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Official Government Reports Admits: Crisis Will Continue For 2 Or 3 Years

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http://uk.news.yahoo.com/pressass/20080729...ng-6323e80.html

Mortgage crisis timescale warning

Press Assoc. - 1 hour 52 minutes agoBritain's crisis-hit mortgage market
will not return to normal for another two to three years, a Government-commissioned report warned
.
The review of mortgage financing - led by the former head of the Halifax Bank of Scotland (HBOS), Sir James Crosby - said it was inevitable that the mortgage market woes would hit house prices.
Sir James said he was looking at how to jump-start the crippled home loan sector "with some urgency". But the interim report cautioned there was no quick fix to ease the log-jam in home loan funding and stopped short of providing any firm solutions to the lending troubles.
Sir James, who was appointed by Chancellor Alistair Darling to lead the review in April, mooted the idea of further temporary support from the Government to help stimulate the mortgage-backed securities market, which has all but dried up amid the credit squeeze.
However, he said that Britain should avoid US-style government-backed agencies to tackle the funding crisis.
"Much has been said about the case for launching a US-style agency but I think it unlikely that it would be right to tackle this century's problems with last century's solution," said Sir James.
Banks and building societies will have to wait for the second report in the autumn for his final conclusions and recommendations.
The Chancellor is also understood not to be planning to make any announcements on the issue until the Pre-Budget Report
.
Plans to hold off from taking action until the autumn has already angered lenders, with the Council of Mortgage Lenders saying earlier this month that the Government must "act swiftly" to resolve the current mortgage drought.
Figures from the Bank of England revealed that mortgage approvals plunged by nearly 70% in June to a new record low. Just 36,000 new loans were arranged for people moving house, while net mortgage lending dropped to an eight-year low of £3.1 billion.

The governments that failed to take action when this monster bubble was forming are just now admitting the degree of crisis to the sheeple at large. IMO, we are seeing a structural failure in the banking system and NOT just an end of cycle correction.

I no longer believe we will see house drop 50-60% by the time this thing hits bottom. How bad? Bad. Could see 70% plus off the average house price. Especially if we go into depression territory with massive levels of unemployment to follow the inability of consumers to keep Gordon's bubble inflated with credit based purchases. Back to the old days of owt for nowt and nowt unless you can pay for it. The miraculous nature of Gordon's promise to end the business cycle will be a very distant memory very soon.

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The only option is to wipe out the debt to the new paradigm levels.

If we get deflation this will be the only option as the vast majority of people would have unserviceable mortgage debts with no possible way to pay it off.

70% could be being a tad optimistic you might be looking at the 90% level or higher, especially if the banking system implodes.

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By "Back to Normal", do they mean 6X 120% loans?? :blink::blink:

IMO, we are back to "Normal".

This current (3x + 10% deposit) situation will last for 20 years or more, until the next property bubble kick off.

I worry about people talking about normal just after a huge debt fueled bubble, like Carol the weather bird on the BBC this morning talking about holidays and how many people are now camping or going to caravan sites in the UK because of the Credit Crunch. :blink:

What she means is, now things are back to normal i.e No Credit, no-one can afford a foreign holiday on their salary alone. :rolleyes:

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The governments that failed to take action when this monster bubble was forming are just now admitting the degree of crisis to the sheeple at large. IMO, we are seeing a structural failure in the banking system and NOT just an end of cycle correction.

More like we are ssing a structural failure of government! Whilst we have major problems of poverty, obesity, street crime, nhs, education etc etc, the government seem hell bent of kicking starting another acceleration of long-term debt at any cost! What great news that is for us as a Country. :wacko:

AFP :angry:

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More like we are ssing a structural failure of government! Whilst we have major problems of poverty, obesity, street crime, nhs, education etc etc, the government seem hell bent of kicking starting another acceleration of long-term debt at any cost! What great news that is for us as a Country. :wacko:

AFP :angry:

Problem is who's going to fund the debt???

We are broke, the US is broke, Europe is broke and the banks are broke, so who will fund this now empire of debt?

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More like we are ssing a structural failure of government! Whilst we have major problems of poverty, obesity, street crime, nhs, education etc etc, the government seem hell bent of kicking starting another acceleration of long-term debt at any cost! What great news that is for us as a Country. :wacko:

AFP :angry:

They seem to be missing the point that what we actually need is a functioning economy that produces useful goods and services and employs people such that they can have an acceptable standard of living.

At what point will they realise/admit that the UK economy has been a mirage for the past 10 years and that the real economy has been rapidly eroding behind the smoke and mirrors? That what we have left is a husk of a country resembling somewhere like Romania but with massive fixed cost overheads?

I think the only protection now is to get out there and start making friends and looking after your family - they'll be all we have in a few years if this goes where it looks like it's going.

Make sure you have some basic useful skills:

building things

repairing things or people

growing things

or for the ex-bankers:

protection rackets

pimping

Fagin-like child crime rings

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Problem is who's going to fund the debt???

We are broke, the US is broke, Europe is broke and the banks are broke, so who will fund this now empire of debt?

Debt is a promise, promises are being broken, trust is being lost and will take many years to rebuild (i.e. a new generation of fools will be along in about 8-10 years in all likelihood).

Unfortunately the game will probably not be played out on these shores, it will probably be in Asia. We probably won't get a chance to play in the next round of HPI madness being UK residents with no economy.

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Problem is who's going to fund the debt???

We are broke, the US is broke, Europe is broke and the banks are broke, so who will fund this now empire of debt?

It does not seem logical though that trying to create a perpertual motion economy of debt is any more advisable though than just suffering the pain of past mistakes. Why has the world got such a consumerist mindset.

Everything seems to be doom and gloom if the consumer will not borrow to over consume. There are major cultural flaws in the way society thinks it is supposed to operate. It's starting to drive me bonkers :o

AFP

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



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