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bluenun

Very Impressive Set Of Headlines In The Blog

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Debt, debt, debt and more debt.

You know, for the first time in 3 years, I'm thinking inflation followed by deflation followed by re-inflation.

Anyone care to hazard a time frame?

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Okay, here's a serious question then. It's looking like bad debts are getting on for a third of total profits for the last half year for most of the big commercial banks.

At what point do they throw in the towel and stop lending?

Let's say there's no lag in the system first of all. Do they stop when bad debts = profit and they are providing jobs simply so they can stand still ? Or do they stop when bad debts = profit / 2 because 100% markup on "investment" (bad debts written off) is a rule of thumb most healthy "value adding" businesses would use.

If they try and take account of rising trends in bad debts, do they stop lending now to try and prevent bad debts > profit?

Genuinely interested in answers as this may be the ultimate credit tightening we're looking for... :D

BN.

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bankers are here to make a profit.

they will tighten credit criteria very very fast indeed, regardless of irs.

they have no intrest in giving money to people who cant pay it back. make no mistake in that. someone at the top will put a stop to it and very quickly it will be quite hard to borrow at all.

gread becomes fear.

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I believe they've already sent out the signal to be more circumspect in lending. Its coming...

Will be interesting to see if we all get less 'junk' mail from banks and credit card companies offering their deals for cards, loans, re-mortgages etc in the coming weeks. I normally get a good handful each week.

AFP

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Will be interesting to see if we all get less 'junk' mail from banks and credit card companies offering their deals for cards, loans, re-mortgages etc in the coming weeks. I normally get a good handful each week.

AFP

you might be wrong actually - i read on the bbc wesite last week that rules are to be relaxed governing the amoung of junk posties can deliver - a deluge of this crap may follow

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Debt, debt, debt and more debt.

You know, for the first time in 3 years, I'm thinking inflation followed by deflation followed by re-inflation.

Anyone care to hazard a time frame?

My prediction exactly. Timings are very difficult indeed though as things inevitably undershoot on the way down just as they do on the way up. But I'll give it a go :huh:

2001-early '07 - Asset Inflation

2007 Q1 - America goes into recession

2007 Q3 - UK 'officially' (I think we're in one now!) enters recession

2007 - 2012 - Asset deflation (Property, commodities - yes oil as well)

I think a big reflation of the Anglo Saxon economies should happen in about 2015 after all the bubbles and excess liquidity has been drained away. Boom years again in about 2020, deja vu!

There are three countries which will be hit especially hard by the coming downturn - US, UK and Australia. Spain, the petro flush Middle East and China won't be too pretty. Germany, France and Japan will escape relatively unscathed because they haven't indulged in the excesses of the past 10 years.

Just remember, if I was that clever I'd be sunning myself in Marbella with a Pina Colada but you did want a timeframe!

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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