At last, some news

Never leave a long time in between blog posts. It’s so difficult to decide where to start.

  • Europe as a no-fly zone because of volcanic ash? (I was affected, were you? And it’s back!)
  • The never-ending story that is the Greek economy? (Ohh dear!)
  • The UK election? (No, I’m leaving that. It’s tomorrow and I can’t vote.)

Well, quite apart from the fact that I can’t vote then it’s rather interesting to watch the debate and hear what the candidates don’t say. I find this so much more interesting than what they say. Don’t you agree? No one really wants to talk about how to straighten out the economy and how the inevitable tightening of belts will happen. And then the election campaign is of course spiced up by various gaffes by our three main contenders.

One might have thought that with the Euro zone and the IMF pooling their funds and coming up with €110bn that we would have seen the last of the big-letter headlines. Not so. The front page of WSJ Europe screams “Markets unhappy with deal” today. The market is not reacting in the way it was hoped which could be seen as a signal that the market does not believe in the Greek ability to straighten out the situation and also that growth is unlikely.  This is certainly what Paul Krugman suggests in the New York Times.

And yes, I know it’s some time ago and I hope all those stranded have now managed to return to their homes but the shutdown and subsequent repercussions of the volcanic ash from Iceland showed beyond doubt how a large part of the work has come to rely on air travel. I was supposed to fly out on the day it all began and of course I didn’t get anywhere.  At least I could go home and unpack my suitcase but many were not so lucky. A new ash lcoud is drifting in, closing airports in Ireland and the UK so lets see how long this lasts. This morning Edinburgh looked OK with only a few flights cancelled but now most flights into and out of Edinburgh are cancelled. While checking this I noted that the BAA website suddenly has a new button “Volcanic ash FAQs“.

I’m to fly out on 14 May so I hope it’s gone by then!

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Yesterday saw the presentation of Alistair Darling’s budget, a budget that sees Britain sink into about £1 trillion in debt next year. Yes! Ouch! In his budget speech Mr Darling was forced to admit that his previously predicted ‘mild downturn’, to the tune of 1.25%, would in fact be a plunge of about 3.5%. Double ouch! The scary bit is that the IMF shortly after announced that Mr Darling had got his numbers wrong. Mr Darling’s forecast is based on an assumption of growth in Britain for next year to be between 1.0% and 1.5%. Wrong said IMF and predicted a shrinkage of the economy of 4 – 4.5%. Triple ouch! So brace yourself and hope for the best.

It is easy to start blaming the bankers and their big bonuses and those who have failed to give the full picture when advising people on their finances. But with the risk of being called a killjoy, or worse, can I ask you to look closer to home? Did you max your credit card and maybe several of them? Did you live the high living because you expected that the home that you bought at an already inflated price would continue to rise and thus pay for it? Did you take out a mortgage (maybe you were advised that it would be OK by less than frank advisers) that was five or six times your annual salary? Or more? Well then you have contributed to the situation. Collective Britain has overspent for a long time and now we pay the price.

Ouch! Ouch! Ouch! Ouch!