Showing posts with label Money. Show all posts
Showing posts with label Money. Show all posts
Sunday, November 16, 2008
Standing in the rain
Ah, good old ELO. I once lived around a mile up the road from their drummer, Bev Bevan. Nice bloke, and still breathing. He had a big place, think it was called 'Cornerways' or something like that, near the Warwickshire village of Rowington. Big old mock tudor house with a lawn the would give a New Brunswicker palpitations of jelousy (They like acre sized yards in New Brunswick. That and big decks. "Hey, honey, come sit on my big deck." or "Look at the size of my deck."). Wonder if he still owns it.
Damp foggy day all day today here on our part of Vancouver Island with visibility around 100 metres. Not a Sunday for getting out and about, just a day for snuggling down and keeping warm. Oh, and trying to fine tune the Synopsis for the current MSS. Next is the sequel, followed by an attempt to re-draft my half finished Cerberus trilogy.
Am watching the current financial crunch with a certain heaviness of heart. It had to come, but I would rather that it wasn't taking such a bite out of our capital as it is. No matter, we have to earn our way in this world, and that is what I and Wife are doing. Standing in the rain. Doing our best.
Friday, October 24, 2008
Winners & Losers
With the speculators taking a big hit it might just prove good news for the rest of us mere mortals. If they don't have the funds, they can't use panics to artificially inflate prices. Take for example the local gas prices, now down to 111.9 / litre, and oil price per barrel $60 ish. Elsewhere in Canada, this is dipping below the dollar a litre mark. This is good news because the rises that have been stoking the underlying inflation of food prices will slow down. For example; nine months ago, a 500g pack of thick sliced bacon was $5, now the same product has been seen around $8.29. I cite an example at the top of the price range (Premium product) but my grocery bills have gone up from $70-80 a week to $120 for roughly the same goods, so it's pretty much happened across the board, although if you're canny, you can keep the bills down to size (Not always possible with Wife in tow). These rises take an unwelcome extra bite out of the finances, I can tell you. Forty bucks here, another forty there. It all adds up.
In addition; immigration to Canada isn't a cheap business; every month brings new expenses. The latest item on the list is around three hundred and fifty bucks for a medical examination (Each). Took us a working day to track down which clinics did what (Loss of working time & pay), and who could fit us in on their list. Wife's new job is going through the full process, and it's like the old Cat Stevens number, 'Matthew and Son'. I think the lyric goes; "The works never done, there's always something new." So it is with immigration. Always something new.
On the other hand, when I negotiate past the false flags of nostalgia for Sunny early mornings on the Fosse Way and other Gloucestershire roads, I realise life for me in the UK wasn't as good as it is here. Less stress, fewer crowds. Just the weather alone is a compensation. Brilliant sunrises over the Islands, little traffic. Sometimes the silence can be deafening. When I walk Dog in the woods this morning, the only sounds will be a Sea Lion snouting and snorkelling as he hunts up and down the Narrows, one of the local Black Tailed Deer running away, Dog crashing through the underbrush and the sound of leaves falling.
Have been doing some work on my Sci-fi MSS "Sky full of stars", which grows by the day. Current word count, despite ditching paragraphs of unnecessary verbiage, is over 135,000 words. A tweak here, a sentence there, a single word change. It all adds up. One of these days it might even get finished.
Sunday, October 19, 2008
Sums
Have just been dredging around my computers hard drive and come across my old cost of living figures from two years ago in the UK: Back in the bad old days when we had a mortgage, we had a total monthly outgoing (Without luxuries) of two thousand three hundred and seventy six pounds and thirty eight pence. This was everything; Mortgage, House repairs, clothing, travel costs, council tax, food, etc. After tax was removed from our salaries, we managed to save a grand total of one hundred and thirty two pounds and change every month. Our two girls could take a bite out of our remunerations to the tune of up to five hundred pounds plus. The change from the aforementioned sometimes went on a bar of chocolate for Wife. The rest went on saving for our big leap of faith to BC. Wife and I occasionally had a trip to the movies, or the theatre when we could blag free tickets.
Using a straight two for one conversion rate to the Canadian Dollar, that would be Four thousand seven hundred and fifty two point seven eight Canadian Dollars basic outgoings. Add another thousand for the girls costs, and we were left with two hundred and sixty one Canadian Dollars after savings.
Now we live in British Columbia, Canada, and although we are not making the money that we were in the UK, our outgoings are at present just under two thousand Dollars per calendar month. That includes all costs including cars, rent, tax, everything. We live fairly frugally, but we don't go hungry, and the view from my kitchen window every morning, even on rainy days is spectacular. Of course we do miss some of our friends and neighbours from back in the UK, but we're making more over here every day.
