Council Of Mortgage Lenders In A Panic

[Alfie Moon]

See the following FT article:

http://www.ft.com/cms/s/0/477d80aa-1434-11df-8847-00144feab49a.html?ftcamp=rss&nclick_check=1

It starts with:

"Britain’s banks and building societies have warned that they will have to slash mortgage lending and raise rates on home loans if the government insists on prompt and full repayment of the £300bn they have received in state support since 2008.

In a recent paper aimed particularly at policymakers, the Council of Mortgage Lenders set out its case for continuing government support for the Special Liquidity Scheme and the Credit Guarantee Scheme, which must be fully repaid by the ends of 2012 and 2014 respectively. "

But Estate Agents are continually claiming (and property bulls) that the property market has recovered with prices rising and houses/flats flying off the shelves - with this in mindf surely the Gov of today and Gove after the General Election have good grounds for withdrawing all its support, via the SLS and CGS, as the property market is is rude good health (isn't it?).

If prices had continued downwards and Estate Agents had been honest about the ongoing crash in transactions (2008 was the worst year on record but 2009 has seen the crash in sales worsen) and the sick state of the property market it would be much harder for the Gov to withdraw its support.

Eastate Agents shooting themselves in the foot?

Any views about how this might pan out?

Edited February 8, 2010 by Alfie Moon

[OnlyMe]

Council of debt pushers wantg more taxpayer money. These crooked thieves have hijacked the economy and are now holding it to ransom - to the detriment of the country and every other business sector in it.

The ******* banks and their thieveing staff should have been shown the dole queue for their actions.

Edited February 8, 2010 by OnlyMe

[Mikhail Liebenstein]

Council of debt pushers wantg more taxpayer money. These crooked thieves have hijacked the economy and are now holding it to ransom - to the detriment of the country and every other business sector in it.

The ******* banks and their thieveing staff should have been shown the dole queue for their actions.

Any bank that makes a noise of this sort should be nationalised immediately and their execs thrown into Bellmarsh.

There that'll shut them up.

[Timm]

Nice to hear the CML telling it like it is.

The mortgage market, and by extension the housing market are now essentially the state.

If we stop using tax money to keep it all up, the whole house of cards comes down. It's not stimulus, it's just burning rocket fuel in an attempt to support the whole thing suspended above the ground. We know this, the CML knows this, the markets and the Govt know it.

[TheCountOfNowhere]

Nice to hear the CML telling it like it is.

The mortgage market, and by extension the housing market are now essentially the state.

If we stop using tax money to keep it all up, the whole house of cards comes down. It's not stimulus, it's just burning rocket fuel in an attempt to support the whole thing suspended above the ground. We know this, the CML knows this, the markets and the Govt know it.

Sometimes I wish I didnt know it too.

We are seriously f**ked.

[OnlyMe]

Watch this space for the launch of a uk equivalent of fannie mae and freddie mac.

Allows them to withdraw sls and credit guarantee scheme as promised whilst replacing it with something else on a 'long term and sustainable basis'.

You thought QE was over.

Apparently another 50 billion has been earmarked to buy "assets".

http://notayesmanseconomics.wordpress.com/2010/02/05/a-new-unconventional-monetary-policy-for-the-ukwhy-did-the-bank-of-england-not-tell-us-yesterday/

A New Unconventional Monetary Policy for the UK:Why did the Bank of England not tell us yesterday?

By notayesmanseconomics

After yesterday’s announcement from the Bank of England after its regular monthly meeting that it was suspending asset purchases via its Quantitative Easing (QE) programme one might reasonably assume that this was the last word on such a policy for the day. After all any similar policy should be announced then one might think. However it has turned out that this is not true. Later in the day it transpired that the Chancellor of the Exchequer has authorised the Treasury/Bank of England to continue with a similar policy. This policy had been announced back on the 19th January 2009 which was the same day as QE. However as the Bank of England had taken centre stage since then this secondary policy had been somewhat back stage and ignored. Both programmes were authorised by the Chancellor on the 3rd March 2009.

This was explained in a letter from the Chancellor of the Exchequer Alistair Darling to the Chairman of the Treasury Select Committee John McFall. This can be found on http://www.hm-treasury.gov.uk/d/chx_letter_040210.pdf

What does it mean?

