Excellent article about house bubbles in todays Guardian

StevieJ

sdooley wrote: »

Abbey's secret toxic portfolio sorted out before Santander

Northern Rock - over-reliant on wholesale funding

Bradford & Bingley - poor lending decisions

Alliance & Leicester - borrowed short lent long

HBOS - too big after the merger to manage all divisions - treasury function blew a hole

RBS's acquisition spree & the debt on it being due

The credit crunch caused the drying up of the wholesale lending market, resulting in problems for all the above. Whether they had other problems (maybe, but not terminal) the credit crunch was the stake through the heart.

ad9898_3

I absolutely agree that the lending here is at least as bad as the US, the critical difference is this, home owners here cannot simply hand keys back and walk away.... if they could we would have seen total carnage, at least as bad as the US.

kennyboy66_2

Excellent - although in fairness the vast majority of people didn't need much persuading to get on the housing ladder. At least not in the last 30 years.

chucky

carolt wrote: »

For the second time today, Stevie, I have to ask you to post stuff you actually believe.

I can't believe after the implosion of several of our own home-grown banks - all our biggest mortgage lenders, as Peston pointed out yesterday, that anyone can seriously be naive enough to believe that UK mortgage lending was all fine and dandy.

Or are you in fact Gordon Brown posting under an extremely unlikely (but therefore cunning!) pseudonym?

Carol - as you know the implosion of the home-grown banks isn't just due to their mortgage debt.

the off balance sheet stuff that was the main cause of the current global problem.

the UK property issue is a seperate issue completely in addition to the funding models that these home-grown banks had.

you can try to deflect the argument as many times as you like but these are the facts, ignoring these facts won't make them go away, neither will trying to take this discussion off topic.

robin_banks

If I knew what caused the credit crunch and wrote a book about it, I wouldn't be feeling the credit crunch.

Off balance sheet debt a la Enron is always a good place to start.

brit1234

StevieJ wrote: »

OK time to get back to basics again (was that JM who said that). The credit crunch ( i.e. the housing crash) was caused by extreme lax lending in the US not the UK.

:rotfl:

Sorry but you have swallowed all the government spin. You have to ask yourself why British house prices were far more overvalued than the US (IMF figures) then if we didn't have loose lending.

Our banks are going under because what they lent here and not what they bought in the US. The key subprime areas in the UK are buy to let and self cert mortgages with the biggest bank supporters collapsing.

Just go to a housing auction and you will plainly see the british subprime.

andys15

brit1234 wrote: »

:rotfl:

Sorry but you have swallowed all the government spin. You have to ask yourself why British house prices were far more overvalued than the US (IMF figures) then if we didn't have loose lending.

Our banks are going under because what they lent here and not what they bought in the US. The key subprime areas in the UK are buy to let and self cert mortgages with the biggest bank supporters collapsing.

Just go to a housing auction and you will plainly see the british subprime.

how much as a percentage is the sub prime market. I thought it was less than 5%, but sure to be corrrected

chucky

brit1234 wrote: »

:rotfl:

Sorry but you have swallowed all the government spin. You have to ask yourself why British house prices were far more overvalued than the US (IMF figures) then if we didn't have loose lending.

Our banks are going under because what they lent here and not what they bought in the US. The key subprime areas in the UK are buy to let and self cert mortgages with the biggest bank supporters collapsing.

Just go to a housing auction and you will plainly see the british subprime.

i'm sorry Brit but you really need to get away from this forum and into the real world... i'm seriously worried for you if you think this was the case...

hethmar

I remember a programme a couple of years back in which developers were giving mortgages to buy to letters who werent even employed, on the basis that the property rental would more than cover the payments and of course, they would gain on the capital increases. They even guaranteed these saps their tenants for 2 years. I wonder if we have seen the carnage from that scam as yet?

JayScottGreenspan

Sir_Humphrey wrote: »

Nonsense.

Bankers are responsible for their own actions, just like anyone else.

Blaming bankers for this mess is a bit like blaming a three year old for eating too much chocolate on Easter Sunday. Bankers are greedy and irresponsible. I disapprove of their actions, but they were entirely predictable.

The govt knew irresponsible lending was going in and chose to ignore it for the short-term political capital associated with an unsustainable boom. They are the real villains, the !!!!less parents of the b*****d offspring that is our banking sector.