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grey shark

Bbc Pestons Blog , Libor Back At 6%

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http://www.bbc.co.uk/blogs/thereporters/ro...libor_ouch.html

9. At 02:30 PM on 26 Mar 2008, Nick wrote:

How long before the Bank of England and the Treasury confess to the public that this credit crunch has been mainly caused by irresponsible lending, the large majority of which is mortgage lending that has gone into overpriced housing. The greed of the public and the banks over the last 6 years has ended up making the majority of housing in this country unaffordable and pricing young people out of the housing market and the security to raise a family in a dwelling that is not going to change at the whim of a landlord. This housing greed has brought the worlds financial markets to a standstill to the point where we are now looking over the precipice to recession and possible depression. The only way that this mess will be fixed is for house prices to return to normal levels in-line with salaries and for people to stop thinking they can make "free money" out of investing large quantities of "borrowed" money in housing. Ultimately someone has got to pay for it and in the end it is going to be painful one way or the other.

Edited by grey shark

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Good find... I'm encouraged by these words (attributed to Mervyn King)

The Bank of England’s money should not be used by banks to fund future incremental lending, but only to allow them to meet their pressing current financial commitments

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He He He, market forces are at play here the muppets are f@cked, with little manufacturing to fall back upon they might aswell protect sterling ... but then again that won't work either ... what a mess.

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"banks should retain 100% liability for any future losses" - this is a bit meaningless, if a bank goes under then the BOE will have to queue up with the other creditors to try and claw something back. Unless they are saying that the BOE gets some sort of special priority in the event of bankruptcy but that would make banks less willing to lend to each other if they knew they were only a "second class" creditor :lol:

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16. At 04:19 PM on 26 Mar 2008, John E wrote:

Someone, somewhere needs to start unpicking these CDOs that seem to be all the banks have left as security. Until the true risk is known, and the toxic waste is sorted from the sound paper, the financial system will remain stalled. Sorting the problem out will take resources and time, but the longer the wait, the worse the problem will become and the more damage the global financial system will sustain.

Based on common sense as opposed to a knowledge of derivatives and how they work, I'd agree with this comment. But I wonder whether it would actually be possible in practice to unpick all those CDOs and return the assets/liabilities to their originators which is where they rightly belong.

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  • 293 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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