Wednesday, Nov 29, 2006

Thoughts from the sheeple

Daily Mail: Women who face debt forever

Insight into attitudes towards debt.

Posted by martyn @ 06:11 PM (520 views)
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29 Comments

1. little professor said...

"My daughter wanted to learn to play a musical instrument, but that would have cost nearly 100 a term, and I had to say no - I felt awful. My husband was educated privately and he'd love to do that for our children, but the harsh reality is that we just can't afford it."


Aww, diddums.

No sympathy at all. It's wimmen and their nesting instinct that are driving this insane bubble.

Wednesday, November 29, 2006 08:42PM Report Comment
 

2. indiablue19 said...

Dear Prof....

If these greedy bankers and oil barrons who are scarfing billions in profit every quarter; the government who are using the figures to prop up a fading manufacturing sector;, or the estate agents and financiers who are tempting homeowners into ever deeper debt knowing they can sell defaulted property AND keep the equity are one and all predominantly female, then I'll have to agree with you.

Wednesday, November 29, 2006 09:29PM Report Comment
 

3. nearly30 said...

This is what you get when you take home economics away and replace it with media studies in schools (joke-ish!!).

Think it's a bit odd having a 'female' slant to the article - so it's ok for blokes to have debt - we're dumb but when it affects the wimmin - that's a whole new ball-game - come-on sisterhood!!

Debt is debt and stupid is stupid.

Although, I have the slightest suspicion that the reporter is making some correlation between women getting hold of easy credit and bad financial management - and this from a women - you couldn't make it up!!!!

Are the financial institutions complicit in a trend of marketing to women (the 90s idea of female empowerment/independence)?

Although the evidence is there that it does work - don't believe me?

Anyone remember a Pyramid Scheme some 6 years ago that wiped out the finances of 1000s in Isle of Wight and other communities around UK (all over GMTV at the time)!

http://news.bbc.co.uk/1/hi/business/1298197.stm

It also caused mass riots in Albania!!

Wednesday, November 29, 2006 09:53PM Report Comment
 

4. nearly30 said...

Sorry forgot to mention.

The Pyramid scheme was called "Women Empowering Women".

To a bloke that would be called 'You what! Sod off it's your round tight g*t!"

Wednesday, November 29, 2006 09:56PM Report Comment
 

5. nearly30 said...

Sorry if it looks like anti-women.

Read: Insolvency figures reveal gender gap

http://www.ft.com/cms/s/18867a10-6a17-11db-952e-0000779e2340.html

"21% of women in over 10k of unsecured debt now report some likelihood of becoming insolvent (an increase of 6% in 6 months) compared with 15% of men (an increase of just 1% since April 2006)"

Wednesday, November 29, 2006 10:28PM Report Comment
 

6. japanese uncle said...

These cases are just examples of the millions of UK households where housing boom seriously deteriorates their quality of life. Their lifestyle is quickly getting similar to their counterparts' in Japan. Ha ha ha!

Wednesday, November 29, 2006 10:34PM Report Comment
 

7. talking rot said...

Is anyone feeling sorry for these twits?

Wednesday, November 29, 2006 10:39PM Report Comment
 

8. nearly30 said...

No sympathy at all. "Stupid is as stupid does"

Incidentally, funny what BBC says about Pyramid Schemes:

"Of course, the supply of potential investors will dry up, leaving the majority of people in the scheme having paid out a large sum and receiving nothing in return. So, steer clear of them and don't let anybody persuade you to invest in one."

Sounds like something else. I wonder what?

Wednesday, November 29, 2006 10:44PM Report Comment
 

9. nearly30 said...

No sympathy at all. "Stupid is as stupid does"

Incidentally, funny what BBC says about Pyramid Schemes:

"Of course, the supply of potential investors will dry up, leaving the majority of people in the scheme having paid out a large sum and receiving nothing in return. So, steer clear of them and don't let anybody persuade you to invest in one."

Sounds like something else. I wonder what?

