Jump to content
House Price Crash Forum
Sign in to follow this  
eric pebble

Echos Of The Recent Past: Do You Think You Can See The Writing On The Wall?

Recommended Posts

DO YOU THINK YOU CAN SEE THE WRITING ON THE WALL?

I am going to take out some lines from the Wikipedia "Sub-prime mortgage Crisis" page: https://en.wikipedia.org/wiki/Subprime_mortgage_crisis

Read them - and think of what is happening RIGHT NOW here in the UK -- Here in London....... PREPARE TO BE FRIGHTENED. IT IS SIMPLY INCREDIBLE THAT THE POWERS THAT BE ARE STANDING BY AND LETTING ALL THIS HAPPEN ALL OVER AGAIN....!

"The immediate cause or trigger of the crisis was the bursting of the United States housing bubble" [THE UK BUBBLE IS FAR, FAR WORSE].

"While the housing and credit bubbles were growing, a series of factors caused the financial system to become increasingly fragile. Policymakers did not recognize the increasingly important role played by financial institutions such as investment banks and hedge funds, also known as the shadow banking system."

"According to Robert J. Shiller and other economists, housing price increases beyond the general inflation rate are not sustainable in the long term. From the end of World War II to the beginning of the housing bubble in 1997, housing prices in the US remained relatively stable.[48] The bubble was characterized by higher rates of household debt and lower savings rates, slightly higher rates of home ownership, and of course higher housing prices. It was fueled by low interest rates and large inflows of foreign funds that created easy credit..."

"High-risk mortgage loans and lending/borrowing practices
A mortgage brokerage in the US advertising subprime mortgages in July 2008.

In the years before the crisis, the behavior of lenders changed dramatically. Lenders offered more and more loans to higher-risk borrowers,[6][84] including undocumented immigrants.[85] Lending standards deteriorated particularly between 2004 and 2007, as the government-sponsored enterprise (GSE) mortgage market share (i.e. the share of Fannie Mae and Freddie Mac, which specialized in conventional, conforming, non-subprime mortgages) declined and private securitizers share grew, rising to more than half of mortgage securitizations.[6]"

etc etc.

Read it!

IT'S BREATH-TAKING.....

Share this post


Link to post
Share on other sites

I don't think you can say that the powers that be are standing by and letting it happen.

They are driving it. Making it happen.

The bit we don't know yet is what happens if / when the next bank crisis arrives... Is it another bail out, more QE, more taxpayers money burnt? Or is the market allowed to do what it wants and needs to do in such circumstances and eliminate the weakest participants? That is the important part.

Share this post


Link to post
Share on other sites

When the actual crash happens, we will enter the world of 1984 : Police State, electronic money (cash banned), zero freedom, assets seized (pensions etc), free press banned, and probably massive war.

Share this post


Link to post
Share on other sites

As for a banking crises i can`t see that happening on a large scale ,the only thing that looks subprime at the moment when it comes to UK banks is the BTL sector it`s no coincidence this is not regulated in the same way as the residential sector ...learn form past mistakes don`t look that way

Share this post


Link to post
Share on other sites

Sub prime ultimately wasn't the problem it was the distraction, the losses on sub-prime weren't that great Varoufakis gives some of the figures in his book. The issue was the housing higher up the chain which had the bigger loans and therefore bigger losses was the issue, sub prime was only indicating at a far bigger problem.

Share this post


Link to post
Share on other sites

"As for a banking crises i can`t see that happening on a large scale".

Well, in 2008 admittedly only 28 people on here, Vince Cable (I know, I know...), and myself saw it coming. Pray do tell where you bought your crystal ball? If I can get hold of one I'll be very rich.

http://www.zerohedge.com/news/2015-09-02/why-next-crisis-will-be-worse-20008

"To put this into perspective, the Credit Default Swap (CDS) market that nearly took down the financial system in 2008 was only a tenth of this ($50-$60 trillion)."

http://investmentwatchblog.com/worse-than-2008six-years-ago-the-official-public-debt-in-the-us-was-under-10-trillion-now-its-about-18-trillion-total-debt-is-higher-too-about-50-trillion-in-2007-i/

"Cause and effect tend to get blurred when you are falling off a galloping horse".

http://blogs.new.spectator.co.uk/2013/11/the-tories-have-piled-on-more-debt-than-labour/

"Osborne has borrowed more in under four years than the Labour Party borrowed over 13 years."

