These are the days and surviving a recession

Within days of a black president being elected as president of America, and a life of protesting against racism, Miriam Makeba has passed away. I pinch myself to check that I’m really living with these experiences and am so grateful to be alive in this era of exciting times, great times and troubled times. I hope that Obama goes on and becomes one of the great presidents, which is a big ask, but it is very necessary.

Meanwhile downunder, Helen Clark has resigned her leadership of the Labour Party having lost the New Zealand election to probably one of the youngest Prime Ministers in our history. To me amongst other things, she represents the Politically Correct which is ironic, because I know she lost many staunch Labour voters in her campaign by trying to make the National Party and John Key in particular look untrustworthy. The TV advertisements at the end of their campaign were all trying to smear John Key instead of focussing on their successes and their future plans, and in my humble opinion, it backfired badly. When you throw mud, some of it stays on your hands and she should have known better. Several people told me that they decided against voting for labour because they didn’t like smear campaigns.

Now we are heading into the biggest recession / depression in living memory. The 30’s and the 80’s will pale in comparison. The depression is a bad thing, but there are different ways of thinking about it and smart people will do well, or at least survive.

Something that has amazed me for some time is how business has teased people, who should know better, to spend money they don’t have on things they don’t need and keep doing it over and over. Retailers and finance companies ought to take some responsibility for what they have done, but many will because their business will dry up. The finance companies will go broke because they loaned money to people that they couldn’t secure and most of the goods had dropped way below their value, the minute they left the showroom.

Banks forgot about their commitment after the 1987 crash. For a while they started looking at people’s ability to pay their mortgages and required that they have at least 20% deposit. Then as property values increased they suddenly decided to finance people with 100% of the loan, figuring that the property values would keep going up and it wouldn’t make any difference. Of course while the mortgages were being paid they were making a tidy profit.

The retailers (including car companies) figured they weren’t taking any risks because it was the finance companies that were lending the money, not them.

Funny really because we often say that instead of employing politicians, who have a short term focus and often little experience in running a business, we should pay a premium and get successful business people to run the biggest business of all, our country. The rational was that in business anyone that went to the board and said, “Whoops I miscalculated and we have half a billion dollars less than we thought”, would be quickly helped into a new career, but it seems business has been doing the same thing and thinking that they can get away with it.

By saturating the market with things they can’t afford (and this hasn’t stopped) with 18 months deferred payment and interest free for another year or so, all they are doing is compounding the crisis. Who wouldn’t be teased into buying a new 42″ LCD widescreen HDTV with freeview built in, especially when the Jones’ have one next door and you don’t have to pay anything for over a year.

So we aren’t just heading into an economic crisis, we are adding fuel to the fire to make the mess even worse and if our government’s are broke, we are walking straight into the arms of the waiting Chinese Government who would be delighted to buy our failing banks and finance companies.

Has everyone taken leave of their senses? Have you taken advantage of a 100% mortgage? Have you bought products on special deals that you wanted but didn’t need? Come on, be honest.

There is potentially an exciting side to this as well. If you were smart and saved money, or invested in assets or property that you could afford and that made sound business sense, you could be looking forward to exciting times. Many of today’s wealthy families made their fortunes in the great depression of the 1930’s. If you were prudent during the boom, you could find yourself on top when the crunch comes, ready to buy into a business or buy some real estate at rock bottom prices and benefit from this situation. Even now it isn’t too late. What are you going to do now?

Christmas is coming. Don’t take that overseas vacation, pay half of the money into your mortgage and have a local holiday. The domestic tourism industry is hurting and you should be able to have a great time enjoying your own back yard. Reduce your debt as quickly as possible and only have debt in things that will increase in value when things come right. I think it’s called delayed gratification.

While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course https://luigicappel.wordpress.com.

Thanks so much for your support:)

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Myanmar and others needing aid and not getting it

I have a real problem with donating to aid organisations when so often it seems that the military, government, war lords or whomever runs a country has control over whether the aid gets to the people that need it.

It was pleasing to hear today that the military rulers have eased restrictions a little on allowing aid workers to send food, blankets, medicine etc into the devastated areas, but I also read that to date only 25% of the people stranded and hopeless have received anything.

On TV I see and hear about stockpiles of donated goods that sit at airports while people are starving, dehydrating and suffering from illness caused by the contaminated water and food. Yesterday I was listening to the latest Digital Planet podcast and they had interviews from people who said a truck arrived in their emergency compound with rescue aids including enough water to supply one family!

So PM Brown is telling the rulers of Myanmar to lift aid restrictions. Big Deal! Didn’t he tell Mugabe to play fair as well, didn’t that make a big difference.

So here’s the thing. We see advertisements on TV all the time about donating funds to all sorts of organisations to send supplies to countries in need. Then on news stories we see evidence of those same supplies stockpiling in warehouses or simply dissapearing between arrival and the people it was supposed to go to. There is a real credibility issue. I don’t mind donating, but I restrict it to charities or organisations that convince me that they are actually doing something. I think most people feel the same way, we don’t mind going without a little if we have evidence that what we are giving genuinely goes to the people who need it, irrespective of their politics or allegiances and doesn’t get enjoyed by people who don’t need it, or who out of their thirst for power allow other people to die of thirst, hunger and malnutrition.

I love programs like Idol Gives Back because they show evidence of results. They seem to show that people are doing better as a consequence and if they were here I would have given some koha (Maori for unconditional gift). But having seen so many examples of the generosity being abused, I generally limit most of my donations to local needs such as Hospice, Child Cancer and the Foundation for the Blind, being charities I trust and where I can see where my money is being spent. This is sad because many possibly very hnest and capable organisations miss out, not because they are doing anything wrong, but because people like the Myanmar Junta stop them from doing their work.