In 2007 my London home was worth more than five times the price I'd paid for it and like millions of others it was this equity, to supplement my increasingly modest pension provision, that I was looking to realise on retirement. Well, those plans are truly shattered now.
The focus not only of UK but international government policy has been to re-capitalise the banks and push money back into the economy to stimulate spending, even explicitly to get the banks lending again at 2007 levels. There is still a hope amongst some that this is just a blip, albeit a big one, and that with concerted government action we can all go back to the way we were in 2007.
This is risible pap. There's no going back to 2007. Deflating the worthless derivatives bubble has a long way to run yet, and it will take other asset prices - houses - with it. The London financial market will never again occupy all the square mile's buildings, and we might as well start converting the Gherkin to social housing right now. Canary Wharf will slowly empty as shrunken banks and financial institutions retreat back to the City. Canada Square will be filled with pound shops and fried chicken bars in five years time.
We'd better start getting used to the fact that the big competition with Singapore and New York is over. Financial services will form a far smaller part of a future British economy. And a sustained period of modestly high inflation - say 10% - 15% a year for three or four years - is about the only thing that will erode the burden of personal debt in the UK, that will restore some growth to house prices and get things moving again. Unfortunately at the expense of the banks and lenders, but heh.
But whichever way, let's stop pretending and get on with it.