Monday, October 13, 2008

Robert’s summary of today’s developments

Momentous Monday

See item 2 - RBS and Lloyds/HBOS promise to return mortgage lending to 2007 levels

Posted by pelethar @ 09:15 AM (3646 views)
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97 thoughts on “Robert’s summary of today’s developments

  • This will not be possible unless one of the following happens:

    1. Prices drop significantly
    2. The banks reduce their minimum LTV on widely-available mortgages, or
    3. The banks increase the income multiples back to 4, 5, 6 x earnings.

    So which are they intending it to be, I wonder?

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  • last_days_of_disco says:

    The public mood has changed, there is nothing the government can do.

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  • Have I got this right? They’re using tomorrows tax to temporarily boost the fractional lending reserve today?

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  • 4. renting2 said…
    “Have I got this right? They’re using tomorrows tax to temporarily boost the fractional lending reserve today?”

    they always have, and we pay the interest with more debt, sad innit

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  • Another way of saying – Banks are desperate to get some value back into their mortgage books.
    This is sold as a service to the public, for which the public are paying.

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  • now tell your children we live in a real democracy and this is all an accident !

    wealth extraction on turbo

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  • tc – yes – they’re on the box now, mouthin it all – yuk

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  • “RBS and Lloyds/HBOS promise to return mortgage lending to 2007 levels”

    You WILL borrow money. You WILL borrow this money from us. You MUST buy a house or re-mortgage.

    What if no-one wants to take the money?

    That’s the same as when the mortgage lenders ‘promised’ that they will only use repossession as a last resort when they took the last wodge of cash from the BoE.

    Obviously it’s a last resort. You can’t try anything else once the house is repossessed.

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  • RBS and Lloyds TSB/HBOS will also return mortgage and small-business lending to 2007 levels, which is much more than they are currently lending.

    “This is hugely significant given that a shortage of credit is to a large extent behind the economy’s deceleration into recession levels,” our business editor said.

    This is a potentially a hugely significant statement.

    What this says to me is that the Government have effectively demanded that lending multiples remain inline with crazy 2007 levels to stop the bubble bursting. Perhaps I’m reading it wrong I’m sure some of you will point out the problem with this other than the fact that 2007 levels were unsustainable.

    I await your comments to this one.

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  • Our children and grandchildren may look back and ask “Why didn’t they spend all that time, money and effort on saving the bees?”

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  • Yes TC
    Sick to my stomach I think.

    Cornishman
    This is the Great British Seeple we’re talking about not the French or Germans.

    They will take every single last penny on offer and then demand another bailout.

    If the statement above has any truth to it (re: lending levels to 2007) then the bubble will re-inflate.

    Thing is alot of people can’t afford not to re-mortgage and while there at it pop another £10k on the mortgage.

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  • Small business lending needs to be maintained at 2007 levels as this was not a problem. However not sure about mortgage lending. The days of 125% mortgages are over as are 1000’s of buy to let deals but a return to 90-95% LTV would not be a completely bad idea.

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  • In fact I can’t believe how deeply worrying that statement is.

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  • Getting the sheeple to borrow money has ever been a problem, its getting people to lend it to them, problem solved.

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  • 13. renting2

    I hope you don’t mean B&B

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  • Now I have a reasonable grasp on the subject, I can’t quite believe how the Journos don’t pick up statements like this and really get to the bottom of it – for the peoples sake.

    If they only spent half the amount of time on this as they did on Max Mosely.

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  • An orchestrated B wave for next spring. If it works they will go to the polls and then the armageddon will hit with no sign of touching the sides. if it doesnt work the B wave scenario (i.e. mine or dead cat bounce or whatever you want to call it) is wrong and we just whistle down the wind. The gun only has one or two bullets left in the barrell. And if someone borrows money at 95% and its available then they deserve everything they are gonna get.

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  • Renting2 – what are you doing worrying about the total collapse of agriculture? We’ve got house prices to inflate!