Wednesday, November 29, 2006 10:44PM Report Comment
 

10. bidin'matime said...

Well, Nearly, I think you win the prize for most posts on one subject!

Wednesday, November 29, 2006 10:51PM Report Comment
 

11. talking rot said...

Bidin'

You have to hand it to Nearly though. His last post about the BBC describing the pyramid scheme is rather good.

Wednesday, November 29, 2006 10:54PM Report Comment
 

12. bidin'matime said...

TR - I have to agree - even worth repeating! Just needs someone to shout it from the roof tops so that more Rons can here...

Wednesday, November 29, 2006 10:57PM Report Comment
 

13. paolo88888 said...

These people seem to have forgotten that they will have to act as the "Bank of Mum and Dad" in not too many year time. If not, then the pool of FTBs will be further depleted.

And the comment "because if mortgages remain unpaid children now legally inherit the debt" seems a little confused. The mortgage normally has to be repaid before the property is transfered or sold. The difference is that some lenders now advertise that they will allow the mortgage to be continued. But it is never written off.

Wednesday, November 29, 2006 11:28PM Report Comment
 

14. Thetidewillturn said...

Ok I'm confused....if I made some of the monumental bad judgement calls that these people have made then personally I would keep quiet about it for fear of my employer finding out and questioning my judgement at work...they seem to be on decent salaries so I suspect most are managerial grade! Some managers!

I am confused as to why they are "telling all"? Has the DM paid these people for their story is that why they hold themselves up for ridicule like this - in which case I am sorry for them being in that position? Do they feel the need to stop others making the same mistake-in which case in a way I do admire their courage? Or (more likely) is this a bit of tongue in cheek/sexist journalism from the DM ...(lets all laugh at the silly women)..if so I think its in very bad taste. As for some of the stories ...I have to admit I was amazed and saddened at the stupidity...."I spent 1k on a holiday in Brazil to forget about my debt"...join the Territorial Army love, visit Iraq (its hotter there's more sand and you get paid for it) - ok there's a downside you get shot at (both from the "insurgents" and your US allies but hey makes for an interesting few weeks I guess!) (sorry sarcastic sick joke - my apologies...and there was me talking about bad taste as well!! Shame on me!!).

As for the first woman who wants to move to New Zealand..if you think its bad here try their 7.25% base rate and see what that does to your ability to service your debts.

An underlying thread here is that they all live beyond their means and that can affect anybody of any income...there is a phrase for it..."cut your cloth". I would have liked a big wedding - but opted for a smaller registry office with no guests only family, I would have liked expensive foreign holidays, but opted for 500 for two weeks in SW England this year...and surprise surprise I don't have these sort of debts.

I am fed up with people like these (fake middle class) looking down on me for my apparent "frugal" lifestyle whilst they live an "apparent" high life funded by borrowed money. In some respects its good to see the mighty fall and in others I am saddened to read about it and am genuinely concerned for what their families/children will go through. What does it do to children to see their social status fall overnight? Better surely that those children had the right expectations from the outset.

Two things do annoy me here though:-

1. They blame the banks - I blame both the banks AND the borrower. There is joint responsibility here. The borrower could have said no to the approaches the bank makes offering credit cards. I am sure they would have been the first to moan if the bank had said no. Its all to easy to say its the banks fault. Thats like blaming the drink for the car crash...what about the person who drank it?

2. Why are they allowed to duck the consequences by going down the IVA route? What reward do I get for NOT going into an IVA? (Or is it like the Bible - "the meek will inherit the earth" - or in these cases their properties when they are auctioned off by the mortgagees in possession in 2008 to the highest bidder!

