Posted by: martinworster | April 4, 2008

96. ECONOMIC WOE

The worst recession since the Great Depression in the 30s. Wall Street suicidal. Middle class families losing their homes. Constantly I’m reading a endless glut of doom and gloom stories in the US media about the current economic slump. The media are great at hyping – sexing up – everything.  According to the mainstream press we’ll all be living under five feet of water by 2030, that is if we survive the imminent Muslim extremist dirty nuclear terror attacks, unless a rogue state manages to nuke us before then.

But in the case of the recession perhaps the media are right. I was reading a story about a large homeless city in Ontario – the one in Southern California, not Canada. Ontario is in the Inland Empire which is basically the inland strip of Southern California and the area hit hardest by the housing crisis. At the homeless city people live in tents as their homes have been repossesed. That’s quite a serious situation, I try to imagine this happening in the UK – and can’t. Good, honest,  probably God fearing middle class Americans looking for their slice of the American dream, white picket fence heaven. And now they live under a piece of dirty tarps. The American nightmare.

And really the downturn is a result of greed. It’s just sad that the people who are most affected by the recession are probably the least greedy, it’s unpoetic justice. It’s also reported that California, specifically Southern, will be worst affected.

Basically property developers built hundreds of thousands of homes in the Inland Empire, a vast dry land of dairy farms on the slopes of the Sierras to accomodate all the people who want to live here but can’t afford the costal strip (unless they live in a condo like me). Coupled with the sub prime fiasco – lending to people who couldn’t afford it – the economy was a house of cards waiting to tumble. The boom of the late 90s and noughties was fuelled by people borrowing against these homes. And now it’s all gone Pete Tong. Or actually Pat Sharpe, which is worst than Pete Tong.

I am affected by this. I also bought a property, just off the peak of the market – and it is of course worth considerably less than I paid for it. Admittedly as I am less than a mile from the beach the decline will hopefully be less, but you never know. It’s Mickey Mouse economics, I should have kept my money in the olde worlde where it’s clearly safer.

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