It was a great party until someone found the hammer.Vivian Stanshall

RIP

Share this post


Link to post
Share on other sites

"As for a banking crises i can`t see that happening on a large scale".

Well, in 2008 admittedly only 28 people on here, Vince Cable (I know, I know...), and myself saw it coming. Pray do tell where you bought your crystal ball? If I can get hold of one I'll be very rich.

No crystal ball were all guessing on her it`s just your guess is the opposite of mine and zero hedge please ...£50k an ounce gold anyone

Yes government debt is high but they never need to go bankrupt as they can print at will it has no bearing on the private banks they are leveraged to the private sector

Edited by long time lurking

Share this post


Link to post
Share on other sites

we've got government backed sub prime, state guaranteed, low interest rate, sub prime lending, money laundering and foreign speculators driving up prices to over double any sane measure...

doesn't this all seem pm very familiar. when it collapses who's it going to take down this time?

not the bankers this time, never the politicians, that leaves... you and I.

it's not a housing bubble it's carte blanche for the bankers to rob up all blind.

Share this post


Link to post
Share on other sites

we've got government backed sub prime, state guaranteed, low interest rate, sub prime lending, money laundering and foreign speculators driving up prices to over double any sane measure...

doesn't this all seem pm very familiar. when it collapses who's it going to take down this time?

not the bankers this time, never the politicians, that leaves... you and I.

it's not a housing bubble it's carte blanche for the bankers to rob up all blind.

That`s my whole point it`s BACKED/ pay-rolled by the government this time around, my bet is there won`t bee a banking crises (massive recession now that's another mater and as you say that means you and i) HTB numbers are minuscule compared to the madness running up to 2008

Share this post


Link to post
Share on other sites

At least the yanks got something in return for their mortgage boom...ie lots of big, shiny, 3 car, mahogany and marble, air conditioned 3500sq ft macmansions.

Wasteful and unaffordable, like those massive SUVs the yanks like yes, but at least they got $300k of building in return for a mortgage they couldnt afford.

We get the same house (or less) that existed for decades beforehand.

Share this post


Link to post
Share on other sites

"As for a banking crises i can`t see that happening on a large scale".

Well, in 2008 admittedly only 28 people on here, Vince Cable (I know, I know...), and myself saw it coming. Pray do tell where you bought your crystal ball? If I can get hold of one I'll be very rich.

http://www.zerohedge.com/news/2015-09-02/why-next-crisis-will-be-worse-20008

"To put this into perspective, the Credit Default Swap (CDS) market that nearly took down the financial system in 2008 was only a tenth of this ($50-$60 trillion)."

http://investmentwatchblog.com/worse-than-2008six-years-ago-the-official-public-debt-in-the-us-was-under-10-trillion-now-its-about-18-trillion-total-debt-is-higher-too-about-50-trillion-in-2007-i/

"Cause and effect tend to get blurred when you are falling off a galloping horse".

http://blogs.new.spectator.co.uk/2013/11/the-tories-have-piled-on-more-debt-than-labour/

"Osborne has borrowed more in under four years than the Labour Party borrowed over 13 years."

It was a great party until someone found the hammer.Vivian Stanshall

RIP

Agreed about the banking crisis. I could see house prices were overvalued by 2003, absurd by 2006...but I always expected a repeat of the 89-95 correction, not every bank being effectively insolvent.

About Osbourne however, thats not really fair though, is it. On that line of thinking, the worst Osbourne could be accused of is perpetuating a broken system.