    As I said on another thread:

    We are now at the stage where even if lending does pick up, the market should go south because jobs are being cut and the economy is on the downslope.

    So what happens if 3 banks start lending again but no-one else does?

    Hmm…
    i. People will remortgage to avoid bankruptcy where overexposed… this is simply an elongation of debt.
    ii. Many people are still waiting for house prices to drop further before buying
    iii. All the non-government banks will not be able to lend to these levels
    iv. All the non-government banks will see major capital outflows as everyone piles into the government-backed banks
    v. The government will own the entire mortgage market

    What you are seeing is the government trying to build the economy on government spending. This has never worked – anywhere. There are two options:

    i. Crash continues.
    ii. Crash is postponed and grows in size, while everywhere else continues to have problems

    The third apocalyptic option is everywhere else does the same thing and suddenly if you want a house anywhere you have to take 10x salary and pay the government your mortgage forever. 40% tax and then 50% of the rest of your salary to the government?

    Not good news.

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  • “RBS and Lloyds/HBOS promise to return mortgage lending to 2007 levels”

    Even if this doesn’t actually happen in the short term, you can count on the bulls repeating this statement in every property article you read from now on, which will just make sellers even more stubborn to drop their price.

    However, look what such false promises did with the stamp duty fiasco! It basically ground the market to halt, making things worse!

    Not sure which way to look at this yet.

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  • For once I hope that one of S2R1’s predictions come true and the there is enlightenment to the people who rebel and stop borrowing.

    Guess what though.

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  • The statement is next to meaningless and designed to make the electorate think the Govt have extracted some sort of deal for their tax money.

    Some effort will be made to increase lending but against a back drop of falling asset values, recession and an unwillngness to borrow it will be pushing on a string.

    House prices will continue to fall. The banks may well be fully nationalised sooner than we think.

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  • techieman & bellwether

    Thanks for cheering me up.

    Common sense tells me something similar, it just seems that common sense has been hurled out of the window of late.

    It’ll be interesting to see if todays rises on the FTSE are a dead cat bounce by this afternoon or tomorrow.

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  • voiceofreason says:

    Why bother taking a 10x salary govt. mortgage to get a house?

    If the govt. wants to take charge of housing, then having no job and housing benefit would be the sensible way to go.

    There must be a way around this. A way to avoid UK population being forced into usury by our own govt.
    Any ideas ?

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  • Won’t this just cause a bull trap? Everyone breathes a sigh of release and things are back to normal. Except they aren’t and we know it.
    If this stalls the collapse/depression/whatever, everyone on here should see it as a positive opportunity to get themselves prepared.

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  • ‘we the people’ don’t want debt, we don’t need more debt and we don’t want banks passing money around between each other creating masses of fiat money.

    The basic assumption that our economy has to be debt based is false and incredibly stupid

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  • anyone know what the Money Reform Party are saying on this?

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  • I am as furious as you all are at this statement.

    The only hope we have is for a lost decade of deflation.

    The alternative scenario for hard-working savers and tax-payers is not worth thinking about.

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  • ‘Mortgage lending to return to 2007 levels’?
    Most people who would be borrowers are already ‘maxed out’ in debt up to their eyeballs, having been duped into borrowing excessively. Unlike 2007 they now have depreciating assets and don’t particularly want to go there again.

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  • And another thing – surely this is massively inflationary if it works?

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  • don’t forget the Galactic Federation of Light ship turns up tomorrow?

    looks like we might need them.

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  • voiceofreason says:

    Actually, is it really possible to “maintain mortgage lending and small-business lending at 2007 levels ” ?
    Where will the £625bn funding gap come from that was provided by the credit markets ?

    And this is a promise from RBS and Lloyds TSB/HBOS, and they are desperate and would say anything at this stage.

    So, maybe not such a big worry really.

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  • Everyones moaning like GB & AD want – inaction – I’d like to know what everyone is going to do about it!!