Incidentally...anyone got any ideas what effect all these personal IVA's will have on the economy/next recession. (Last time round in 1991 people took out personal loans/consolidated and paid their debts back (something which seems incomprehensible to this cycles "victims").I suspect the banks are on the verge of getting a massive bloody nose for personal bad debt in 2006 and 2007. My own theory is that Government have deftly and with sleight of hand transferred the main burden (not all) of the consequences of their credit boom back to the banks rather than the borrower which will mean that the next recession will be shorter than the last and will keep the voters happier. ie the disposable generation get to throw their debt away as well. Can the banks survive this though or will we see smaller bank failures. Any thoughts???

and finally.... a question for the first example Sarah Houseman...."and just what the hell is wrong with Hennes and Primark!!"

Ok time to give my soapbox to someone else now....

Thursday, November 30, 2006 12:44AM Report Comment
 

15. Headmelter said...

"I am an intelligent, educated woman"

Really.

"The trouble is that we live in a culture which encourages debt. Everyone throws money at you - the bank, credit cards, store cards. That's all very well when you can afford to pay it back - the misery comes when you can't make the minimum repayments and the charges start to stack up and up."

obviously

"I was spending more than I earned "

Oh dear.

"I had a 6,500 overdraft at Lloyds bank, with no way of paying it off, as well as the credit card debts. By 2003 I was 115,000 in debt."

That's a lot.

"we decided to buy a flat together, we managed to persuade the building society to give us a 125% mortgage against the value of the property."

That was nice of them.

"I went to see a debt agency,I couldn't pay anything near the debt I owe, but I am paying 650 a month,We had to sell the flat after just two years - which had negative equity, thanks to the huge mortgage - and we're now renting a tiny one-bedroom flat."

maths wasn't a strong subject at school then?

"I am an intelligent, educated woman"

Are you sure about that?

This would be laughable if it wasn't so pathetic.

Thursday, November 30, 2006 01:47AM Report Comment
 

16. geed said...

HAHAHAHAHA......ahhh where Glorious Sunshine when you need him.....i think i need a joyous tune to hum.

"Spoilt it rather" pompous b1tch! HEHEHEHEHEHEHAHAHAHAHAHAHA........

Now lets see who do i owe money to, ugh no one! This article is the funniest lot of whinging drivel and makes me smile. I'm still smiling.

Thursday, November 30, 2006 01:49AM Report Comment
 

17. Nohpc said...

The housing market cannot be compared to a pyramid scheme. Well maybe a pyramid scheme where everyone that has joined in the last 5 years has made a killing which is not usual for these schemes. London prices set to continue to rocket in 2007.

Thursday, November 30, 2006 03:10AM Report Comment
 

18. nearly30 said...

Headmelter - what about the "Although I was earning only about 20,000 in my first job, I managed to get a mortgage of 190,000 with my dad acting as guarantor".

Genius!! A 9X mortgage.

Done some math - think she refers to a interest only mortgage @ 5% and no gain (captal - unless it goes up and she sells) - which brings me on to noHPC.

noHPC - "The housing market cannot be compared to a pyramid scheme. Well maybe a pyramid scheme where everyone that has joined in the last 5 years has made a killing which is not usual for these schemes. London prices set to continue to rocket in 2007".

Sorry have I missed something here? Pyramid schemes tend to collapse at the last possible moment when no-one is left to 'subscribe' to the scheme - leaving existing pyramid people without any means of re-couping their investments.

Thursday, November 30, 2006 07:57AM Report Comment
 

19. Houses_for_nesting_not _investing said...

Hi guys

Nice to see my view of the Pyramid scheme in the housing market is gathering support :)

This article is more proof of how stupid people really are. "It's not my fault i am in debt it is that mean nasty bank" Please!!!!!

I like the woman in the articles opinions on what being "educated" is. What a sad pathetic person. Surely if she was as smart as she belives she would not have got caught up in trivilalities such as keeping up with the Jones's.

Keeping up with the Jones's is what has caused this mess well that and people buying into the celebrity lifestyle Paraded not only now in junk magazines but across the front pages of our nations daily press.


Three other points before i stop my rant.

