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Insolvency Statistics - Q2 08

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Statistics on individual insolvencies (IVA & bankruptcies) for the second quarter of 2008 are due to be released on Friday 2nd August.

Total figures for second quarter in 2007 were nearly 27,000 (roughly 16,000 bankruptcies & 11,000 IVA).

What number should we expect?

Personally, I'd go for 40,000. With the IVA industry appearing to be enjoying a new boom - with Northern Rock accepting deals writing off up to 80% of the debt ..... -, and fast increasing house repos leading to more bankruptcies, I reckon this is a realistic number.

And unlike with house prices, these are hard statistics that can't be spun or easily manipulated ......

This will focus minds on the UK's £1.4 trillion moutain of personal debt

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A mountain if it keeps growing will ultimately collapse in on itself.

The debt mountain will do the same the only option is repayment, interest rates should be 0% with the previous service costs now going to paying the debt down.

Profit / Yield curves etc.. all go out of the window in the current situation what matters is getting the debt down so it doesn't cause an economic collapse.

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The debt mountain will do the same the only option is repayment, interest rates should be 0% with the previous service costs now going to paying the debt down.

This hobby horse of yours is very eccentric. If interest rates were zero then anyone could afford to service any amount of debt. No, when the country is over-borrowed interest rates need to go up to force people who can't afford it to deleverage.

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Guest DissipatedYouthIsValuable
This hobby horse of yours is very eccentric. If interest rates were zero then anyone could afford to service any amount of debt. No, when the country is over-borrowed interest rates need to go up to force people who can't afford it to deleverage.

As long as you don't contract the money supply too rapidly to cause mayhem.

You could have 0% interest rates and fixed payment schedules, and tight criteria on new lending.

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A mountain if it keeps growing will ultimately collapse in on itself.

where the hell did you get your Geology degree........

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http://www.nasa.gov/vision/earth/environme...ng_Rivalry.html

In the entire solar system, Mars boasts general features that are some of the biggest, widest, and deepest. One of its standouts is the immense Olympus Mons, a volcano of such size and scale that it’s own peak reaches above most of the Martian atmosphere. Olympus Mons could not even exist on Earth; with Earth's stronger gravity field, the massive volcano would collapse under its own weight if it were here.

http://www3.interscience.wiley.com/journal...=1&SRETRY=0

At a temperature of 800 degrees Celsius, coesite requires a pressure of 28 kilobars, and diamonds, over 35 kilobars. This is irreconcilable with an ultra-high-pressure metamorphism within the continental crust, where the normal rock density is 2.8 grams per cubic metre. At such pressures the crust would have had to have been 100 to 120 kilometres thick, which would not accord with a mean mountain range elevation of eight to ten kilometres and peaks of 15 to 20 kilometres. The continental crust, however, is not strong enough to support such an elevation over periods of thousands of years. Within no time, the range would collapse under its own weight.

So this isn't accurate then or am I misunderstanding what's being said? Everest can keep growing indefinitely then and won't collapse under it's own weight?

Obviously if your going to go for 0% rates for existing loans then strict lending criteria must be inforced. One you wouldn't be able to increase your borrowing and all new applications would be rejected. So pay a higher rate to keep borrowing money or pay 0% and be refused new credit. For new loans you wouldn't get 0%. All what I'm concerned with is paying down the debt and stopping an economic meltdown or is that more preferable somehow?

Explain the following:

If I am the central bank and I control all money, and I lend person A £1m and Person B £1m and charge them 5% interest a year how do person A and B get the £50,000 pound to pay me the interest?

If I only accpet my currency £ where does the money come from?

Now person A may do person B a job and charge them £50,000 they can then pay me all my money back plus interest. Person B now only has £950,000 and is £100,000 short?

The only possible way Person B can pay the bank back is if I increase the money supply and may lend a Person C who's just turned up £1m. Person B then does work for Person C and charges £100,000. Person C is now £150,000 short of the money they owe the central bank.

It appears my thoughts are not alone on how this works.

So it appears that the only logical way the central bank can get there money back is to continually create new money and lend it out to the original lenders and ever new lenders.

However the central bank rates is currently 5% and money supply has been growing at 10%+ so where has this money been going???

It appears to be a circular system which needs the banks to continually increase the money supply and create new lending to get it's money back from past lending.

