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[Vamps]

Nope.., I was at the rough end of that one.., lost a house etc.  Believe u me, it was no walk in the park. Neither will this one be.., but it is surmountable.

So did I in 1985

And yes it was, no idea where this one is going

[Nickbat]

The problem is that all this negative talk makes for a self-fulfilling prophecy. The more the media speculates about institutions and plays on the fear factor, the more people will bring about that very situation. B&B had a default rate of around 1.8% on its own mortgages and did have a portfolio of debt with a >5% default rate, but it got shot of the latter last week. It wasn't too badly off, from what I can judge. The problem is that the media piranhas start to encircle the next victim and, bingo, millions of pounds are wiped of B&B's share values and withdrawn from accounts. Net result is a failed bank, but more importantly, even less confidence in the market place. So people spend less, companies make less money, lay-off workers  and more mortgages go into default. Bring on the next victim!

As I've said before, it's all a question of confidence. There's no science in all this, just emotion. There's still the same amount of money sloshing around the system as before, it just starts to freeze up when the doom-mongers take over.

Technically, we could be out of this in months, if the media put a more positive spin on things. However, with the BBC putting out pages entitled "What would financial Armageddon look like?", I don't hold out much hope in the short term.

[albitz]

Meanwhile,our pension funds are going down the toilet,because when the "greedy bankers " arent making fortunes,our pension funds which they invest for us,arent making money either.

[SheWhoMustNotBeOUTBID]

I agree Nickbat.  We just have to concentrate on the fact that things have been bad before, the mud eventually cleared and things got better.  Pessimism has a certain amount of survival value but only a certain amount.

[cem_devecioglu]

Nickbat is right, media sprays fuel over the fire..

the reality is -as it started- low interest non-returning mortgage credits..Somebody had to pay the bill..

And if the governments dont response quickly, it will spread..

so government quarantees are the key..

[Nickbat]

Remember that all things are cyclical. When the dust settles (and it will), there will be quite a few opportunities out there. Tunnie's right about the cheaper housing and there will be opportunities for buying bargain shares and businesses. The difficulty is reading when the market bottoms out. Boom and bust is a natural and unavoidable cycle, and prudent individuals and governments (unlike our current lot!) will put money away in the good times to see them through the bad times.

Pensions are long-term investments and they will recover in time once the balance of stocks, commodities, housing etc have regained their equilibrium. Dunno WHEN that will happen, just know it will.  

[Nickbat]

Nickbat is right, media sprays fuel over the fire..

the reality is -as it started- low interest non-returning mortgage credits..Somebody had to pay the bill..

And if the governments dont response quickly, it will spread..

so government quarantees are the key..

Cem, you're right, but at some point, governments will draw a line at helping every failing business - with the result that more companies fail and unemployment inevitably rises. However, with increased unemployment comes increased government expenditure on social security. Then comes the crunch. Do you increase tax on those still working to pay for the extra expenditure or do you reduce taxes and interest rates to kick-start the economy? Were I PM, I would do the latter. Lower taxes and lower interest rates get the money moving around the system again.  

[albitz]

Our current lot would raise taxes (again) - as the left always do.
The next lot,gawd knows what they will do, other than spend a lot of time trying to work out which is their *rse and which is their elbow.  
gormless gordon wouldnt know how to make serious tax cuts if his life depended on it.

[cem_devecioglu]

Nickbat is right, media sprays fuel over the fire..

the reality is -as it started- low interest non-returning mortgage credits..Somebody had to pay the bill..

And if the governments dont response quickly, it will spread..

so government quarantees are the key..

Cem, you're right, but at some point, governments will draw a line at helping every failing business - with the result that more companies fail and unemployment inevitably rises. However, with increased unemployment comes increased government expenditure on social security. Then comes the crunch. Do you increase tax on those still working to pay for the extra expenditure or do you reduce taxes and interest rates to kick-start the economy? Were I PM, I would do the latter. Lower taxes and lower interest rates get the money moving around the system again.  

we had a solution for that..give and take back..inflation

smooth crisis..

[Nickbat]

Nickbat is right, media sprays fuel over the fire..

the reality is -as it started- low interest non-returning mortgage credits..Somebody had to pay the bill..

And if the governments dont response quickly, it will spread..

so government quarantees are the key..

Cem, you're right, but at some point, governments will draw a line at helping every failing business - with the result that more companies fail and unemployment inevitably rises. However, with increased unemployment comes increased government expenditure on social security. Then comes the crunch. Do you increase tax on those still working to pay for the extra expenditure or do you reduce taxes and interest rates to kick-start the economy? Were I PM, I would do the latter. Lower taxes and lower interest rates get the money moving around the system again.  

we had a solution for that..give and take back..inflation

smooth crisis..

Cem, don't give away government secrets like that. They think we don't realise what they're up to!  

[Mr Skrunts]

BBC News has been saying that talks are going on for the B&B to be Nationalised and sorted with a possibibility of giving it to Northern Rock.

This in turn needs to be finalised by the time the Asin markets open to stop a further drop in it's value.

http://news.bbc.co.uk/1/hi/business/7640143.stm

(The Northen Rock was mentioned in the 4am news on BBC)

[albitz]

The beeb have just gone live to washington to hear various politicians speaking. It sounds like they have agreed the big bail out plan in principle,but still need to get it down on paper in an agreed form.
hopefully it will be the the start of seeing some light at the end of the tunnel.

[Mr Skrunts]

It's all bloody stupid, quidlines should have been in place, this situation could have been avoided.

Kerb the greed on traders, equal to less risk trying to get rich quick.

Better mortgage guidlines stopping people over stretching themselves.  The 95% mortgage was reasonable, but then the 100% and more morgages just got daft, people jumped on board as they saw the rate dropping, they never planned for it going back up again.

Lets face it they (the Government) turned a blind eye, as house prices were booming, so were all the building trades, and the knock on effect was plenty of money flowing through trade and retail business with more staff being taken on in all area's

Dropping the interest rate at the time might have seemed to be good for the country, in the long term it obviously wasnt.

[albitz]

other side of that coin is,when they make lots of money quickly,so does the exchequer/our pension funds,and the economy as a whole.
anyway far more important than that skruntie,motogp live on BBC1 now,see you later.

[pete.h]

I don't think they should ever have been allowed to offer introductory rates on mortgages.

There seem to be a lot of people who started off on a rate of say 4% and they get used to living with the repayments associated with that.

When the introductory period ends and the rate goes back to the standard rate of say 7% , they are struggling because they haven't budgetted for the increase.

Recipe for disaster if you ask me .