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Council Of Mortgage Lenders In A Panic


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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

The thing is - with the bank bailouts - which is what we're talking about isn't it? - the people who got "bailed out" were the people with more than £35k savings and the banks themselves.

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The thing is - with the bank bailouts - which is what we're talking about isn't it? - the people who got "bailed out" were the people with more than £35k savings and the banks themselves.

No. The over 35k thing is a bailout. You guys. Honestly. You can't reject part of a bailout but like the bit that saves your £35k. That's a bailout too. Without any bailout you lose everything.

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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

you're right, we are chatting on 2 threads and I have some work to do.

the other source is the taxpayer of course....pays just me, or better still, moves my balance to a non dead bank...all it needed was a guarantee to the other bank should I take my money and run...I beleive this is what they did with savers from B+B moved to Santander.

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you're right, we are chatting on 2 threads and I have some work to do.

the other source is the taxpayer of course....pays just me, or better still, moves my balance to a non dead bank...all it needed was a guarantee to the other bank should I take my money and run...I beleive this is what they did with savers from B+B moved to Santander.

Sure, but see my point above your post. That is still a bailout. If there was no bailout at all the 35k thing or moving deposits, whatever, would have counted for nothing. B&B savers would have been burned through to take the loss on the asset base.

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Sure, but see my point above your post. That is still a bailout. If there was no bailout at all the 35k thing or moving deposits, whatever, would have counted for nothing. B&B savers would have been burned through to take the loss on the asset base.

I think a guarantee is different to a cash bailout somewhat.

and personally, in the case of B+B, bearing in mind the length of time involved, savers should have rotted. they had ample time to shift out.

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I think a guarantee is different to a cash bailout somewhat.

and personally, in the case of B+B, bearing in mind the length of time involved, savers should have rotted. they had ample time to shift out.

And there we differ. A part, or even whole-funded government backed guarantee is the same as a bailout, in my mind at least, since it provides moral hazard that shouldn't be there.

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And there we differ. A part, or even whole-funded government backed guarantee is the same as a bailout, in my mind at least, since it provides moral hazard that shouldn't be there.

Take it away then.

That way there would be no compunction to save money in any UK accounts. The decision to go and pick a stable country/currency/bank would be a lot easier. It is there to ensure funds at UK banks as much as it is protection for the depositor, in fact to any half-honest bank it is already a freebie supplied incentive provided with the taxpayer as a backstop.

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Take it away then.

That way there would be no compunction to save money in any UK accounts. The decision to go and pick a stable country/currency/bank would be a lot easier. It is there to ensure funds at UK banks as much as it is protection for the depositor, in fact to any half-honest bank it is already a freebie supplied incentive provided with the taxpayer as a backstop.

No, there would be an incentive to do some research. Which people would do anyway if they had a clue. Just because you seem to think you would be better off taking currency risk doesn't mean it's automatically true.

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No, there would be an incentive to do some research. Which people would do anyway if they had a clue. Just because you seem to think you would be better off taking currency risk doesn't mean it's automatically true.

But UK banks have always been see as an utterly safe plac to kee your money. How many people were even aware of the £35K protection before all this blew up? It was as inconceivable to most that a bank could end up in trouble as it was that houses wouldnt simply go up in value for ever and ever!

But the banks have built their reputations up over generations, it has only gone to shit very very recently. So people have never been taught the risks of banking because in essence, there has never been one.

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And there we differ. A part, or even whole-funded government backed guarantee is the same as a bailout, in my mind at least, since it provides moral hazard that shouldn't be there.

I crashed my car once and got bailed out by my car insurer and health insurer, even though I was yet to pay my first premia.

Edited by kilroy
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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.

As one of the savers, you are part of the failed organisation that was bailed out

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As one of the savers, you are part of the failed organisation that was bailed out

actually, I wasnt.

and savers consider themselves customers. How many times have we heard from losers "Ive been with x bank for the last 40 years and look how they treat me"

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I think a guarantee is different to a cash bailout somewhat.

and personally, in the case of B+B, bearing in mind the length of time involved, savers should have rotted. they had ample time to shift out.

Savers would not have had ample time to shift out if any more than an insignificant number of them actually did so.

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

Actually ... Not quite .....

If prices fell by 50% over a short period of time, lenders would be completely wiped out and cease to exist. No more lending at all.

While there are many assumptions about the reasons for the bailout, I suspect that it was the fear of a systemic wipeout of all lenders and the resultant death spiral in asset prices that was the main motivation. The assumption is that lenders can bear an inevitable 50% collapse in asset prices over the long term but not over the short term.

Welcome to the land of the zombie banks part 2 .....

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Actually ... Not quite .....

If prices fell by 50% over a short period of time, lenders would be completely wiped out and cease to exist. No more lending at all.

While there are many assumptions about the reasons for the bailout, I suspect that it was the fear of a systemic wipeout of all lenders and the resultant death spiral in asset prices that was the main motivation. The assumption is that lenders can bear an inevitable 50% collapse in asset prices over the long term but not over the short term.

Welcome to the land of the zombie banks part 2 .....

why?

so they have neg equity....as long as people keep paying the monthlys, why worry....the bonds are already sold and bailed...they arent marking the prices for these as it is.

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why?

so they have neg equity....as long as people keep paying the monthlys, why worry....the bonds are already sold and bailed...they arent marking the prices for these as it is.

If prices fell by 50% in a short period of time, it is much harder to finesse the untruths about bank solvency than if prices fell by 10% per year for 5 years.

I believe that this the reason why monetary and fiscal authorities are prepared to perpetuate the myth about liquidity without regard to the truth about solvency in the banking system.

They are prepared to live with the consequences of a zombie banking system for a decade rather than allowing asset prices to revert to sustainable levels over the short term with the resultant "creative destruction" that would go along with it.

Governments and civil servants have a vested interest : they crave power over anything else and will do everything possible to cling to their perceived power at any cost.

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Excellent piece from the ever reliable FT Lex column (click on link for full article):

http://www.ft.com/cms/s/3/6cb5b476-1495-11df-9ea1-00144feab49a.html

Well, there’s a surprise. UK mortgage lenders cannot contemplate life without government support. The Council of Mortgage Lenders warned that the nation’s banks will have to slash mortgage lending and raise rates if Whitehall insists on prompt repayment of the £300bn of guaranteed debt it has received since 2008. So be it. The need of the hour is less for the government to prop up a spivved-up housing market than for the UK’s overvalued property prices to return to earth. With a recovery underway and house prices rising again, a public subsidy of this sort is indefensible.

Won'y make a jot of difference mind. Doesn't matter who gets elected. Tories / Labour won't let the property bubble burst.

We need a Land Value Tax now!

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