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City Diaries: 25 June

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What does this mean? All of these areas of control will restrict banks growing. The knock on effect of this will be most keenly felt in mortgage markets where the likes of Northern Rock will not be able to fund the huge growth in their mortgage book which eventually was their downfall.

I can hear you say that we don't want another Northern Rock so that is a good thing but we also don't want property prices collapsing and businesses unable to get funding.

Was this written by the banks PR department?

Hmmm...same old arguments used in the boom!

Edited by HostPaul TAFKA Rover2000

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A useful guage of sentiment for those of us not actually in the City.

These people seem to be quite philosophical - but just wait until their sociopath mentors engineer the flows of money again.

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also;

"It is all very well increasing the banks' capital requirements but if you do too much you will stifle economic growth which will be bad for everybody"

The opposite is true, we need to stifle growth and make it difficult, to make the quality and appropriateness of businesses better. If something is harder or more risky people will apply more time and effort to the decisions, ultimately they are better quality decisions...Shall I develop a house..?

its easy to fund and low risk - yes why not, lets do it easy money.

Its risky and difficult to fund - how many other developers am I competing with?, what is the supply like?, what is demand like?, how many empty houses are there?

Its very clear the gov't and bankers think this and want a easy ride to economic growth, this is why we keep getting bubbles, because they find a way to increase confidence and money supply, but its on elastic and when it runs out of steam it snaps back and correction has to occur. Not just a return to trend but an integrated curve compensating for the previous excesses (undershoot).

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also;

"It is all very well increasing the banks' capital requirements but if you do too much you will stifle economic growth which will be bad for everybody"

The opposite is true, we need to stifle growth and make it difficult, to make the quality and appropriateness of businesses better. If something is harder or more risky people will apply more time and effort to the decisions, ultimately they are better quality decisions...Shall I develop a house..?

its easy to fund and low risk - yes why not, lets do it easy money.

Its risky and difficult to fund - how many other developers am I competing with?, what is the supply like?, what is demand like?, how many empty houses are there?

Its very clear the gov't and bankers think this and want a easy ride to economic growth, this is why we keep getting bubbles, because they find a way to increase confidence and money supply, but its on elastic and when it runs out of steam it snaps back and correction has to occur. Not just a return to trend but an integrated curve compensating for the previous excesses (undershoot).

Painful.

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Its very clear the gov't and bankers think this and want a easy ride to economic growth, this is why we keep getting bubbles, because they find a way to increase confidence and money supply, but its on elastic and when it runs out of steam it snaps back and correction has to occur. Not just a return to trend but an integrated curve compensating for the previous excesses (undershoot).

i.e. a SCAM!!! :rolleyes:

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Guest X-QUORK
also;

"It is all very well increasing the banks' capital requirements but if you do too much you will stifle economic growth which will be bad for everybody"

The opposite is true, we need to stifle growth and make it difficult, to make the quality and appropriateness of businesses better. If something is harder or more risky people will apply more time and effort to the decisions, ultimately they are better quality decisions...Shall I develop a house..?

its easy to fund and low risk - yes why not, lets do it easy money.

Its risky and difficult to fund - how many other developers am I competing with?, what is the supply like?, what is demand like?, how many empty houses are there?

Its very clear the gov't and bankers think this and want a easy ride to economic growth, this is why we keep getting bubbles, because they find a way to increase confidence and money supply, but its on elastic and when it runs out of steam it snaps back and correction has to occur. Not just a return to trend but an integrated curve compensating for the previous excesses (undershoot).

Very good post, I'd never really thought of it like that.

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Firstly, and as an aside, working in the City is no holiday. Whether or not it justifies what people hve been paid is another argument, but it certainly isn't easy.

Anthony (not his real name) hit the nail on the head though. There won't be growth in mortgage lending. He may not want property prices to collapse, probably because he is in negative equity, but without the return of the missing lenders and the return of MBSs, lending isn't going to shoot up again. The Bulls need to get used to this and get over themselves.

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Firstly, and as an aside, working in the City is no holiday. Whether or not it justifies what people hve been paid is another argument, but it certainly isn't easy.

Anthony (not his real name) hit the nail on the head though. There won't be growth in mortgage lending. He may not want property prices to collapse, probably because he is in negative equity, but without the return of the missing lenders and the return of MBSs, lending isn't going to shoot up again. The Bulls need to get used to this and get over themselves.

Yup. The "boom" in house prices over the last 10-12 years was the stuff of INSANITY - MADNESS - and GROSS DISHONESTY on a scale never seen before..... MORTGAGE FRAUD/LIAR LOANS [and the SIVs and CDOs

("SECURITIZATION") behind them] were like rocket fuel - and "prices" were blown sky high completely artificially by them.... IF the VIs want to do this all over again -- the INEVITABLE end result is just the same -- Financial Armageddon.

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Firstly, and as an aside, working in the City is no holiday. Whether or not it justifies what people hve been paid is another argument, but it certainly isn't easy.

Anthony (not his real name) hit the nail on the head though. There won't be growth in mortgage lending. He may not want property prices to collapse, probably because he is in negative equity, but without the return of the missing lenders and the return of MBSs, lending isn't going to shoot up again. The Bulls need to get used to this and get over themselves.

If they have a small number of people o high salaries working extreme hours, then perhaps they should recruit more people on lower salaries, so everyone can go home at 5 and you don't see lots of bad decisions made by tired/stressed people?

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If they have a small number of people o high salaries working extreme hours, then perhaps they should recruit more people on lower salaries, so everyone can go home at 5 and you don't see lots of bad decisions made by tired/stressed people?

:lol:

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