Sunday, September 21, 2008

"The financial system is closing down."

- so said Simon Cawkwell, London trader and author, in yesterday's Daily Mail. (It's amazing, the amount of people who won't countenance anything at all that appears in that newspaper. You can quote the exact same thing to them and tell them it's from the Times, the Indy or even the Guardian and they're immediately interested and ready to debate the issue. But mention the Mail and you get a disparaging: "Oh. Well. It can't be true, then. It's in the Daily Mail." So, it's not a broadsheet. But even the broadsheets aren't broadsheets any more and they're quite capable of printing rubbish too, so I'm not interested in prejudiced newspaper snobbery.)

"It doesn't matter what the Government does," he went on to say. "Everything's completely ****ed." And: "All this talk about having brought everything back under control is hooey."

In the same newspaper, as blogged by Tim, Peter Oborne "signalled the start of a new world order which will have devastating implications for Western nations" in his essay: Apocalypse Now. Sensationalism? Doom mongering? Maybe.

But if you've seen Paul Grignon's Money As Debt video, you might think differently. (Most people do, after watching it.)

Simon Cawkwell again: "The whole thing's mad, no economy on earth can run this way. Until people grow up there's no hope for us."

But I couldn't base this blog post on cartoons and newspaper soundbites, compelling though they may be, so I went off to read something by George Soros, who always seems to have his finger on the pulse in a more explanatory way, and found another soundbite to base it on instead:

"The current crisis is the culmination of a super-boom that has lasted for more than 60 years."

If markets are cyclical which, for all Gordon Brown's superhero claims to the contrary they are, then that's quite a long period of super-bust coming our way, isn't it? (Funny how you don't see that term around quite as often as its opposite!)

As a further sop to the newspaper snobs amongst us, here's a quote from Friday's excellent Financial Times article Mood sours as crunch hits home in UK, by Jonathan Guthrie, Chris Tighe, Atideb Sarkar and Andy Bounds:

The Waitrose supermarket in Harborne, a smart Birmingham suburb, was selling char-grilled vegetable pizzas alongside newspapers whose headlines lashed a US hedge fund manager as a “greedy pig”. In the car park, Kate Organ, 53, a freelance arts manager, described her mood as “wretched and disempowered”. She expected her income, currently £30,000 a year, to dwindle. She said: “When I was at university, the Workers’ Revolutionary party harangued me that capitalism would collapse. Now I know what they were on about.”

And another:

But even for the debt-free, the fragile UK economy has exacerbated worries about higher living costs – putting thrift back in fashion and evoking memories of Austerity Britain. “I’m more conscious what I’m putting in the trolley,” said Sue Reay, a PR officer, whose weekly grocery bills have risen by a third to £80.

- which chimes with something I heard on Woman's Hour on Friday. After a particulaly facile non-debate about whether female bankers would have prevented the current situation (A programme called Woman's Hour is hardly likely to disagree with that suggestion, is it?) the piece moved on to the realities of this new, enforced prudency, citing children who had been overheard in supermarkets asking their parents: "But can we afford this?" And, the discussion went on, what do we say to the children about the present situation?

This raised a grim smile to my face, which won't surprise regular readers. My children have been faced with this reality for most of their lives, and it's never bothered them. If anything, we've always thought it a bit sick and distasteful when we've seen people swilling about with obviously too much money. How can you appreciate anything, when you can have absolutely anything?

And this was the tone that the Woman's Hour piece ended on - that families are rising to the challenge and starting to more carefully cherish their material possessions again. Good. It's a nicer way of living.

But what of the millions who will be made jobless and homeless and who will be already frightened and starting to panic? I sympathise. I know the feeling, having been there several times in my life. The more you have to lose, the more terrifying the prospect of losing it.

All I can advise is this: the reality is always much easier than the dread, so get to the reality as soon as you can. Face up to your situation. Get out the bank statements and properly assess your state of affairs. Don't follow the government's example of spending even more money to try to stave off disaster. (Where is all that government money going to come from, anyway? They haven't really got it sitting in a bank account, have they? They're just going to print it... and then we'll have rampant inflation... *rolls eyes* The oldest stupid trick in the book.)










And in my experience, the simple life is profoundly better than the profligate one. It's easier, more straightforward and less stressful. It's bliss, really. All we need is food, fuel and shelter which, unless you happen to live in the middle of a desert, can be found all around you, for free.