Foreign Perspectives

Archive for the ‘Business’ Category

Perhaps one of the most interesting developments in the mortgage market in recent years is the arrival of chequebook mortgages. That’s interesting in the Chinese sense of the term in their curse “may you live in interesting times”.

A key aspect of a mortgage is that it’s a very, very long term committment. Typically the term is at least 25 years over which time untold numbers of changes to your life and lifestyle can take place. Children can arrive, grow up and leave home over that time, interest rates can go from 5% to 15% to 5% (and have done exactly that in the past), the area in which your house is in can even go from “up and coming” through “marked for demolition” and back to “attractive” (which has happened in areas of Belfast). That’s just the changes that can happen to anyone.

So, as I say, the arrival of chequebook mortgages is “interesting”.

For one thing, 25 years is so long that you just don’t think about arriving at the end of such a period and that, for a mortgage product, is a fatal error to make. Chequebook mortgages actively encourage that kind of thinking in that they effectively give you an overdraft of perhaps £100,000 or even more. It’s all too easy to spend that on the day to day things and find that you’ve absolutely no way to cover the final mortgage payment 25 years down the line.

Ah, but you’ll look at your statements all the time, won’t you? Many people don’t but even for those that do, that 25 year period is just too long to appreciate the problems that can befall you by spending just a little bit too much as you go along.

The run of peculiar incoming links to this blog continue.

Every time I mention something finance related, a whole raft of blog aggregation blogs pick up the post and republish it. The theory is that they’ll make money on the ads on their site and, of course, they don’t have any nasty work to do once they set up the aggregator.

I write a fair bit on various finance topics so I can understand them monitoring this blog for any appropriate key words and then picking up on them. Or is it simply the category “banking & finance” that they are picking up on? Well, this entry is tagged with that as an experiment so I’ll know better tomorrow.

Other places are a bit more unusual. For example, my piece on The Color Purple was picked up by a literature aggregator and the one on building your own house by a home aggregator. I’m very tempted to play games with them to see just what they’ll pick up 🙂

Still, it does help the incoming links which is all to the good.

We received a reservation a week or so back for two rooms for today. Not unusual really but it was from one of the many places that don’t tell us when people might be arriving.

Now, November is a fairly quiet month for us and they were the only people due in today.

It’s Wednesday so no school trip which meant that we were in right up to 5pm. That’s when we’d to nip out to the shop for some things but we were back by around 5.20pm.

Guess what? Yup, that’s when they arrived, wrote a note to say there were here and left!

Naturally, they couldn’t understand why we weren’t there to greet them but then we’d no idea of when they were coming nor how they were getting to us as they didn’t reply to the e-mail we sent them asking that.

In times gone by saying that you were involved in a “cottage industry” meant that you were doing something like making quilts at home or perhaps making cute little craft items. Essentially, working with your hands by and large.

These days a cottage industry is quite a different beast.

Yes, there are still many people around making those quilts and craft items but you’ll see them sold online these days. In fact, that aspect gives you more contact with the original maker of such items than most people would have had in the hay-day of the cottage industry. In the past, they’d have sold most of their items via buyers whereas now they can sell them to you directly.

However, these days there is a whole new class of cottage industry. It’s not uncommon to come across an ebay seller in the most unusual places. I’ve bought several items from a place based in the Shetland Islands myself which is about as far from “civilisation” as you can be. Likewise, there’s a number of places based in Point Roberts, the little bit of land forgoten about when the treaty definining the border between Canada and America was signed.

Similarly there are the likes of myself making something of a living from writing. There have, of course, been writers pottering away for a long time but the Internet has made that much more of an occupation open to everyone than it ever was in the past. After all, realistically I’d never have had a hope of getting 35,000 readers a week for my writing yet that’s the number I’ve had in the last week for this blog.

Some might say that these Internet based efforts aren’t a cottage industry. How could they be with so much technology? Yet, that craft item you bought also used technology, it’s just that the technology used to produce it was older.

It looks like the UK government is shaping up to provide yet another unconditional guarantee with an open-ended cost for the taxpayers.

Last time it was Northern Rock for which they have kindly guaranteed that everyone in the UK will pay £1300 to support a bank that should simply have been allowed to fail. This time, it’s potentially even more than that as they appear to be about to guarantee that they will cover any losses incurred by any of the 25 million people who are not potentially at risk to identity fraud thanks to action by the government.

Still, at least they are directly responsible for that this time around.