27
Sep
08

Damned if they do…

I’m not a very political person, to say the least. I don’t pretend to know the first thing about it all.

However, I am looking at the situation on both sides of the pond, and find myself thinking, bloody hell, how do these people even WANT the job?!

I think it’s becoming increasingly clear that we are heading for a global recession of possibly unprecedented levels. That’s a pretty scary thought. Major banks are crashing around us. I am actually shocked by it all- not being very politically aware, it came as a bit of a surprise to me to be honest. I’m not proud of that, and should have been paying more attention.

Electricity in NI anyway has gone up by 50% in the past six months alone, fuel costs so much it makes me nearly faint, and my grocery bill is cause for heart palpatations. Ian and I are not well off- but there are SO many people who earn less than us, but who have much bigger outgoings. We have been spectacularly lucky in moving house JUST before the housing market hit the deck here, and we sold our first house for a huge profit, so our mortgage is comparatively small. If we’d left it another year or two before we bought that first house, I don’t even want to think about what financial position we’d now be in, but it would not be good in any way.

That’s the problem- people have bought houses, thinking complacently that, as everyone used to say “you’ll never lose money on a house”, and at time of buying, their repayments were affordable because overall outgoings were so much less.

Now- hmmm, not so much.

The girl who bought our first house was a first time buyer who was buying as an investment. House prices in that area have now plummeted since we sold by £40-50k (about $100k), and I actually think about her and feel bad that it’s turned out to be a poor short term investment. I hope in a few years time the market will recover and she’ll be OK.

The house we bought hasn’t really lost much value, not that we want to move, and at the moment it’s SELLING- not value. Can you even find a buyer? Who can blame buyers? Who really knows when the market has hit rock bottom? Scary times.

I don’t pretend to know how we have got to this point. Like I say, I should have been paying closer attention. But, I look at poor sodding Gordon Brown, who has made some major mistakes in the short time he’s been Prime Minister, but who probably couldn’t have stopped this anyway. He’s not long for this job, and looks increasingly exhausted and irritable with every passing day. Even those closest to him are scenting blood; no-one can wait to be rid of him. David Cameron, the Conservative leader, looks smug and complacent. He’ll almost certainly be looking more exhausted in two years time, when he’s PM and the country is still in recessionsville- sure, it might not actually be of his doing, but you can bet your bottom dollar that the British people will be blaming him for the financial state of the land…it goes with the turf.

I look at the US, where two interesting candidates are battling it out for the Presidency, (going to stay neutral here, ha ha!) both of whom under normal circumstances could be great…

Things are SO bad- anyone in the top job on either side of the Atlantic is going to be blamed, whether or not the problems are their fault. All of these people are inheriting problems which have resulted from the work of others. Yet, in the year or so since Gordon Brown took over from Tony Blair- it’s all his fault. It will be the same in the States- whoever wins the race now will be to blame in a few years time when the recession isn’t over.

I don’t envy anyone that level of power. I’d hate to be held accountable for the fate of a nation. I wonder if, in the back of their minds late at night, those who desparately want to hold the reins ever question their own judgement on even wanting that role in the first place!

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4 Responses to “Damned if they do…”


  1. 1 Jenny
    September 28, 2008 at 9:57 am

    Suzy, you really were lucky to sell when you did. We weren’t able to sell our house in Belfast before the property market crashed, because we were still waiting for our visas to be finalised. Now we would struggle to sell it at half the price we would have got 18 months ago. It’s rented out now, which takes the immediate pressure off us, but it’s still a worry. I don’t think we’ll be able to sell it for another couple of years, but we still have to pay rates and insurance and repairs, and deal with the hassle of maintenance.

    But at least we didn’t buy that house 18 months ago either. I do feel sorry for those people that bought at the peak but can’t afford to hang on for the long term. It’s like the stock market – if you can’t afford to take the hit in the short term if things go bad, but also can’t afford to wait around for years, then don’t play the game. The value of a house in a good location will always go up, but maybe not at the speed you anticipate.

    I think you guys made totally the right decision in renting the house out for now. At least it’s giving you some kind of return now- of course, the rental market is stronger than ever now because noone can afford to buy any more!

  2. September 28, 2008 at 1:00 pm

    Government service in a political situations seems like a death sentence. Here, on the other side of the pond, there is already a reayt-made scapegoat in office and everyone is trying to be the savior.

    Buying a house for investment is a risk/reward chance that people take. We all saw overstated property values here years ago, but people kept buying and lending.

    I think the situation is very similar both sides of the Atlantic…

  3. 3 Skry
    September 29, 2008 at 12:48 am

    It’s not even both sides of the Atlantic MTAE – we’re in New Zealand and everyone is bricking it here. There are banks in trouble, investment companies and financial institutions collapsing and building projects foreclosing everywhere. It’s big news around the world, and all because some numpty came up with a “better way” of working mortgages…

    The whole issue is very complex, but I did watch a programme on TV and read a couple of news articles a few months ago on why this has happened. It basically boils down to banks wanting to get mortgages out to more people, as the more people who owe you long-term loans and mortgages, the more stable a future income you have.

    If everyone bought a house today on a 25 year mortgage from Bank X, Bank X would know exactly how much money it would be making for the next quarter centuary and that then helps investments. The trouble is that all these investments are based on the banks getting mortgage repayments from people, which is now not happening because people are unable to repay their mortgages. Kinda like Jenga when you pull a piece of wood out of the bottom and the whole pile falls down, when you pull enough mortgagee repayments from a bank it’s income stops and it stalls.

    The whole thing is a very big and complicated mess, because banks and their investments effect properties, savings, insurance and pensions – basically all the high-value things you will ever be involved with. Combined with oil running out and food prices soaring, this is going to be one hell of a recession, and it’s probably going to last for years…

    Takes your mind off global warming though! 😛

    Thanks for the explanation! Sorry it’s as bad in NZ…

  4. September 29, 2008 at 3:59 pm

    When I was a kid, I wanted to be President. By the time I got to high school, all that fame and power seemed like a poor trade-off.

    I wouldn’t want that job for all the money, power, and historical fame the earth could muster.

    Couldn’t agree more. I’d be a very bad Prime Minister in any case, ha ha!


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