It's at times like these, despite the fact that neither of us are pulling down anything like our UK salaries, I think we are miles better off. Better quality of life; and although the bureaucracy of immigration sometimes trips us up, less stress. All I can say is this; had I known thirty years ago what I know now, I'd already be a Canadian citizen.
God bless Canada.
Using a straight two for one conversion rate to the Canadian Dollar, that would be Four thousand seven hundred and fifty two point seven eight Canadian Dollars basic outgoings. Add another thousand for the girls costs, and we were left with two hundred and sixty one Canadian Dollars after savings.
Now we live in British Columbia, Canada, and although we are not making the money that we were in the UK, our outgoings are at present just under two thousand Dollars per calendar month. That includes all costs including cars, rent, tax, everything. We live fairly frugally, but we don't go hungry, and the view from my kitchen window every morning, even on rainy days is spectacular. Of course we do miss some of our friends and neighbours from back in the UK, but we're making more over here every day.
It's at times like these, despite the fact that neither of us are pulling down anything like our UK salaries, I think we are miles better off. Better quality of life; and although the bureaucracy of immigration sometimes trips us up, less stress. All I can say is this; had I known thirty years ago what I know now, I'd already be a Canadian citizen.
God bless Canada.
Friday, October 10, 2008
Two good things about the current financial crisis
Two really good things about the current stock market falls;
Firstly, the price of gas has dropped from 129.9 to 117.9 in the past four days locally.
Secondly, all the whinging and bitching about 'Climate Change' seems to have dropped off the media's main agenda.
Wonder if the politicians will have the sense to drop the raft of ineffective and purely superficial 'green' tax plans as well. We can but hope. There's an election coming up, and although I can't vote, am not keen in seeing the NDP or Greens gain any more power. Canada can't afford them.
I don't own shares, so there's no tears shed there. We've spread our capital around a number of banks, so we won't lose if another one goes under, although we've been pretty careful where we stashed our savings. Wife and I have both got jobs. We're just hunkering down, continuing to work hard and waiting for the fiscal storms to pass.
Firstly, the price of gas has dropped from 129.9 to 117.9 in the past four days locally.
Secondly, all the whinging and bitching about 'Climate Change' seems to have dropped off the media's main agenda.
Wonder if the politicians will have the sense to drop the raft of ineffective and purely superficial 'green' tax plans as well. We can but hope. There's an election coming up, and although I can't vote, am not keen in seeing the NDP or Greens gain any more power. Canada can't afford them.
I don't own shares, so there's no tears shed there. We've spread our capital around a number of banks, so we won't lose if another one goes under, although we've been pretty careful where we stashed our savings. Wife and I have both got jobs. We're just hunkering down, continuing to work hard and waiting for the fiscal storms to pass.
Sunday, October 5, 2008
Down on Wall Street
A lot of the media are going on about the current credit crisis and how it is the fault of those greedy, hateful capitalists and Republicans who leech off the poor. This, I find is a very blinkered point of view. The source of the problem actually comes from a relatively obscure piece of American legislation called the Community Reinvestment Act. I know the following explanation is just a broad brushstroke precis, but the facts are true enough.
A little lesson in economic history and the law of unintended consequences is in order here. Essentially the CRA forced mortgage lenders to lend to people who would usually be considered a 'bad credit risk'. Originally passed into US law by the Democratic Carter Administration, it's provisions were massively extended by the Democratic Clinton Administration so that even more of these 'sub prime' mortgages were issued with the increased risk of default in case of economic crisis.
More Americans wanting to buy put pressure on housing stock and forced the price of a home up, thus increasing the need for more credit. This had a knock on effect to all the other markets, UK and European included. The lenders, forced to lower their lending criteria did what they thought was sensible to spread their exposure to bad debt by selling the debt on. Bankers and traders bought and sold the risks rather like anything else they do to make money. In reality what they were doing was trading what was little better than 'junk bonds'. Thus the bubble grew and the exposure to those on the margin of creditworthiness expanded. All it required was a small economic downturn for the whole jerry built monstrosity to go completely tits up.
In the meantime, Congress blocked all attempts by the Republican Bush Administration, who seemed to think all this bad debt was a truly awful idea, to water down the CRA. While Congress blocked all moves to slow the increase of potential bad debt because it would be 'unfair' Bankers kept on selling the risks on in s kind of ever increasing money-go-round to spread the load, rather like a game of 'pass the parcel' where the 'gift' inside isn't all that pleasant to get lumbered with. For some this was not all bad. Those with a little foresight and understanding of what was really going on understood what was coming, made their money and got out of the business of selling credit risk into precious metals. Others didn't. They got well and truly clobbered.