    I’m not holding my breath when I press the reload button – I just expect to see more moaning and inaction.

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  • If this bunch of bent f**kers actually manage to reinflate this bubble and I still can’t afford a house in a couple of years, I’m seriously taking my valuable knowledge and skills to a warm f**king country that will appreciate and reward me for it.

    Screw this sh**hole, I’ve had enough!

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  • str 2007 – i am looking to short between 4400 and 4500 at the moment. So am thinking this has a few more days of euphoria when good ol uncle sam comes in. Having said that i posted yesterday re barclays shares having to overcome 240 resistance to fill the bearish gap, and then could go up to 310 before falling back. Todays high ….so far…242 ;-). Personally i think it does now go up there (later today it breaks through the resistance) but there is no way on earth i am going long of this stuff.

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  • Gordon Brown is on his way to achieving a 1980’s Labour manifesto pledge – nationalisation of the banks (to be followed by the rest of the country).

    New Labour (the acceptable face of socialism) is dead. Welcome to the Peoples Socialist Republic of Britain.

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  • I don’t think that returning to 2007 mortgage lending levels is desirable for the future of these banks, let alone possible.

    If they try to lend 125% mortgages at 15x salary levels again, the banks’ shares credit ratings will drop through the floor to junk status, thereby making their debt insurance prohibitively expensive, leading them to bankruptcy.

    It is at best naiive for the government to think they can wave a magic wand and restore confidence in the housing market this way.

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  • Shipbuilder “Won’t this just cause a bull trap” – yep at best (from their pov) at worst there will be no bull. Matt – inaction? Hmmm i think we need to see what jo public does with this new info, its blindingly obvious to everyone except perhaps the economic commentary provided by the Sun’s page 3 girl, that this is a throw of the dice. Surely inaction is action – for example if people dont borrow more money etc that inaction amounts to action. And what about uncle Sam?

    Vote with your feet people.

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  • voiceofreason says:

    Paul @ 45. Agree, it doesn’t look feasible.
    Matt @ 40. I agree, we do need to do something …. any ideas ?

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  • 45. paul

    Just to bring you up to speed – the 4 biggest banks in the UK are bankrupt that’s why the government is nationalizing them. WAKE UP

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  • Missingteddybear says:

    I hope, as shipbuilder suggests, this may cause a bulltrap (rather than re-inflate the bubble on a long-term basis) which will delay capitulation in the housing market giving me more time to grow my deposit.

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  • matt, the entity would be loss-making and continue to be so – that’s the problem. Nationalizing them won’t make them get cheaper debt insurance.

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  • quote “is a British dictator, sorry, prime minister legally allowed to take such drastic action without referring to parliament?”

    Neddy Nogg, Chairman Worcester Universal Donkey Prodders Ass.

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  • @47

    Start a new site…..

    democracycrash.co.uk ??
    communistbritain.com ??

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  • Right. Only Robert Peston has actually mentioned (leaked) this. The situation is changing by the hour. Once the government sees that returning to 2007 mortgage lending levels won’t work, the requirement will be automagically editied out of the discussion.

    Just slow down a bit – no-one thinks that the current promise will work.

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  • larry pickleman says:

    Never thought the day would come, but as hashbrown and TC said, I’m planning to get the f*ck out out of here too.

    The media and the government must be brought down, I suspect they both know cracks are appearing to the general public.

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  • brown just now on the box “and build the world financial order”

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  • Paul, fingers crossed you’re right and Peston has jumped the gun here, but you have to admin he’s been pretty reliable lately…..

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  • Can’t imagine the on site hysteria when interest rates start heading to to 2%.

    We are fighting a deflationary scenario that if it happened in full would probably make us beg for house prices 10 times salary.

    The best that will happen here is that we keep going.

    If the worst happens we will wish we had spent our time learning to use a gun rather than posting.

