Saturday, September 20, 2008

Hard Times

a female hand with a needle about to burst a bubbleEcoEarth reports:
Current economic difficulties are largely caused by failing global ecosystems and resource scarcity, and are not an excuse to reduce environmental commitments, warns Ecological Internet. The bursting of the mortgage and financial bubbles, and food and energy price increases, are the logical and inevitable economic consequences of over-population, inequitable and unreasonable consumption, and unsustainable economic growth. Environmentalism is the solution to economic hardship, not the cause. More….

England is now the most densely populated country in Europe apart from Malta. That’s overall, it does not break out London and the South East.

Now, the question of the moment is this. Does it make sense to carry on with plans drawn up during times of plenty when the situation has now changed? Is the forecast for housing demand in the south east still accurate? Does it make sense to sell assets at the bottom of the market to deliver things that are now possibly not needed? Is the market telling us something that our elected representatives should be listening to?

Hard Times mean a Hard Re-Think. Do our elected reps have the bottle?

7 comments:

  1. Er, that's five questions, B21!

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  2. I have no sympathy for all the Developers that have had to put their building projects in mothballs. No point in finishing them off when they know they cant sell them at a profit.I dont think they will be finding the pinch for a few hundred years though.
    Ron King

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  3. An Anon who can count but can't spell their own name!
    Unless your name really is A. N. Onymous?

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  4. Goodness, there is so much in that quote that is seriously questionable!

    Do we need so much housing? Well, probably not, but try telling the Govt that - I had it confirmed to me last week that the Government will NOT rescind their housing targets, which if necessary will have to be met by Councils borrowing the money to fund developments. Guess who will have to fund the repayments.

    Since few people will have the money to buy, they will have to be let to those who cannot afford rents, so they will be subsidised by US, the taxpayers.

    Now, much of the current financial crisis here and in the States has been caused by the US government forcing banks to lend to the sub-prime market, ie the people who couldn't repay debt. Another major contributory factor has been keeping interest rates artificially low (thank you, Messrs Greenspan and Brown), thus encouraging incontinent borrowing.

    I could go on, but will spare you. However, where the 'failing eco-systems' come in is a mystery to me.

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  5. Well, Judith. Maybe we are reading that quote differently.
    For most people, it would seem to me, ecology or ecosystems mean plants, trees and animals, something quite separate from and not related to us human beings.
    I see it differently. We human beings are part and parcel of the whole. We are an inextricable cog in the machine and our actions and behaviour are all part of that whole, including what we call our economy.

    That is, the economy is part of the ecosystem. The clue is in spelling ECO-

    I can’t fault the rest of your comment and I do like your use of the word incontinent.

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  6. "Do our elected reps have the bottle"? Well, one could well be forgiven for thinking they had been on it!

    I agree in general terms with Judith's comments. The "crisis" is often brought about by unrealistic expectation on all sides - developers, lenders, borrowers, even governments! In my early days as a borrower I had to decide some priorities - pay mortgage or have foreign holiday, pay for decorating or replace car, and so on. I was lucky enough to secure a 90% mortgage, but regular repayment was a fact of life. The recent availability of 125% mortgages has been speculation not so much on the part of the borrower, but certainly by the lender who has depended on property value inflation to secure the loan when foreclosure looms. They have caught the proverbial cold in a crisis of their own making.

    Realism, responsibility, and thrift are not unreasonable principles.

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  7. Yup!
    In the mid-70s you were lucky if you got an 80% mortgage.

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