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Vince Cable & George Cox On Reflating The Housing Bubble

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Write down the mortgage debt for individuals, if the money never existed neither does the debt.

Over my dead body! Tighten lending criteria and multiples...let those who made pig stupid decisions pay for them. I'm sorry, but I have spent the past 7 years not buying a house because of the greed of others and I will not tolerate having the value of my hard earned savings eradicated by such an obvious bail out of the irresponsible. No, no, no, no no. I could have taken out a super sized loan, but I decided live in rented rooms and houses because it would have been financial suicide in the medium term to do otherwise. Other fools, just went ahead and took out the loans anyway. This sort of "let's bail out the irresponsible idiots" attitude is one of the things that is very wrong with this country. As it is I will probably suffer unemployment due to this credit binge...don't damn well destroy the value of my savings as well.

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Thank God for Vince. I will be livid if the gubbmint use my money to underwrite cretinous pig-bank's risk taking whilst they pocket any upside.

Vince = Lone Voice of Reason

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http://news.bbc.co.uk/today/hi/today/newsi...000/7530357.stm

Discussing the extension of the special liquidity scheme for new mortgage lending. They say that shortages in the mortgage market will persist until 2011 and something needs to be done as we cannot finance our own mortgage market with retail savings alone! :o

That's the way it always used to be done, and it seemed to work fine. That's what building societies used to be for. What they mean is people who shouldn't be getting mortgages anyway (no deposit, bad credit risk) can longer get them, which is no bad thing. This is annoying me a bit as it suggests that we've reached some new 'paradigm' where every feckless person is entitled to borrow hundreds of thousands of pounds that they may not be able to repay. This is just delaying the inevitable, again.

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It's annoying that they want to perpetuate house prices at ludicrous income multiples by "getting the market moving" at those same ludicrous multiples.

Did you hear that twonk from the Institute of Directors trying to portray the banks as innocent restaurants who had been hit out of the blue by food shortages caused by feckless American diners! What a ******. Howls at goverment "interference" whenever it involves fat prophits and bonuses and demands taxpayer bailout when they ****** up.

Vince and Evan slapped that one down reasonably hard.

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People who object to these plans must make their voices heard to their Labour, Tory and Liberal MPs. Any bail out of reckless lenders and borrowers is a disaster for anyone who was "prudent".

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I would also suggest that as many HPC'ers as possible write letters, against the bail-out, to 'Letters to the Editor' pages of national and local newspapers. For high visibility this would need to include the red tops and be written in a suitable style accordingly. The political parties do monitor the national newspapers letters as one small measure of trying to keep tabs on public opinion - so this effort would not be a waste of time.

Writing directly to MP's, of course, is worth while.

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Vince and Evan slapped that one down reasonably hard.

Well, thank God they were there to try but Cox's rubbish will have been on the frequency most people want to hear and I fear will be what they took away from this.

His attempt to simplify this complex calamity to "the money (or 'food') was just cut off, nothing else at all" is so craven and dishonest that he deserves public humiliation.

Unfortunately that would take public awareness and I fear (I'm in a pessimistic mood!) that the main story of this bust will be the almighty, simplistic whinge of "the Yanks took the money away!".

Like the last UK crash appears to have gone down as the fault of MIRAS removal and nothing else in popular consciousness (ignoring the context that this needed to cause damage i.e. another almighty elevation beyond sustainable lending multiples!) this one will go down as "US subprime's fault", and nothing more.

It's like blaming WW1 and WW2 on Gavrilo Princip having been sold a gun.

Crazy UK lending's role will be forgotten in the fog of economic disaster and superficial recrimination (in the man on the street's mind at least); nothing will really be remembered so nothing learnt, and Cox and his sort will hope to be ready to plunge back in and reap the mega profits of crazy lending and 'Nu Securities' trading some time in the future when their appetite is back. The Diner he talks of is really the Bank's Big Feast.

He knows all this very well, and knows just what to say to ensure it's remembered the way he wants it to be.

B*stard.

