There was grimly ironic celebration at this news from various quarters, considering the weakness of the growth could so easily slip back into another contraction next quarter; the sad little percentage highlights the pathos of recession semantics. A recession is defined as two quarters of consecutive contraction in the economy, so – hurrah! – this means that we can’t be in another recession until at least the third quarter of this year. But of course in real terms, the recession is unlikely to be over for some time yet.

I recently spoke to Christopher Pissarides at the London School of Economics about what he thought was happening to the economy. He gave reasons to be upbeat: “The housing market is reviving and companies that de-stocked will want to build up their stocks again. The policy response to the recession, both here and in America, has been good, Europe is not in as deep a recession as initially feared and China is growing fast. Britain should benefit from these and from the depreciation of sterling.” But overall, his outlook was sober and gloomy, firstly for the immediate health of business.

“No company wants to use up its own funds to invest now, discover that demand is still weak, and find that its bank is not prepared to lend it funds to carry on with its business. So companies are holding back on their cash and waiting until they see either a recovery of demand or until they can be assured by their banks that they will come and rescue them if they need more cash. It’s a chicken and egg situation and something needs to break it.

“Spending power will eventually get back to trend but it will take long to recover the losses suffered. In 1989-90, when the housing market lost a lot of ground too, it took seven years to recover the losses and start showing positive gains again. Nothing tells us that it will be better this time.” One of Pissarides’ peers at the LSE, Richard Jackman, also told me just how far we’ve fallen: “It will take years, probably between three to five years, to restore the economy to the high levels of employment and to reduce unemployment to the levels of 2006 or 2007.”

Secondly, the more general health of society is being seriously affected, and with effects that lag far behind the immediate upward shifts in the economy. On the same day as the recession was announced as being over, a statistic was published showing that a fifth of UK workers surveyed by HR body the Chartered Institute of Personnel and Development expected to lose their jobs as a result of the recession. This figure was part of a wider survey showing that job satisfaction was at an all-time low in the UK, with the CIPD also saying that unemployment figures masked the true impact of unstable work patterns and their effect on families and communities.

“We have learned a lot from the unemployment experience of the last serious recession, in 1980-83, and the costs of unemployment this time will not be as big as they were then”, says Pissarides. “I expect unemployment to continue affecting young professionals for one or two more years, especially those who trained to enter the lucrative financial sector. At the lower end of the distribution, unemployment causes crime and unhappiness and although government measures, such as the welfare to work programme, help a lot, there is still misery to be dealt with”. The psychological effects of the recession are already making themselves manifest – Raphael Healthcare’s Guy Bannister, writing in the Guardian in early January, said that the recession has been provoking substance abuse, suicide attempts and mental health issues in young people affected by it. His comments that are backed up by research last year at the Economic and Social Research Council, that found that the health effects of the recession are markedly worse in the young.

Considering the highs the economy reached prior to this recession, and the psychological effect that had on society with people becoming increasingly blithe about credit and fortune, we can expect the psychological reaction to our current lows to be worse than ever before. While that little 0.1% isn’t worthy of outright derision, it’s a reminder that we need to fill our lives with something other than personal prosperity, as it won’t be coming back for some time yet. And when it does, we need something else to fall back on once the cycle of bust inevitably renews itself. Pissarides posits a serious collective lifestyle change for us all: “Quality of life will not be measured solely by spending power, in the way that the Thatcher and Reagan governments of the 1980s made every one of us think, but by better health, environment and safety from international terrorism.” It may be corny cat-calendar philosophy, but quality of life can’t be measured in percentage points.

The growth of this trend has been sudden and unprecedented. Since 2004, nearly 10,000 square miles of land across Ethiopia, Ghana, Madagascar, Mali and Sudan has been leased to overseas investors; in the first half of 2009, an area equivalent in size to all the arable land in Europe was leased across the world to investors from developed world economies. New deals are occuring every week: in the last few days there have been agreements between Nigeria and Thailand over rice production, and talks between Saudi Arabia and African nations to develop farmland, to add to Saudi’s multimillion investments in the Philippines.

Companies at the forefront of this property land-grab include the US asset management company BlackRock, who have earmarked US $30 million for the acquisition of farmland in areas from Sub-Saharan Africa to the UK, and banking giants Deutsche Bank and Goldman Sachs, who have invested in both pig breeding operations and chicken farms in China. And it’s not just individual companies fronting up capital: the Indian government is giving financial incentives to empower 80 companies such as Karuturi Agro Products Plc to buy land in Ethiopia and other African countries. So far these companies have invested £1.5bn - and this trend looks set to continue as Africa is said to have 807m hectares of cultivable land, of which just 197m is currently being cultivated.

In the July 2008 newsletter of the Canadian private equity firm Ag Capital, Reza Vishkai of Insight Investment claimed ‘the single best recession hedge of the next 10 or 15 years is an investment in farmland’, echoing wider financial opinion, and petro-dollar rich nations like Qatar have been quick to wade into the field on the basis of such advice. Developing nations have been only too happy to oblige them: Ethiopia’s prime minister Meles Zenawi has expressed his government’s eagerness to give access to hundreds of thousands of hectares of farmland in the lowlands to Saudi Arabian investors, whilst Turkish Agriculture and Rural Affairs Minister Mehdi Eker said: “Choose and take what you want.”

Perhaps the most widely reported example is the now-bankrupt Korean conglomerate Daewoo Logistics, who agreed to lease arable land from the government of Madagascar in November 2008. Daewoo intended to use the land to farm corn and palm oil for export to the Republic of Korea, where 95% of non-rice foodstuffs are imported, and concerns about food security and sudden price rises are high.

However, the Daewoo deal, worth multiple billions of dollars for a 99 year lease on an enormous 1.3m hectares of land, is now regarded as a case study in the volatility of such investments. Predictably, the proposed deal provoked widespread anger in Madagascar, where citizens see their land as the sacred property of their ancestors. The deal came to a sticky end when the government of Madagascan president Marc Ravolomana was ousted in March 2009 in a coup led by the military-backed Andry Rajolina. Upon claiming leadership of the country, Rajolina stated, “In the [Madagascan] constitution, it is stipulated that Madagascar’s land is neither for sale or for rent, so the agreement with Daewoo is cancelled.”

“Many Malagasy felt that the land deal was another instance of the government thinking of Madagascar as a private business,” Madagascan citizen journalist Lova Rokotomalala tells me. “More than anything, it was the perception that the government tried to sneak in the land deal without posting any basic information and objectives before hand that really got the population outraged.”

