Sunday, December 9, 2007

Sad truth about the cut – I wish David Smith read his own newspaper

Banks make millions from rate cut

Read this article: there is only ONE category of "winners" versus FOUR categories of losers. Well done!! "HIGH STREET banks are already making millions from last week’s interest-rate cut, having sneakily slashed savings rates up to six weeks ahead of the announcement while mortgage rates for some borrowers will not come down until the new year"

Posted by confused76 @ 08:54 AM (836 views)
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4 thoughts on “Sad truth about the cut – I wish David Smith read his own newspaper

  • Happy days for lenders indeed. The SVR is going to be THE new income stream for banks. With the fees for new mortgages sky-rocketing, it won’t take long for the majority of the 1.4m borrowers coming off discoutned rates next year to work out they’re best paying the SVR. With these at about 1% more than their present rate, happy days for lenders as the product mix goes from discount to SVR. Simultaneously, the lack of compulsion to make banks follow BofE cuts to borrowers brings in a lot more money on this stream too. Only one problem: if the market evaporates in a housing crash and people hand in the keys – there would be red faces. Now I do wonder why some margin taking is happening now….. Do they know somehting we don’t 😉

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  • I believe prices will fall significantly, but we will not see a return to the mid 1990s. We may have to face up to the fact that living conditions in the UK peaked in the 1990s and we will never have it so good again. My friend’s parents were a factory supervisor and a cleaner and they own a 3 bedroom house; absolutely unthinkable for a couple in this generation with the same jobs.

    We will just have to knuckle down and make the most of it instead of sitting on our back sides hoping and waiting that a corrupt government will come to our aid. In the words of a historic US Admiral “If you don’t make the future, you become the victim of a future that someone else makes for you”.

    Take note.

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  • I suppose anything could happen – who knows. I personally think that a mixture of lack of confidence, high debt and difficult times in retail due to the of limitless credit is a dangerous mix. With credit institutions typically relying on secured loans – and those securities under threat – there will be a downturn as we are seeing. It only needs one or two large-scale closures to cause a real crisis of confidence. There will soon be pressure on institutions for turning a qualified blind eye to some of the excesses. Having seen the 70’s, 80s and this upcoming crash, there has always been greed that has preceded a crash. Nothing new here.

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  • The question is, though, after how many boom-busts where the banks get richer and richer will we finally learn?

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