_w_

How about 'sublimated', straight from solid to gas phase. Or, less accurate for the current housing market but more media friendly, 'vaporised'. Edit: typos

Great graph. I just can't believe it shows London still shooting up that fast!!! Looking at the graph you'd think absolutely nothing is happening with the exception of NI. It seems to contradict the other reports of house price falls in the last few months. Am I reading this wrong?

I am not sure how accurate that is but I've read in a few places that the US economy needs to create 100,000 to 150,000 jobs per month to break even, taking population growth into account. So I guess the job deficit is even bigger than that.

and Agincourt ...

Great book. And can be useful from time to time...

That wouldn't explain why the european banks expanded credit just as much though.

Amazing! I know hindsight helps but it is amazing to see how far behind the curve the other members of the panel were! They just thought it was all over by then, they just completely failed to understand the depth and nature of the crisis. And to think these people are paid by someone to give investment advice! My favourite is the muppet who recommends buying banking an builders stocks on 31/10/07. Although the one who says this whole crisis is just "noise" comes a close second

THIS IS THE RIGHT ANSWER. Optobear, with all the more authoritative attempts at answering your question the correct one was about to be ignored. The answer to your question is not that banks were lending at a loss below base rates to 'increase market share' but that they were indeed making a profit all along because ther funding cost was also below base rates. To understand you need to look at how banks finance these mortgages and understand a bit about wholesale funding: banks don't base their fixed rates on the BOE rate but on the wholesale bond market's swap rates (which is where they get their funding from); and swap rates have been lower than the base rates for most of 05 and 06 (which is arguably a result of the UK's position on the global yield curve). Here's an article from Pimco (June 2007) that explains things much more clearly than I ever could. I find Pimco are a good reference if you want a reliable perspective and understanding of bond markets: http://www.pimco.com/LeftNav/Global+Market...07+Bradshaw.htm The chart below from the same article shows the spread between the STG 2 year swap rate and the average UK 2 year fixed mortgage rate until mid-2007 (blue line). It shows that the spreads have indeed been reduced, mainly because the originators' risk component of the spread became unnecessary thanks to securitisation (or 'Ponzi scheme' as Pimco like to call it at the moment). Are the banks responsible? All you need is to look at who benefited, and the 2007 bonuses bankers paid themselves in the midst of this crisis gives you the answer. I pity the poor bank shareholder who has to read about these obscene remuneration packages while his savings are being comprehensively destroyed.

Thanks for that, newbie and didn't know him, it made my day. It's refreshing to hear that kind of talk from time to time. Makes me hopeful common sense will prevail.

I don't think anyone has been able to regulate the banks since the 70s. The first post war global bubble (that I know of) was the latin america/emerging markets debt crisis (that was only cleaned up last year or the one before?). It's interesting to note that as the US tried to control money supply at the time the banks just went to the euro dollar market and kept inflating that particular bubble. If the US haven't been able to control their banks since the 70s then I think it is a lot to expect of any UK governement to control their banks and foreign ones as well. I think Brown can only be accused of having tried to take credit for something that was totally beyond his control: low inflation and low rates. Everything else that is happening seems to be more and more global in nature and a small country like the UK can't do much to stop it. You try to raise rates to slow things down? As banks create ever more money gilt and corporate rates keep going down (remember Greenspan's conundrum). You try to restrict money supply? The banks will find the money abroad or use SIVs. You want to regulate? They'll just move to some offshore center to avoid the regulations.

I think you are wrong on this one. I spend almost half my time in France and I can assure you that despite the rough and tumble the UK is a much happier place to live in. From a standard of living perspective they are much worse off than we are. Despite their social posturing they offer less protection to the vulnerable than we do here; the number of people living in the street is way beyong the level that would cause an outtrage in the UK. France is in such a mess I could go on for ever.

Not much happening in the Euro area, and in France in particular, at least as far as I can tell. I put it down to the fact that unlike the Fed, the ECB has been taking MBS and other crap securities as collateral from the very begining of the crisis. The latest figure I read was $500bn. So no credit crunch in Europe if that information is correct.

Frightfully cynical. And probably accurate too

I don't think this has been posted already. http://www.ft.com/cms/bfba2c48-5588-11dc-b...mp;fromSearch=n

That article isn't too bad is it? Much more importantly, wouldn't painting roofs in white contribute to global cooling as more light is reflected into space?

h76, here's a link that validates your point. It's only Wiki but it should be simple enough, even for those more interested in posturing than admitting they might learn something from others here. http://en.wikipedia.org/wiki/Money_creation Cheers William

What a bunch of rip-off merchants! As you write, probably anticipating demands for discounts on the back of a falling market by raising prices even more. The problem is that the sheeple don't know what a house is worth anymore and those b*st*rds are taking advantage of it. This is a demonstration of the power of information of the ugliest kind. Thanks for bringing it up. We need reminders like this to remember this market is dominated by con artists.

Funny you should mention that because the truth i rather counter-intuitive on this one. I can't remember what price was paid it but turns out that had the buyer kept all of Manhattan to this day his return on investment would have been pretty poor.

First 30%+ reduction in Fulham spotted on Property Snake. http://www.propertysnake.co.uk/site/postcode/sw6 Note the sneaky little sh*ts' attempt at raising the asking price before finally reducing it two months later.

None required! Between you and Bloo Loo's posts you gave me a good laugh. My calculation was based on the fact that whilst the first bank can lend say 12 trillions on 1.2 trillion capital (based on a conservative 1:10), those 12 trillions once deposited with other banks can be used to generate further loans (on a 9:10 basis) and on until you get a 1:10X10 or factor (hence the 120 trillion). But yes, I was being sensationalist so your comment was right.

Indeed, or to get the BOE/government to buy their dodgy loans 'a la Fed'.

Thanks for that. Having gone bust last time so it looks like they have learnt their lesson. When reading this article I saw a link to another article on thisismoney about BTL. It' pretty good IMO, do you know if it has already been posted here? http://www.thisismoney.co.uk/mortgages/buy...p;in_page_id=56

The more it goes the more I like Mervyn King. He is the only CB that will say things for what they are and flight to clean things up. It is just about possible that with a guy like that at the helm the UK will come out this crisis in better shape than the rest. The concept of UK Central Bank independence is going to be severly tested in the years ahead.