1. Anyone noticed how fewer new/sports cars they have seen in their local area in 2006 compaed to say 2002 [wonder if people bought them on credit]

2. Back in 2002 people never admited to debt or more importantly how the fancy new car, constant holidays designer clothes etc were obtained, after all they were "Middle Class" and could afford it, admiting anything was bought on credit was simply hidious and for the commoner, now it seems it is hip for people to say how much debt they are in.

Hey in 2002 i was saving in 2006 i am saving still, i have no debts and am living stress fee, sure i may have missed a few extravagances but in the bigger picture was that holiday in Barbados really worth it in retrospect???????

3. Anyone remember when the boss of Barclay card said he wouldnt use a credit card and there was national outcry.... That really made me laugh becuase i have to say i agree with him. Why pay interest in double didgit figures for something when you can not make double digit returns with your bank. Credit cards are maddness really.

Once again though this is not what the masses wanted to hear, how dare he say that they thought? what how dare he speak fundimental sense by preaching the kind of mathmatics that should have been learnt watching Sesame Street. 14 is a bigger number than 5

Not rocket science

Thursday, November 30, 2006 10:10AM Report Comment
 

20. Houses_for_nesting_not _investing said...

How Times Change

Middle Class

1956 Definition of........

Doctor, Dentist, Solicitor

2006 Definition of...........

Anyone who can haphazardly throw their banks money around


think about it

Thursday, November 30, 2006 10:45AM Report Comment
 

21. monty said...

Yes, I do feel sorry for the ignorant. No-one here can claim to have been born with a financial education and neither is there reason to drag the debate into a steaming swamp of misogyny.

I too have friends who, just a year out of uni, had racked up all kinds of debts on top of their student loans. Hell, the first thing I bought with my student loan was a pair of Raybans and a seriously ugly jacket. It's all part of the learning process and so is dealing with debt responsibly. Some just take longer to learn than others but the later lessons are often the more painful ones.

There do seem to be an unusual number of network marketing schemes targeting the stay at home mum brigade. Tupperware and Phoenix cards leap to mind. (Anne Summers too but I've never been invited to one of those.) The line seems fuzzy as to when network marketing turns into a pyramid scheme but then I've not heard of any Tupperware ladies being locked up yet. I can quite see the temptation of these - especially when a Dinky (double-income-no-kids-yet) family turns into a single income during the child rearing years but the financial pressures remain the same.

For better or worse, we live in a consumerist culture. For those who can't hear above the noise of their iPods I SAID WE LIVE IN A CONSUMERIST CULTURE. :-) That means all those toy adverts targeting children just before Christmas, neighbours with better cars, kitchens and holidays than yours, credit cards and overdrafts. I wouldn't dream of changing any of it through law. That would be a mistake. Education is the only way.

I like to know that I can drive a bloody great big 4x4, bulldoze a small village in Latvia for a holiday home, max out my plastic and finance it all through the cashflow from my buy-to-let empire. I choose not to do this but enjoy the freedom of knowing that I could.

"Live within your means" is about the best advice I've ever been given. Just say no.

Thursday, November 30, 2006 11:15AM Report Comment
 

22. d'oh said...

Monty,

I suppose my problem with all this is that the three women had no valid reason to be ignorant, they just CHOSE not to think about the consequences. They all appeared to be "well educated", whatever that means these days. They chose not to rent, but to buy a 4 bedroom house. They chose to buy a 2000 plasma TV whilst still in debt. They chose to go on a 1000 holiday to forget about their debt problems.

Whilst I have all the sympathy in the world for someone who ends up in a financial mess due to being made redundant, or illness etc., and believe that such people are deserving of IVAs instead of bankruptcy, this wilfull spending more than one earns to the tune of is criminal. The IVAs that are going to arise from people who abuse credit will seriously affect the banks' profits (e.g. Barclays writing off 1.5 billion a few days ago...that's a lot of money per card holder), which means that the banks will just turn around and find new charges and lower interest rates on savings to punish those of us who are financially responsible. This sort of irresponsible borrowing should be criminal. It is no different from robbing a bank. One of the women had 90000 in credit card debt! Ignorance of the law is no defence, neither should ignorance of financial reality be. (My partner's closest female friends is precisely the same as the case studies, and I know a number of people, both male and female, with similar behaviour patterns and financial problems.)

