An American in London
I was lucky enough to spend 5 days in London at the beginning of the month (the weather was quite mild for December and there is still a lot of green around, even some geraniums and cyclamens blooming in pots and window boxes). It rained off and on almost every day, but we had umbrellas and were often just dashing from the Tube (the London subway system) to a pub or museum. I didn’t notice any overt anti-Americanism, in fact, most people were quite friendly; however, we did overhear an exchange about American politics, during which one referred to Guiliani as ‘an idiot’, another said, ‘they’re all idiots’ and the first finished up to general laughter, ‘well, they’re Americans.’
There was a lot in the news about the American subprime mortgage problems and housing market ‘collapse’ (see recent post from Dick Howe here) and a sense that because of better regulation, ‘it can’t happen here,’ meaning there. However, the current liquidity crunch, largely caused by the problems in the US, may put some UK homeowners in jeapordy. They seem to have a much higher percentage of balloon mortgages (called ‘endowment loans’) which need to be refinanced to avoid paying off the ‘balloon.’ With funds scarcer and harder to get, some of those balloon payments are coming due. (I think the US only has about 7% of this type of mortgage).
The biggest shock about being in London was the high cost of everything. Two coffees and croissants cost us 13 pounds one morning, not that bad for a major city, until you do the math: the pound was worth over $2 when we were there which means our light breakfast cost over $25! Ouch! So, we took the tube or walked, went to pubs and got half-price tickets to see a play. The good news is that there is a lot of free entertainment in London – just walking around, the many beautiful parks, most of the great museums and you can walk around Harrods without buying anything.