Wednesday, September 17, 2008

Pop

Another day, another bank going bust. The bubble has well and truly burst, hasn't it? I don't pretend to be an economist but I'm amazed that so many people have been living - even working in the financial industry - and not preparing for the inevitable. The Lehman employees who kept their entire wealth in Lehman shares, and have now lost millions, are a classic example. What went wrong? We seem to have massively over-extended ourselves as a (global) society; nothing shows this more than the ridiculous over-valuing of housing in London.

One prediction I read yesterday said that average house prices might fall by 50% in this recession. Ouch! But from a personal point of view... it would be nice if houses were priced at 3-4x salary rather than the current 10x.

1 comment:

dave bish said...

Having bought relatively sensibly at the top of the prices last year it's interesting watching all of this. Thankfully we can afford our mortgage... (though we were offered twice the amount we borrowed)