Wednesday, April 16, 2008

Mentioned elsewhere on HPC but now the main headling on BBC

Government plans to help UK banks

The Bank of England is poised to launch a new lending programme for UK banks in an effort to break the logjam in the credit market, the BBC has learned. Final details are still being worked out including the scale of the plan and the exact terms. But it will be similar to moves in the US, will be backed by the Treasury and could be launched as soon as next week.

Posted by jack c @ 06:10 PM (1983 views)
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41 thoughts on “Mentioned elsewhere on HPC but now the main headling on BBC

  • only the idiot gordon can think this is a good idea, more taxpayers money to help those idiots… why oh why do they want to keep houseprices high??

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  • mark – IHT receipts, SDLT receipts, CGT receipts, keep their BTL portfolios profitable…….. this list is almost endless and this move (if it goes ahead) is a disgrace

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  • why oh why do they want to keep houseprices high??

    monopoly money supply

    How a foreign (Dutch) king in 1688 managed to invade England by sea, and march an army
    from Devon to London as part of ‘The Decent on England’, depose the existing king, become
    king of England himself and somehow get this recorded in history books as ‘the glorious
    revolution, should make us all a little sceptical if not deeply suspicious. But of course William
    didn’t do this all on his own.

    Six years later the same transnational conspirators that had put him in ‘power’, came up with
    a brilliant loan plan to finance William’s obsession with war on France. The Bank of England
    was born and William’s obsession became the national debt. The loan was secured against
    future taxes on the British people who although never expected to repay the capital, pay the
    interest on it to this day. But that’s only part of the story, after all this is the worst invention
    and it does get worse.

    The government’s responsibility to provide currency was handed over to The Bank of
    England, perhaps the best printing job any ‘printer’ ever had, totally beyond comprehension.

    Not only this but also the right to charge the government (read ‘the people’) interest on the
    money printed. Madness? I think so. Over time money was printed with less and less security
    or fractional reserves so the money loaned actually didn’t (and doesn’t) exist until the loan is
    made.

    If it looks like a fish and smells like a fish it probably is a fish.

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  • Why is it i have been the lone voice on this forum, and for that reason i have been slated for my views on why the market will not crash…
    As i have said many times before (right or wrong) the government intervention will not allow such a crash, and as you will all witness from now on this is beginning to unfold..

    Regards
    greenbay

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  • The Spaniard says:

    The borrowing merry-go-round must be kept going. If it stalls then there would be no new money borrowed into existence/circulation to service the existing debt. The money supply would then contract bringing recession/depression. Housing, a necessity for most of us, is both the softest and biggest market in which to induce people to borrow.

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  • The Spaniard says:

    malct – keep telling it like it is.

    One day the people will collectively realize how they have been ripped off for the last three hundred odd years.

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  • George Francis says:

    The swap is only temporary so market/credit risk of the MBS will remain with the banks, therefore how does this help? I doubt banks will start lending to each other again on the back of this half-baked idea.

    How successful has this policy been in the US?

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  • Just WHO is running the Treasury?

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  • Is that AD next to under Miss Piggy ?

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  • malct

    On a serious note : The answers as you show are all there. I hope people at least read and appreciate your posts even if they consider them off subject. None of us should hide knowledge.

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  • Surely this is what the ECB have been doing since the beginnning of the crisis, but the papers and speculators,FX traders, have ignored this as their is major money to be made from destroying the dollar and sterling. IMHO

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  • it_is_going_with_a_bang says:

    Taking on Bank debt?

    Well done Gordon. Fantastic Idea.
    Reminds me of someone who had good ideas …

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  • it_is_going_with_a_bang says:

    A cunning plan even….

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  • so cunning you could stick a tail on it and call Darling a badger

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  • more money, print, print, print!

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  • Tastingstars says:

    So let me get this straight. The banks are refusing to lend to each other because mortgage debt is ‘toxic’ – no-one understands the risk involved, so no-one can price either an appropriate interest rate or an appropriate discount. There are literally *thousands* of highly-paid, very bright people unable to do this.