So what is happening here? Why are developing nations like Madagascar so willing to sell the treasured arable land of their ancestors to foreigners, leaving themselves open to destabilising accusations that they are inviting ‘neo-colonialism’? Moreover, why are foreign companies so willing to risk big money on these exotic, politically sensitive ventures?

In short, the answer is that many developing economies desperately need an influx of capital to ease crippling public debts, and are betting foreign ownership of their land will bring with it jobs, technological and infrastructural development (in the form of fertilisers, agricultural tools and an investment in transport) and a transfer of labour skills to modernise their agricultural industry. For investing companies, the potential rewards are simply enormous: large ownership stakes in economies that will likely to see real growth in the coming decades, as the over-leveraged developed world falters and food demand increases.

On the face of it, this trend appears to be a ‘win-win’: large-scale capital investment in poor African and Asian nations could massively improve agricultural productivity, and help to feed selling countries’ famine-hit populations, while easing the food security fears of developed nations. In the process, it is argued, large multinational corporations will be able bring food to poverty stricken populations in a manner that development agencies can only dream of. The World Bank, for one, has endorsed this vision, stating that investment in agriculture is the best way for wealthier nations to contribute to developing world economies.

However, uplifting as the sales pitch may sound, the experience of Daewoo Logistics in Madagascar suggests this positive theory does not always play out in reality, and that locals are unimpressed with the proposed benefits.

In Sudan, the Darfur crisis has left the World Food Programme struggling to feed 5.6 million refugees – suggesting the country might not be the ideal place to grow food for foreigners. Yet this week the Sudanese minister for investment, Salman Suliman Alsafi, announced that he expected an investment of US $6 to 7 billion in the country in 2010, highlighting agriculture as being the chief area of interest. Even assuming the best of intentions, it seems churlish to expect foreign corporations to serve two masters equally; were they to do so, there would likely be over-fertilisation and deforestation of the farmland that could cause long-term damage, but it seems more likely they would concentrate on more profitable markets in the world’s wealthier nations.

“If there is a real world shortage of food in the future – and there may well be – it is difficult to imagine that a wealthy nation, like Saudi Arabia, that has leased or bought land in a poor country in Africa, such as Sudan, will put the food needs of the local population before the food needs of its own population in the case of an emergency,” explains Sue Branford from ‘Grain’, an organisation supporting small farmers.

In many cases, the legal ownership rights of selling governments are also questionable. During the Communist rule of Ethiopia in the 1980s, farmers lost their land to the Mengistu dictatorship; when the regime was overthrown, their land was privatised and sold to the Ethiopian-born Saudi citizen Al Amoudi, who is the 43^rd richest person in the world according to Forbes magazine. The farmers maintain that the land is still theirs though.

Then there is the tension between foreign companies and locals.

Joachim Von Braun, Director General of the International Food Policy Research, tells me: “Investors can make these deals politically acceptable if they inform local communities beforehand, include them into planning and treat them as investment partners… this can be done sustainably, when local communities are trained, supported by extension, and transparent, fair and sound contract arrangements are done.”

However, this is frequently not the case. In Kenya, the US agricultural giant Dominion Farms reportedly flooded the land of one farmer after he refused to sell his land at a rate of US $60 per property, and lent on the local police force to harass him (Dominion deny abuses of power took place). In Laos the market for land sales is chaotic and deregulated: land can be sold by both local and national legislatures, but ownership information is not collated in one place. This has caused utter confusion, with multiple investors claiming rights to each other’s farmland. Amid the madness, Laosian farmers, who have no land ownership rights under their country’s law, are seeing logging companies move in on land they have farmed for many years, and their livelihoods disappearing as foreign contractors are brought in to replace them.

While Von Braun’s sunny view on land leases can become a reality, the tensions caused by the international sale of domestic arable land is prompting local farmers to create their own agricultural initiatives, in order to protect themselves from the vagaries of such policies. Take Madagascan scientist Andriankoto Ratozamanana, whose innovative social agriculture business Megaseeds aims to empower African farmers by helping them to increase the yield on existing farmland by 400% per hectare through careful water use, organic fertilisers and selective mechanisation. Megaseeds then makes money by taking a share of the extra profits accrued.

Workers’ cooperative schemes also appear to be taking off. Author Andrew Rice recently wrote in The New York Times of his discovery of an Ethiopian scheme in which farmers working small plots were able to export their produce of green beans to the Netherlands.

Compared to the massive land concessions to foreign companies, this might seem like small beer - and it is. However, many are hopeful that a mass accumulation of similarly small-scale enterprises could have a powerful impact, swinging the balance of power back towards local agricultural producers. Local entrepreneurs need credit for such ventures though, and ironically, much of this is coming from abroad, via microfinancing networks.

‘Microloans’, small loans offered to poverty-stricken locals to spur entrepreneurship, are growing in popularity. The International Fund for Agricultural Development (IFAD) says that 75% of its funded projects involve providing financial services to poor people via rural banks and savings associations, with Western institutions heavily encouraged to invest in microfinance initiatives. IFAD has established 200 microfinance institutions, offering services that have directly issued microloans to more than 800,000 developing world entrepreneurs.

While critics have argued the microcredit movement has merely succeeded in privatising anti-poverty programmes, it is often a more benevolent form of investment than that made by large profit-driven companies from abroad. The emergence of new web based lending platforms such as Kiva.org and Lendforpeace.org, which connect small-scale investors with micro-entrepreneurs, suggests the true potential of digital microcredit has not been tapped yet. Even more encouraging is United Prosperity, an Internet microcredit organisation that maximises the money received by borrowers by using lenders’ investments as guarantees at local banks. With the guaranteed investment, borrowing entrepreneurs are able to claim higher value loans from their local bank, allowing them to obtain a credit history that might subsequently help them borrow more money for future ventures.

Of course, these innovations are no panacea for the mass redistribution of developing world farmland to foreign commercial interests. But assuming the trend for this type of foreign investment in developing economies continues, it seems likely that similar small-scale agricultural initiatives will grow exponentially along with political unrest, at least until foreign companies are prepared to swallow the less profitable pill of supplying their new hosts’ demand for food.