Allow me to explain.

Gordon Brown always took credit for britain's 'recession free' economy between 1997-2007 (flawed as their way of counting GDP may be) boasting of his 50 quarters of GDP growth

If he is taking credit for not just the public sector growing, and he is not, as he mentions the economy/GDP as a whole, then he must also take responsibility for the cause of that 'growth' ie presiding over the biggest private debt bubble in history...

fig6.png

My view is that Osbourne had an opportunity to fix things by letting the banks go to the wall and allowing house prices to correct and he didnt. Thats shameful. But on the other hand Osbourne has had many things count against him. In 2003 for example, ALL growth in the UK economy was funded by equity withdrawal, as was a majority of growth in all other years (somewhere in the favourite charts thread). If north sea oil revenues in the 2000s had been as dimished as the 2010s, again, the 2000's would have been a decade of recession.

Osbourne is not a good chancellor, but Brown still takes the biscuit as the worst, for the sheer scale of the private debt bubble under his watch.

Osbourne is simply adding public debt until the private sector re-leverages, as mentioned in the "money is debt, and we're heading for another crash"

Don't mean to sound like an osbourne fanboy, im honestly not...I think he should focus on monetary reform and not fiscal fiddling, his 'austerity' (ie, spending marginally less than labour would do, and attempting to merely offset private hesitancy to borrow) will at best, buy us some time, but I think people forget just how dire simultaneously lucky Brown was.

Share this post


Link to post
Share on other sites

When the actual crash happens, we will enter the world of 1984 : Police State, electronic money (cash banned), zero freedom, assets seized (pensions etc), free press banned, and probably massive war.

''electronic money (cash banned)'' and very negative interest rates.

Share this post


Link to post
Share on other sites

Agreed about the banking crisis. I could see house prices were overvalued by 2003, absurd by 2006...but I always expected a repeat of the 89-95 correction, not every bank being effectively insolvent.

Well i was expecting the same, but the banks it was obvious to me that there would be bankrupt banks but not on the scale it turned out to be

Where ever i looked around me there was fraud and liar loans people with sub £20k earnings borrowing £200k and more @100% + LTV

Share this post


Link to post
Share on other sites

‘Banned’ self-cert loans set for return

A new lender is looking to bring back self-certified mortgages at the start of next year.

The FCA banned so-called ‘liar loans’ in the Mortgage Market Review. However, Graeme Wingate, the founder of unsecured lender Quick Loans, is looking to bypass UK regulation by setting up in an Eastern European country, the identity of which he would not disclose.

While the new lender, selfcert.co.uk, will not have to abide by UK regulation, it will have to adhere to the incoming Mortgage Credit Directive, although it is less strict on rules around creditworthiness and income verification...

...Wingate plans to passport into the UK under the Electronic Commerce Directive.

An FCA spokeswoman says: “A Firm located in an EEA Member State can provide a lending service under the Electronic Commerce Directive to UK consumers, but the service has to be provided solely at a distance and on-line.

“This service however would not be regulated by the FCA and if something went wrong, the FCA is not generally able to intervene, additionally there would be no recourse to the compulsory jurisdiction of the UK’s Financial Ombudsman Service”...

<_<

Share this post


Link to post
Share on other sites

An FCA spokeswoman says: “A Firm located in an EEA Member State can provide a lending service under the Electronic Commerce Directive to UK consumers, but the service has to be provided solely at a distance and on-line.

No doubt they consider that's one of the positives of the internet (extreme mortgages) - it's only stuff like the freedom of speech etc that's a negative for them.

Edited by billybong

Share this post


Link to post
Share on other sites

KJV, Matthew 16:3 - And in the morning, It will be foul weather to day: for the sky is red and lowering. O ye hypocrites, ye can discern the face of the sky; but can ye not discern the signs of the times?

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Next General Election   89 members have voted

    1. 1. When do you predict the next general election will be held?


      • 2019
      • 2020
      • 2021
      • 2022

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.