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  • So techieman
    In English you see this dead cat bounce running to 4400-4500 over the next few days but then falling back again ? But the sutuation is so fickle you wouldn’t actually buy any shares at the moment ?

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  • I didn’t know the government had such power.

    Why don’t they buy Excel from the administrators and insist they return package holiday sales to 2007 levels?

    It’s so easy.

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  • Don’t forget unlike other banking crisis this is not being driven by the real economy this crisis is being driven by the greed and stupidity of the banking sector. Even if they manage to get through this crisis once the real economy implodes in 6 to 12 months they will be facing another one.

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  • @malct 51

    quote “is a British dictator, sorry, prime minister legally allowed to take such drastic action without referring to parliament?”

    You ask this about a [email protected] that wasn’t even voted in? What does he care about what anyone thinks?

    Where will this put house prices now?

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  • I know you shouldn’t take notice of the FTSE by the hour and normally I wouldn’t but as of typing, this mornings initial euphoria seems to have turned and it looks as though it could be heading back down again.
    That’ll put the cat amongst the pidgeons if the market ends up 200 down today after this weekends efforts !

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  • 50. paul

    >>Nationalizing them won’t make them get cheaper debt insurance.

    Why do they need debt insurance they are government owned, and why aren’t the insurance companies paying out on ICEsave.

    All this waiting to see what the general public do bull5hit – Its a credit crunch not a lack of people willing to take out credit – its like posting on a site full of zombies – wake up

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  • Matt, calm down will you. Everyone here is awake – just because we’re not all having a tantrum doesn’t make us asleep.

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  • hash [email protected]
    “I’m seriously taking my valuable knowledge and skills to a warm f**king country that will appreciate and reward me for it.”
    Same here, If this government are able to re-inflate the housing bubble (with future tax payers money) then i am off.

    But i really do not believe its going to be possible, because its too late.
    House prices are in Free fall and unemployment in the next 12 months is going to rise dramatically.They may be able to force banks to lend, but how will they force the people to borrow more?
    These measures will stabalise the crash maybe, preventing it from overshooting on the downside to +50%.

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  • Ok, we are now as a nation royaly boned, anyone got any ideas on which is the best country to go live in while this mess plays out, me and my 15 week old boy will go and sit this out. Might even invite the wife, lol.

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  • str2007 – yep thats about right. The boys have offered up the shares on the news and now the day traders that have been sucked in have to decide if they have the balls to hold em or not. I never buy individual shares and yes if it plummets then fine – i am still short small at 4950 after liquidating most on the way down- which i want to add to. I think it goes higher but i wont buy the index (or even liquidate all my shorts – if i had wanted to do that i would have done so Friday).

    Its not that i think its fickle – i do think it will rally but it may have already rallied enough from the lows (<3900) on Friday. And if this is a DCB and i miss it then ill just look somewhere else. Its too volatile at the moment imo to take on anything other than options.

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  • if it gets to 4400 – 4500 and i go short i am looking for new swing lows. If it goes my way i just move stops to where i got in and run them. I see 2 more swing lows before we have a “proper” rally.

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  • C'mon Correction says:

    So Gordon Brown wants RBS and HBOS to ‘catch a falling knife’, lending at unsustainable levels again will expose them to any sh!t (sub-prime) left in the market. There is no way other banks will follow and it will effectively kill any profits that RBS and HBOS.

    No, even – as deluded as he is – Gordon Brown wouldn’t put the banks and all that taxpayers money into a vulnerable position would he?!

    I’ve heard a lot about “the death of capitalism” being the result of the financial crisis, but let’s not forget that it’s Socialism playing with capitalism that got us here. The New Labour experiment (and Bill Clinton’s administration) has been the biggest catalyst of all this. Gordon Brown and New Labour just haven’t got the right mindset to fix Broken Britain.

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  • These banks only represent 20% of the mortgage market. I suppose they could return their lending to 2007 levels by gaining greater market share. A bigger slice of a smaller cake ?

