MrB Posted July 6, 2009 Share Posted July 6, 2009 Many of us know that the banks are CR*PPING themselves - because they created the Greatest Pyramid Scam/BUBBLE in all history with their insane, totally ill-thought out property mania..... They have pinned EVERYTHING - indeed, THEIR VERY SURVIVAL - on the supposed "ASSET" value of the VAST, VAST, VAST amounts of property they have lent out on..... [LIAR LOANS]...... This FT article brilliantly explains the nightmare situation these STUPID, IDIOTIC, THICK banksters find themselves in --- THE PAYOFF for their unbridled greed.... i.e. They are TEETERING on the very edge of the ABYSS..... http://www.ft.com/cms/s/2/5ef2e4ca-6a37-11...0b5df10621.html I agree eric. One of the best articles I've seen for a while. The banks are 'technically' insolvent and piling up pressure for disastier in 2011. Quote Link to comment Share on other sites More sharing options...
Total_Injustice Posted July 6, 2009 Share Posted July 6, 2009 (edited) This is NO 90's recession!!Those who play with fire will get burnt...unfortunately they are taking us with them. We now have a huge work force in the East (China/India) to compete against...so show me where we will get the growth. The West is drowning in a sea of debt! The west will have embarked upon the road to recovery when it creates policies that do not incentivise high asset prices. Until this bold step is made we will be trapped in a cycle of HPI / HPC. - Robust lending criteria. - Measurement of inflation that includes house prices / mortgage payments. - Higher taxation on second / holiday homes. - Reduced inheritance tax thresholds. - Withdrawal of shared equity / part ownership schemes. - Increased corporate and personal lending accountability / responsibility. - ??? When we see these sorts of changes you know progress is being made. Until then it's all spin. Edited July 6, 2009 by Total_Injustice Quote Link to comment Share on other sites More sharing options...
Guest An Bearin Bui Posted July 6, 2009 Share Posted July 6, 2009 The most irritating part of the report for me is:"The banks realise there’s no point in selling at bottom of the market except in extreme cases,†Creamer said. “They got their fingers burned in the 90s, selling off loans … then the market came back strongly. This is near the bottom of the market so if they hold on prices will come back." So we are bailing them out, keeping them afloat, whilst they hold onto assets so they can sell them at a better return later. This must be evident to all in power, yet the bail-outs (in one form or another) persist. This is a clear indication of how the 'establishment' are working at keeping house prices high. Exactly the same as the guy sitting in his large detached house that he bid heavily for at the peak in 2007, paying far more than he could afford but hoping for big returns. He's sitting there now, hanging on by a thread, using his credit card to make ends meet and praying that interest rates stay low so he can manage the monster mortgage 'until the market goes back up'. If he loses his job and has to relocate he'll 'just rent it out instead and wait for the market to pick up'. It always goes back up in the end so it's just a matter of keeping his job, keeping interest rates at 0.5% and not eating very much for a couple of years. Anything except sell that house for below its 'real' value!! It's going to be a magical time in 2011-2012 when the banks' rolled over debts come to maturity and the generous tracker deals are gone and yet there's still no sign of peak 2007 prices ever returning. The banks and the borrowers are going to get the shock of their lives... Quote Link to comment Share on other sites More sharing options...
Total_Injustice Posted July 6, 2009 Share Posted July 6, 2009 Exactly the same as the guy sitting in his large detached house that he bid heavily for at the peak in 2007, paying far more than he could afford but hoping for big returns. He's sitting there now, hanging on by a thread, using his credit card to make ends meet and praying that interest rates stay low so he can manage the monster mortgage 'until the market goes back up'. If he loses his job and has to relocate he'll 'just rent it out instead and wait for the market to pick up'. It always goes back up in the end so it's just a matter of keeping his job, keeping interest rates at 0.5% and not eating very much for a couple of years. Anything except sell that house for below its 'real' value!!It's going to be a magical time in 2011-2012 when the banks' rolled over debts come to maturity and the generous tracker deals are gone and yet there's still no sign of peak 2007 prices ever returning. The banks and the borrowers are going to get the shock of their lives... I'm keeping the wife at bay when it comes to buying but I don't know if I can keep it going until 2011 - 2012. Is this the point when it is impossible for the banks to hold out any longer, and capitulation sets in? Quote Link to comment Share on other sites More sharing options...
eric pebble Posted July 7, 2009 Author Share Posted July 7, 2009 Exactly the same as the guy sitting in his large detached house that he bid heavily for at the peak in 2007, paying far more than he could afford but hoping for big returns. He's sitting there now, hanging on by a thread, using his credit card to make ends meet and praying that interest rates stay low so he can manage the monster mortgage 'until the market goes back up'. If he loses his job and has to relocate he'll 'just rent it out instead and wait for the market to pick up'. It always goes back up in the end so it's just a matter of keeping his job, keeping interest rates at 0.5% and not eating very much for a couple of years. Anything except sell that house for below its 'real' value!!It's going to be a magical time in 2011-2012 when the banks' rolled over debts come to maturity and the generous tracker deals are gone and yet there's still no sign of peak 2007 prices ever returning. The banks and the borrowers are going to get the shock of their lives... +1 Quote Link to comment Share on other sites More sharing options...
arthurwasright Posted July 7, 2009 Share Posted July 7, 2009 The FT is the mouthpiece of the banking class. The only people who should be sh*tting themselves is you. ..That's right enough Quote Link to comment Share on other sites More sharing options...
