Jump to content
House Price Crash Forum

Recommended Posts

A report by Sir James Crosby, the former chairman of Halifax , into the credit crunch was just reviewed on Sky News as it has just been released.

Quick points:

  • Mortgage drought to last well into 2010 - hooray
  • Does not think that the Government should intervene - hooray (Won't stop them though)
  • Does not think that the Government intervening would do any good anyhow
  • Should be left to the Banks to sort out
  • Should be left to the Free Market - i.e. the Banks - to sort
  • Does not think that the Banks/Free Market can do anything anyhow as this simply needs to run its course
  • Does not think that a UK Fannie Mae or Freddie Mac would do any good and should be avoided

Share this post


Link to post
Share on other sites

The free market is screwed it's incapable of sorting out this mess.

The free market created this mess in the first place so I think it's highly unlikely to fix it unless of course you call complete financial failure and social unrest (revolution) a fix.

It needs writedowns across the board from govt, banking and individual level, plus the bankers jailed.

It's hardly a surprise a banker calls for the banks to fix it.

Share this post


Link to post
Share on other sites
A report by Sir James Crosby, the former chairman of Halifax , into the credit crunch was just reviewed on Sky News as it has just been released.

Quick points:

  • Mortgage drought to last well into 2010 - hooray

  • Does not think that the Government should intervene - hooray (Won't stop them though)

  • Does not think that the Government intervening would do any good anyhow

  • Should be left to the Banks to sort out

  • Should be left to the Free Market - i.e. the Banks - to sort

  • Does not think that the Banks/Free Market can do anything anyhow as this simply needs to run its course

  • Does not think that a UK Fannie Mae or Freddie Mac would do any good and should be avoided

Seems a pretty reasonable set of conclusions.

Not so sure about a mortgage drought though. I think this translates to shortage of idiot MBS investors!

Share this post


Link to post
Share on other sites
Guest An Bearin Bui

Here's the text of his letter, as provided by the Guardian

It says that they are going to look further over the next three months at trying to stimulate the marke for MBS which is slightly worrying as it could mean that in 3 months' time we get a hare-brained scheme to spend more taxpayers' money on creating an artificial market for derivatives no-one wants anymore.

Otherwise though, a remarkably sane and sober assessment of the situation from Crosby... it's most likely that the banks don't actually want any intervention as the stronger players will be given a few years to recapitalise while weaker banks fall by the wayside (Northern Rock), leaving the field open for those remaining to expand market share, when the time is right (around 2011). It looks like the CML, estate agents and mortgage-brokers are now out on their own in clamouring for government help. Their friends the banks have deserted them for now! :D

Share this post


Link to post
Share on other sites
  • Mortgage drought to last well into 2010 - hooray

  • Does not think that the Government should intervene - hooray (Won't stop them though)

  • Does not think that the Government intervening would do any good anyhow

  • Should be left to the Banks to sort out

  • Should be left to the Free Market - i.e. the Banks - to sort

  • Does not think that the Banks/Free Market can do anything anyhow as this simply needs to run its course

  • Does not think that a UK Fannie Mae or Freddie Mac would do any good and should be avoided

It's a "Different World" all right. ;)

Share this post


Link to post
Share on other sites
The free market created this mess in the first place so I think it's highly unlikely to fix it

I think there is a good argument that the government/BoE caused the problems by allowing moral hazard over the past decade. Not just in the UK, but Greenspan's low interest rates didn't help after the dot com bust. Other examples are in August 2005 when the BoE cut rates when they clearly shouldn't have.

Share this post


Link to post
Share on other sites
He also predicts there will be an increase in the number of people defaulting on their mortgages over the next two to three years raising the spectre of tens of thousands of homeowners having their properties repossessed.

The news comes as homeowners have been warned to brace themselves for further falls in the value of their houses after figures from the Bank of England showed mortgage approvals have plummeted by more than two thirds in a year.

http://www.telegraph.co.uk/money/main.jhtm...bcncross129.xml

Share this post


Link to post
Share on other sites
I think there is a good argument that the government/BoE caused the problems by allowing moral hazard over the past decade. Not just in the UK, but Greenspan's low interest rates didn't help after the dot com bust. Other examples are in August 2005 when the BoE cut rates when they clearly shouldn't have.

i have too agree with you on that one, sir. you have free market or you dont.

Share this post


Link to post
Share on other sites
I think there is a good argument that the government/BoE caused the problems by allowing moral hazard over the past decade. Not just in the UK, but Greenspan's low interest rates didn't help after the dot com bust. Other examples are in August 2005 when the BoE cut rates when they clearly shouldn't have.