    Meanwhile, the other nationalised bank (Northern Rock) is still trying to shrink it’s market share!

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  • Matt you are soooo wrong. Its both. The multiplier effect on the way up is mirrored on the way down. ITS ALL about a change in psychology is the overriding concern. We have had that, the question is 2 fold: 1. can it be reversed? 2. can these attempts to reverse it work. For 2 even if they do its the speed that the politicians have had trouble responding to. Its true they have to do what they are doing now, but will it work? If people dont believe em then it might for a while but at the end of the day it will make zip difference.

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  • Matt – “All this waiting to see what the general public do bull5hit – Its a credit crunch not a lack of people willing to take out credit – its like posting on a site full of zombies – wake up” – wrong [it may be a matter of semantics what came first but both sides dont want to lend nor borrow] – sold out is 100% correct – “They may be able to force banks to lend, but how will they force the people to borrow more?”. if actually when they realise this dont work they will reduce some interest rates,,,, at a point in time yes this will be pushing on a string. Who will invest in the banks when they have defaults up, and have to charge less for their borrowing. LIBOR might reduce but for how long and by how much.

    They had to do this now and lets see what Retail sales figures look like for Christmas and the January sales. Thats the next good indication to see if this has actually worked.

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  • Sold & Loving Renting says:

    is it just me or has everyone looked at this in the wrong way…… it says they will ‘maintain mortgage lending and small business lending at 2007 levels’ that doesn’t actually mean lending 100% LTV or 6 x salary. It could just as easily mean that they will promise to actually lend money to people rather than turn them away for no aparent reason. The banks are currently not wanting to lend to anyone at all so are basically not doing so – therefore they may lend the money to these individuals not but still at lower LTV’s and lower multiples.

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  • Well, it is interesting what exactly “Return to 2007 level” means. How can GB promise “no more reckless lending” and “a return to reckless lending” in the same speech? I feel the word “level” was chosen deliberately to make it vague.

    Banks will return to reasonable lending, which is good news for economics. And if they have any sanity left with them, they will also shift focus more on “productive” businesses (like agriculture and manufacture) instead of property (and other businesses essentially don’t “make” anything, but only make money by flopping between speculators).

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  • Re: another country

    Last year was the time for that. It’s got 20-30% more expensive to do it now. Check your exchange rate.

    They’ve trapped you here.

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  • 69. techieman
    This is a monumental case of group think, sensible people surround themselves with sensible people. So we don’t talk to the people who bought with 125% mortgages or 5x salary. But these people don’t think gosh that’s allot of money, they just ask the bank manager how much can I borrow! Why if thats not the case are lending figures not zero at the moment. Today anyone with any savings has been shafted, this is debt britain and the junky is not ready to withdraw.

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  • techieman
    I guess I translated the last one ok

    ”i am still short small at 4950 after liquidating most on the way down”

    You got me with this one.

    WTF does that mean ?

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  • matt @73 – the answer to your point is that they liquidate the credit . Sensible people pay it back and dont take out any more, stupid people default. Amounts to the same thing re credit deflation. Lending figures zero? Well the mortgage market got pretty close to that last month!

    The pusher is still pushing but the cost economnically and socially is rising and people whether by cold turkey or gradual withdrawal have to get off.

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  • When any government with a full employment policy is faced with inflation or deflation they will always choose inflation. House price falls are unacceptable, the problem will be inflated away along with your savings. Democratic governments create polices for the mass electorate and they are not savers in this country.

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  • str2007 what does “”i am still short small at 4950 after liquidating most on the way down”mean? It means i went short when the market opened lower and then went up to approx 5000.

    I bought put options which were not 4950s but 4900s but because of the change on the premium i am (in my mind) in effect short @ 4950. As the market went down i sold some of the options – 50% and 4600 and 25% at 4450. For the last 25% i sold 20% at 3900 [i.e. open on Friday] and am now holding 5%. 5% of what – well i dont think i should say what my size is.