    Along comes HMG, declares that it CAN value the debt and work out and appropriate discount, and so lends huge amounts of other people’s money (which s all government debt is, a loan against future tax receipts) to the banks who messed this up in the first place.

    And this is NOT a scam a prop up house prices and so avoid a Labour meltdown in the polls.

    Does anyone else here feel the urge to stroke their chin and say either “Jimmy Hill!” or “Chinny reck-ON”?

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  • thats the deflation or inflation argument out the way then ?

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  • I told you to standby for something “clever”. oh deeear . oohhhh dear. oh dear.

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  • What in blazes??????
    This is obsence in it’s worst meaning. Just to get a few points.
    Pensioners had to march naked in winter to get £10M in owed pension fund stealing.
    £40B goes overnight to Northern Rock
    It took 1 month after no-one would be the pile of rubbish to nationalise it (The only option left after pumping a fortune into it). I’m guessing they used this month to syphon off all the good capital. Any sane person or not corrupt government would not have left the loonies at the helm and unaccountable before taking on all its obligations.
    Now it takes a few days to dispense even more of our money to help them out even more. At best this is a BOE role, at worst it’s outright robbery. No mention of the sums, no oversight. I wonder is this is even legal?
    Disgrace to every single polititian in this country.

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  • print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print,

    credit anyone??

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  • Steady hpwatcher if they realise your intelligent you’ll be classified as ‘high risk’.

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  • crash bandicoot says:

    Perhaps I am falling for some of the conpiracy theories on here, but the government’s fake statistics, overt and covert surveilance and political rhetoric are starting to remind me of the glory years of the DDR (East Germany).

    One line that I remember from Anna Funder’s book is that “There is no unemployment in the DDR”.

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  • What would be the cash required to overcome the HPC?
    Would it not be very much higher than the BoE can afford to give away?

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  • Whoops!! Spelling again.

    you’re intelligent, or even your intelligence

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  • thanks plato – I mean well (for we the people) – even if I don’t get my point across clearly.

    I don’t know where HPC website expects to go after the crash!

    How about ‘House Price Rise’ – there has to be more to life than this. up down up down bo!!ocks. (refrained)

    we are all high risk, I gave up worrying about it years ago – they have us nailed.

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  • “British mortgage lenders have warned that lending could halve this year unless more action was taken by the government….banks are toughening up their lending terms even though official interest rates are falling.” Too bloody right it’s about time – why do UK taxpayers have to take on mortgage debt??? ‘Wealth preservation’ will become extremely difficult.”

    Really depresses me how all of us UK taxpayers are going to end up footing the huge bill for the years of banks excess profits and bonuses. The ‘money makers’ who have had it so good seem to always win in the end. All of civilisation is at the mercy of the banks and the people that run them. We will all go down in the end. Wealth preservation is impossible.

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  • Talk about moral hazard -isn’t this way worse than the NR bailout? Tell me they aren’t proposing to buy worthless assets with taxpayer’s money, just so people can borrow too much for overinflated housing?

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  • Stormbringer says:

    money makes the world go round … but theres not enough too go around lol

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  • malct said…”I mean well (for we the people)”

    I doubt your fiercest critic on ths site would doubt this. It is simply a question of priority in relation to the subject discussed and the right platform and of course the time and attention involved.
    Personally I have no problem with either. Most of the views here are from very astute sensible people and these are the views that are needed. Ironically they don’t want to be heard on this subject,or their attention diverted for very good reasons to them. However these are the very ones who need to be heard because of their reasoning and logic.Very ironic.
    Perhaps HPC will lead to another level in the future. Let’s hope so.

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  • 18. doom&gloom said…

    Really depresses me how all of us UK taxpayers are going to end up footing the huge bill for the years of banks excess profits and bonuses. The ‘money makers’ who have had it so good seem to always win in the end. All of civilisation is at the mercy of the banks and the people that run them. We will all go down in the end. Wealth preservation is impossible. Rob in Hood / Thatcher / Bliar

    We will all go down in the end. NO WE WON”T 2012 s2r1 said so

    Wealth preservation is impossible. NO IT ISN”T

    EFFING WAKE UP! ! !