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http://en.wikipedia.org/wiki/Mount_Everest#Measurement

It is thought that the plate tectonics of the area are adding to the height and moving the summit north-eastwards. Two accounts[19][22] suggest the rates of change are 4 mm (0.16 in) per year (upwards) and 3-6 mm (0.12-0.25 in) per year (northeastwards), but another account mentions more lateral movement (27 mm/1.1 in),[23] and even shrinkage has been suggested.[24]

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FWIW I think we're still on the footslopes of the insolvency mountain.

I do wonder what will happen when more people realise they can write off 80-100% of their "debts" and the world won't in fact end.

Will the banks tell Darling to tighten the insolvency laws?

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FWIW I think we're still on the footslopes of the insolvency mountain.

I do wonder what will happen when more people realise they can write off 80-100% of their "debts" and the world won't in fact end.

Will the banks tell Darling to tighten the insolvency laws?

Does that go for the banks as well can they write off 80-100% of the debts??? Probably stupid question they can and the consumer pays for it.

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where the hell did you get your Geology degree........

Cambridge :rolleyes:

You actually see extensional faulting (collapse) within the Tibetian plateau due to it's excess height - and when India stops moving North in the next few dozen million years or so, the whole hymalaya will collapse in short order.

As one lecturer said, 'Over geological time, rocks have no physical strength'.

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I do wonder what will happen when more people realise they can write off 80-100% of their "debts" and the world won't in fact end.

Will the banks tell Darling to tighten the insolvency laws?

That happened two years ago when the IVA industry enjoyed a massive boom and banks ended up complaining to various bodies about irresponsible advertising.

Banks played hard ball with IVA providers and the whole 'industry' contracted.

Things are very different now in these HPC/credit crunch times.

There is also the fact that one the banks most exposed to personal insolvencies is the People's Bank, aka Northern Rock, who now appear happy to say 'yes' to IVA plans with dividends as little as 20% .....

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As long as you don't contract the money supply too rapidly to cause mayhem.

You could have 0% interest rates and fixed payment schedules, and tight criteria on new lending.

And no is there no taking into account what zero percent interest rates would do to sterling? We are in a cyclical commodity bullrun, and the UK became net importer of oil in 2007. The zero percent interest rate policy in Japan led to the birth of the carry trade. This would cause alot of sterlings to be lost in the forex market, which would weaken sterling considerably...The Japanese had over capacity in manufacturing in the 1990's and they export goods all over the world. A weak yen was not all together bad for the Japanese. They have a huge current account surplus. Britain has a deficit that was funded in a way that every £1 in GDP growth £3.30 was added in debt. To cut interest rates to zero would be calamitous disaster for the UK in my view.

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If I am the central bank and I control all money, and I lend person A £1m and Person B £1m and charge them 5% interest a year how do person A and B get the £50,000 pound to pay me the interest?

If you had everything, where would you put it?

(reprise: how many central banks are there? and what's this time value of money thing all about anyway? does either explain the demand curve for your money at 5%?)

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I think you have misunderstood I'm not arguing for a single 0% interest rate.

My main criticism of interest rates is that one rate does not fit all.

But like everything in life nothing is 100% effective.

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Guest DissipatedYouthIsValuable
And no is there no taking into account what zero percent interest rates would do to sterling? We are in a cyclical commodity bullrun, and the UK became net importer of oil in 2007. The zero percent interest rate policy in Japan led to the birth of the carry trade. This would cause alot of sterlings to be lost in the forex market, which would weaken sterling considerably...The Japanese had over capacity in manufacturing in the 1990's and they export goods all over the world. A weak yen was not all together bad for the Japanese. They have a huge current account surplus. Britain has a deficit that was funded in a way that every £1 in GDP growth £3.30 was added in debt. To cut interest rates to zero would be calamitous disaster for the UK in my view.

I agree. I didn't say it was a good idea, just that it was theoretically possible to do.

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FWIW I think we're still on the footslopes of the insolvency mountain.

I do wonder what will happen when more people realise they can write off 80-100% of their "debts" and the world won't in fact end.

Will the banks tell Darling to tighten the insolvency laws?

It would take at least 2/3 years to alter the law, by then the worst will be over but there will be only three people with clean credit history the Queen Brown and me.

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  • 395 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% +
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      • Even
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      • up 5%



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