Illustration: Verity Keniger

Paradoxically though, it’s that very lack of a legacy telephone network, coupled with a similar lack of banking infrastructure, that has made developing nations the pioneers in mobile phone banking. As well as G-Cash in the Philippines, the most high-profile example of a successful mobile banking network in recent years has been M-PESA, a Kenyan service that has evolved out of a microfinancing tool developed by Vodafone. Two thirds of Kenyans “do not have bank accounts and never will have bank accounts”, according to Michael Joseph, CEO of M-PESA; the service is a way of transferring cash safely, often between a breadwinner working in the city to their family in the country. The money is sent via M-PESA and picked up in cash from one of their 14,000 agents across the country.

Moreover, “You can pay your electricity bill, your water bill, your council bill, you can buy airtime with it, you can pay salaries with it, you can make donations with it”, explains Joseph. Their recently launched “Diaspora” product allows transfer of money between Kenya and the UK, purely through mobile, and M-PESA’s parent company Safaricom even pays shareholders their dividends via the service. Research by thinktank CGAP noted that M-PESA often increased the income of rural people, and allowed greater financial independence for women whose husbands work in urban areas. Juniper Research has said that half a billion people will be using mobile phone banking services globally by 2014, with the majority of those in developing countries.

This kind of SMS banking has been offered, in a fairly uninterested way, by banks in the West for some time. But the experiments in the developing world have helped banks start to truly believe in the service, thanks to its ability to lower the cost of serving less well-off customers.

“If you’re less educated, don’t self-service, have few transactions, and less funds under management, you actually become unprofitable for a bank”, explains Serge Van Dam, head of marketing at M-Com, a leading provider of mobile phone banking services who recently added Microsoft as a technology partner. “You’re using expensive channels, you’re going to the branch. But in Kenya, a bank can make money from someone who’s got 100 bucks in deposits. So there’s a lot to be learned, not just in technology, but actually how you manage customers in a way that doesn’t erode your margins. The typical ratio in a Western bank is that a quarter of the customers aren’t profitable, so there’s a massive incentive to learn off these guys”.

The crucial factor is that while not everyone has the internet, everyone has a mobile phone which at least has SMS, which can first of all be used for a wide variety of banking alerts. And as well as allowing banking customers to do tasks that would otherwise involve a call or visit to the bank, mobile alerts provide banks with more directed marketing opportunities. “The fundamental thing that everyone went wrong on was that they assumed that the mobile phone was going to be another convenient, but customer-reactive channel. What’s fundamentally different is that the mobile phone can be a customer-proactive channel”, says Joe Salesky, founder of Clairmail, another major player in mobile banking services – the mobile phone allows the customer to demand the services, rather than have the bank dump services onto them.

New mobile banking services in the developed world include alerts that the customer chooses themselves, telling them when, for instance, they’ve spent over a certain amount using their credit card. These alerts both help the customer feel more secure, knowing that if their phone alerts them to a purchase that they haven’t made, they can deal with the fraud immediately; they also help keep any rampant sprees in check. The idea is that as the customer comes to see their bank as a benevolent sage, the marketers can move in for the kill.

Banks can direct relevant products (loans, credit cards) towards their receptive and softened-up customers within the alerts, which is far more efficient and empathetic than mass media advertising. The thing for banks to remember is not to spam their mobile users and erode the relationship; as long as they embed advertising in information that the customer has actually asked for, they’ll forge a uniquely personal rapport.

The next level of phone banking is actual payments – payment of bills or payments to another person. These can be remitted over SMS, but for which the attractive interfaces and sophisticated tech of smartphones are even better suited. And these payments involve processes that actually become more secure on a mobile phone.

As well as allowing greater fraud awareness, mobile banking uses more secure protocols, but without the cumbersome business of usernames and passwords, as Salesky explains. “You just text a ‘b’ to your bank, and your balances are going to come back to your phone. Is that secure? Absolutely – I’m doing the same thing as when I send you an alert, I’m sending data to a known destination, a trusted path. I didn’t put my username and password at risk.

“But if I want to do a transfer or a payment, I need to escalate authentication – the fact that it’s coming from that device isn’t enough. I’m going to send in the letter “g” for go – that basically tells the server that I want to initiate a session, and what the server does is send me a single use, outbound token, that is a proxy for username. Then I get presented with an SSL session when I’m going to key in my numeric password. I’m now in a session that’s four times stronger than a website session, because it was started with a known destination. It’s hopping protocols, using one for session request, and another for session start, and interrogating the user with something they know”.

Nevertheless, there are concerns that with the growing popularity of the medium, more and more breaches of security will be attempted. The most recent example is a “worm” that targets customers of Dutch bank ING who use ‘jailbroken’ iPhones, hacked to bypass Apple’s proprietary software, by sending them to an identical but fraudulent banking homepage. It’s more damning of the security of a hacked iPhone than of the bank themselves, but it shows that mobile banking is a prime target. “It’s all about critical mass – hackers aren’t going to get into it until such a time as there’s enough gullible people using it that they can try and target”, says Serge Van Dam. “Lots of financial institutions will be exposed if they haven’t taken the appropriate measures”.

And despite all the advantages, banks are still dragging their feet with mobile banking, especially in terms of selling the idea to their customers. In the UK, mobile phone banking is slowly growing, but still only five percent of customers use it; in the US it’s more like 10 percent, but the number of customers getting banking alerts has plateaued after four years of growth. “We saw too often that banks were fumbling the message. In some cases they’d invested all this money on mobile banking and you couldn’t search on their website to find information about mobile banking”, says Mark Schwanhausser, mobile analyst at Javelin Strategy. “And too often banks were ignoring consumer fears about it.” Van Dam agrees: “Your average banker, middle manager, they’re 45 years old, they earn US $200,000 a year, they have no empathy for someone who lives week by week and doesn’t sit in front of a computer all day. They just sit there and say: why don’t these people do online banking?”

Some offerings are simply dismal. Take the iPhone app for US bank Chase. “Look at the feedback that’s being given – it’s appalling” says Van Dam. “They have no tools to help customers with the app. They say you need to help yourself, or sorry, we can’t help you. That’s entirely unacceptable in the world of financial transactions”. The recently launched Natwest app hasn’t fared much better, with App Store reviews slating its speed, functionality and the cumbersome security protocols.

In Africa meanwhile, the success of M-PESA is so far relatively isolated – a report from Oxford Policy Management outlines the difficulties and measures that need to be taken before the likes of Angola and Malawi can start to offer phone banking even in their own countries, let alone across borders. Cross-border banking could be hugely useful to the continent, where labourers and refugees often move back and forth across different countries, yet for countries that don’t even have reliable telecommunications, the reality is still a long way off.