Depends on how you look at it. Personally, if I was going to pop the "moral hazard" title on situation, I'd say it was actually the wage inflation of the 70s, and to a lesser extent the 80s that did it. Those periods of time created the situation where wage inflation paid your mortgage - in essence, they made the housing ladder what it is - thereby setting the pattern of behaviour (reinforced by older generation's experiences of the market) for first timers. The removal of that significant wage inflation (which was the correct thing to do) meant the end of the inflation-powered housing ladder as it was. When it comes to housing, wage inflation really is the ultimate moral hazard.

Share this post


Link to post
Share on other sites
How do you square this with the Beeb's version:

The government may have to give a taxpayer guarantee to billions of pounds

of mortgage market bonds if it wants to recover from a credit crunch.

The option is one of a number raised by Sir James Crosby as part of a report

commissioned by the Treasury that looks at ways to revive the mortgage market.

I heard Robert Peston on the BBC News say the gov was going to have to go for the tax payer bailout eventually.

Looks like the media trying to influence gov decisions by leading public expectations.

Share this post


Link to post
Share on other sites
I think there is a good argument that the government/BoE caused the problems by allowing moral hazard over the past decade. Not just in the UK, but Greenspan's low interest rates didn't help after the dot com bust. Other examples are in August 2005 when the BoE cut rates when they clearly shouldn't have.

I'd like to third that. interestrateripoff is a little too left wing for his own good. He's also inconsistent. I see he's calling for writedowns (text) and paydowns (signature) in the same post. Go figure.

Share this post


Link to post
Share on other sites
A report by Sir James Crosby, the former chairman of Halifax , into the credit crunch was just reviewed on Sky News as it has just been released.

Quick points:

  • Mortgage drought to last well into 2010 - hooray

  • Does not think that the Government should intervene - hooray (Won't stop them though)

  • Does not think that the Government intervening would do any good anyhow

  • Should be left to the Banks to sort out

  • Should be left to the Free Market - i.e. the Banks - to sort

  • Does not think that the Banks/Free Market can do anything anyhow as this simply needs to run its course

  • Does not think that a UK Fannie Mae or Freddie Mac would do any good and should be avoided

How do you square this with the Beeb's version:

The government may have to give a taxpayer guarantee to billions of pounds

of mortgage market bonds if it wants to recover from a credit crunch.

The option is one of a number raised by Sir James Crosby as part of a report

commissioned by the Treasury that looks at ways to revive the mortgage market.

Edited by Sledgehead

Share this post


Link to post
Share on other sites
I think there is a good argument that the government/BoE caused the problems by allowing moral hazard over the past decade. Not just in the UK, but Greenspan's low interest rates didn't help after the dot com bust. Other examples are in August 2005 when the BoE cut rates when they clearly shouldn't have.

If the free market was all that it would have realised the dangers of lending out recklessly and NOT DONE IT. Greed came into play and they want for the fast buck.

I'd like to third that. interestrateripoff is a little too left wing for his own good. He's also inconsistent. I see he's calling for writedowns (text) and paydowns (signature) in the same post. Go figure.

I'm not inconsistent, you wouldn't get the whole amount written off just a proportion to put you back in line with the new paradigm then you'd have to pay it off what was left.

We have a major problem HPI not only created artificially inflated house prices they also created artificially inflated personal debt which is totally unserviceable.

If you add into the mix the element of artificial inflation by liar loans then a fair portion of the debt is illegal.

I really wouldn't describe myself as left wing more as a free market, socialist, right wing, left wing libertarian :)

Share this post


Link to post
Share on other sites
I think there is a good argument that the government/BoE caused the problems by allowing moral hazard over the past decade. Not just in the UK, but Greenspan's low interest rates didn't help after the dot com bust. Other examples are in August 2005 when the BoE cut rates when they clearly shouldn't have.

Bang on the nail......

Share this post


Link to post
Share on other sites
The government may have to give a taxpayer guarantee to billions of pounds

of mortgage market bonds if it wants to recover from a credit crunch.

The option is one of a number raised by Sir James Crosby as part of a report

commissioned by the Treasury that looks at ways to revive the mortgage market.

This is the real agenda here. All this;

Does not think that the Government should intervene - hooray (Won't stop them though)

Does not think that the Government intervening would do any good anyhow

Should be left to the Banks to sort out

Should be left to the Free Market - i.e. the Banks - to sort

Does not think that the Banks/Free Market can do anything anyhow as this simply needs to run its course

Does not think that a UK Fannie Mae or Freddie Mac would do any good and should be avoided

is designed to scare the government into doing what he wants, which is to bail out his mates in the city.

It's a done deal anyway, as the only way Gorden gets to keep his job is if he can buy the next election- and what better way to do this than promising to keep house prices up. ( There are more homeowners than not)

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 396 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%



×
×
  • Create New...

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.