    3. malct said…
    why oh why do they want to keep houseprices high??

    monopoly money supply

    How a foreign (Dutch) king in 1688 managed to invade England by sea, and march an army
    from Devon to London as part of ‘The Decent on England’, depose the existing king, become
    king of England himself and somehow get this recorded in history books as ‘the glorious
    revolution, should make us all a little sceptical if not deeply suspicious. But of course William
    didn’t do this all on his own.

    Six years later the same transnational conspirators that had put him in ‘power’, came up with
    a brilliant loan plan to finance William’s obsession with war on France. The Bank of England
    was born and William’s obsession became the national debt. The loan was secured against
    future taxes on the British people who although never expected to repay the capital, pay the
    interest on it to this day. But that’s only part of the story, after all this is the worst invention
    and it does get worse.

    The government’s responsibility to provide currency was handed over to The Bank of
    England, perhaps the best printing job any ‘printer’ ever had, totally beyond comprehension.

    Not only this but also the right to charge the government (read ‘the people’) interest on the
    money printed. Madness? I think so. Over time money was printed with less and less security
    or fractional reserves so the money loaned actually didn’t (and doesn’t) exist until the loan is
    made.

    If it looks like a fish and smells like a fish it probably is a fish.

    spelling shafted is not difficult – knowing you’re being shafted is difficult – acknowledging it is almost impossible.

    ask questions be critical of answers

    Reply
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  • Just heard the BBC version on the 10 o’clock news, the man is dangerous, what he is proposing is unbelievably irresponsible, with the state of the Over Leveraged UK Economy, the plight of Sterling, Imported Inflation and the simple fact that House Prices are simply Unsustainably High .

    The Glubberment is now proposing to BUY Mortgages that are taken out on Houses that are not worth what they were purchased for, the only way they will be is if we get double digit inflation which is entirely a probability. In any case the only people who will get burned when Gordon and Darling play with matches are UK Taxpayers.

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  • mark wadsworth says:

    Tastingstars hits nail on head “The banks are refusing to lend to each other because mortgage debt is ‘toxic’ … no-one can price either an appropriate interest rate or an appropriate discount. There are literally *thousands* of highly-paid, very bright people unable to do this. Along comes HMG, declares that it CAN value the debt and work out and appropriate discount, and so lends huge amounts of other people’s money … to the banks who messed this up in the first place.”

    Although, to be fair, one of the cabinet once had a job as a postman, they do have some experience in the commercial world.

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  • enuii saud “if we get double digit inflation which is entirely a probability” – you wouldnt be to worried about that matter if like MP’s you had a gold plated INDEX LINKED final salary pension with arguably the best accrual rate in the country.

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  • it_is_going_with_a_bang says:

    No doubt these assets that nobody has found a solution to or indeed put a value to in over 6 months can be valued within about 48 hours.
    By the same whizzes that thought up the CSA and every other unworkable unbelievably expensive underperforming worthless cunning plan that GB has forced down our throats for over 10 years.

    You couldn’t make this stuff up.
    A bunch of bankers who make it up as they go along asking to swap their debt which nobody wants because it cannot be valued with government bonds. But apparantly they are swapping the bonds just ‘for the sake’ of it since if they turn out to be worthless then they have to shoulder the burden of debt anyway – assuming this is the case if the taxpayer is ‘not at risk’. Which begs the question what is the point of it?

    If the taxpayer is not at risk then who is? The bank that swapped it? It makes no sense. It just playing games. Unless of course it is just one huge lie that won’t get found out for a few years and no doubt a Law will be passed that keeps it quiet because it’s in the public interest. I mean that’s what they want to do with Northern Rock isn’t it? They want to keep it quiet because it’s in the public interest.