Gasoline prices pushed up by speculators and driven by media panics grew. The costs of transport grew, pushing everyday prices up. Meanwhile the property market saturated, over saturated, then burst when the underlying inflationary spiral of costs not included in the inflation figures got ahead of many people's economic capacity. Companies shed workforce in order to survive. People who were no longer able to pay off their debt began to default on the loans. Bankruptcies grew with ever more foreclosures until the market in selling the mortgage risks collapsed, sucking the rest of the stock market down into a kind of financial space time anomaly.
Banks with a heavy speculative exposure to these risks such as Lehmans in the USA, and Northern Rock and HBOS in the UK, were bound to be hit badly. Anyone with even a little understanding of the market could predict that. Fortunately, the Canadian market does not seem to have quite such a problem with exposure to such bad risks, although property values here on Vancouver Island are going to take a serious hit as many Americans are forced to sell their holiday homes. I'm thinking 15-25% price drops overall.
Looking on the bright side of the whole mess, this crisis means Wife and I can probably buy a decent lot for our dream house at a reasonable price. Wife has a new job. I have a new job. Who says it's all doom and gloom?
A little lesson in economic history and the law of unintended consequences is in order here. Essentially the CRA forced mortgage lenders to lend to people who would usually be considered a 'bad credit risk'. Originally passed into US law by the Democratic Carter Administration, it's provisions were massively extended by the Democratic Clinton Administration so that even more of these 'sub prime' mortgages were issued with the increased risk of default in case of economic crisis.
More Americans wanting to buy put pressure on housing stock and forced the price of a home up, thus increasing the need for more credit. This had a knock on effect to all the other markets, UK and European included. The lenders, forced to lower their lending criteria did what they thought was sensible to spread their exposure to bad debt by selling the debt on. Bankers and traders bought and sold the risks rather like anything else they do to make money. In reality what they were doing was trading what was little better than 'junk bonds'. Thus the bubble grew and the exposure to those on the margin of creditworthiness expanded. All it required was a small economic downturn for the whole jerry built monstrosity to go completely tits up.
In the meantime, Congress blocked all attempts by the Republican Bush Administration, who seemed to think all this bad debt was a truly awful idea, to water down the CRA. While Congress blocked all moves to slow the increase of potential bad debt because it would be 'unfair' Bankers kept on selling the risks on in s kind of ever increasing money-go-round to spread the load, rather like a game of 'pass the parcel' where the 'gift' inside isn't all that pleasant to get lumbered with. For some this was not all bad. Those with a little foresight and understanding of what was really going on understood what was coming, made their money and got out of the business of selling credit risk into precious metals. Others didn't. They got well and truly clobbered.
Gasoline prices pushed up by speculators and driven by media panics grew. The costs of transport grew, pushing everyday prices up. Meanwhile the property market saturated, over saturated, then burst when the underlying inflationary spiral of costs not included in the inflation figures got ahead of many people's economic capacity. Companies shed workforce in order to survive. People who were no longer able to pay off their debt began to default on the loans. Bankruptcies grew with ever more foreclosures until the market in selling the mortgage risks collapsed, sucking the rest of the stock market down into a kind of financial space time anomaly.
Banks with a heavy speculative exposure to these risks such as Lehmans in the USA, and Northern Rock and HBOS in the UK, were bound to be hit badly. Anyone with even a little understanding of the market could predict that. Fortunately, the Canadian market does not seem to have quite such a problem with exposure to such bad risks, although property values here on Vancouver Island are going to take a serious hit as many Americans are forced to sell their holiday homes. I'm thinking 15-25% price drops overall.
Looking on the bright side of the whole mess, this crisis means Wife and I can probably buy a decent lot for our dream house at a reasonable price. Wife has a new job. I have a new job. Who says it's all doom and gloom?
Monday, September 15, 2008
Financial musings
I've been watching the news of the stock market crash in the US and UK with not a little disquiet. Wife and I got out of the UK almost at the peak of the property market, paid off the mortgage and invested our money carefully. No stocks or bonds, just a big wodge of cash earning steady interest at fixed interest in several of the larger banks, taking care to spread the load. We're still a bit nervous, but as they say, in a recession cash is king, and we have cash. We also have jobs. Our children's University courses are funded. So far so good. The family is safe. That is what counts.
Well, I'm not saying 'I told you so' but the UK economy is still, in my very staid and sombre economic view at least, horribly over inflated and has a way to go in a downwards direction. Even back in 2004 the writing was on the wall, it was only a question of how long the pressure was going to build before the bubble finally burst. You can only sell debt for so long. Even a comparative financial ignoramus like me could see that you couldn't float an economy on over inflated property values and credit cards forever.
