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From The Editor

We're in the midst of a credit crunch. I know this because I read the papers, but it's set me thinking about the last time the UK's credit crunched and how this time around compares.

I'm old enough to remember The Thatcher Years and then the more minor Major Years. Friends of mine certainly felt the crunch bite (sorry!). The Dad of a good friend who ran a jewelry shop went bust, things in shops actually got cheaper, and you could visibly see more people on the streets, by which I mean homeless people, not people out having fun. These were the days when the South Bank was known as cardboard city and you had to step round boxes on the way to the theatre. It made me feel guilty and rich, neither of which I was.

Well, it's happening again. But this time around it feels different. Tooting is certainly not the same, rather dreary, place it was 20 or so years ago. Indeed, to me at least, the place looks like it's flourishing. Crunch or no crunch.

Tescos is now open, or almost open, on Mitcham Lane and TK Maxx is soon to follow, I'm told. Food might be becoming more expensive (indeed it certainly is) but our local economy is riding the storm rather well. I've been checking house prices in the area and it's true they've dropped, but not by the 25% that some commentators would have us believe. What's happening in the housing market, from my observations, is that houses just aren't selling as quickly as they used to, and prices are down, but not catastrophically so and perhaps that's no bad thing. The market had gone mad. This time last year, when I bought a house, you had to get an offer in before the house had even gone up in the estate agent's window or you had no chance of buying it. The stress of it was dreadful. Sellers held all the cards and they could ask silly money. Which they did. Good for them, bad for the first-time buyer, the local teacher, policeman, nurse, the community as a whole...

So I'm not worried about Tooting's credit. It's got money in its many banks. Banks, however, do worry me, so I bothered to find out where, exactly savers stand.

So, in case you've got money in the bank, here's some good advice. Up to 35K savings in any one bank is secured by the government. In other words, if the bank where you've got your money goes under, you'll get 35K back again, guaranteed. If you're lucky enough to have more than 35K in one bank then you could lose whatever you've got over 35K if that bank fails. It's unlikely any UK bank will fail given Gordon's determination to keep them afloat, but there is some, however tiny, risk. So, where should you put the money you've got if you want to avoid all risk alltogether? The answer surprised me, but makes perfect sense - Northern Rock - which is, of course, now government-owned, is safe as houses. It will not be going the same way as Lehman brothers. Not ever. The second saftest place to put your money is the Post Office, which runs the National Savings scheme. Third safest are the building societies with Nationwide (which owns Portman) topping the list. It is a mutual and lots of money has been pouring into it as investors flee the banks.

And one other tip I received recently. There is at least one commodity bucking the economic downturn and that is carbon. It might sound like a lot of hot air, and indeed it is, but the carbon market continues to grow strongly, buoyed by regulation (the Kyoto Protocol). Oh, and gold!

So, if you live in Tooting, have your money in Northern Rock and own a carbon and gold portfolio, I think you'll be OK, though I'd love to hear your views. Has your credit crunched and where is it starting to bite? Please write in and tell me and I'll post the most interesting comments online.

From The Editor

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