Friday, September 3, 2010

Double Dippy Doldrums

Can anybody here tell dippy old me if the second dip in a double-dip recession is likely to be better or worse than the first dip?

I met up with my old mates Frank, Max, Joe and Charlie yesterday. Like me, they’d flown back to the UK from their winter homes abroad to catch up with family and friends. Of course, a major topic of conversation was the financial crisis. And each of us had a horror story to tell about the way in which the recession had affected our lives.

Frank told us he’d had a terrible time so far. He’d piled into the Stock Market when the FTSE plunged below 4000, and then sold out after it soared well above 5000. Gosh how I feel for him, because the poor chap doesn’t own a single share in anything now.

And Max had a hard time too, when the government gave him and his girlfriend £2000 each to swop their old bangers for brand new cars that cost far less to run. How sad; the poor souls really loved their old cars.

Joe told us how he’d been forced to stock up on lots of goodies when the VAT rate was reduced to 15%. Then Joe broke the sad news about his son, who had bought his first home after the threshold for stamp duty was raised, and after the purchase price fell to a level where the tax was not payable.

And let’s not forget Charlie, whose fixed rate mortgage of 5.09% on his London second home expired and reverted to a standard variable rate of 2.5%. Shocking, isn’t it?

I’m down in the dumps too. Last December I exchanged 10,000 Euros for Pounds Sterling, after which I waited until June when I exchanged the Pounds back into Euros. And would you believe it, in that period of time the Euro per Pound rate changed from 1.09 to 1.21.

Alas, there’s nothing I can do about it, so tomorrow I’m leaving the UK and heading back to the Canary Islands – with my 11,100 Euros of spending money.

I wonder if the second dip of this double-dippy recession will be just as dippy as the first dip for dippy old folk like me and my mates…



Expat said...

Oh, I would comment if I had any idea what you're talking about!

Meanwhile I now have this tune stuck in my head...dippety doo dah, dippety day, my oh my what a beautiful day.

Does that make me a dipsomaniac?

Canary Islander said...

Expat – what a dummy I am! This tongue-in-cheek blog was all about the crazy changes that have happened in recent years as the UK government has struggled with the financial crisis, and how some people (those who have a bit of money) have profited from changes in UK taxes, interest rates, and in currency exchange rates. It’s not the sort of UK-specific stuff that you, living in the USA, would be aware of in great detail. Sorry!

But you’ve got me wondering about the financial crisis in the USA, and how it has affected people there.

And the funny thing is that I too, have been humming the tune “Dippety doo dah, dippety day, my oh my what a beautiful day”. It’s very, very catchy, and helps sooth my hangover!

JW10 said...

Oi you, C.I, what’s the meaning behind this dipping of your toes into the world of business blogging? You realise this means war and my next article will be about socks.

A fine essay about winners and losers. What a shrewd bunch of friends you have. Hold on what’s this? From next year VAT will be 20%, that’s it I’ve had enough. Where’s me passport? I’m off to dip in the swimming pools of Tenerife.

Dolores Doolittle said...

Blimey, CI - I understandeth not at all! Except I know the euro has not been at all kind for us english here in france over the last few years.

Luckily we're incapable of making enough filthy lucre to play with stocks & shares.
If one Is a gambler, could one wait for a triple-dippy, and get one's money back?

Canary Islander said...

Hi JW! I see you are busy socking it to me! How can you be so cruel to a grizzled old pensioner like me? I’m only trying to make an extra humble crust by dabbling innocently on the fringes of low finance : -)

But seriously, VAT does not exist in the Canary Islands. The only equivalent is a local consumer tax known as the IGIC (Impuesto General Indirecto de Canarias ) which is applied at several different rates. For example, it’s only 2% on office supplies, and I think the highest rate I’ve paid on other stuff is 4.5%. The low taxes and the glorious weather are the main reasons I spend so much time here!

And yesterday I made it back to Tenerife in exactly 10 hours door-to-door! Yippee!

Canary Islander said...

Hi Dolores!
Yes, the Pound Sterling has had a bad time against the Euro. In 2002, when we first arrived in Tenerife, the rate was 1.6 euro per pound, and recently it dropped to below 1.1, which was a devaluation of over 30%. But things are somewhat better now (I’ve just looked and it’s 1.198 today).

That’s a big drop in spending power for the Pound in Euroland, but we’ve found that we are getting cannier at shopping and keeping expenses down as time has passed. And we do love having the occasional flutter on exchange rates, and we've been lucky so far (touch wood!).

If there is a triple-dippy, then we are ALL doomed!

But HEY, wait a minute!

A “Triple-Dippy” is a great name for a new cocktail. I’m going to start mixing and shaking now; people will need to drown their sorrows!!!

Dolores Doolittle said...

CI - jolly glad you're back in paradise!

And can't wait to hear the details of the cocktail... I like vodka, rum, tequila and cointreau best, but had an unfortunate experience once with the vodka & cointreau mélange.

In Moderation is the answer of course!

Canary Islander said...

Hi Dolores! I like all those drinks too! (and Jack Daniels with coke). Mucho cheaper here in Tenerife!

Kathy has just placed an order with Telefonica to upgrade our internet access to super-fast broadband. Bye-bye super-slow ancient decrepid dial-up!

But there's always a sting in the tail, isn't there? This upgrade may involve us having no internet access for up to two weeks. Ouch!

I'm dreading having to use that internet "cafe" downstairs...

Dolores Doolittle said...

You'll be always in our thoughts, CI, no matter how disconnected.

Be careful down there with them internet-cafe-lurkers!

Canary Islander said...

Dolores, I've got a big problemo. (sorry about the Spanish, but that's the way folk talk in these parts, and I like melding).

The problemo is this. Our mate JW has posted a blog with a picture of the supermarket LIDL in it. And I've just discovered that the newly opened LIDL here in Tenerife is doing a special offer of Scotch Whisky tomorrow. The price for a Fine Old Queen Margot 70cl bottle will be 3.99euro (or £3.32).

Should I tell him? :-)

Dolores Doolittle said...

Hi CI-finely-melded, Yes, JW Should be told! Whatever a 'fine old queen margot' is, I'm sure he can handle it with care and sensibleness.

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