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Everything posted by huw

  1. That's how I interpreted his post: a subtle and ruinous form of eugenics is already happening, and he wants it stopped. Presumably those who took offense, want the present situation to contine
  2. This kind of failure rebounds on the banks anyway. In the long run you need genuine wealth creation, rather than asset-price speculation, to enable loans to be serviced and repaid. Seems like banks ought to just "get" this.
  3. This is the crux of the matter. The quesion is, shouldn't they at least be in the market of lending to invest, rather than for consumption and property speculation? Not necessarily in the shareholders/employees' short-term interest, but in the national interest? With the nation now a significant stakeholder in the banking sector, it could potentially make that happen. Going forward and assuming we do get an upturn in demand, shifting towards a more Teutonic model rather than a freewheeling Anglo-Saxon, would stand us in good stead. Nothing wrong with beginning to set the tone for that, IMO, even if there's not a lot of loan demand from real wealth-creators at the moment.
  4. Misleading headline (not yours, the article's). The affected individuals are already jobless, they're just being reclassified. Good thing too: we need transparency and honesty, not obfuscation and lies.
  5. Where a bit more honesty would really have helped, was in the implementation of the Maastricht treaty. There needed to be less self-deceit among the architects and promoters of the project in general, and less fraud surrounding the assessment of convergence criteria in particular. The fact that endemic Greek tax-evasion is only NOW drawing so much comment, shows that convergence never existed except on a (falsified) check-list in Brussels.
  6. Well worth it when set against the long-term economic stability that EZ membership has brought.
  7. Are the pensions in question index-linked? If not, then I expect the problem will solve itself in due course If so, they need to be de-linked Apparently: ...which are the 15 other countries, I wonder.
  8. You have to admit, it was an extremely clever and sophisticated fraud that this oldster committed. Given that he was dead, and all.
  9. I agree. It sounds like a nice, big house with more than average garden space, and will remain so regardless of internal alterations. Since Band C is supposed to be the average (I think?) then Band D might well be optimisitic for such a substantial property. Worst case is that the OP asks for a review following his changes, and gets bumped up to Band F
  10. The same applies to the lending corporation, which decided to make a loan on risky (to them) terms. The loan agreement will have been theirs; the jurisdiction was their choice. On your final point: it's lenders (and their insurers) who have most at stake: the worst outcome for them is loss of the entire loaned amount, while the worst outcome for a borrower is that he goes bankrupt or loses a specific asset that wasn't his in the first place (in the case of non-recourse loans).
  11. Sounds like this was a non-recourse loan: in which case, the debt was already cleared, with the seizure of the collateral.
  12. I expect that Cameron is hoping for that. But Germany has a trade surplus to spend, and is closer to home for the EZ countries... The question is, how to get them to consume not only their present production, but all the previous production that's represented by their surplus (and thus, by others' debts)?
  13. That won't help, long-term. What bankrupt countries need is a partner economy that's an engine-of-demand, not production.
  14. It's odd because that doesn't seem to be an option in this case ... the principle has to be repaid. Seems fishy to me; on the face of it I'd expect a non-repayment mortgage old enough to have reached the end of its term, to be an endowment mortgage. As far as I'm aware, modern IO mortgages in the UK -- with an implicit repayment vehicle funded by HPI -- were not developed until after Gordon had abolished boom and bust.
  15. What if you include the remortgaged ones? MEW etc? TBH it's not the effect on the borrowers that's concerning. Worst-case for them is they go bankrupt -- sad for them and their families, but it happens. It's the wider effect of all that debt defaulting, and the inflationary/deflationary consequences.
  16. I doubt it's that simple, it's not as if public funding/direction hasn't been directed at British entrepreneurship in the past.
  17. +1. Effectively the banks have said, "it's too risky getting involved with the people trying to maintain the hull and the engines, we'd rather lend to those who are re-decorating the cabins." And if a far-sighted, nationally-interested bank had built a solid, unspectacular business around engine/hull financing, it would have been forced (by means of the FSCS) to bail out the cabin-financiers when their bubble burst. Under those circumstances it's better to belly up to the punchbowl with the rest of the crowd. Edit: much of the "business" lending that did occor was indirectly to the real-estate market, for example where the business was reliant on MEW, unsustainable public sector contracts, or other funding that derived from HPI. So I'd suggest that real lending to innovators & wealth-creators was much less than 3% of the total.
  18. I was a saver at the time and remember marvelling over the rates on offer. TBH my recollection is that I got pretty good rates (10%+) for a decent amount of time, I can't recall exactly how long though. Being young and thoughtless, it never occurred to me that there was probably some over-leveraged borrower on the other end of the deal. I think it's important to understand that the interest rates were there in defence of sterling's over-optimistic ERM band. The resulting lack of competitiveness cost jobs, which is where much of the mortgage distress came from; as far as I'm aware there was no political imperative to keep the repo numbers down, as happened under the New Labour Spinmeisters. I recall I used to meet UK builders in Dutch bars from time to time, they were making their way to German building projects, Auf Wiedersehen Pet style. Looking back, I don't think I grasped how troubled/desperate some of these migrant workers must have been (no internet back then )
  19. Since savings = debt, and since there's way more debt than can be repaid ... yes, the above statement is correct. The first in line for the losses should have been those who chose to take the higher risk/reward profile of buying the bonds of banks like NR. The previous government decided otherwise.
  20. Sadly it's not in their remit ... we are caught in a tragedy of the commons. The logical thing to do is to assume it's going to happen no matter what you do personally, while using the available carbon-wealth to prepare/mitigate. 'Cos if you don't use it, someone else will. Either that, or push for a world government, I guess.
  21. It's called "pottering" and (kids aside) is the main point of having a house edit to add: When someone makes the last mortgage payment, I imagine that feels like a significant change -- victory at the end of a long grinding struggle. If someone exchanges a wad of saved money for a house, then they were already financially secure so that's not a big change; they've just become less liquid and (hopefully) more secure/happier in their shelter. I actually felt a little less financially secure when I did this in '94, because the financial buffer I'd had before was largely gone.
  22. By and large they're not, apparently.
  23. Far more cogently put than I managed above
  24. Absoultely. But returning to the point you made -- that "both sides are too foolish to understand their own self interest" -- the UK doesn't lose anything by wealthy people departing and falling back on their non-UK wealth (okay, it loses skills/spending-power/tax but in terms of its own productive resources ... they're all still here). The UK's self-interest is not to have people leaving while still making claims on its productive capacity, and that's entirely under the UK's own control.
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