Cash Piggy

In the process of digging up old articles from the Economist, I stumbled across “The storm to come” - authored by Anatole Kaletsky and published in the November issue of 2007. The slowdown had just begun, and it appears the aftermath of the storm had been underestimated. Quite understandably so, since it was a period of blossoms and rich harvest. Unemployment levels were low and the prices were still stable. The forecast carried no severity and for people, it just meant a temporary dip in GDP growth. They had no reason to check their expenditure or save up for the 'rainy' day. In short, the prosperity experienced since 1997 had given rise to complacency. Sure enough, a year later the slump pulled the rug of financial security from under their feet. The gravity of the slowdown reflected in the 0% growth in GDP in the second quarter of 2008.

There has been a unanimous feeling that it is perhaps too late for some people to recover from the shock. It is justified by the steep increase in unemployment numbers, leaving the affected just hoping that they can evade bankruptcy a little longer. Since the storm clouds are not expected to clear any time soon, the effects would assume bigger proportions. However, the prolonged slump also had a positive influence, if we may call it so. People finally woke up to harsh reality and saw sense in being prepared for worse. Financial stability dented but resolve strengthened, Brits have geared up to beat the crunch. People who haven't gone bankrupt are scouting for debt-prevention alternatives that don't add up to their existing debt woes. Most of these options are short-term, since paying off these loans is always simpler. At the same time, care is also being taken to ensure that credit scores aren't adversely affected.

People have learnt their lessons after being dismissive of crisis predictions. It is widely believed that towards the end of 2009, the situation will improve. Till then, everybody is hoping that their last-ditch efforts would bear some fruit.