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How the hell the chairman of B and B until 2006 can be regarded as any kind of authority on this current crisis is beyond me.

His comments blaming the crisis on events in the USA were silly. And to imagine his comments defending those comments were credible as he seemed to think with his pompous accent is beyond belief

Does he really represent the level of intelligence in british banking????

He and his ilk have brought this madness to the current state of affairs

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I would also suggest that as many HPC'ers as possible write letters, against the bail-out, to 'Letters to the Editor' pages of national and local newspapers. For high visibility this would need to include the red tops and be written in a suitable style accordingly. The political parties do monitor the national newspapers letters as one small measure of trying to keep tabs on public opinion - so this effort would not be a waste of time.

Writing directly to MP's, of course, is worth while.

YES and as I said in my thread yesterday, to your MP also, via www.writetothem.com

They know their seats REALLY are on the line now, they are much more likely to listen.

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Over my dead body! Tighten lending criteria and multiples...let those who made pig stupid decisions pay for them. I'm sorry, but I have spent the past 7 years not buying a house because of the greed of others and I will not tolerate having the value of my hard earned savings eradicated by such an obvious bail out of the irresponsible. No, no, no, no no. I could have taken out a super sized loan, but I decided live in rented rooms and houses because it would have been financial suicide in the medium term to do otherwise. Other fools, just went ahead and took out the loans anyway. This sort of "let's bail out the irresponsible idiots" attitude is one of the things that is very wrong with this country. As it is I will probably suffer unemployment due to this credit binge...don't damn well destroy the value of my savings as well.

Ditto.

(Except I didn`t rent, I stayed in my very modest house, and didn`t gorge myself on "free" money). I am suffering some degree of unemployment, but that`s what I`ve saved for - so I don`t have to turn to the taxpayer to help me out.

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Well, thank God they were there to try but Cox's rubbish will have been on the frequency most people want to hear and I fear will be what they took away from this.

His attempt to simplify this complex calamity to "the money (or 'food') was just cut off, nothing else at all" is so craven and dishonest that he deserves public humiliation.

Unfortunately that would take public awareness and I fear (I'm in a pessimistic mood!) that the main story of this bust will be the almighty, simplistic whinge of "the Yanks took the money away!".

Like the last UK crash appears to have gone down as the fault of MIRAS removal and nothing else in popular consciousness (ignoring the context that this needed to cause damage i.e. another almighty elevation beyond sustainable lending multiples!) this one will go down as "US subprime's fault", and nothing more.

It's like blaming WW1 and WW2 on Gavrilo Princip having been sold a gun.

Crazy UK lending's role will be forgotten in the fog of economic disaster and superficial recrimination (in the man on the street's mind at least); nothing will really be remembered so nothing learnt, and Cox and his sort will hope to be ready to plunge back in and reap the mega profits of crazy lending and 'Nu Securities' trading some time in the future when their appetite is back. The Diner he talks of is really the Bank's Big Feast.

He knows all this very well, and knows just what to say to ensure it's remembered the way he wants it to be.

B*stard.

Agreed. To further the analogy, the restaurant he spoke of has simply been selling food that no one can pay for any more because it is too expensive. Prices must come down, you enjoyed the profits, no need crying now that your profits now have to be eaten.

I was going to start a thread about this entitled George Cox, what a c*ck.

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The mistake they make is saying there will not be enough mortgages from retail savings. This is only true when you need 200k mortgages. When you only need 50k mortgages everyone that wants a mortgage will get one for exactly the same total cash amount. This would be due to falling prices.

This idea is simply a scheme to prop up prices. There will be ample funds to satisfy all mortgage lending when house prices fall.

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then move them out of sterling and into gold, silver and euros.

Too late for that advice...3rd already in metals...has been since gold was $500. Still, I do have some cash investments and trading accounts that are denominated in Sterling etc.

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The mistake they make is saying there will not be enough mortgages from retail savings. This is only true when you need 200k mortgages. When you only need 50k mortgages everyone that wants a mortgage will get one for exactly the same total cash amount. This would be due to falling prices.

