Wednesday, Apr 22, 2009
So, no recovery for a few years then!
Mail online: Budget wake-up call for Darling:
Labour was rocked last night by a devastating warning that the banking crisis will cost every person in Britain £3,000. So that's nice then, 3,000 quid for every man, woman, child and baby, thanks darling!
Posted by tim miller @ 02:47 AM (535 views) Add Comment
6 Comments
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1. alan said...
Lots of homes are being reposessed and the losses are still being taken by the banks who were foolish to have loaned out the money in the first place. To this is added the losses from business failures.
Over the next 9 months, the banks will continue taking these losses, the IMF says. Another bail-out will be required by the autumn, I suspect. This will put an end to the "green shoots" in the housing market.
How long before we go to the IMF? Any suggestions?
2. str 2007 said...
£3000 for every man, woman and child.
That frankly sounds very light.
Take for example the average house that was £200k (halifax) and is now £160k (halifax). that's £10k each assuming 2 adults and 2 children.
Any families that suffer unemployment would automatically be down £15-25k per year.
The majority of small business owners will loose a least that figure anyway due to lack of sales and reduced margins. And I'd say that will be a minimum loss. I suspect the average small usiness owner will be down a good £50k this year and next.
Most peoples vehicles have dropped in price more than usual. Probably an extra £3-5k per household in depreciation more tha was expected.
So to summarize I'd say an average of £12k per household would in actual fact be a very small price to pay to get back on track.
I suspect when all added up the cost per person would come out nearer £25k each or £100k per household. (Admittedly achunk of that would be unrealised equity that shouldn't have been there in the 1st place).
Oh and I forgot the 30% drop in any share value (although this may eventually recover itself.)
3. str 2007 said...
And from the article :-
''The report laid bare the scale of the debt bubble that grew under Labour, saying the amount of credit extended in the UK during the boom years was 'massive' - exceeding the levels in Japan before its financial collapse in the early 1990s.
Shadow Chancellor George Osborne said: 'Now we know the potentially massive cost of Gordon Brown's utter failure to regulate the banking system.
'This couldn't be worse news on the eve of the Budget. It blows apart the myth that Britain was better prepared for the recession than other countries.'
4. stillthinking said...
Its not really bank losses though, B bought 200K of house/services from A, and B won't be paying up, the Banks won't be honouring the debt also, so that only leaves the taxpayer. As the average debt per household is 30K, the taxpayer isn't even honouring debts due to fellow Brits. Rather, we are honouring external debts for imports that we didn't even get. Or worse, we are honouring the failed loans by RBS to foreigners such as the nearly 1 billion loan to a russian, who spent the lot abroad, nothing back, so we are honouring a debt run up in a foreign country by a foreigner!
5. uncle tom said...
The government is on course to borrow an immense sum over the coming year, and virtually none of it looks likely to come from UK domiciled investors.
Who on earth (literally) has the cash, and the inclination to lend us these sums? - it seems almost inevitable that the govt will either have to let interest rates take off - or print more cash; and if they do the latter, the overseas owners of existing Sterling debt will abandon ship.
The govt must let interest rates rise, else Sterling will collapse and inflation will get out of control.
6. str 2007 said...
UT
That's exactly what I'd have thought. Having said that isn't that exactly what we all thought 12-18 months ago and look what happened !
I'm just not sure I could put anything pas this government now.
I said a while ago that GB is a desperate person with nothing to loose, but I am surprised at the measures that have already been taken and they still have over a year of spending our - yet - unearned futures.