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  • Printing more money will accelerate the collapse. Look at Japan; look at the Asian banking crisis.

    Political solutions are not the answer – we need economic solutions.

    Everyone has had fair warning – if you have money in an unstable bank get it out now and put it into an institution which has not called on a bail-out loan.

    Banks need to collapse. The system needs to cleanse itself of the toxic/worthless debt.

    Weapons of Financial Mass Destruction.

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  • matt thats what they will TRY to do but if they could do this they would never be where we are now. WAKE UP ! :-).

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  • I think I am a sensible sort of person (some on here may disagree), I didn’t buy in the last HP boom because the economic factors were not there. I am not only 2% in IR or inflation terms from buying a house. When I see negative real interest rates hit 2%, I know I will have a decade or so when my mortgage will be paid for me by inflation, this wasn’t the case when inflation was 2% and IR were 4%.

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  • Stop panicing chaps.

    You can’t buck market trends this easily. The property market is going down by 50%. You can’t turn this stuff around by throwing money at it. We may avoid a drepression , but a recession is totally anaoivadabele. Listen to RADIO 4 at midday. They are doinga piece about the UK Sub-Prime market. Our own su-prime market is MASSIVE . Based on ever increasing prices. They a falling like a stone. This may (or may not) slow the falls slightly.

    “RBS and Lloyds/HBOS promise to return mortgage lending to 2007 levels” Bo££OCKs – What this actually mean “By you’re very own negative equity here”

    The bubble has burst. The market was NEVER really as everyone thinks. Propety IS/WAS too expensive. The economy cannot support it and unemployment will rise.

    The confidence has gone from the market. Fools will rush is but the will only be buying bad stock (property prices on the slide).

    I’ve said it before and it’s slightly changed now –

    New Labour, New Debt, New Negative Equity, New throwing money at a problem and hope that it goes away.

    The banks have been lending money they haven’t got. Borrowed against assets that were not worth as much as they stated, and those assets are going down by over 15% a year.

    NOTHING HAS CHANGED CHAPS. The stable door has simply been pushed shut. No-one has the ability too, nor can they LOCK IT.

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  • This is insane. I now am convinced Brown is utterly mad / deluded. Will it work ? — You can lead a horse to water but you cannot make it drink.
    Just hope th emedia pick up on this and see it for the massive swindle that it is trying to be. What was it Brown was saying about irrespossible lending ?!

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  • True Nooneo

    i. Banks are still insolvent – they just will not go bust because the government won’t sell their shares, so 51% control means no-one can buy the banks.
    ii. Asset classes are still depreciating and losses will continue
    iii. To answer someone’s point earlier – yes lots of people borrow 125% like idiots. They are also used to being able to get a job easily. This is changing rapidly and people are starting to become nervous (you have to know more to be scared already). Even those that want to borrow 125%, would be insane to do so as house prices drop. Banks can’t lend to that level now, even if government backed.
    iv. So if the government does insist on 100% no deposit mortgages – what happens? All the other mortgage providers lose all their business, at the same time as they lose deposit capital as everyone flees non government-backed banks. Hey presto another crisis.
    v. If all of this pans out the way the government wants, it still leads to massive inflation. Trying to counter this deflation is going to hurt all taxpayers and savers in the pocket at the same time.

    No-one’s mentioned gold yet, I’m surprised.

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  • The Telegraph reported that Brown said he was ‘genuinely shocked’ when told how much cash was needed to re-capitalise RBS and that banks were ‘more vulnerable’ than had been thought. The golden rule is that banks give out bad news in the smallest chunks possible and as late as possible, ergo things are always worse than they seem. If Brown had read this site he would have known this. Or did he know it? He’s been talking to banks for months – if it’s all a bit of a shock to him why did it take him so long to get the numbers?

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  • Beartil2010

    Can’t reme,ber your stance on Gold.

