For a minute there it appeared we were on the brink of apocalypse. Then it seemed OK. Then we were back to searching for clean underwear. And repeat. It's been a busy few days for London's financial markets, and it might not be over yet.
It seemed in August that the worst of the credit crunch was behind us and the problems ahead were more straightforward issues of the business cycle and housing market. Yes, Mr Darling was prattling on about the worst economic crisis in 60 years but no one remembers 1948 as being a particularly bad year for the economy, unless you lived in west Berlin, and so we assumed the stress was getting to him and went on our merry way. Obviously he was onto something, even if he got the year a bit off (twenty years off by some guesses )...
Tonight, for 4,500 of our city's fair citizens the word downturn doesn't quite cut it as they went home yesterday with a box of ill-gained office supplies and no job to return to. The good news is that Lehman's employees will get paid for the work they did this month (as little as it may be for some) but the collapse also leaves a pension scheme in deficit and no doubt a long queue at the receivers for everyone from the market traders who are out of pocket to the stationery company whose invoice has not been paid. All in all it's an almighty mess.
Canary Wharf Group now has a million square foot of empty offices that are going to be pretty hard to rent out in the current market (but don't panic - CW group is insured on the rent by none other than the very recently US majority owned AIG insurance group, so American taxpayers will be picking up the tab - cheers y'all). But there's nothing like an empty skyscraper to deter developers from putting up more.
It's also well established that the the ravenous property market in London is fed by the bucks these boys and girls bring home and a bonus shortage and big redundancies in the city will mix it up in the prime commuting territories for owners and landlords (argh!) and renters (hurray!) alike.
As much as they may deserve their place in the hall of fame of 'love to hate' targets, our dear bankers are a precious commodity. They suck in money from all over the world and dish it out again in our Michelin starred restaurants, award winning theatres, champagne bars, charity balls, Filofax shops and Saville Row tailors. There is bound to be something in this great city that you value that depends on our more numerate and less risk averse friends for financial sustenance.
When they sneeze, we all catch cold.
By JamesU
Image by Dean Nicholas