Because of the massive setup costs of a full mobile banking infrastructure, most banks are turning to third-party providers of these services; and with the industry taking off as it is, it’s one of the major technology growth areas. “In Atlanta, which is the Silicon Valley of electronic banking technology, there’s probably a new startup in mobile banking payments once a week – everybody wants to capitalise on this space”, says Van Dam. That said, the market is already consolidating, with mergers between some of the bigger players paring the market down to a handful of heavyweights. “Providing bank infrastructure technology is not something I would invite many people to go and cut their teeth on”, says Joe Salesky. “It’s an area of significant requirements – if you don’t have US $30m, you probably can’t get there.” Van Dam adds: “Mobile is going to end up with five to ten real vendors within three years”.

The inability by the banks to see the potential in mobile has meanwhile led to another business opportunity for those who do see it. “The banks don’t know how to use it for Gen Y”, Salesky says. “They have some expertise, but there’s others that really help people understand what gets people to adopt”. Cue Clairmail providing analytics and adoption services alongside its actual product.

Despite the ongoing hiccups, the overwhelming financial incentives for banks to roll out these networks means that we’ll start to see more and more features embedded in them. As well as saving banks money by making their customers do their banking for them, and providing cheaper and more effective advertising, services like payroll accounts and international payments will start to be channelled through phones. “Everybody’s missed the network effect”, says Salesky. “If you’re offloading funds at a Western Union, they just go to cash. But if you have the ability to have micro-accounts that are efficiently managed, the person doesn’t have the security risk of going and picking up cash, and it actually fuels another banking relationship”. The customer is more secure, the bank takes a fee – everybody wins.

The ‘Swiss Army Knife’ nature of modern smartphones has prompted innovative banks to respond with intuitive tools that make the most of a phone’s capabilities. Geo-location, by guiding the user to the nearest free ATM or bank branch, was the first step; now they’re using inbuilt phone cameras for what’s known as Remote Deposit Capture – taking a photo of a cheque and sending it to the bank to be cashed. Clairmail use the “push” technology in smartphones that automatically refreshes your email inbox when new mail comes in, to create a dynamic mobile banking icon that flashes when new alerts come through, meaning that you don’t have to needlessly check up on your banking.

Mobile will also become another type of acceptance, like a debit card, either through Near Field Communication (the technology Oyster cards use) or having your various accounts stored within the phone. Mark Schwanhausser paints the future: “What we see coming is the mobile wallet – this thing you carry is going to contain the ability to know your bank accounts, your credit cards, offers from merchants. It’ll enable you, when you walk into a store, to find out what coupons are available, what specials are available, to speed the process up for tracking your mileage and your points – wouldn’t it be nice if when you’re stood at the checkout, your phone says if you use this card rather than that card, you’re going to have a bigger discount.”

Back in Kenya, Michael Joseph says that the technology will continue to further social programs in the country. “We’re looking at NGOs now funding or providing money to people who are in need via M-PESA, and at how the government can provide benefits to children and old people with it”.

It’s taken some time for the penny to drop, but banks are finally realising that the one piece of technology that everyone owns worldwide is the one that most people are likely to bank with. “There’s a lot of transformational consumer habits that are happening because of mobile devices”, says Serge Van Dam. “And banks in order to stay relevant need to meet consumers where their habits are.”

Illustration: Alan Clarke

Last year, 68.3% of homes in Britain were owner-occupied while just 13.9% were privately rented. That might not sound startling, but these figures actually signify the highest proportion of privately rented households in the UK since the 1970s.

Ever so slowly, lettings are beginning to rise and sales beginning to fall. Throw in an enormous recession, from which the property and mortgage loan market is hardly immune, and you may have the ingredients for profound change to an aspect of British culture that is centuries old.

So what do the property dealers make of the situation? I spoke to several, and each one confirmed the lettings side of their business had improved in recent months, while house sales continued to decline or stagnate. At least one suggests that lettings have as much as doubled since January 2008. Andrew Berry, Managing Director of Haart Lettings, says “Haart Lettings has seen a dramatic increase in the rental market during the recession. If people aren’t sure what is going to happen to their jobs, they are not going to tie themselves into a mortgage and are far more likely to rent.” Carl Mimmick, Managing Director of Birmingham-based lettings agent Accord, adds, “Our lettings have grown and the average time a tenant stays in a rented property has increased by about 20%.”

It’s not just the number of tenants that has risen, either. Many home-owners suddenly found themselves living as ad hoc landlords, as Murray Kerr, of Bonnets estate agents in Brighton, explains: “the problem Brighton had, like many cities, is that they built a lot of new developments when the going was good. Customers bought these properties at the wrong time and now people who can’t afford to sell have been forced to rent in order to move on – they didn’t intend to be landlords. Our business here grew as a result because people came to us looking for agents.”

But all the agents and tenants agree that renting is likely a short-term solution to what everyone hopes will be a short-term problem. The implication is that we’re all still itching to get back on that ladder. Another lettings agent explains that many of his clients are just “renting for six months until they can afford to buy a house.” The rise in house prices over the last six months is proof that for eager prospective buyers, whose ideals have been conditioned by a decade of sunny Channel 4 property trading programmes, the home-owning culture of the boom lingers in spite of a flat-lining economy.

Take Carl Zandberg, a London plasterer with his own business, who, having bought his house shortly before the recession hit, is still relieved to have finally left the private rented sector: “I was anxious to get my own home because I really didn’t like paying out that money every month to somebody else. I wanted to have my own place because I can do what I like with it, I’m constantly doing up other people’s homes and now I can improve my own.” Zandberg exhibits a common British cultural attitude: prospective homebuyers view paying rent as ‘giving money to someone else’. By ‘someone else’, they generally mean their landlord, who they see as the ‘real owner’ of the property. However, when paying mortgage and interest payments to a banking company, having borrowed money to purchase the property, they choose to view themselves as a ‘landlord’, as opposed to their banker. This illusion is central to the contemporary British homebuying culture.

Kate Fox, in her book Watching the English (2004), suggests that home improvements are also a quintessential British desire, contributing to an obsession with calling our home our own: “an Englishman’s home is much more than his castle, the embodiment of his privacy rules, it is also his identity, his main status-indicator and his prime obsession… This is why a house is not just something that you passively ‘have’, it is something that you ‘do’, something that you ‘work on’.”