    From what I’ve seen it’s not behaving as you’d expect and is over 15% if it’s peak.

    That makes it too volatile for me at present.

    Plus the fact it depends how you determine it’s peak, I was informed the other day (shipbuilder or cornishman) that it’s above peak measured in sterling as sterling has dropped against the dollar.

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  • Hello all,

    Have been reading this site for a while and would be able to buy some options. I have a grasp of how this operate to some extent. However, I am having some difficulty in finding a brokerage that would allow me to start trading in the UK, If I do stumble across any brokerage that does they want £10,000 to start. Can anyone point in the direction of any brokerage that does so in the UK, that doesn’t ask for such a large deposit. Just trying to pull my self out of debt and in a more stable financial situation using the opportunities on offer. Thanks in advance.

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  • Madness. As far as I can see ‘we should not reward reckless lending’ has been replaced with ‘we will ensure reckless lending continues’.
    Sold out – the thing that worries me is that as you say, nobody with any sense would “choose” to borrow now, so if the banks HAVE to lend then they will lend to whoever will borrow – and that will be the people that NEED to borrow to delay bankrupcy. But thats all it will do – it means the banks will be forced to lend more to those that can least afford it so when they do go t*ts up, the banks need another bailout.

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  • @ titaniccapt – yeah, “those naughty banks kept me in the dark, so that makes my task more difficult, so failure on my part is excusable and success all the more praiseworthy”.

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  • STR2007 – I think holding gold is sensible but not as a way to make money. It’s simply an asset (or even a currency) that doesn’t lose it’s value. Hence exactly what you’re saying – it’s below peak on dollars, but actually it’s exceeded its peak recently in pounds and euros because they’ve been devaluing. Gold, unlike companies and banks, cannot just disappear.

    It’s just not possible to know whether inflation or deflation is going to win out. I think deflation for the mo, the only way to stop it would be USGov stopping US homeowners from defaulting, that’s the asset calss that caused all this to start, and continues as they have non-recourse loans. I don’t see USGov giving everyone free housing; although…

    if they can get the banks to reduce mortgages to about 2% then maybe people will stop moving out.

    So for me: Deflation for the mo, until we hit inflation at some time 1-2yrs from now. With the proviso that USGov might force us into inflation earlier than that.

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  • Oh my god sorry – its, not it’s – third person posessive pronoun has no apostrophe! How embarassing!

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  • hahahahahahahaha,

    Just had a letter from natwest increasing my overdraft limit that i have never used ……………. interest to be charged at17.09%

    hahahahahahahahahaha

    fook off you banker

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  • Not really beartil2010

    I make lots of typos myself don’t worry. Now 1 r in embarrassing that’s disgraceful – go and stand in the corner.

    So deflation for a couple of years ’til the extra money filters through ?

    Is that RPI deflation all the way down from 5% ?

    Or continued house price deflation ?

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  • Beartil2010
    Possessive – get back in the corner !

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  • ha ha ha ha ha ha ha!

    Deflation in all asset classes. So everything becomes worth less. Except gold, relatively, because it’s actually a currency, so it will seem like it stays stable in £/$ terms.

    Then we hit a deflation bottom, and the inflationary parts of these global finance policies starts to kick in causing inflation, where gold becomes more valuable as currencies devalue.

    I think. Who knows eh?

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  • At some point given their use houses will be worth buying.

    The question will be where that point comes.

    If interest rates were to drop quickly, it could be that sooner rather than later is the time to buy even with a mortgage (especially with a mortgage) as deflation with eat the debt.

    Maybe one should put all their money in Gold and take out a 100% mortgage then clear it all in 5 years when the currencies have collapsed. How about that for a thought.

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  • TC
    It would make S2R1 happy. It’s a speculative thought I must admit. I don’t BTW want to speculate, just want a sensibly priced family home.

    I do ask myself the question though, if these politicians are so stupid and I’m so smart, how come they manage to thwart my every move.

