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House Price Crash Forum


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Everything posted by Methinkshe

  1. A listener emailed the R5 money prog (5.30 - 6 am) to report that listeners are already queuing outside Northern Rock in Nottingham - at, least, I think he said Nottingham - was only half listening - although, wherever it is doesn't make a lot of difference. Sentiment is the same.
  2. If you want to be the last one in on a speculative bubble, (the greatEST fool) then buy. If not, rent.
  3. Exactly so! And tenants need greater security. At the moment it is possible for, say, a family with 2 children to rent a house, place their children in schools, find work in the locality, only to be told six months later that their shorthold tenancy will not be renewed and that they have 2 months to vacate. Doesn't matter that they have been A1 tenants, paid their rent on time, redecorated and improved the property, - if the landlord wants to evict them after 6 months, they're out. That's just not fair on tenants - especially families.
  4. Redressing the balance between landlord and tenants rights which are presently stacked in favour of the landlord would go a long way towards stopping the speculative aspect of BTL. Sitting tenants devalue property. It's too easy for a LL to evict a tenant under the terms of the shorthold tenancy and cash in his chips at will. Make it harder for him to leave the game and he won't be so keen to enter it in the first instance.
  5. Make it psssible for a computer illiterate like me to access, would you? I can just about click on a link but not much more.....!
  6. Didn't Gordon sell half our gold reserves? As far as I have been able to work out, the B o E largely trades on the good credit of the country/government, i.e. the nation's reserves in terms of its capacity to produce REAL wealth, i.e. saleable goods.
  7. If gold is remonitised at some future stage in a global banking crisis, as the only means of restoring confidence, one would assume that it would again be up for confiscation. Is it not true that when buying gold from any bullion dealer, one has to give name and address? Would you put it past a government to seize the data-bases of these bullion dealers? I wouldn't. Even if not confiscation of gold, a retrospective windfall profits tax would be very much on the cards, imho.
  8. From The Downwave by Robert Beckman. Although this book was written in the 1980s the principles still apply, although if anything the situation has deteriorated with so many banks getting involved in mortgages i.e. borrowing short to lend long. "A collapse in the international and domestic banking system could occur at any time, without warning. It is my firm belief that an international banking crisis similar to that in the 1930s is not a matter of 'if', but simply 'when'. To understand how and why, a brief acquaintance with the way the system works would be useful. At the root of banking is the fractional reserve system where money can be created by the banks. Banks in Britain (along with those in most other countries, supposedly under the watchful eye of the Bankk of England, the Federal Reserve, or some other central bank) may not only lend the money they have on deposit, but may also lend several times that amount. How many times depends on the existing fractional reserve requirements. For example, suppose the reserve requirement is 33 per cent. That means a bank can lend £2.00 for every £1.00 on deposit. If the reserve requirement is 25%, then the bank can create £3.00 for every £1.00 on deposit. If the reserve requirement is 10 per cent, the banks can lend £900 for every £100 on deposit. You can now begin to see how the system may have some built-in perils. But the fault is not with the system, but the way it operates. The prospects and stability of the banks revolve around 'solvency' and 'liquidity'. When the system is solvent and liquid, it is considered sound and stable. When the system becomes illiquid, soundness and stability are threatened. When the system becomes illiquid and insolvent, the consequences are usually disastrous. Solvency involves matching the total of banking assest against the total of banking liabilities. As long as the assets of a bank are as great as its liabilities, the bank is solvent. Liquidity involves current assets, as opposed to aggregate assets. A bank is considered liquid if its cash on hand equals current liabilities. If, suddenly, all of the bank's depositors showed up at once and wanted their money back, if the bank could meet all those withdrawals, it would be liquid. If it could not, it would be illiquid. As a result of the fractional reserve banking system, all banks are illiquid. Banking involves confidence. As long as depositors believe the bank is solvent, only a few of them are likely to want their money at a given point. The bank, although illiquid, will continue, and remain solvent. However, if it is suspected that the bank may become insolvent, a sudden rush of depositors could force it to sell investments at a loss, or suddenly write-off bad debt, in which case illiquidity can lead to insolvency. When a financial institution becomes insolvent in Britain, its banking licence is withdrawn and it must close. This is an over-simplification. While most banks are illiquid, most are also solvent (at least, on paper)........
  9. There could be a lot of anger simmering away over the weekend. A lot of people have to work on Monday so that will leave them even more frustrated. How many angry people could decide it's worth taking a day off work to rescue their savings? They won't be in a good frame of mind if they do join the queue on Monday.
  10. 200 people queuing at 12pm. Processing 5 customers per hour. Closing at 2pm. That leaves 190 very unhappy customers. Wait for the first glimpse of police turning up to "manage" queues, and look for the riot van in the background.
  11. Someone on this site doesn't think Britannia is a good bet. HERE
  12. Seems to me it wouldn't take much - a leakage of bad news from another BS or Bank - for panic to spread to all BS's and banks. That's when it gets really dangerous. Even sound banks fail when depositors lose confidence and withdraw funds in a panic. At that point one has no option but to join the herd and panic with them - hopefully at the head of the queue. Bank runs are largely irrational - that's what makes them so dangerous. The bad take the good down with them.
  13. Isn't it the case that even if the problem began as one of liquidity, it will quickly become an issue of solvency if depositors keep withdrawing funds?
  14. A lot of NR customers have been complaining about their internet access only accounts because they cannot even be accessed via a personal visit to the branch. They were completely shut out of their accounts when the website went down. Personally I wouldn't want any cash tied up in an account with internet access only.
  15. Do branches of Northern Rock customarily open on a Saturday? If so, it will be interesting to see whether all the soothing noises have had any effect on Joe Public or whether yesterday's queues will be repeated.
  16. It's becoming more and more clear how loss of confidence in ALL banks could spread. If we're feeling edgy about Natwest because their online banking is temporarily unavailable (which, to be honest, won't be the first time, it has happened several times before when I have tried to log on) imagine what will happen after a couple more Northern Rocks. Fear is even more contagious than the greed that drove HPI.
  17. Just tried to log on to my Naatwest account and get the message that this service is temporarily unavailable. How exposed is Natwest to sub-prime? Does anyone know?
  18. To the extent that starting again this time around is not going to be anything like as easy as it has been when credit was so easy to come by, I think you are right. BTL landlords aren't just going to lose their BTL's, they are going to lose their homes, too.
  19. Check out THIS thread in the Investment Sub-Forum. Bradford and Bingley aren't safe according to this poster.
  20. 7:15 ish, - I think. He came across as a complete halfwit
  21. Caught the tail end of an interview with a BTL landlord on R5 this a.m. He thinks that all those people who are delaying house purchase are causing the economy to go slower and interest rates to rise, so what they need to do is to get buying houses asap which will cause the economy to go quicker and interest rates to fall then everyone will be happy again. He has 4 BTL's in Liverpool because "it's a city of culture, innit?"
  22. Are you not getting it or am I not getting it? As far as I can tell, NR has no business left because it's business model has collapsed. No ongoing/future business = no business at all. Or have I misunderstood? The way I see it is that they are like Fred Flintstone selling chiselled rock wheels to Michelin.
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