This status-anxiety is echoed by Carl, who notes “…There’s lots of pressure to go out there and buy a property. Everyone is keeping up with the Jones’s. It’s not always an investment thing, it’s because you want something that someone else has.”

Carl’s views are shared by many in Britain, where personal aspiration frequently fuses with a home ownership culture, and estate agents, mortgage brokers and banks are the chief beneficiaries. But the huge number of foreclosures in the UK – the state owned bank Bradford and Bingley reported a 50% rise in the number of home repossessions in the first half of 2009 – shows that this ‘mad dogs and Englishman’ approach to playing the property game can have dark consequences.

And what happens if, as many forecasters predict, Britain experiences a decade of low growth or even deflation? Estate agents, of course, rarely pass up an opportunity to talk up the market, but it’s their clients, the prospective buyers, who will pay the greatest penalty for failing to properly analyse future market conditions. If they fail to read the economic signs, it’s entirely possible that an ownership fixation, akin to the irrational euphoria that fuelled an unsustainable finance and housing boom over the past decade, will kindle a dramatic rise in house prices in the short-term, with another crash potentially on the way.

Professor Steve Wilcox, editor of the UK Housing Review and a member of the Centre for Housing Policy, says this is certainly possible in localised markets, warning the trend could cause the British economy to plunge again.

“I’d be looking at what’s happening in the wider economy rather than just the housing market. Lagging unemployment is an indicator. Whatever happens in the election next year, we’re going to see significant pressures on public spending. The spatial impact of the recession will change… it’ll move from the financial sector to areas where there’s a high proportion of public spending. The overall level of economic recovery is a matter of how sharply we see a fall in public spending and public sector employment. That could potentially cause a double-dip situation.”

Ed Stansfield, head of housing market research at analysts Property Economics says, “I’ve got a lot of sympathy with those who think the recovery we’re seeing now is not sustainable. The market is very thin right now and what we’re getting is a picture based on a select group of buyers acting under abnormally low interest rates, so it’s not necessarily representative. On ‘normal’ interest rates, property would actually still be considered very expensive.”

Another indicator of the continuing property fetish is the rise of innovative new co-ownership products. Strikingly British in their eccentricity, versions of these schemes have been around for decades but in the last five years they have experienced their own mini-boom. Typically, a group of friends will club together to buy a house, then pool money for the deposit and commit to paying off the mortgage over the next decade or two. In recent years new variations on this theme have been developed: one increasingly popular plan sees buyers enter into an agreement with the government or a private agent to rent them part of the property. In some cases, buyers start off by ‘owning’ as little as a quarter of the property, before later purchasing further portions – a practise that is vividly referred to as ‘staircasing’. While such schemes promise great material for a This Life follow-up, they lack practicality and foresight. Apart from the economic risks involved, they seem a sure-fire way to ruin a friendship – and if the Englishman of folklore has to share his ‘castle’ with his friends just so he can afford it, surely the nature of a purportedly ‘private’ property investment begins to look ridiculous?

Websites like www.co-buyers.net even help complete strangers contact each other in search of prospective home-mates. An anonymous user of the site told me, “my husband and I are finding it increasingly difficult to raise the 20% deposit (approx. £30,000) for an average priced £150,000 property in the area we live. Like most people we would prefer to own than rent as we feel the money is going towards something more worthwhile… I guess there is some apprehension about this type of buying if you don’t know the co-buyer but as our options are limited I still feel it would be a good idea”.

An astonishingly small number of the people I interviewed were aware of the cumbersome reality of property trading. Houses are what economists describe as ‘illiquid assets’, which is to say they are not easy to sell, particularly in a down market, and the danger for buyers is that they often have little awareness of the disadvantages associated with investing in a home. Apart from the difficulties of selling a property quickly, there are other problems: asset depreciation and the money that must be periodically spent to fix roofing and structural problems, and so on; the lifestyle pressures that come with paying off a substantial mortgage loan with interest payments, over what is likely to be a twenty year plus period; and the reality that the value of the housing market, like any other, can go down as well as up. Many boom-time buyers, who were not fully aware of the risks they were taking, have fallen into the unenviable position of being in ‘negative equity,’ which is when the value of a buyer’s home sinks below that of their mortgage debt. The personal consequences in the long-term could be severe.

The Centre for Housing Policy is a think-tank frequently employed by the government to advise on the economic implications of housing policy. Senior Research Fellow, Dr. Julie Rugg, says that the new co-buying schemes are still teething, and that the mythic hold of the home ownership concept over the British psyche is still strong, thanks, in part, to continued government encouragement. “Lots of policy rhetoric about [renting and home buying] is very ambiguous, such as the HomeBuy schemes. On some levels [the government is] still giving the impression that if you rent you’ve failed somehow”. In a speech to the Fabian Society in 2008, the then housing minister Caroline Flint said the government aimed to help people “into work and onto the property ladder.” She added, “Many social tenants have a real appetite for change and self-improvement. Most say they’d like to own their own home. And if we don’t work together to unlock their potential, then we are failing to live up to our responsibilities.”

Dr. Rugg recently found, among other things, that local authorities could be doing much more to “support good landlords whilst tackling poorly performing landlords and promoting tenants’ rights.” She also feels that current taxation hinders landlords’ growth and that overall there isn’t enough protection for vulnerable tenants. Another member of the Centre for Housing Policy, Professor Mark Stevens, also notes “there are political reasons for shying away from social renting because unemployment among social tenants tends to be much higher.”

So what’s the worst-case scenario if these trends continue? The ‘double dip’ threat mentioned by Steve Wilcox is something a number of analysts and industry insiders are considering right now. Lucian Cook, Director of Savills’ Residential Research group has said that the agent expects house prices to fall by 6.6% next year, bringing the average cost of a UK home back down to £150,000. “What we think will happen,” he said, “is that premature house price growth will be followed by a down period and what could actually occur next year is a slow haul out of recession. That said, we don’t think prices will go below the February ’09 level and affordability for those who can buy is still strong at the moment.

“There will be greater sobriety when it comes to mortgage sales in the future, I think. One of the lasting results of the credit crunch is that ‘renting’ will no longer be a dirty word.” Ed Stansfield agrees: “I think from now own we’re going to see a lot more scepticism on the bottom rung of the property ladder.”