At the time (2004-2006) we had Estate Agents (Realtors) soliciting us to sell so they could earn commission on the sale and so we could get a bigger mortgage for a bigger house, which we didn't really need. I shut down my business because I could see the way things were going in 2004, and took a day job to weather the inevitable financial storm. Turned out I was a bit previous as far as guessing the date of the crunch, but now the storm is with us, and we are hunkered down watching it pass.
There was plenty of warning in the markets, and I'm pretty sure the 'smart money' got out last year (2007) and went into precious metals because the price of gold soared as the UK gas price climbed above the #1GBP per litre mark. We were crossing the Trans Canada at the time, and keeping in touch with things via the various Wi-Fi points in Motels.
Some Neighbours of ours who put their house on the market shortly after we sold up are still on the market a year later at a reduced price. For less than we finally got, and they have a larger, more modern abode than we ever did. Notwithstanding, I feel for them and wish them well but in my heart I know they'll have to take another serious hit on the price before long if they still have to sell. My Brother bought into the district three years before prices peaked, so he won't be hurt too much.
Wife's ex, who she divorced back in the 1990's, is feeling the financial pain because all his stocks and shares have taken a palpable hit. We had some very snotty e-mails from him back in March regarding our Girls' higher education funding, but since we'd already taken care of 'the necessary' I fail to see what he was whinging about. Unless of course the Girls had been wheedling expensive stuff for 'Uni' out of 'Daddy', which, knowing them is pretty much par for the course. Hopefully, Wife and I have taught them a little frugality, and the world will teach them a little more. They both have jobs and support themselves, and I think will not be coming out of University with a first class degree and massive debts, just a First. That will put them ahead of their peers. I approve.
Here on Vancouver Island I am still perplexed that Gas prices locally are still at the 148.9 marker, yet oil has sunk below the $100 a barrel mark and dropping. Screenshot taken at 20:09 New York time 15th September 2008.
What the markets will do in Canada is another thing, and I don't know enough about them to even hazard an opinion. All I know is if you put the price of one thing up, it will have a knock on effect. No price or tax rise can ever be 'revenue neutral'. The UK is currently paying the price for thinking of that nature.
Well, I'm not saying 'I told you so' but the UK economy is still, in my very staid and sombre economic view at least, horribly over inflated and has a way to go in a downwards direction. Even back in 2004 the writing was on the wall, it was only a question of how long the pressure was going to build before the bubble finally burst. You can only sell debt for so long. Even a comparative financial ignoramus like me could see that you couldn't float an economy on over inflated property values and credit cards forever.
At the time (2004-2006) we had Estate Agents (Realtors) soliciting us to sell so they could earn commission on the sale and so we could get a bigger mortgage for a bigger house, which we didn't really need. I shut down my business because I could see the way things were going in 2004, and took a day job to weather the inevitable financial storm. Turned out I was a bit previous as far as guessing the date of the crunch, but now the storm is with us, and we are hunkered down watching it pass.
There was plenty of warning in the markets, and I'm pretty sure the 'smart money' got out last year (2007) and went into precious metals because the price of gold soared as the UK gas price climbed above the #1GBP per litre mark. We were crossing the Trans Canada at the time, and keeping in touch with things via the various Wi-Fi points in Motels.
Some Neighbours of ours who put their house on the market shortly after we sold up are still on the market a year later at a reduced price. For less than we finally got, and they have a larger, more modern abode than we ever did. Notwithstanding, I feel for them and wish them well but in my heart I know they'll have to take another serious hit on the price before long if they still have to sell. My Brother bought into the district three years before prices peaked, so he won't be hurt too much.
Wife's ex, who she divorced back in the 1990's, is feeling the financial pain because all his stocks and shares have taken a palpable hit. We had some very snotty e-mails from him back in March regarding our Girls' higher education funding, but since we'd already taken care of 'the necessary' I fail to see what he was whinging about. Unless of course the Girls had been wheedling expensive stuff for 'Uni' out of 'Daddy', which, knowing them is pretty much par for the course. Hopefully, Wife and I have taught them a little frugality, and the world will teach them a little more. They both have jobs and support themselves, and I think will not be coming out of University with a first class degree and massive debts, just a First. That will put them ahead of their peers. I approve.
Here on Vancouver Island I am still perplexed that Gas prices locally are still at the 148.9 marker, yet oil has sunk below the $100 a barrel mark and dropping. Screenshot taken at 20:09 New York time 15th September 2008.
What the markets will do in Canada is another thing, and I don't know enough about them to even hazard an opinion. All I know is if you put the price of one thing up, it will have a knock on effect. No price or tax rise can ever be 'revenue neutral'. The UK is currently paying the price for thinking of that nature.
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