Having said that, it is also quite clear that the banks were willing to lend these people ridiculous sums for housing given their financial circumstances. This is the true cause of the current HP inflation, and it is criminal that the government have allowed the banks to do it. Similarly, the concommitant inflation of money supply in this country and manipulation of the RPI is nothing less than state approved theft from those of us who save or borrow prudently rather than borrow excessively.

So, althouth no one is born with a financial education , it is one's responsibility as an adult to obtain one. If you don't and the wolves eat you...well, that's just natural selection in action. That we "live in a consumerist culture" is no excuse.

Sorry for the rant, but the attitude expressed by these women just makes my blood boil. Quote:",but it is simply not enough to keep our heads above water and live a middle-class lifestyle." Well then luv, don't live that lifestyle.

Thursday, November 30, 2006 12:23PM Report Comment
 

23. indiablue19 said...

Why doesn't Britain have a personal finance tracking system? It benefits all lenders and the citizenry in general as no one can aspire to be monumental debts without many knowing about it. Easily done. Every lender inputs to the central system the amount of debt for each individual, by tax ID number, and how it is handled vis-a-vis increases and payment history. Those with more debt than available income to service debt can't borrow any more. Basta. Everybody in the nation has a credit score tally on display for any prospective lenders to view online. Anybody responsible knows their score on a regular basis and strives to keep it high. Doesn't completely eliminate borrowing addictions, but minimises them.

These stories are silly and, if they are true and not just for feature journalistic value [many people on "talk shows" who "tell all" are hired to do it you know], then this is merely indicative of an out of control financial policy that more lends itself to the underbelly culture of the betting parlour and horse or dog track, not to a civilized society.

Thursday, November 30, 2006 01:35PM Report Comment
 

24. inbreda said...

india - there is effectively such a thing. The credit reference agencies (Experian, Call credit, Equifax) all collect and supply CAIS (Pronounced keys) data. This is both positive and negative - i.e. it will reveal the amount of a loan and the payment history to date irrelevant of whether they have missed a payment. Admittedly a lender would have to sign up to all three systems to get a 100% picture of an individuals debt level, but the opint is that the info is there if they want it.

big IF

Thursday, November 30, 2006 03:05PM Report Comment
 

25. monty said...

Inbreda, methinks you're right in that IF is the key - no pun intended. Perhaps 1.5bn write off is considered by some to be a reasonable price to pay for increased market share and 7bn profit? Sure, that bad debt will be paid for by other, more loyal customers but my answer to that is rather obvious.

The evidence seems to be stacking up that the lenders are ignoring credit ratings and choosing to lend on a higher risk = greater reward basis, hence the huge increase in the sub-prime mortgages business. As I've mentioned here before, large portions of this debt are being securitised and sold off into the mortgage-backed securities market which seems to have quite an appetite for it. Who knows, perhaps these will be the junk bonds of the 21st century? Anyone remember Michael Milken?

Thursday, November 30, 2006 03:37PM Report Comment
 

26. d'oh said...

Sadly Monty I suspect you are correct w.r.t. IF being the keyword. As you point out, losses due to a policy are only losses if they are more than the gains due to that policy. I thought that this is what we have government financial regulation for - to limit suffering due to the excesses of a truly free market. I mean, ponzi schemes are illegal. Or is borrowing 6x salary a good thing for those at the bottom of the pyramid\ladder? And who is buying these mortgage backed securities that the banks use to offload the risk of these loans...ah I remember...it's the pension funds. Hmmm, what should one expect from a country where the government allowed companies to take pension holidays. Methinks some government ministers spent too much time politicking in the Oxford Student Union (or equivalent) rather than attending their economic history tutorials.

By the way, I wonder what happened to all those "clever" people who took out euro mortgages a few years ago. Haven't heard a peep out of them, but with the euro getting stronger and stronger their mortgage repayments must be beginning to hurt.

