I have only just noticed something, something completely horrifying. It is this: today the FTSE 100 is currently trading at almost exactly the same levels as it was ten years ago: 5,835 this Wednesday and 5,945 a decade ago.
So during ten years of Labour rule and ten years of being told by Gordon Brown that he has abolished boom and bust, delivered endless stability, been prudent with our public funds and so on, the value of most people’s pensions and Isas has gone precisely nowhere. Irritating, isn’t it?
Still, it isn’t half as irritating as the real state of our economy. Inflation is at its highest level since the early 1990s, with energy and food prices wrecking the budgets of our poorer households. Commercial and residential property prices are falling, as is consumer confidence. We are running a massive current-account deficit (around 5% of GDP) along with a whopping budget deficit of around 3% of GDP.
And of course the credit crunch is getting worse, not better: the global securitisation market is barely functioning and the UK’s banks are reining in borrowing as fast as they can. At the same time The Times reports that two million people in the UK have resorted to taking out loans with interest rates of up to 100% from Provident Financial. “Current market conditions are favourable for us,” said its chief executive, with some understatement, earlier this week. The whole thing’s a complete mess – and one there is no way that poor Alistair Darling can sort out in next week’s budget.
I can’t think of much to say that will be of much comfort to Gordon Brown (nor, for that matter, do I much want to) but it should bring him some solace to know that he is not the only one-time hero finding himself walking on less-exalted ground than a few months ago. He is joined by all sorts of groups: the country’s property promoters are one of the most obvious, but a few new entrants must surely be the employees and ex-employees of Goldman Sachs. For years now we’ve all been in awe of them and their astonishing moneymaking abilities, but a few recent events appear to have proven them to be just as useless at most things as the rest of us. They didn’t exactly cover themselves in glory in their efforts to find a private sector solution to Northern Rock, did they?
Then there is Ron Beller, the ex-Goldman’s man who has just lost half his fortune (put at $80m by the Evening Standard) in the spectacular credit-related collapse of his hedge fund Peloton Partners. He is hardly waving the flag for prudent money management. Back in 2003 he had so much money knocking around in his current account that he didn’t notice his secretary nicking a few million quid from it. Now it turns out that far from sensibly diversifying his portfolio, he kept reinvesting his profits back into his fund. This is a man who needs a good deposit account to keep what he has left safe: there’s a list of the best rates available here: compare savings accounts.