This letter authorises the Bank of England to spend up to £50 billion on asset purchases. However these will now be private sector assets as opposed to the public sector ones that the Bank of England’s QE programme mostly ended up purchasing. It will buy commercial paper,corporate bonds and secured commercial bonds. It will be financed by the issue of Treasury Bills. So just to make it clear whilst the Bank of England will no longer buy government bonds it will continue to buy corporate bonds.

[Blue Peter]

see this thread: Pages 106 - 7

They want government guarantees for RMBS, to avoid moral hazard!

Peter.

[The Spaniard]

Nice to hear the CML telling it like it is.

The mortgage market, and by extension the housing market are now essentially the state.

If we stop using tax money to keep it all up, the whole house of cards comes down. It's not stimulus, it's just burning rocket fuel in an attempt to support the whole thing suspended above the ground. We know this, the CML knows this, the markets and the Govt know it.

Yes indeed, as Ben Elton might say.

The mortgage market is the main conduit through which our debt-based, rent-a-currency money system is kept going, through which new (broad) money comes into general circulation.

When that money pump falters, as sooner or later it must, then a massive financial reset of one sort or another will ensue.

[right_freds_dead]

if prices fell 50% they would have 50% more to lend.

[babesagainstmachines]

Perhaps they should encourage some saving by putting rates on savings accounts up, rather than paying no interest so everyone spends their cash on imports.

The simple solutions are normally the best.

[Timm]

You thought QE was over.

Apparently another 50 billion has been earmarked to buy "assets".

http://notayesmansec...l-us-yesterday/

A New Unconventional Monetary Policy for the UK:Why did the Bank of England not tell us yesterday?

By notayesmanseconomics

After yesterday's announcement from the Bank of England after its regular monthly meeting that it was suspending asset purchases via its Quantitative Easing (QE) programme one might reasonably assume that this was the last word on such a policy for the day. After all any similar policy should be announced then one might think. However it has turned out that this is not true. Later in the day it transpired that the Chancellor of the Exchequer has authorised the Treasury/Bank of England to continue with a similar policy. This policy had been announced back on the 19th January 2009 which was the same day as QE. However as the Bank of England had taken centre stage since then this secondary policy had been somewhat back stage and ignored. Both programmes were authorised by the Chancellor on the 3rd March 2009.

This was explained in a letter from the Chancellor of the Exchequer Alistair Darling to the Chairman of the Treasury Select Committee John McFall. This can be found on http://www.hm-treasu...tter_040210.pdf

What does it mean?

This letter authorises the Bank of England to spend up to £50 billion on asset purchases. However these will now be private sector assets as opposed to the public sector ones that the Bank of England's QE programme mostly ended up purchasing. It will buy commercial paper,corporate bonds and secured commercial bonds. It will be financed by the issue of Treasury Bills. So just to make it clear whilst the Bank of England will no longer buy government bonds it will continue to buy corporate bonds.

All of this was fully available on the main MPC page right after the release of the QE / IR decision.

I even posted it on here or CC myself.

It may be dodgy, it may be cynical, and it may be unsustainable but it wasn't secret.

Well not unless secret means "I'm a very lazy journalist who simply reports the news reports of others"

[RandomBear]

Errr it's the public's fault.

The public only has £750bio on deposit with the banks, but borrowed over £1.2trio to fund house purchases. How you didn't think someone would end up on the hook for the difference is a mystery to me.

Just FYI, every £1,000 you put way with FIRST BANK OF NIGERIA or PUNJAB I NATIONAL BANK for another 0.1% or 0.2% is only making it worse. Cretins.

[huw]

Errr it's the public's fault.

The public only has £750bio on deposit with the banks, but borrowed over £1.2trio to fund house purchases. How you didn't think someone would end up on the hook for the difference is a mystery to me.

Still, it's hardly unreasonable to expect that the people who made the lending decisions ought to be on the hook, or at least nearest the pointy barbed end.

[Bloo Loo]

Errr it's the public's fault.

The public only has £750bio on deposit with the banks, but borrowed over £1.2trio to fund house purchases. How you didn't think someone would end up on the hook for the difference is a mystery to me.

Just FYI, every £1,000 you put way with FIRST BANK OF NIGERIA or PUNJAB I NATIONAL BANK for another 0.1% or 0.2% is only making it worse. Cretins.

for every borrower, a lender be.

and lenders are EXPERTS. they KNOW what they are doing...Its the LAW.

borrowers, see, they apply, they get a decision. its NOT the other way round.

