Tuesday, 24 June 2008

House Prices, Bonuses, Whatever Next?

Everything is dropping. Not a month passes by without horror stories about house prices dropping. Now comes the worst shocker: Last year's City bonuses, so reports The Guardian, were lower than the year before for the first time since total bonus payouts were recorded (how does that work by the way?) in 2003.

They were lower by the mere sum of £300m year-on-year, and they were still 174% higher than 4 years earlier, but such mundane numbers should never get in the way of a punchy headline.

Of course, these two things, and a few others are not entirely unrelated.

Amidst all the doom and gloom, people start wondering whether they really like to commit all their disposable cash to buy a bigger townhouse in Chelsea or whether it's worth the wait to get it a little bit cheaper. Maybe after the next Chelsea FC manager is sacked and moves back to his home country, or maybe after prices have declined overall.

Rightly so, a genuine concern about bonuses seems to have gripped the City. 2007 was a bad year - although note that payouts were still almost 3 times what they were 2003 - and 2008 does not promise to be much better, probably quite the opposite in fact.

And this of course, could have wider implications.

I am starting to get concerned for instance that Damien Hirst might have problems flogging his Golden Calf, or at least maybe has to give a discount on its £12m price tag due to a miserable economic outlook.

That is of course, unless potential buyers realise that it is ACTUALLY a bull (covered and suspended in all sorts of liquids and precious metals). Hence it could be considered food, and if one thing is certain about food prices currently, they are far from dropping.