a vicious cycle, the governments in charge a the moment dont wan’t the economic crash to happen so are pumping in moneyto the banks,while raiseing taxes to compensate for the loss.

It sounds pretty terrible, the truth is though our economy is still actually quite strong, and yes we are still paying too much, infact if you look at actual inflation vs wages you will find that even if the market drops a further 20% we will still be poorer than we were 30 years ago.

The truth of the matter is that a crash has to happen, people will lose jobs, banks will go bankrupt and people will lose money.

In other news Boy George was arrested for handcuffing a male ‘escort’ to some rails, I will avoid making the obvious ‘do you really wan’t to hurt me’ song reference here and instead go on to mention that you have to be careful forrockstars who may sem loveable, but often use their on stage personalaty as camoflage, rather like a karma karma karma karma chameleon.

I’ll get my coat.

written by Oli \\ tags: Bail-out, Banks, Celebrities, Recession

I was pleased to see that the Government has decided to officially tackle the obesity problem. Yes that’s right, all you fat bastards out there, you are now officially a problem.

This new campaign has been brought together after an obviously shammed together report claimed that in 2050 90% of people will be overweight.  Judging by this I have looked at decent trends and deduced from the governments recent interest rate cuts that in 2050 interest rates will be at minus 30%.  Good news for mortgage holders but sorry savers, your lucks not in.I am not sure exactly how the government is deducing it’s priorities, I mean lets face it, they are pretty much removing all aspects of fitness from our every day lives, take for instance the following :-Rising taxes on pub beers forcing people to shop for booze at the supermarket - This not keeps people at home rather than visiting the pub! (On a serious note I know 3 pub football teams that have collapsed due to the insane rises in alcohol tax), forcing people to stay at home is not only damaging pubs but removing a lot of social activities, many of which ARE fitness related.Increased benefits for single parents - Gone are the days when b***rdry was a crime.  Today we promote single parentage and following that the number of children eating at Macdonalds everyday on non working single parent support has risen drastically.  (On a serious note here a huge percentage of obesity comes from government supported families, this is not coincidence)Compare this to times past when single mothers were flogged and sent to the work house while their children had to walk to London and survive on stolen vegetables while performing spontaneous song and dance routines with surprisingly athletic stall holders.  You can suddenly see why obesity has risen drastically from 200 years agoClosing Sport and Health Facilities - I am not so sure about other areas but due to lack of funding my local city has wait for it NO inner city sports facilities.  This means no cheap government subsidised gym, no swimming pool, nothing infact other than quite a lot of paths which can be run along with only minor damage caused to your knees.Anti Bullying Legislation - Yes I know it may seem cruel and no one likes to see a child picked on.  But lets face it, nothing will get a kid on the sport track faster than 50 of his peers calling him fatty and throwing pies at him.  I think a lot of problems that are around today come from too many rights organisations and do-gooders making life too cushy, these same people have caused countless c*ck ups with their mis-management and shot sightedness.All in all I am not surprised obesity is increasing.Infact the only light at the end of the tunnel I can see most surprisingly came from Gordon brown (although in some ways it isn’t that surprising, the money grabbing retard doesn’t see the benefits the scheme will have on the country he merely sees a quick buck).  Yes that’s right, in the near future it will be much harder to claim benefits unless you are actively looking for work!British Economy

written by Oli \\ tags: Depression, Law, Politics, Recession

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

The credit crunch has been a major part of the UK press recently. Due to the recent rise in interest rates the newspapers have suddenly took on a doom and gloom look on the UK Housing and Consumer Market.

Now first of this was predicted several years ago by many of us,  with many peoples earnings not being enough to buy.  But te real fact of the matter is that when people are having to borrow 8 x their earnings to buy a house a 0.5% interest increase is not going to make a huge amount of difference, it is the multiplier, not the interest rate, that is preventing first time buyers from investing at the moment.

On the BBC website today I saw the following quote,

“But 2009 is particularly difficult to predict at the moment as the credit crunch may last for two to three years.

“But this in turn may lead the Bank of England to cut interest rates sharply, which may help stimulate the market, especially as there is now pent up demand from would-be first time buyers.”

Now to me this looks like yet another pile of bullshite from the big boys. Now that the Public has become aware of the fact that people are having trouble affording houses, and there is no longer a ‘boom’ to cash in on there is little posibility of these companies promoting housing as a growing market.  Personally I believe we will be looking at a minimum of a 20-30% drop in housing prices (Enough to get to the 5x earnings barrier at least) before things start to settle, though this may take 3-4 years.

I particularly like the part where this representative states that  “there is now pent up demand from would-be first time buyers.” Of course there is a pent up demand for first time buyers.  The problem is that first time buyers are looking at around 8 to 10 x their annual income before tax to afford their first house.  It was not even fourty years ago that a single person could go out, get a basic job on just over minimum wage and still get a house at no more than 3x yearly earnings.  The social idea that you need to have a partner to buy a house is now quite ironicaly becoming reality after it was the topic of so many jokes in the mid 90’s.

As someone waiting to get in on the housing market and with very little debt I am personally dead on eager for this housing crash, recession and equalisation that has been making the rich richer and the poor poorer.

written by Oli \\ tags: Debt, England, Housing, Recession