MrWallace

Don't be silly, billionaires, oligarchs, mafia bosses and third world dictators and their families only live in the posh parts of London. And there is NO WAY the police would have let rioters loot and burn in Nottinghill and the City of Westminister.

If you bought in London in 2008 you'd most likely be mortgaged up to the hit on a property that's price could fall through the floor at any minute. Unless you had a buyer lined up right now.

I think you misunderstand, I actually agree with you, I believe that people with no assets and very little income after essentials have no other option, it's just funny the way the official tune has changed when suggestions that telling the creditors to go to hell or published on the BBC.

Quote from that article you quoted... "Charities say that, on the positive side, the DRO figures show that people are doing something about their financial problems. " That made me chuckle, yeah they're doing something positive and showing that they're serious about their financial problems, they're defaulting. It's like someone saying: "I have finally decided I'm going to be responsible and take my debt problems seriously... I'm telling my creditors to go whistle for it." I'm still laughing, it's just so surreal. It used to be that the responsible thing to do was look seriously at your spending, cut out all the unnecessary spending, set up a repayment plan that your creditors would agree to and stick to it until it's paid back. Now the responsible thing is do the opposite, according to that quote anyway... On a more serious note it is the only option, there is probably more debt than money as money = debt minus the interest. It is not really, real. At least not in the way that the goods and services it bought are/were real.

I get what you're saying, but it doesn't seem like an equal relationship to me. On the one hand we've got the general population, and on the other hand there are sophisticated banking operations out to get their debt claws into them and make money from money with everything from unsecured personal loans and credit cards to pawn shops and pay day loans. And they spend millions on slick PR gurus to tell them the best techniques to do it too, the PR gurus are constantly refining their ways to come up with the best techniques to manipulate people. They constantly bombard our media with adverts and even write to people directly in the mail. And they're not even working alone either, they are backed by their armies of commission salesmen in other industries selling and advertising everything from cars and TVs to holidays - trying to persuade people to just sign this paper in the show room and it is theirs. And mean while the government is silent and there are no equally loud voices warning of the dangers, just a few lines buried in the loan agreements small print. At least with our dangerous addictive things like tobacco they're not constantly telling you how great it is and there are very loud voices warning people about it's dangers, but not so with debt. You make a good point in your later post about my analogy of giving addictive drugs to school kids not being a fair one because borrowers aren't children. A better analogy might be when the British sold and push opium in China and turned a 1/3 of the population into drug addicts...

Oh I don't know, it's not the first time this has been done. As far as I can see the western world started out on this generation long credit binge when those who were old enough to remember the roaring 1920's and the terrible pain that came afterwards started dying out

In your opinion, is that a bad thing? Should people be ashamed of being bankrupt or in debt? People no doubt made a lot of bad decisions out of the desire to have everything now now now without having to save or even actually be able to afford the things they wanted, but how much of the blame should really rest on the debtor? The banks were supposed to be the sophisticated investors looking after everything with all their risk management models etc... But they just kept on lending the money out to almost anyone who wanted it. A guy at work told me about one of his sons friends who was unemployed and living with his parents. Just after he turned 18 he took out a credit card after they sent one of their direct mail shots to his house. Not enough to advertise on TV they had to write to the young man offering him a credit card, anyway he took it. Two days after the card arrived it was maxed out on online poker. My work mate says his sons friend doesn't care and just wants to go bankrupt, he has not paid a penny and couldn't pay the debt even if he wanted too. But he's not worried either way though. Yeah it's mad, but when banks are handing out credit like it's rain water what do they expect? That would be like schools handing kids heroin with societies approval and then society moaning about the number of drug addicts and how there was no social stigma in being an addict any more. Can we really put the blame on the borrowers?

If we had the US laws where you could walk away from a mortgage and be free of it simply by handing the keys back to the bank it would certainly help us get the housing crash so many on here want to see, as it is in the UK we will probably see the housing bubble take just as long to deflate as it took to inflate. US style mortgage laws here would lance the boil and get it over and done with a lot quicker as home owners in negative equity wouldn't be holding on. Saying that, the USA's laws would make the bubbles upside worse too. I mean, if house prices are rocketing and you have 'no job no income' why not take advantage of the banks 'no problem' offer by gambling risk free? All you need to do is take a mortgage with an ultra low teaser rate and if prices are higher still next year then flip it and take the cash, if not hand the keys back. It's like heads you win tails the bank (I mean tax payers) lose. If I were in the USA and in negative equity I'd hand the keys back, save my mortgage/rent money for a couple of years and buy again at the bottom after I had finally been kicked out. And I'd have all that money I'd saved in mortgage payments too. On a side note: The USA laws really show the way different groups are treated in society. Home owners in America are typically middle class or better off and not all that young either, for those people they have laws that let them get a way with irresponsible borrowing. Yet for the young they recently introduced changes to the bankruptcy laws that mean that a student loans can't be discharged through bankruptcy, including things like credit card debts run up when one was a student. That is like the other extreme and I think it is pretty sickening really. '****** the young' seems to be the new political mantra replacing 'it's the economy, stupid'.

So, have you seem the teacher again yet?

