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Housing

Cooking the Books 1: Turmoil at the Stock Exchange

“FRESH TURMOIL IN EQUITY MARKETS” read the headline of the weekend Financial Times (11/12 August) after a week of dramatic falls in share prices on the world’s stock exchanges. “GROWTH THREATENED BY MARKET TURBULENCE, SAY ECONOMISTS” read the one in the Times the next day, which reported the principal of one hedge fund are saying “Nobody has yet mentioned to me the possibility of a stock market crash and I find that surprising”.

Booms and Slums

Anyone who has read Frederick Engels’ The Condition of the Working Class in England will long remember much of what it says. Page after page describes the lives of workers in the big cities in 1844. Two boys in London, for instance, were arrested for stealing a half-cooked calf’s foot from a shop: the magistrate discovered that their mother had sold or pawned all the family’s possessions in order to buy food. Many others had little or no furniture and slept on the floor, covered in rags.

Cooking the Books 1: Buying to leave empty

In the 1970s Centrepoint, a 32-storey office block in the centre of London at the junction between Oxford Street and Tottenham Court Road, was the centre of a scandal. It had been built with money put up by a notorious property tycoon of the time, Harry Hyams. Once built Hyams kept it empty for many years because, with a boom in the property market, its value rose constantly – but only as long as it remained empty; if it had been let the rent, and so its value, would have been fixed for 10-15 years. A classic case of property speculation.

Bubble troubles

The intoxicating US housing boom has come to an end. Now the economic hangover has arrived.

With the collapse of the housing boom in the US what is likely, at the very least, is a prolonged crisis of the credit system. And as credit greases the wheels of capitalism this is no laughing matter for the capitalist class.

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