Friday, April 3, 2009

Meeting Obama - well, almost.

Sitting in traffic yesterday on the way into London, just about to enter the Limehouse link tunnel, when a stream of several motorcades flew past on the other side of the road, carrying the G20 (possibly a boy-band) to a concert at the Excel centre. We knew it was them as the radio news was saying that they were all arriving for the summit. Loads of people complaing on the phone-ins about the cost of the whole event, in the circumstances, although 20 million quid really is just a drop in the ocean. But they could have flown them all to Jersey or somewhere, which would have saved a fortune and stopped all the protests kicking-off. And now we have seen lots of self-congratulatory pics and newsbites about how they have all agreed to invent lots of money to pump in the financial systems and sort out the global problems. Whether or not this will help remains to be seen. Clearly there have been some monumental banking screw-ups that have been going on for a number of years, and there is some reluctance to return to what keeps being referred to as "normal" lending. I don't think that a situation where the majority of adults in the UK have thousands of pounds of unsecured debt on loans and credit cards is particularly normal, just that it has ended up being common. People don't necessarily need access to ever increasing levels of credit, but if someone wants to move house, or change car etc, then redeeming loans and taking new ones simply oils the wheels of life. Better regulation is certainly needed for consumers and the amounts that they can borrow, but that will always grate with the people that insist that they can service more debt, and there will always be another credit card and balance transfer that can be used to borrow more.
Mortgage lending in the UK was up in Feb, a good sign, and net credit was down, so have people started paying back more, perhaps because of falling mortgage payments leaving more cash available?
How will this help this in the Spanish mortgage and property market ? This also remains to be seen as I think we are certainly behind the curve of the UK. If people have confidence and ability to borrow in the UK, then perhaps that holiday home / investment will again feature on people's minds.
What is going to happen with sterling though, is anybody's guess.......

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