This idea is simply a scheme to prop up prices. There will be ample funds to satisfy all mortgage lending when house prices fall.

I remember the old days when it was hard to get a mortgage and if you were not a saver with that bank or that buiding society it was harder still. But no doubt if you were 'connected' then money was always available.

The problem today is being created because the problems of yesteryear were not allowed to run their course because people/politicians/the greedy tend to believe that banks can just create money and it is possible for government to solve lifes problems. Instead as we are learning now if banks cant sell their liabilities then they need more deposits or more capital.

If prices now go back to sensible pricing based on sensible lending then lending to all borrowers will diminish and so lending to producers will dissapear as much as lending to speculators dissapears. People wont have jobs. Many people now salivating over price falls wont have jobs or money to buy at the seemingly cheaper prices.

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Careful now! You are getting pretty close to 'fulminating with rage' there but I want to get in with my own 'spittle flecked rant' first!

What I want is a long drawn out decade of pain in which every single one of the 50-60 year old baby boomers is forced to cut their house price in half. No way should these vultures be allowed to get away with feeding off the generation below them.

Have to let off steam somehow as one has no possibility of stopping "them" socialising the losses of this fiasco. The other option is to just keep it inside and do a "Falling Down."

As for your wish, I fear it may be granted. Unfortunately, they won't be the only ones who suffer.

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Its about bail out - shifting their problems onto us via inflation. This is always what the bankers do. They can't save the housing market, they can't save the economy, but they can save their bonuses and give a slap on the back to politicians looking for a nice juicy executive directorship in two year's time.

BTW Vince did a great job of exploding the B&B guy's spin about lax bank lending.

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Over my dead body! Tighten lending criteria and multiples...let those who made pig stupid decisions pay for them. I'm sorry, but I have spent the past 7 years not buying a house because of the greed of others and I will not tolerate having the value of my hard earned savings eradicated by such an obvious bail out of the irresponsible. No, no, no, no no. I could have taken out a super sized loan, but I decided live in rented rooms and houses because it would have been financial suicide in the medium term to do otherwise. Other fools, just went ahead and took out the loans anyway. This sort of "let's bail out the irresponsible idiots" attitude is one of the things that is very wrong with this country. As it is I will probably suffer unemployment due to this credit binge...don't damn well destroy the value of my savings as well.

Careful now! You are getting pretty close to 'fulminating with rage' there but I want to get in with my own 'spittle flecked rant' first!

What I want is a long drawn out decade of pain in which every single one of the 50-60 year old baby boomers is forced to cut their house price in half. No way should these vultures be allowed to get away with feeding off the generation below them.

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I've got a feeling this will happen, the pieces are falling into place.

A couple of weeks ago there was talk about changing Gordon's golden rule to borrow more and now Gordon and his party are facing disaster and talks of plots to remove him. Gordon/Labour have nothing to lose here. My feeling is that Labour are desperate now.

If house prices fall too much there will be a serious recession. How do Labour deal with problems, they throw money at them. It's what they do!

I am home today and listening to the commentators on various news channels they seem to expect this to happen.

If there is a silver lining, listening to the interview with Vince Cable and George Cox, it won't stop prices falling, it might reduce the crash a bit, but prices will still fall. The deal won't be perfect for the banks, as with the special liquidity scheme I imagine there will be an unfavourable rate for the banks.

Has this been tried elsewhere before? Wasn't this sort of already the case in America?

Edited by BecksMyCat

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I will be livid if the gubbmint use my money to underwrite cretinous pig-bank's risk taking whilst they pocket any upside.

Given the chance the UK gubbmint will do it mirage.

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If legislation is needed for the government to support mortgages then it could be almost a year before any scheme kicks in.

The quick alternative way of doing it through the BoE extending the Special Liquidity scheme seems to have been ruled out by Merv. This is what the banks really seem to be pushing for.

Hopefully, by next Summer the HPC may have gathered so much momentum that it may be too late for it to have much effect

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  • 399 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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