All posts tagged global financial crisis

That bit where I realise how white & middle class I am.

by tealou on April 24, 2009 in Uncategorized with 2 Comments

I want to talk a little bit about a revelation I had today, whilst walking back from the shop. I have found myself car-less for 2 weeks, and have actually been walking wherever I needed to go, and only buying what would fit in the bottom of the baby’s stroller.

And it’s awesome.

Not only does it force me to just wander, and think, and not have a constant barrage of phone calls, emails, tweets or Facebook notifications… but I get exercise as well. I actually have a stack of material stored for this blog that came about just from letting my thoughts travel.

On the walk home today, I was enjoying my walk, thinking about fitting exercise into my day and thinking about previous years, where I have purchased gym memberships, hired machines, done fad diets, etc…

And it occured to me.

I would pay $55 per month, get in that car (that I couldn’t afford), drive 10 minutes to the gym, to stand on a treadmill and be bored shitless. If I even went in the first place.

Just let me repeat that in case you didn’t realise how absurd it is:

$55 per month to drive 10 minutes to the gym, to stand on a treadmill.

It was this thought, where I chuckled to myself about the absurdity of our consumer culture, that I wondered out loud to myself… WHEN THE FUCK DID I BECOME A PART OF THIS?

I grew up in very modest surroundings – with a father on a disability support pension, and a grandmother who came out of retirement to clean hotels just for me. I always thought that I was fairly humble – of course not without *some* ego, but for the most part pretty humble and moderate in my consumerism. But of course it all crept in over time, until all of a sudden I was one of those BORING CUNTS who complain to their grandmother about how FUCKING MISERABLE I AM to be earning 3 times the biggest salary she ever earned, trying to pay off a car with a shitty finance deal & repayments that were killing me and the fucking-woe-is-me-isn’t-it-SO-hard-being-able-to-work-whenever-I-want-in-my-own-business-for-good-money-and-oh-the-bills-and-my-oh-so-middle-class-lifestyle.

I deserve to be punched in the face for it, and I am honestly surprised Grandma didn’t.

Anyway, I arrived home after my walk, having had this revelation that my life for the last 5 years has pretty much been bullshit, tail chasing consumerism at it’s finest. My Dad, who is a car-less pensioner, who relies on public transport & walking everywhere, was here, and I felt the need to tell him about my revelation.

I said “I have decided that I am going to simplify my life”.

He laughed at me in that “I love you but fucking hell did you really spawn from my loins” kind of way that only a parent can. Because he doesn’t have the choice. And I felt like a complete wanker, because it shouldn’t be a revelation that we spend too much fucking money on pointless shit, to impress people we don’t really like and who would never really be impressed anyway.

So, despite the economic situation having a scary effect on my financial future, I have actually realised that I am tremendously lucky to even have the CHOICE to simplify. For so many people, it isn’t a matter of choice but necessity. Heck, it might even become necessity. But hey, that’s alright, because I’m too fucking fat and lazy anyway.

Troubling times ahead…

by tealou on October 13, 2008 in Uncategorized with 2 Comments

I have been watching the global economic crisis unfold both here and in the world market, and I must say, the events of the past 2 weeks are really not a big surprise to anyone who has been paying attention.

Today, the Rudd government announced more injections into the economy, to try and boost consumer confidence, by giving pensioners and families one-off bonuses. Last week, he also guaranteed all bank deposits, and has committed to additional government spending. I am supportive of all of this, as it will allow us to (temporarily!) weather the international storm.

But Rudd has made one huge mistake, which I think may actually be a nail in the coffin for the Australian economy and for consumer confidence. He has increased the First Homebuyers grant from $7000 to $14,000 (or $21,000 if you build). This has disaster written all over it. The original $7000 (and $14,000 for a little while if you built) put massive inflationary pressures not only on established housing in older suburbs, but on the crappy estate housing as well.

The average mortgage payment for us, if we were to enter the market right now, would be at least $1000 per week. This doesn’t include rates, or anything other than just the mortgage. We earn well over $100,000 a year and we still would find it extremely difficult to make those sorts of payments. And that is for the crappiest houses in the crappiest suburbs. We are better off than the great majority of people in Perth, and yet we sure as hell can’t afford a house! So I wonder how successful any attempt to get people to enter the market now is going to be. It’s going to seriously hurt middle and low income families.

Housing in Perth is ridiculously and artificially overpriced. Those that jump on the $21,000 grant are most at risk, because they are buying when the market is at a premium, and building in those shitty estates that are most vulnerable when the housing market shifts. Those in the $14,000 bonus gap can potentially do OK, but a lot of housing is currently overvalued and WILL DROP. Prices have already dropped by around $50k in many suburbs, and it is on a downward spiral.

Rudd has effectively made a cataclysmic mistake in trying to put people into inflated mortgages. It will come unstuck. They WILL foreclose on their houses, and it will be the same downward spiral that was inevitable anyway, just with a whole lot more casualties.

What are we going to do? Right now, every single cent we earn is going into paying off credit card and personal loan debt, and then saving the rest in term deposits. We will strike when the market collapses, and be in a good position to get finance because people like us will be hard to find in a year. The money I get from the government for the kids and the baby bonus will all be put into savings, not spent at Toys R Us at Christmas. And eventually, even though we will have to rent for maybe another year or two, we will then buy a house at a reasonable price, with a comfortable life.

As lovely as it would be to buy a house (we have considered it at various points throughout the last 5 years and have had opportunities), I think anyone who enters into a mortgage right now is either extremely stupid, or extremely brave. I hope for many people’s sake that people realise how damaging this grant could be (doubt it… estate bogans I am looking at you), but it is going to be very, very tough to recover if, and when the housing market collapses and you are left with a mortgage that is nearly double the actual value of your house.

This is a very real possibility, and I hope that the government rethink the grant. It was the original grant that fucked everyone up in the first place.