Nevertheless, home-ownership ideals seem to still be firmly entrenched in the British psyche, and prices are still rising. Unless prospective buyers and potential tenants are better informed of the risks that they are taking, it’s possible that a combination of cultural, political and financial factors could drag Britain through the mud again. The chances of a major cultural shift in the immediate term seems slim, however, but there is an alternative perspective: that the collapse of a mini-housing boom could prove beneficial for the British economy in the long run.

If would be homebuyers are increasingly persuaded to rent by adverse market conditions, savings and bank holdings will rise, and the personal debt culture that has taken hold in the U.K. in recent years, and which threatens to strangle any economic recovery, could abate. While the proverbial Englishman’s castle would become a mere rented turret, order and sanity might once again reign in the Kingdom.

Multiple signs image: blech @ flickr

We sip wine, we gulp water. Good manners? Actually, basic economics. Water is relatively abundant and cheap, wine scarce and dear.

So if you’re a central banker, and you want folks to uncork their wine, you threaten to turn it into water (somebody already took the water-to-wine trick).

That’s essentially what many central bankers are doing: opening their cellars – or in this case, their vaults – and giving money away.

For its part, the Bank of England has created £175 billion of new money through ‘quantitative easing’ – buying assets from banks, thereby giving them cash. Factor in reduced interest rates, which should create new money by encouraging banks to lend more, plus government stimulus programmes. Add it all up, and such policies have pumped as much as US $30 trillion of new cash into the world economy.

Stack up that many dollar bills, and you’d get to the moon and back, four times. Now, just try to spend that. That’s the point. Print money faster than folks can make things to buy, and money will become cheap. Rather than watch our wealth evaporate, we’ll rush to spend our cash. And voila, the recession ends.

The problem is, too many of us have just come off a decade on the plonk. Spending outstripped incomes, debts rose, and we grew giddy on cheap money. Now, central banks are trying to push hair of the dog on us.

But there’s a problem. In a closed system, when you can either save or spend, and saving only depletes your wealth, for sure you’ll unload cash faster than it can disappear. But today’s economic systems aren’t closed.

Instead of getting zero interest on our savings, we can put them into ‘emerging-market’ funds though. The very poverty of the Third World means there are huge potential returns there. And policy changes in poor countries over the last couple of decades have created environments friendlier to business.

Is it any wonder, then, that a lot of this new money has been shipped out of the country? Institutional investors have been engaging in a ‘carry trade’. They borrow US dollars or pounds sterling cheap, then ship the money offshore. But this is not just a luxury market.

Retail investors have been putting money into mutual funds and, more recently, exchange-traded funds (ETFs). ETFs are funds that are broken up into units, which are themselves traded on exchanges. That makes it easy for small investors to enter and exit the market. Take Barclays’ ishares MSCI-emerging markets ETF, for instance: a punter who bought it at the start of the year will have made about a 60% return. Beats zero interest. But it also beats the FTSE 100 index, which has crawled barely over 10% since January. Not surprisingly, investors have been flooding in: Barclays’ emerging-market ETF has tripled its assets this year.

In the US, since the start of the year, ordinary investors have withdrawn about a tenth of their mutual-fund deposits in the local stock market, and have reallocated most of it to gold and emerging markets. In consequence, all ten of the fastest-rising stock markets this year are in developing countries, Peru leading the list.

Cheap wine can be bad wine. Make it too cheap, and we’ll start drinking pisco or caiprinhas instead.

Grubel has announced that UBS is aiming for nearly £9bn in profits over the next three to five years. That’s considering that they just lost another £331m last quarter, to add to the £11.6bn they lost in 2008. An analyst at JP Morgan told the FT: “We wanted figures, we wanted a timeframe for hitting them and we wanted divisional breakdowns. The challenge now is to meet those targets”. Quite.

To be fair, the losses have been slowing down – perhaps the cutting of thousands of staff had something to do with it. Trouble is, investors have also been leaving the bank, cutting its revenue to £1.6bn – Grubel is aiming for nearly £12bn in revenue to generate those profits. There’s a sense that the worst is over, but they’re still tarnished by the ongoing legal disputes, and at a time when they need new revenue fast.

Ah yes, the legal disputes – the US wanted UBS to hand over names of its clients who were evading tax, UBS refused, and the whole thing led to some diplomatic handbags being brandished. The US eventually got a bunch of the names, 250 of which have now been revealed to be serious fraudsters. They arrested some of them straight away earlier in the year, and said that if tax evaders wanted to avoid the same fate they could come clean about their accounts. It was a very clever move by the US – it’s just been revealed that 14,700 customers came forward, many of whom could have probably got away with not announcing themselves. It’ll be interesting to see how many people on the list gambled on not being, and didn’t come forward – there could be some rather juicy fraud cases on the horizon.

Meanwhile let’s raise a glass to Oswald Grubel. Whether he truly believes he can meet his targets, the sheer never-say-die ballsiness of his stance is more the stuff of Hollywood sports films rather than Swiss banking. Whether anyone will be convinced, we’ll have to wait and see.

It must be tempting when you got so much money passing through your coffers not to just quietly gamble with some of it, and so it proved to four UBS employees, who ignored the voice in their heads that said “are you actually doing this?” and went ahead and did it anyway. They were speculating in foreign commodities and currencies to the tune of up to 50 illegal trades a day in 2006 and 2007.

You may remember David Redmond, who earlier this year got drunk at a long boozy lunch then bet on some oil futures, only to see the price collapse. Even though he managed to turn a profit on the bet in the end (with a hangover!) he was still fired from Morgan Stanley and banned from working in the sector. The UBS miscreants however weren’t even any good at their bets – they lost £26m in the unauthorised trades. UBS had to pay all of that back to the wronged clients, and another £8m in fines. 

This isn’t going to endear them to their clients, who, after the double whammy of potentially being named and shamed as a tax evader and working with a bank whose reputation is in tatters, are pulling millions from their UBS accounts and heading elsewhere. This loss of revenue is further damaging those already record losses – their third-quarter results, released earlier this week, show a loss of 564m Swiss francs. They’re trying to focus on rebuilding their investment banking unit to generate some stable profits – but with stories like the one above cropping up with worrying regularity, they’ve got an image problem that could be insurmountable.

Still, CEO Oswald Grubel isn’t looking glum, saying in a memo to staff yesterday: “We have made good progress until now, which makes me optimistic. I am confident we will continue to move forward”. But forward to where?