Redcellar Posted July 7, 2009 Share Posted July 7, 2009 Great article. Incredibly naive attitude by the banks. Hold on and all will be right. Of course that assumes there are no further drops that 'force' them to shed the distress from there balance sheets. If they hang onto it then they will be seen as potential Icelandic failures and we all know what happens then. There is a bottom line where they are forced to improve the balance sheet or face takeover by the authorities. Thankfully they can't ignore the system forever. I suspect though the strategists are thinking a few more years of work, and leave for another job in this time and sod em all. It seems idiocy is rewarded in all trades. Quote Link to comment Share on other sites More sharing options...
davidcameron Posted July 7, 2009 Share Posted July 7, 2009 Interesting parallel here between the private equity funds who are moaning that the banks won't sell them their commercial assets at a distressed price and the members of this forum who moan that owners of nice houses won't sell their houses to them at distressed prices either. We have some way to go in this stand off but I think the buyers might blink first. Quote Link to comment Share on other sites More sharing options...
Wait & See Posted July 7, 2009 Share Posted July 7, 2009 Interesting parallel here between the private equity funds who are moaning that the banks won't sell them their commercial assets at a distressed price and the members of this forum who moan that owners of nice houses won't sell their houses to them at distressed prices either. We have some way to go in this stand off but I think the buyers might blink first. These buyers will only blink first if they can fund the property, so again, the banks are the ones that matter. If we don't see 6x or more mortgages again, the property market stops, completely. Do you think we'll see high multiple lending again?? Quote Link to comment Share on other sites More sharing options...
cynical_man Posted July 7, 2009 Share Posted July 7, 2009 Interesting parallel here between the private equity funds who are moaning that the banks won't sell them their commercial assets at a distressed price and the members of this forum who moan that owners of nice houses won't sell their houses to them at distressed prices either. We have some way to go in this stand off but I think the buyers might blink first. I have never heard of anyone who has little savings and has just lost ther job being forced to buy a property. The term 'distressed buyer' just doesn't exist. Quote Link to comment Share on other sites More sharing options...
davidcameron Posted July 7, 2009 Share Posted July 7, 2009 I have never heard of anyone who has little savings and has just lost ther job being forced to buy a property. The term 'distressed buyer' just doesn't exist. This sounds very much like a distressed buyer to me. Despite having raised significant funds to deploy on the distressed debt, as they did in the early 90s, the funds have so far been frustrated at the UK banks’ reluctance – and incapacity - to sell, sources said. Private equity wants to buy the loans at around 40-50 pence in the pound, but so far the UK banks are not playing ball, they said ...and there were some very distressed buyers of houses in the run up to 2007 who would get into bidding wars before paying the wrong price. Quote Link to comment Share on other sites More sharing options...
Charterhouse Posted July 7, 2009 Share Posted July 7, 2009 IT's pretty funny that someone linked that John Maynard Keynes quote, because it's 100% not true at the moment. The mrket can stay irrational for longer than you can stay solvent, UNLESS you are all backed by the Government and too big to fail. What makes you think the banks ever have to capitulate on these assets? If I was short to a guy who I knew had bottomless pockets, I'm pretty sure I'd capitulate. Instead you guys just go on living in your little fantasy world. Get it into your heads, unless you want to live in a crappy new build 2 bedroom flat, you're not going to see prices substantially lower than this. Quote Link to comment Share on other sites More sharing options...
cynical_man Posted July 7, 2009 Share Posted July 7, 2009 IT's pretty funny that someone linked that John Maynard Keynes quote, because it's 100% not true at the moment. The mrket can stay irrational for longer than you can stay solvent, UNLESS you are all backed by the Government and too big to fail.What makes you think the banks ever have to capitulate on these assets? If I was short to a guy who I knew had bottomless pockets, I'm pretty sure I'd capitulate. Instead you guys just go on living in your little fantasy world. Get it into your heads, unless you want to live in a crappy new build 2 bedroom flat, you're not going to see prices substantially lower than this. But surely this goverment won't be around in 12 months time. Quote Link to comment Share on other sites More sharing options...
cynical_man Posted July 7, 2009 Share Posted July 7, 2009 http://www.bloomberg.com/apps/news?pid=206...id=aWJ1aTFKp35E Why should U.K be any different? Quote Link to comment Share on other sites More sharing options...