Thursday, November 30, 2006 04:17PM Report Comment
 

27. Ticktock said...



Many might feel it a little difficult to have sympathy with those who cannot afford a house, while so many of us seem to take so much pleasure in the missery and misfortune of others. It seems that people must display a certain level of financial competence in order to warrent any sympathy when their life collapses?
Nobody , however, has yet explicitly given the level of intellegance, or financial awareness, that a human being must first display before becoming worthy of sympathy. Perhaps those of a 'nearly 30' type view could enlighten me?

Thursday, November 30, 2006 04:25PM Report Comment
 

28. nearly30 said...

TickTock - fair point - I kinda feel cheesed off by people who should know better but at the same time know that banks et al. do their best to con the general public. We are at the zenith of the 'have-it-all-now' 'alright-jack' 'economic-miracle' 'be-what-ever-you-want-to-be' constantly lied to culture - and people are starting to get the hang-over.

I've been to those parties where everyone around says - come on another 4 shots its only 03:30 a.m. - oh go on you've still got 6 hours till you REALLY have to be in work - loads of time to sleep it off. Oh the dilemma!

In the end it is down to poor management - on behalf of the Govt. They should have the population's best interests at heart and should regulate accordingly - but NL loves money.

Yes a bit 'nanny state' - but rather "buying a serious over-priced house on minimum wage will serious damage your life" than ban smoking, fast food ads and have Ruth Kelly tell me to live my life!!!!! Priorities all messed up!

20th century economics - hey lets mortgage a whole generations future before they have a chance to start their lives - yes that'll work!!!

In essence - people are stupid when the world is stupid too - or - people are stupid when they are desperate - or people are stupid when they don't know the facts (are lied to) - you decide.

It's called Boundardly Rational Satisficing in Microeconomics (Herbert Simon)

Wiki entry:

Simon believed that agents face uncertainty about the future and costs in acquiring information in the present. These factors limit the extent to which agents can make a fully rational decision, thus they possess only bounded rationality and must make decisions by satisficing, or choosing that which might not be optimal but which will make them happy enough.

Soap-box over!

Thursday, November 30, 2006 10:27PM Report Comment
 

29. indiablue19 said...

Nearly.....
I agree that people need some moral restraint on their spending. It is also up to the government insist on maintaining "actuarial" statistics, just as within the insurance industry and insist that they are taken seriously. Not to say there should never be risk; but that certain risks are already demonstrated to be completely foolhardy. Lloyd's of London has a worldwide reputation for insuring sea-going risks for example. They don't turn away from this, but they want boats that are sea-worthy and demand captains who know how to pilot them. This entire premise appears to be missing from banking and finance in the UK. Amazing that it's still afloat. I wonder for how long?

Inbreda...

Experian, Equifax, do exist in the USA as well. Experian is the more reliable and tends to have a full picture on everybody. I've many times sat in a bank and had them haul up my entire financial life onto a computer screen. Every car loan, department store card, credit card, mortgage, from the beginning of time. You buy a print out on this every few years just to make sure there's nothing bogus or that belongs to somebody else. If there are errors it takes about a month to have them researched and fixed; a process any sensible person will get on with. The difference over there I suppose is that you can't move a step one way or the other without somebody checking your rating and you don't even apply for credit so much as you might, simply because multiple enquiries on your credit status will look as bad to lenders as defaults.

So far as I can see, bankers and credit companies in the UK will pay now to know a personal track record of financial reliability, or pay later not to have known in the first place -- or at least the rest of us will. As Monty says, banker's mistakes come out of the "hides" of those of us who are honest and maybe it's worth it to them, as they are operating in multi-billions, to lose a percentage in the volume of business without troubling themselves about the morality of it all. After all, 20% of billions may be neglible to somebody who's pocketing the other 80% and charging their losses to the unsuspecting among us who have no forum to complain.

Thursday, November 30, 2006 11:43PM Report Comment
 

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