Photo: Ben30

RBS went on a demented rampage of purchasing over the previous decade, bagging larger banks like Natwest, ones they couldn’t afford like ABN Amro, and ones with their toe in the US subprime market like Citizens, plus all sorts of smaller assets like insurance companies. Their unique combination of a vulnerable customer base and an overextended debt position meant that the bank felt the crisis more than most – now their empire is being broken up the European Union, eager to get the banking sector back to its private ways.

Advisors for RBS were telling them a fortnight ago to get rid of the insurance businesses (Privilege, Churchill, Green Flag, NIG and Direct Line) to placate the EU – now it’s looking more like they’re getting prised out of RBS’s reluctant fingers. After all, it looks like Lloyds is managing not to lose any of its assets, instead planning the largest rights issue in history to generate quick liquid funds as payback. RBS must have been hoping to remain equally unmolested; they had managed to hang onto the insurance businesses earlier this year, reversing the selloff desperately initiated by Fred Goodwin at the heart of the crisis. But the EU is playing hardball, and as well as the insurance businesses, they could lose Citizens, hundreds of branches, and see their investment banking operations scaled back. After the orgy of expansion, the party is well and truly over. 

Stephen Hester, RBS’s biggest cheese, is especially unhappy about potentially losing Citizens, saying that it’s a crucial part of RBS’s plan for emerging from the mire – with its 1500 branches, it’s a pretty sizeable cash generator, and the likelihood of getting a decent price for it is fairly low given the pressure on them to sell and the still relatively depressed marketplace. It of course would also sever RBS’s transatlantic ties, and severely set back their expansion.

So how will the high street change after all these sell-offs? Alastair Darling is keen to inject some more competition into the banking sector (we’ve already seen the potential suitors lining up for Northern Rock), and so we’ll see some brand new names on the high street pretty soon. Northern Rock’s quality assets will be parlayed into the astoundingly generic “BankCo”, while RBS’s branches will be taken over by the rakish and dashing “Williams and Glyn’s”, a venerable brand sucked into RBS in the mid-80s. The Sunday Telegraph, who reported these new banks, also said there’ll be one called “The TSB”, which truly is the brand that refuses to die.

A statement released by RBS today says that there should be an announcement before Friday on exactly which bits they’re going to lose. The adverse reaction on the stock and currency markets seems to endorse the fact that this is the sound of a bubble bursting.

Photo: Heart of Oak

Not George Osborne though, who has seen the pretty obvious vote-securing mileage in the bonus debate, and is going in guns blazing. He called yesterday for retail bankers’ cash bonuses to be ditched in favour of shares, which would be deferred for three years. The cash would then be funnelled back towards new lending.

The reaction from the banking sector has been somewhat frosty – everyone’s coming out with the usual jive about having to keep the City competitive and that not being possible without a bag of gold being plonked on everyone’s desk once a year. Meanwhile, Goldman Sachs’s vice chairman Lord Griffiths hasn’t helped rehabilitate the sector’s image by grumpily saying that people should “tolerate the inequality” – OK, it’s the elephant in the capitalist room that the system is geared towards making certain people richer than others, but you really shouldn’t mention it during a recession when everyone already hates you. But while it’s unequivocally clear that reform is needed fast, you can see the point in some of the beefs the bankers have with Osborne.

It’s true that his arguments are a little simplistic and mechanical, and certainly geared for maximum leverage among the electorate. The banks aren’t being held back from further lending by the cash earmarked for bonuses, and yet those are the terms Osborne has defined the situation in. And banks couldn’t possibly provide share-only bonuses without issuing more shares, thus diluting the value of the taxpayer stake and tying us to the banks over a longer term. Meanwhile he’s gone after the big high street banks which we all recognise and who have our taxpayer money, but not after the other companies who are instantly feeding their cash back to their workers instead of paying it out in a more stable and sophisticated way – the investment banks, the FTSE 100s.

But his attack on the apparent reluctance of banks to extend lending was given extra weight this week by the scrutiny on Lloyds, after their private equity arm has made a sixth of all buyout deals this year, plus a £400m deal currently being negotiated. The arm isn’t a free-standing unit with Lloyds’ branding, but uses the retail bank’s balance sheet to conduct its deals – the charge likely to be levelled at them is that they should be funding more small businesses rather than milking it off big established ones.

It’s good to have the likely future Chancellor pressing away at the issue of remuneration, but he has to do it on relevant terms – it’s in the interests of the banks to co-operate, given their image needs a major collective fillip, but aggressive and illogical attacks will only serve to prolong the already interminable progress of change, as a battleground rather than a round table is formed.

Which is what we have at the moment. Even if the regulators had cracked down instantly on bank bonuses, the resulting legislation would probably not have come into force by now anyway. But with the global discussions making their way through a very slowly yielding network of red tape, and the lobbying power of the banks still apparently very influential on the FSA, we can expect this same story next year.

Photo: Alan Dean

It looked like hedge funds were beginning to claw back the profits and respectability they lost during the banking crisis, albeit with a few scumbags still spoiling the party. Now the industry has been tainted once more by Raj Rajaratnam, who was charged last week in what could be the biggest ever insider trading scam involving hedge funds. 

A brief explanation: a big company will make an earnings call every quarter, half or year-end, and if it’s done well for itself, then it’ll be seen as a better investment, people will buy their stocks and the stock price will go up accordingly. Rajaratnam used information given to him by insiders at these companies to “trade ahead” – buy up stocks before the earnings call, and then sell them off once the price had gone up. They also played the same trick ahead of big mergers, acquisitions and joint ventures. The timing of these trades, made just before extremely high-visibility market changes, is so obviously sketch that they were picked up by even the cloth-eared types at the SEC, who often don’t notice a scam even when miscreants deploy a skywriting plane to announce their wrongdoing.

After Rajaratnam bought 400,000 shares in Hilton right before it got bought out by private equity group Blackstone, the SEC clocked him, and spent the next two years assembling a case. Rajaratnam, described as an “extremely likeable fellow” by former classmate and Black Swan author Nassim Taleb, is meanwhile protesting his innocence.

The news had time to percolate through to investors over the weekend, so yesterday, once everyone got back to work, Rajaratnam’s company Galleon was duly scuttled – $1.3bn of the $3.7bn assets under management have been removed by investors. Galleon are now scrambling to find cash to give them, selling off stocks and other assets. “This may shutter Galleon”, one lawyer told Reuters; Bloomberg says that Galleon staff are polishing their CVs in readiness for departure, while other cry.

