Wednesday, 24 April 2013

Someone should tell America there's a global recession on....

Just got back from a week in Florida visiting friends and felt a little compelled to share. Not to show off about being able to go and visit America but because holidays are spectacularly rare in my world and it's nice to have something to talk about other than what share ends up in the portfolio.

But as this is a mostly finance related blog, let's try and focus on what I saw and learned about in America over the course of the week that has to do with finance, money and wealth. Because wealth is what I saw mostly. Ridiculous over the top wealth. In fact during a week in Florida everything was bigger, more amazing, more beautiful, larger, faster, stronger and more epic than anything I've seen anywhere in the world before. It's been 13 years since I last went to the US and the change in the place seems massive. You'd be hard pressed to know that they'd lived through a huge financial crash. Shops are everywhere, restaurants are everywhere, huge cars are everywhere. Not for them streets of boarded up retailers, dodgy kebab takeaways from a pie cart, busted up roads, and people continuously whingeing about austerity (which doesn't exist).

I sat on Atlantic beach for one day during the week and got hot. It was great fun. Afterwards, cruised down the strip of road that follows the coast to St Augustine, America's oldest city. Along the way, you cruise through 30 miles of a place called Ponte Vedra.

This is the worst house there:

The worst house in Ponte Vedra
Every blinking house there was three stories, had triple garages, beach or lake front, tennis courts, robot butlers, ferraris, lasers, rocket ships, etc. etc. You get the idea. Beyond belief wealth.

It's really hard to see wealth in the UK. I know it's there but it is generally hidden and not spoken of. Great wealth is difficult to see here. My neighbour's house sold for £800,000 in 2008 (I know this from the Zoopla house prices site), yet it doesn't look like £800,000 worth of house to me. It doesn't even have a driveway or garage. How can you spend that much on a house and have to look for a car park on the road every night with the poor people? Somehow I've digressed...hmmm, right, let's get back on track. In the US wealth is conspicuous and obvious. It's in your face, and is a representation of the American Dream. It says, I MADE IT. And over there, that's the incentive for you to make it too. We went to a local diner for Sunday brunch. This ginormous thing almost ran us down as we jaywalked the road. My head came up to the wing mirror.

What the hell is it? A Jeep crossed with the Terminator?
You may say that's an isolated example. Well, let's make it more obvious. In the US last year, the most popular car sold was this, the F-series Ford Truck:

An F150 - Ford can pretend all they want that these things are used by cowboys on a ranch, but
they are every second car on the interstates.

It's a $23,000 truck thing with a 3.7 litre engine that guzzles petrol at 27 mpg (32 UK mpg). Of course, no-one actually has a $23,000 version, they all rock out in $35,000+ ones with blinged up wheels, crew cabs, shotgun racks, etc. This thing is everywhere in America. Sales figures for March 2013 show it selling almost 71% MORE than any other vehicle. It is popular beyond belief. It isn't cheap, sensible, practical or convenient to own but because it is big, fast and muscular it is the no.1 selling vehicle. Those same sales figures show sales up 17% on last year. There is no equivalent vehicle in the UK. The no.1 car here is the tiny little Ford Fiesta, which would fit in the tray of the F-150.

Of course while you're out driving to your hootenanny in your F-150 rocking out to the latest Taylor Swift (OMG, she's so hot), you'll come across some of the most bizarre road rules ever. This is obviously the price you pay for owning a ridiculously impractical monster vehicle. The US has things called four-way stops - an intersection with four stop signs. Nobody knows what the eff to do at these, so everyone stops, then each car is supposed to take turns at going through the intersection. EXCEPT, no-one does that. Some don't stop, others creep through the junction, everyone stops and looks at each other, and other times everyone goes at once. Chaos.

Here's the solution to America's problems and Britain's best export growth plan ever. A ROUNDABOUT. Let's sell them roundabouts. I am a genius.

Look - a whole bunch of people going where they want to go without having to stop.
The second crazy problem America has is the speed limit. The speed changes all the time. You're on an interstate doing 65 being passed by a truck doing 85! No, trucks aren't governed or limited so it is just like being in Duel if you're in the slow lane obeying the speed limit.

Isn't that truck a bit close honey?
That's not the worst bit though, you're doing 65 but somehow the speed limit has dropped to 45. Signs are shown every 1000 miles or thereabouts, so if you missed the sign and continue to do 65 in the 45 you're going to prison when the state trooper catches you. By the way, they drive cars like this:

Dodge Charger State Trooper car - they look like vehicles from a science fiction movie.
Don't even think about outrunning them. On-board computer guided lasers will gun you down. See, even the cops drive cooler cars than anyone in the UK.

On to healthcare. Here's a hospital in Florida:

Florida Hospital - seems a decent place to get sick in.
I know, I know. I'm getting sick there too. Looks more like a country club resort than a hospital. How the hell are they building hospitals that look like this and not like this:

Architecture, what architecture?
I asked my buddy about this. He gave this story as an example. You buy health insurance in America to cover the cost of your treatments. A recent dentist trip revealed he needed a crown. This would cost him personally $300. The insurance covers 90% of the cost. His dentist trip therefore actually cost $3000 for one tooth treatment! Another example is his new addition to the family, their baby girl was born at the local hospital, and the bill for that was $30,000! This is madness. There is no way this is the actual cost of delivering a baby into the world, yet that is how much you plus insurance pay the hospital. Hence, they have hospitals that look like country club resorts, doctors that drive Ferraris, and houses on Ponte Vedra beach that should house the president.

As a contrast, this morning I popped into Oxford. Down the first street I came to, two homeless chaps popped their heads up over a nest of bags and boxes. I didn't see any of this in Florida, although a very happy drunk chap tried to tell me a story at some traffic lights in Atlantic Beach.

I couldn't get over the relentless optimism everyone had. People realised times had been difficult the last five years but they were determined to get over the hump and power through to the next stage in life. It's an infectious thing. I've come back from there more enthused than ever about doing new stuff.

And if you're wondering why everyone in America is a little bigger than normal (!), it's the food. Above is standard fare for lunch. Ridiculous amounts of BBQ beef, chicken, and pork, delivered with beans, coleslaw, fries and constantly refilled drinks (if you want them). My poor tummy.

America may not have a social welfare system the same as the UK, it may not have free healthcare, and it certainly doesn't have sensible road rules but maybe it doesn't need them. Things looked pretty damn rosy to the untrained eye of this tourist there last week.

Somebody should tell them the rest of the world is in recession. I'm sure they wouldn't care though.