In full swing

dopester

mr.broderick wrote: »

7 thanks but we didn't see this coming shaggy....

http://forums.moneysavingexpert.com/showthread.html?t=1049541

:rotfl:

That line stirs a memory from a recent tv-show or movie.

The scheme won't work. Maybe the banks will use it to offload more bad debts, but we're at the end of the line now.

Such an extended scheme would create an artificial market and the market will know it.

No significant number of FTBs will buy in at current levels. Even if the banks were given guarantees of huge amounts of tax-payers money to lend out, there will be few FTBs interested in borrowing it to buy overvalued property.

Confidence has gone. Desperate new schemes full of moral hazard won't bring it back. Crash to continue.

dopester

And in today's Telegraph:

Homeowners face call to act responsibly
By Philip Aldrick
Last Updated: 12:20am BST 30/07/2008

Sir James Crosby, the former HBOS chief executive who is leading a review into wholesale mortgage finance for the Treasury, may propose a regime of "tough love" for Britain's cash-strapped homeowners.

In a letter to the Chancellor, he suggests the Government might be better to let them ride out the mortgage drought despite soaring costs, writing: "I may yet recommend that the Government should not intervene in the market, on the grounds that such intervention would create more problems than it would solve."

However, he provides intricate detail on the problems in the wholesale markets. More than two-thirds of mortgage lending in 2006 was funded through residential mortgage-backed securities (RMBS), bundles of mortgages broken into bonds and issued to investors in the money markets. Since the credit crisis struck last summer, funding has effectively ceased - removing about £60bn of net new lending.

Britain was particularly fond of the funding model, accounting "for over half of all European RMBS issuance" in 2006, with the UK accounting for £220bn. Some 77pc of the institutions who bought those securities were banks and money market funds, exacerbating the crisis because the investor base was "relatively undiversified".

But the problems are even more acute than first appears. Sir James estimates that "the amount of RMBS and covered bonds maturing each year from 2008 to 2010 is estimated at around £40bn". In other words, Britain's banks have to find £40bn a year just to fund their obligations on existing mortgages, let alone issuing new home loans.

The consequence of the markets' closure for borrowers has been a "higher cost of borrowing" due to rising funding costs, and "difficulties in gaining access to mortgages".

Again, Sir James cautions: "It is also debatable whether this sort of approach would help or prolong the transition to better functioning markets in the long term."

Echoing Bank Governor Mervyn King, he states: "A transfer of risk to the Government might distort incentives and create moral hazard, rather than help investors and issuers price that risk more accurately."

There is hardly enough money to fund existing obligations, nevermind spunking tax-payers money to bring in FTBs at these levels.

The scheme would create more damage, even if the banks could somehow be corralled together in coordinating new lending at these levels at significant market levels, together and not to act in their own interests - which is definitely not trying to prop up a hugely inflated market.

And that would also presume there would be demand for borrowing which I doubt. It might even accelerate the crash as the real market would know it is an artificial and unsustainable market.

The only taxpayers cash going anywhere might be to help institutions solvency, whilst granting the occasional mortgage in order to disguise the extent of the problem to the wider sheeple, to delay the panic to the extent the market has collapsed, and the extent the market needs to fall.

mr.broderick

dopester wrote: »

:rotfl:

That line stirs a memory from a recent tv-show or movie.

The scheme won't work. Maybe the banks will use it to offload more bad debts, but we're at the end of the line now.

Such an extended scheme would create an artificial market and the market will know it.

No significant number of FTBs will buy in at current levels. Even if the banks were given guarantees of huge amounts of tax-payers money to lend out, there will be few FTBs interested in borrowing it to buy overvalued property.

Confidence has gone. Desperate new schemes full of moral hazard won't bring it back. Crash to continue.

Confidence has a habit of being extremely fickle.

Vinegartits

I wonder if Pickles/BTLNEWbie would care to give us an update on his "green shoots" theory in light of the NW figures and report today?

With the overtime ban at the docks he should have had plenty of time to think about it....

jetski690

Vinegartits wrote: »

This is all good fun - trouble is, can't take Pickles seriously. Me Nan has a pug called Pickles, short, fat ugly little devil - when I go round there it humps my leg 'til its bulging little eyes cross.

Sorry only just seen this but as I know Pickles Your description is spot on:rotfl:

mitchaa

Thread resurrection or what

jetski690

Didn't see back then, interesting to read it now though 5 months later in todays light.

Vinegartits

jetski690 wrote: »

Sorry only just seen this but as I know Pickles Your description is spot on:rotfl:

You know my Nan's pug? You simply must PM me with details!

mewbie_2

Great to see this thread back again, weren't we all much happier, carefree and younger in those days? Seems the idea of recession hadn't really got the death grip it has now.

Vinegartits

mewbie wrote: »

Great to see this thread back again, weren't we all much happier, carefree and younger in those days? Seems the idea of recession hadn't really got the death grip it has now.

Scared Mewbie?