Charterhouse Posted July 7, 2009 Share Posted July 7, 2009 US & UK are very different. The US was like the UK on crack. The supply/demand dynamic there is far less supportive, and the legal differences with recourse/non-recourse mortgages (which you should know about if you are posting stuff like this) are massively in favour of the UK falling less. Quote Link to comment Share on other sites More sharing options...
Injin Posted July 7, 2009 Share Posted July 7, 2009 US & UK are very different. The US was like the UK on crack. The supply/demand dynamic there is far less supportive, and the legal differences with recourse/non-recourse mortgages (which you should know about if you are posting stuff like this) are massively in favour of the UK falling less. Quote Link to comment Share on other sites More sharing options...
Tiger Woods? Posted July 7, 2009 Share Posted July 7, 2009 The most irritating part of the report for me is:"The banks realise there’s no point in selling at bottom of the market except in extreme cases,†Creamer said. “They got their fingers burned in the 90s, selling off loans … then the market came back strongly. This is near the bottom of the market so if they hold on prices will come back." So we are bailing them out, keeping them afloat, whilst they hold onto assets so they can sell them at a better return later. This must be evident to all in power, yet the bail-outs (in one form or another) persist. This is a clear indication of how the 'establishment' are working at keeping house prices high. I must admit that of all the articles I have read in the past 5 years, this one highlights the most clearly how our governments are completely under the effective control of the banks. Truly distressing. I am sick of being looted by HMRC, Customs and Excise and the banks, both directly and indirectly so the money can be spunked on NHS upper mismanagement etc. On a slight tangent, just got off the phone to Thames Water. We moved into a rental property last year and they forced an unwanted meter on us. Just got an estimate of the expected bill for this year based on a two person household who showers once a day - and it is 40% higher than the non-metered bill. Quote Link to comment Share on other sites More sharing options...
cynical_man Posted July 7, 2009 Share Posted July 7, 2009 US & UK are very different. The US was like the UK on crack. The supply/demand dynamic there is far less supportive, and the legal differences with recourse/non-recourse mortgages (which you should know about if you are posting stuff like this) are massively in favour of the UK falling less. Can you explain how the supply/demand dynamic 'worked' from 1989-1995? Quote Link to comment Share on other sites More sharing options...
Cogs Posted July 7, 2009 Share Posted July 7, 2009 Many of us know that the banks are CR*PPING themselves - because they created the Greatest Pyramid Scam/BUBBLE in all history with their insane, totally ill-thought out property mania..... A decent man might be concerned about what they have unleashed, but that hardly applies here. What do banksters care? They get rewards for failure, bail-outs to socialise losses on demand and bonuses are once again flowing quite nicely. 2011? Do they really think that far ahead? They've shown no capability in that direction so far. Quote Link to comment Share on other sites More sharing options...
Charterhouse Posted July 7, 2009 Share Posted July 7, 2009 Can you explain how the supply/demand dynamic 'worked' from 1989-1995? If you are too stupid to understand it yourself then sure. Higher interest rates make property more expensive which cuts demand. Quote Link to comment Share on other sites More sharing options...
LittlePiglet Posted July 7, 2009 Share Posted July 7, 2009 If you are too stupid to understand it yourself then sure. Higher interest rates make property more expensive which cuts demand. Bulls are always so rude aren't they? So much inner anger. Quote Link to comment Share on other sites More sharing options...
sbn Posted July 7, 2009 Share Posted July 7, 2009 If you are too stupid to understand it yourself then sure. Higher interest rates make property more expensive which cuts demand. Did property get more expensive 1989-1995? Quote Link to comment Share on other sites More sharing options...
Kazuya Posted July 7, 2009 Share Posted July 7, 2009 If you are too stupid to understand it yourself then sure. Higher interest rates make property more expensive which cuts demand. Go crawl in a hole Quote Link to comment Share on other sites More sharing options...
CrashInHand Posted July 7, 2009 Share Posted July 7, 2009 What makes you think the banks ever have to capitulate on these assets? If they don't capitulate the market stalls... Quote Link to comment Share on other sites More sharing options...
eric pebble Posted July 7, 2009 Author Share Posted July 7, 2009 (edited) These buyers will only blink first if they can fund the property, so again, the banks are the ones that matter. If we don't see 6x or more mortgages again, the property market stops, completely.Do you think we'll see high multiple lending again?? Oh they just might [will do EVERYTHING THEY CAN] & try and keep the whole scam going...... Edited July 7, 2009 by eric pebble Quote Link to comment Share on other sites More sharing options...
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