financeguy
ONE love, blood, life
The Western world — Britain, Europe and the U.S. — has moved from excess to
austerity overnight. This week’s financial typhoon will savagely impact living
standards.
In due course, it will topple governments and lead to a permanent transfer of
economic and political power from Europe and America to the emergent and, in some
cases, such as China, semi-barbarous economies in the East.
I know I will be accused of being unnecessarily apocalyptic and irresponsibly
negative, but I believe that the greatest mistake we can now make is to
downplay the seriousness of the situation and bury our heads in the sand.
Let us examine, first, the fate of City bankers from firms such as Lehman Brothers — all summarily dismissed when their firm went under this week.
They will receive no severance payment and almost no chance ever again of benefiting from the six-figure salaries and massive bonuses they have taken forgranted over the past few years.
That means they cannot service the huge mortgages they have taken out on hugely expensive houses. So this weekend they have become forced sellers —which means that thousands of new For Sale signs will be going up in London and the South-East in the coming weeks.
If these unemployed investment bankers had the misfortune to buy anywhere near the top of the market, they now face the prospect of personal bankruptcy.
This is because they will find that their houses are worth much less than they paid for
them, and will therefore be unable to repay their loan.
With so many vendors on the market obliged to sell at any price, it can be assumed that any London house will fetch 25 per cent less this weekend than it would have done this time last week.
For the past 25 years we have lived through a glorious party.
We have all — governments, companies, banks and, of course, consumers — lived beyond our means and are paying the price.
This weekend the hangover begins. It will be prolonged.
Life will be much closer to the austerity that followed World War II than the frenzied, debt-fuelled boom of the past two decades.
Perhaps our lives will be none the worse for all this. Our values will certainly change — many will say not before time.
Material objects should count for much less.
Almost overnight we have entered a new world, and we must learn to make the best of it.
Apocalypse Now?: New world order could have devastating implications for Western nations | Mail Online
Peter Oborne, writing in the Daily Mail.
He's right, in my view, completely right.
On a side note, honestly and truly, I am amazed at the lack of interest in financial and economic matters on this forum.
Please, please, please educate yourselves, and make whatever adjustments - if any - to your lifestyle you deem necessary.
Please, at the very minimum, read the entire article.