    A 500k mortgage at 2% would only be £833 per month Interest Only.

    It’s hard to believe property in Japan went down with Interest Rates at 0%.

    Perhaps Japanese Uncle could tell us what rate mortgages were actually sold at against 0% base rate.

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  • from sold out’s article ealy today

    7. Founders of Housepricecrash.co.uk – property website

    HousePriceCrash.co.uk was established in October 2003 after its founders predicted “one of the potentially biggest economic boom bust events in living memory” was coming. Its aim, apparently, is to provide a “counterbalance to the huge amounts of positive spin the housing market receives in the main media”.

    Whist there is not currently a lot of positive news about the housing market to counter, the site does provide a plethora of information, statistics and forums for those interested in the great house price crash.

    from msm but not in the mainstream – good gatekeeping again

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  • str 2007.

    Stop worrying about property prices falling. Nothing can stop this rot. This money the blubbermint is offering may not even stabalise anything. I listened to Radio 4 at noon. They had apipsqueek former mortgage advisor who worked for a big brokers. They have created a MASSIVE sub-prime market here. Made up of bad equity release victims, self-certification and awful BTL investments. The sub-prime market is possible £80 billion in th UK. The defaulter alone will bring the market down. There is no cash. The banks have nothing to borrow against but dubious “loan assets” – in other words they want to borrow against debt the will never have repaid. The games up. this will take years to rectify and they know it. The “dead cat” in the property market was from august 2005 until about august 2007. Quite a bounce. The property “wealth creation scheme” was nothing other than clever mathematics and smoke and mirrors.

    Interest rates will go down. Property will continue to fall.

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  • str 2007.

    Stop worrying about property prices falling. Nothing can stop this rot. This money the blubbermint is offering may not even stabalise anything. I listened to Radio 4 at noon. They had apipsqueek former mortgage advisor who worked for a big brokers. They have created a MASSIVE sub-prime market here. Made up of bad equity release victims, self-certification and awful BTL investments. The sub-prime market is possible £80 billion in th UK. The defaulter alone will bring the market down. There is no cash. The banks have nothing to borrow against but dubious “loan assets” – in other words they want to borrow against debt the will never have repaid. The games up. this will take years to rectify and they know it. The “dead cat” in the property market was from august 2005 until about august 2007. Quite a bounce. The property “wealth creation scheme” was nothing other than clever mathematics and smoke and mirrors.

    Interest rates will go down. Property will continue to fall.

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  • nooneo

    I hope you’re right but at current rates it is possible to buy a house and rent it out at a profit. It is hard to see rent coming down so why would property prices fall much lower ?

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  • Nooneo

    ”Interest rates will go down. Property will continue to fall”.

    Excellent, hope you’re right with that one.

    I believe self cert and btl mortgages are still available, if interest rates come down much (another 1-1.5%) I can’t help feeling people will start to buy.

    The only thing that will stop BTLers will be the equity level required. If mortgage rates come down in line with base rate falls BTLers will be scrabbling to re-mortgage. It’s that switch over that will allow us to see how the lenders play things.

    As we’ve said before ave. BTL portfolios had about 66% equity I believe, that must be back to 75/80% now.

    If the price falls did slow against a back drop of falling interest rates and they were allowing 75% LTV’s on BTL then you could see Bullish Larger investors buying up property from defaulters and small late entrant investors, putting a support under things.

    It’ll be interesting to see how it pans out.

    It could just be that all lenders fail to pass on interest rates cuts by withdrawing products as rates come down and simply begin the business of rebuilding their balance sheets.

    How about that for a bit of fence sitting.

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  • str 2007…

    Some btl properties have been in negative equity since they were bought
    Many, many people have released equity, hence they too are also in negative equity.
    BTL mortgages maight be “available”. Go out and try and get one !

    Property price are going down by at least 50%.

    A government lending our future taxes to banks changes nothing !

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