Times: Back to the Great Depression?

ultra10

m00m00 wrote: »

people will ignore it, concentrating more on Big Brother and Amy Winehouse


bread and circuses

Your not wrong !!... I think an article in the Times a few weeks back summed it up ..this has a Titanic feeling to it ! ... no one really beleives what many impartial economists have predicted !! ... But they will sooner or later when many (maybee me) wake to no job or home !!

Conrad

!!!!!!? wrote: »

(probably moved to HSBC as UBS are looking shakier than a paint mixer).

I think I'm correct in thinking no British Building Society has ever gone bust.

As a broker I have always struggled to introduce mortgage business to BS's as they have such tough criteria and tended to lend no ore than 3 x income.
The majority did not dabble in subprime / specialist lending although some such as Chelsea and Britania did so I might avoid those.

The sort I love are the localised Quakeresque incredibly risk averse such as the Saffron, Kent Reliance or the Chesham BS. Organisations like these have just plodded on doing what they always did without rushing into online Banking, call centres, text alerts and the like. I love the way they view a lot of the latest fads with an eyebrow raised and wry indifferent smile.

I feel much safer with BS's for cash.:cool:

martinman3

Conrad wrote: »

I think I'm correct in thinking no British Building Society has ever gone bust.

As a broker I have always struggled to introduce mortgage business to BS's as they have such tough criteria and tended to lend no ore than 3 x income.
The majority did not dabble in subprime / specialist lending although some such as Chelsea and Britania did so I might avoid those.

The sort I love are the localised Quakeresque incredibly risk averse such as the Saffron, Kent Reliance or the Chesham BS. Organisations like these have just plodded on doing what they always did without rushing into online Banking, call centres, text alerts and the like. I love the way they view a lot of the latest fads with an eyebrow raised and wry indifferent smile.

I feel much safer with BS's for cash.:cool:

Sorry to be the bringer of doom and gloom but....
All the building societies that I know deposit their cash with banks, the obvious exception is Nationwide. So although they may seem as safe as houses if the organisation that they bank with goes under surely they would lose all their cash in the short term and that could be enough to drag them under.
:eek:
Of course, they would still have illiquid assets, all those mortgages for instance and bonds etc and they would sell them on or forclose on the mortgages.

The questions that people should be asking the building societies
1. Are they spreading their cash deposits around several banks or just one.
2. Would they still be able to function if one of those banks went under ?

BobProperty

Conrad wrote: »

I think I'm correct in thinking no British Building Society has ever gone bust.

Probably true. However, when the figures start to look bad they do deals to "merge" (= get taken over) with other societies. IIRC there were about 90 BS in the late 80s. There are now only about 60. For example, Britannia got the Mornington, IIRC Birmingham Midshires got the Walthamstow and so on.

Conrad wrote: »

As a broker I have always struggled to introduce mortgage business to BS's as they have such tough criteria and tended to lend no ore than 3 x income.

You need some better quality clients Conrad

Conrad wrote: »

The majority did not dabble in subprime / specialist lending although some such as Chelsea and Britania did so I might avoid those

Britannia "subbed" their subprime to Kensington? IIRC

Conrad wrote: »

The sort I love are the localised Quakeresque incredibly risk averse such as the Saffron, Kent Reliance or the Chesham BS. Organisations like these have just plodded on doing what they always did without rushing into online Banking, call centres, text alerts and the like. I love the way they view a lot of the latest fads with an eyebrow raised and wry indifferent smile.
I feel much safer with BS's for cash.:cool:

I always found it amusing that the Ecology were based in a shop with a uPVC front window. I think they've moved since those days.

SteveyLomas

I think investing in Gold is given a perception of being the safest place to put your money, but I think that is not true. Gold has been rising for the last few years and this could equally be a speculative bubble as house prices. I'm not saying it is, but anything that goes up and down based on perceived value is far riskier than cash in a bank. If you are really worried put the money, as someone said above, in government bonds. The rate is higher than inflation still and western governments do not default on debt. I work in finance and the basis for all valuations involving the time value of money are founded on the UK 10 year government bond rate, at is that is considered the closest proxy for a 'risk-free' investment rate.

Conrad

I had some blurb from St James Place Capital that included a letter covering the basics of investment for growth from the Chairman, Mark Weinstock.

In it he tells us cash will not keep pace with inflation unlike shares.
He goes on to say the purchasing power of £20000 will approximately halve after 20 years, but I'm not sure he's accurate here, as he has assumed all the interest earned will be spent, but surely if the interest is re - invested it will broadly retain it's value.

He argues shares are a better long term bet than cash, and I used to agree, but today having invested in both over a long period, I'm not so sure.

I recall the long term chairman of Marconi (when it was succesfull) being cash mad, so much so that he built a company war chest of billions in cash.

dannyboycey

PasturesNew wrote: »

I've always been poor. It'd be nice to have a few people joining me.

Astonished this post got thanked so many times. To me, it's a bit like, "I've got a disease, I wish some more people had it so could I feel better about myself".

Kez100

You've got PN completely wrong.

I'd imagine for years she has sat in her sensible world of living within her means on a low income dicated not by laziness but by local forces only to see people around her throwing money away like it is going out of fashion. They are soon to get a big shock and, yes, they do deserve it.

tradetime

He goes on to say the purchasing power of £20000 will approximately halve after 20 years, but I'm not sure he's accurate here, as he has assumed all the interest earned will be spent, but surely if the interest is re - invested it will broadly retain it's value.

By and large he is talking about a fixed sum of £20,000, so no interest, if you accumulated and compounded interest it would not be £20,000, it would be £20,000 + interest,and he is assuming an average 3.5% inflation rate yoy.

jamescredmond

Conrad wrote: »

I think I'm correct in thinking no British Building Society has ever gone bust.

As a broker I have always struggled to introduce mortgage business to BS's as they have such tough criteria and tended to lend no ore than 3 x income.
The majority did not dabble in subprime / specialist lending although some such as Chelsea and Britania did so I might avoid those.

The sort I love are the localised Quakeresque incredibly risk averse such as the Saffron, Kent Reliance or the Chesham BS. Organisations like these have just plodded on doing what they always did without rushing into online Banking, call centres, text alerts and the like. I love the way they view a lot of the latest fads with an eyebrow raised and wry indifferent smile.

I feel much safer with BS's for cash.:cool:

IIRC, holborn building soc. london went belly up in 1967, due to dodgy book-keeping and a woeful regulatory system.