When the party's over...

How times have changed..! When we first arrived in the UK I was stunned by the national obsession with personal wealth. Newspapers were filled with stories about stratospheric bonuses being paid to City workers; year after year. (The City is the name given to London’s financial district.) "Greed was Good" and it seemed to be absolutely everywhere!

At the time an endless stream of headlines rapidly convinced you everyone else was making hay, while you were making peanuts. In reality only a few investment bankers or financiers were securing bonuses worth millions of pounds. The rest of us were simply reading stories of their excess; rare and expensive bottles of vintage champagne being drunk in bars, rocketing Ferrari sales and so on.


These individuals were riding an unprecedented economic boom, one largely fueled by dramatic growth in the UK’s finance sector. Much of this growth was being driven by investment banking activity; global share trading, large merger deals and large commercial transactions. The City’s huge bonuses were cited as a key catalyst for London’s rapidly rising property prices and its high cost of living.

Garry and I certainly felt the impact when we went to negotiate our heart-stopping rent, while friends and co-workers were all pushing for spectacular pay rises as a natural birthright. In this atmosphere of greed and hype it was incredibly difficult to discern the nation’s true economic health, let alone that of the global marketplace.

Roll the clock forward two years and today’s headlines couldn’t be more different. Almost every broadsheet newspaper led today with stories of the same high-flying financiers out of a job as Lehman Brothers, an American investment bank, suddenly declared bankruptcy. The bank employs approximately 4,500 people in UK, all of whom are effectively unemployed. In a double blow, many had invested their bonuses in the company's shares, which are now worthless.


Media talk is of an unprecedented risk to the global economy. The specter of the Great Depression is raised in every article, while the phase “we’re heading into uncharted territory” is the cliché du jour. Once again media hype, this time unbelievably negative, makes it difficult to discern the true state of affairs.

The nation's Chancellor is also in on the act. Two weeks ago he was quoted claiming that the U.K. is facing economic times "arguably the worst they've been in 60 years." The media initially derided his statement as excessive and unrealistic. Today a few have started calling him prophetic.

As for the City heroes of 2006 and 2007, analysts forecast job losses of 110,000 people in the UK’s financial sector over the next 12 months. It seems that the excesses of the City really were too good to be true. Meanwhile I’m left with a new media-induced quandary. I’m not sure which is worst; boom time hype and the enduring sense you’re missing out, or recession gloom and the risk your job will be gone within a year.

I should be fair. Not all the news is bleak. Earlier today, Damien Hirst, the UK's modern art guru set a new record for an auction dedicated to a single artist. A two-day auction at Sotheby's generated an astonishing £111 million in sales. Hirst's work is odd to say the least. Take his piece called "The Kingdom." Its a tiger shark displayed in formaldehyde. Yesterday this work was sold for £9.5 million, far higher than the estimated £4 million to £6 million price tag. It seems that the City's days of excess aren't over yet.