From where I'm sitting it looks like house prices are crashing, just slowly. In other words the bubble seems to be deflating as quickly as it inflated, or not to far from it. I had a look on aspc.co.uk and it looks like many homes are now fixed priced at under the valuation on the home report, it used to be offers over the valuation on the home report with 10% - 30% over the valuation price not being uncommon. So what do people think? How long did the bubble take to inflate and don't some bubbles, particularly bubbles in pretty illiquid assets, take as long to deflate as they took to inflate?

Exactly, nicest country I've ever worked in (or visited for that matter) is Norway, not only is it a lovely place with a great benefits system, there is low unemployment and the people there are rich. But as the size of the economy goes they're probably fairly low on the list because they don't have a large population. So Norway have very little clout on the world stage, but that doesn't seem to bother the people there who just want to live nice lives. Saying that, France has a population around about the size of the UK's it it wasn't until the financial crisis that the UK fell behind France.

I don't mean to sound rude but I really think you and your primary school teacher mate are wasting your time favouring one of the mainstream parties over the other. They're all the same really, politicians gave their power over to 'the markets' long ago, and they plan to keep it that way too. If Labour were in power unemployment would be like it is now as they wouldn't be able to do much to force private enterprises to create jobs either. All the cuts would be happening too and they would have raised VAT as well. Their promises don't mean anything. Labour are owned by exactly the same group of people who own the Tories. Its like this. Pretty much all politicians of all the mainstream parties will always take the side of a higher social/economic class over another. For example, they will always favour landlord over their tenants, but if landlords get into trouble they will always side with the bankers over the landlords. The only difference is with policies that the mega wealthy aren't untied about; such as the right to protest, free speech, ID cards and other civil liberties. Labour really dislike individual freedom and want as much state control over people as possible in order to socially engineer them into what they want them to be. Labour were also pretty keen on filling up the jails as fast as possible and criminalising as many things as they could, as quickly as they could. Labour will generally sell you a peerage too whilst the Tories will had them out to folk born with a silver spoon in their mouth, but really there is not a lot of difference between them when it comes to things like employment and the economy. What always surprises me though, is how come Labour's core vote of Social Democratic voters are so stupid that they vote for them time and time again? Don't they realise that when your vote can be taken for granted your views become worthless to these people? Labour introduced the non-dom tax break for foreign billionaires, it was such a break that I believe the IMF listed the UK as a tax haven for foreign nationals until 2008. Labour kept all the Tories buy-to-let legislation and engineered a housing (price, not building) boom to transfer wealth from the young and the less well off to the better off and the baby boomers. Labour built less council housing than the Tories and continued to sell it off. Labour introduced tuition fees because their goal was, as Tony Blair put it, 'to create a market in higher education'. They're totally cool with the market in elementary education too and Labour politicians, even the so called 'left-wing' ones, generally send their children to private schools. Labour increased the gap between rich and poor, during Labours term in office the earnings of the richest 0.1% soared and the bottom 50% of earners got poorer in real terms. Labour well and truly reversed social mobility. Senior Labour politicians like Harrett Harmen claim they're concerned about inequality amongst different sub-groups, race, religion, gender etc... but they one group they're not interested in is the working class. They're so far detached from the plights of ordinary working people that they don't even seem to be able to relate to them. Labour boasted about their "light touch" regulation and let the capitalist cowboys in the City of London, dodge taxes, run riot and blow up the banks and then bailed them all out with tax payers money when they did it and allowed them to return to business as usual. Labour MPs ripped off the tax payer with their expense claims at least as badly as MPs from every other party too. Why anybody who believes in social democracy turns out to vote for a party like that is beyond me. At least Conservative voters believe in the massive inequality they're voting for... Show your teacher mate my comments if you will, because I'd honestly like to hear what a Labour voters has to say about these things. If I knew any Labour voters who were social democrats I'd ask them myself but up here they've all switched to the SNP in disgust (not because they want independence).

I don't think most wanna be home owners are really all that sophisticated as investors to be honest, and I doubt all that many of them aren't buying because they're holding out for further falls either to be honest. Some no doubt are, but I don't think it's as many as we might think. I think most FTBers couldn't really afford homes in 2006 and they still can't now, the difference seems to be that it didn't matter if you couldn't really afford a home in 2006 the bank would just lend you the money anyway while now they won't. I know someone who hates renting and really wants to buy but they have no savings and loads of credit card debt. I don't think they'll be able to get a mortgage at the moment. If it were still 2006 they could simply get a liar loan for any amount they wanted and buy whatever they wanted. If that opinion was still available now I imagine they would have already done it.

The deposit is still the single biggest reason first time buyers aren't buying as they simply don't have tens of thousands of pounds of savings. They didn't during the boom times either mind you, but the lenders didn't seem to mind then.

Like I say, it's a bit like a lottery ticket. A jackpot isn't that likely, but it doesn't hurt too much when you're wrong... Lets see... If there was, say, a 90% chance of them going under and a 10% chance of survival and a return to profitability; with the loss being £300 if they went under and the gain being £10,000 if they survived I'd take that bet. I'd rather do that than spend over a thousand pounds on a 1oz gold coin that's probably not going to go any where and has pretty much no chance of ever generating any kind of yield ever. PS. For the record, I DO NOT advocate buying shares in HMV, I just think it's a better idea than buying gold.