[RandomBear]

Still, it's hardly unreasonable to expect that the people who made the lending decisions ought to be on the hook, or at least nearest the pointy barbed end.

Maybe, but it's interesting to try and get people to at least think about it the other way round.

for every borrower, a lender be.

and lenders are EXPERTS. they KNOW what they are doing...Its the LAW.

borrowers, see, they apply, they get a decision. its NOT the other way round.

Savers got the bailout, not borrowers.

[RichM]

No more scope for bailouts now. One more fail and that's it. Can anyone see where heaps more government support could come from, without making things drastically worse?

[Bloo Loo]

Maybe, but it's interesting to try and get people to at least think about it the other way round.

Savers got the bailout, not borrowers.

no.

thats like saying I got bailed out for ordering and paying for a telly and the company goes bust before it arrives...but it gets a repreive with a lottery win and I therefore got my telly and therefore I was bailed out.

the company from then on gets to trade normally. I was saved once...the company is saved continuously.

[RandomBear]

no.

thats like saying I got bailed out for ordering and paying for a telly and the company goes bust before it arrives...but it gets a repreive with a lottery win and I therefore got my telly and therefore I was bailed out.

the company from then on gets to trade normally. I was saved once...the company is saved continuously.

One leads to the other. And yes, you were bailed out, basically. That's why you have to be careful where you buy stuff from/put your cash.

[Bloo Loo]

One leads to the other. And yes, you were bailed out, basically. That's why you have to be careful where you buy stuff from/put your cash.

is my money any safer?

have I learned to check out where my money is?

no. the supplier, who went bust, was bailed and was able to trade.

how was I bailed....I wasnt...it was a consequence of rescuing the dead entity....

[RandomBear]

is my money any safer?

have I learned to check out where my money is?

no. the supplier, who went bust, was bailed and was able to trade.

how was I bailed....I wasnt...it was a consequence of rescuing the dead entity....

If he hadn't been bailed, you lost your money. ergo you were bailed.

And you are right, nobody learnt anything. Which is why blanket guarantees on all bank deposits were imbecilic. But the political mind dictated that no retail saver could lose their money since there was a bailout occuring above them.

[LuckyOne]

for every borrower, a lender be.

and lenders are EXPERTS. they KNOW what they are doing...Its the LAW.

borrowers, see, they apply, they get a decision. its NOT the other way round.

Most borrowers are lenders too. I am not convinced that many of the economic agents in our world actually know what they are doing.

[hedgefunded]

thats like saying I got bailed out for ordering and paying for a telly and the company goes bust before it arrives...but it gets a repreive with a lottery win and I therefore got my telly and therefore I was bailed out.

LCD or Plasma?

[Bloo Loo]

If he hadn't been bailed, you lost your money. ergo you were bailed.

And you are right, nobody learnt anything. Which is why blanket guarantees on all bank deposits were imbecilic. But the political mind dictated that no retail saver could lose their money since there was a bailout occuring above them.

I think its fair to say your logic in the one transaction is true.

but the bailout was for the organisation that had failed.

my close shave was lucky for me....but had I invested in another organisation, my decision would have saved me.

the organisation is now free to carry on regardless.

better to have closed the organisation and handed me my money from another source...which is what they have done...except a large EXTRA amount is going now into the wasteful and therefore draining failed organisation.

[Bloo Loo]

LCD or Plasma?

I rent actually...they are asking £280 for me to buy the thing and the stand....tempted ( 32ins phillips LCD), or do I use my comet points, buy a newer one with the points and save the rental?

[RandomBear]

I think its fair to say your logic in the one transaction is true.

but the bailout was for the organisation that had failed.

my close shave was lucky for me....but had I invested in another organisation, my decision would have saved me.

the organisation is now free to carry on regardless.

better to have closed the organisation and handed me my money from another source...which is what they have done...except a large EXTRA amount is going now into the wasteful and therefore draining failed organisation.

Perhaps. See my other comment in the other thread for what I think the logical conclusion would have been.

Plus, you wouldn't have got your money back - what makes you think you can just get it "from another source"? That's the fallacy of the whole thing, if you get your money from the Gov't you have had a bailout. If you get it back at all you have had a bailout. Truly free markets mean no bailouts i.e. you lose your money and get noTV. I