But while Rajaratnam has got the headlines, thanks to his record $100m bail and links to the Tamil Tigers, the scandal affects many more people. Some of the informants, from intermediaries like Moody’s or the actual companies like AMD and Intel, have already been charged, while managers at fellow hedge fund New Castle have also been charged as part of the same case. At least 10 more arrests are planned. 

It’s also another blow for Rajaratnam’s former business school, Wharton, which became known in the late 80s as the “Wharton Hall of Shame” for its churning out of future insider traders. And Sri Lanka’s stock exchange is tanking after the news about their richest son – Rajaratnam may have funded AIDS projects and helped the tsunami relief effort there, but now he’s doing them no favours.

And outside of those getting busted and losing face, there are murmurings that the loss in confidence that the case provokes could lead to over-stringent regulation. This week, US legislators are putting forward a bill that will demand all hedge funds register with the SEC, so the watchdog can monitor their activities and see whether they’re just one big crap-shoot. Couple that with the clamouring about the sector not being socially useful, and it’s clear that despite their recent rising profits and adoration from the man upstairs, the public and the government are still extremely ambivalent about the role of hedge funds.

It’s published this paper today, full of recommendations and rules on the UK mortgage market, with the big news being that self-certification mortgages are finito. These were the ones where you didn’t have to prove your monthly income, and were perfect for the self-employed whose income might vary greatly from month to month, or for someone who really really wanted to own a house but didn’t actually have enough money to pay one off. Self-cert mortgages grew in popularity to encompass a third of the whole market in 2007; now they’re banned, and the self-employed will have to go through some rather more vigourous verification procedures if they want a house.

The FSA are also pressing for mortgage advisors and lenders being directly accountable to them, so if anyone goes giving out mortgages that people can’t afford, they can expect some very sore wrists. And the buy-to-let market, an over-reliance on which badly damaged banks like Bradford and Bingley, could become regulated by the FSA in the future.

The paper is in its consultation phase, so expect tweaking of the proposed new rules after discussion with the industry. But while the consultation on pay brought about a series of spineless changes resulting from an indignant banking sector, the mortgage sector is more or less in agreement with the changes already – self-cert, excessive subprime and buy-to-let were all innovations that were plainly wrong and damaging. The industry is starting to self-regulate anyway, with only a couple of self-cert mortgages now available following a drop in consumer demand, and a reduced number of mortgages at 100-125% of the value of the house (though there are actually no recommendations in the FSA report to outlaw these as well). However, with a constricted marketplace expect a rise in prices for mortgage products as lenders shore up against a smaller customer pool, potentially shutting out even more potential homeowners.

The mythic attraction of home ownership was allowed to be kept alive by a vast pool of money flooding the UK banking sector in the good times; now, with the industry having woken up, we can expect the rest of the country to follow suit. Home ownership is simply not an option for many people, and we’re currently going through a transition phase of our traditional desires being curbed by financial realities; it’s a shame it had to take a banking collapse to force the change, but patterns of asset-owning look set to be permanently altered by it. Look out for an indepth feature on this topic to be published on our brand new site, coming in a couple of weeks.

Photo: TheTruthAbout…

First of all, the highs. Those worried about the world having potentially deviated from its traditional axis will be relieved to note that the 33 top staff at London hedge fund NewSmith shared a bonus pot of £30m between them for their previous year’s work, despite the company having seen £2bn withdrawn from its funds over the last 18 months. What’s more, even if you didn’t get to buy a yacht this year, next year’s looking good. Hedge fund index Eurekahedge said yesterday that its index has grown for the seventh straight month, the best performance in a decade. It matches the findings of Hedgefund.net, who reported rising levels of investment over the last five months, bringing total assets under management across the sector to nearly $2tn, heading back towards the pre-crisis peak of $3tn; and Lipper Global Hedge Fund Classifications, who said the vast majority of funds turned a profit last month.

The hedge fund industry is also looking strong in the face of potential tough regulation on its activities by the EU. Since Sharon Bowles, the chair of the parliamentary Committee on Economic and Monetary Affairs said that most of the European Parliament agreed on making the regulation lighter, both Boris Johnson and even the Church of England have weighed into the debate calling for the same light touch – Johnson because 80% of the European hedge fund industry is in London and he doesn’t want to see it go to Switzerland, the Church because hedge funds are one of their favoured investments. Hearteningly, managers are saying that even if new directives came in they still have faith in London, one recently comparing it to the Wimbledon tennis tournament: “Businesses come to London because they have the best courts, the best talent, the best infrastructure, and a great championship”. Hedge fund managers are meanwhile also fighting Russian corruption and telling Tim Geithner how to run the Treasury – the industry seems to be well on the way to profitability and respectability, right?

Well, no. On the front page of the FT today is “one in five hedge fund managers found to be misrepresenting facts”; more euphemisms come later with “hedge fund managers’ representations about their funds differed from reality”. Yes, between-line-reader – one in five hedge fund managers are lying scumbags, who will tell you that their fund has hundreds of millions of dollars under management and that most of their profits are spent on helping injured kittens. Or, in the case of one fund, they’ll tell you their partners have no criminal record but it later emerges that actually they do, having stolen a Chinese sailing boat (?!) in the past.

Dragging the industry further into the mire is the case of the ex-Bear Stearns employees who are accused of fraud, by lying to investors about the health of their hedge funds (which were backed by that reliably fund-destroying asset, the sub-prime mortgage); the trial of Matthew Tannin and Ralph Cioffi, who is also accused of insider trading, started yesterday. Boris Johnson’s flagwaving for the industry is facing scrutiny, after it was revealed that over half of his election campaign war chest came from the financial sector (including from hedge funds). And while some managers are sloppily comparing London to prestigious tennis tournaments, there are others who are still saying they’ll bugger off to Asia if the EU directives are passed, purely because the rules won’t let them operate.

The new rules in their current form would prevent EU investors from investing in non-EU-based funds, as well as preventing them from keeping their holdings in non-EU banks – UK investors would have a much smaller pool of potential investments to choose from, while funds would have a much smaller pool of clients. Now that the Church and various charities have entered the fray, saying that over-regulation could lead to their good work being hampered, the regulation waters have been muddied all the more. One thing remains clear – find out if your hedge fund manager has a predilection for stealing Chinese sailing ships before you invest.

Photo: Joe Dunckley