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  • waitingfor hpc says:

    I am now a fan of the Yen & Euro – all my money is moving to the listed and gold. Get out the £. Infact I am now a fan of the EU – but I am making plans to leave the UK. This is such a farce and will end in tears. Moral hazard has now gone …… the taxpayer is pay wokers inflated wages in London who would be laid off and is going to rescue people who took out large unaffordable mortages.
    Anyone with savings … vote with your feet …

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  • Tastingstars said…
    “So let me get this straight. The banks are refusing to lend to each other because mortgage debt is ‘toxic’ – no-one understands the risk involved, so no-one can price either an appropriate interest rate or an appropriate discount. There are literally *thousands* of highly-paid, very bright people unable to do this.

    Along comes HMG, declares that it CAN value the debt and work out and appropriate discount, and so lends huge amounts of other people’s money (which s all government debt is, a loan against future tax receipts) to the banks who messed this up in the first place.”

    I would have thought it was obvious. The government has decided that a pound is worth 180000th of the average house.
    Any link to the price of food, oil or anything else is irrelevent.

    :- Duncan

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  • Van Hoogstraten says:

    Its too late – house prices are already falling. Even if the banks have sufficient liquidity to lend the crash will not be averted for 3 reasons
    a) banks will not lend more than the market value of a property, which is diminishing day by day.
    b) banks will adopt more stringent lending criteria – the days of the self certificate mortgage/liar loans are over (well until memories fade and they get into the same mess all over again)
    c) sentiment has turned and buyers have realised the peak of the price cycle has already been passed – peopel will stretch themselves if they think they can trade up in a rising market, but the are unlikely to do so if prices at best stay level

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  • What you all here fail to make the real connection with is GB and AD will be GIVING private companies “OUR MONEY” !!!!!

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  • What happens if this plan is followed through but the housing market crashes anyway? I believe the government are only planning to give the banks a %age of the ‘value’ of their toxic paper (say 80%). So even if the figures were all totally correct, if the housing market were to drop by more than 20% then the tax payer would be holding a load of paper that’s not worth what we paid for it – even assuming a fair price could be calculated for it in the first place. It’s going to take one hell of a turnaround to start convincing people that property is worth buying again, I can’t see people flocking back to the market even if Labour bail out the lenders. There’s too much risk at the moment that the market could turn very quickly. Additionally, I would think any pick up would be a signal to many BTLers and second home owners that they’ve got a small window of opportunity to offload their portfolios and you could possibly be back to oversupply leading to falling prices etc.

    I think this country is drinking in the last chance saloon and the bar owner has just called time.

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  • @ Wiltshire
    I hope Gordon Brown drives a harder bargain than you suggest.
    If this paper is impossible to value then I think 20% of supposed value or 80% off is more realistic. This would allow some funds to be released into the system to allow some trading.
    If the banks then behave responsibly (sensible lending etc.) Perhaps the B of E in another couple of years issue another 20% of the value. By this point and allowing for inflation if house prices we 40% down from where they are now us the tax payer would still be holding bonds with a hyperthetical 20% of margin value left.
    Given that literally no-one will buy these Security Backed Investments the opportunity to drive an extremely hard bargain is huge.

    The only problem Gordon Brown has is in saying he’s trying to get first time buyers onto the ladder at present. This is fool hardy advise for them and makes it look as though he’s taking advantage of vulnerable people to prop up the housing market.

    If he came clean and showed the electorate the hard bargain he’d driven with the banks and confessed it would be likely to make house prices fall 30% due to more stringent lending criteria that would now be imposed by the banks – I think the majority of the electorate would be accepting of the fact. (Most baby boomers have kids that need a home so they’d be ok with it, anyone is their last house wouldn’t be effected, anyone moving onto or up the ladder would gain) (Only loosers are BTL – Ahh, and then only if they sell))

    The only people that would then need help would be those purchasing after 2004 who want to move up the ladder – providing some package was put together to allow them to move their negative equity with them then we could all get on with our lives.

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