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What needs to happen in order for the credit crunch to end?

2

Comments

  • paulherts
    paulherts Posts: 697 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    A complete revision of asset prices.

    On the BBC South West news last night worrying about falling house prices and then discussing repossessions in Devon and Cornwall. The average house price in many of those areas is still over 10x average wages.

    The fundamentals are still all wrong there is no point in shoring up a flawed system for it to bust again in the near future.
  • Pocoyo
    Pocoyo Posts: 601 Forumite
    paulherts wrote: »
    A complete revision of asset prices.

    On the BBC South West news last night worrying about falling house prices and then discussing repossessions in Devon and Cornwall. The average house price in many of those areas is still over 10x average wages.

    The fundamentals are still all wrong there is no point in shoring up a flawed system for it to bust again in the near future.

    Agreed. Common sense dictates that average house prices were not sustainable way above 3x the average salary. What's happening now is healthy. Maybe not for the person who finds themselves in negative equity but things were just not feasible longterm before.
  • edwinac_2
    edwinac_2 Posts: 268 Forumite
    jerusalem2006 wrote: »
    So, basically what I am asking is: What needs to happen in order for the credit crunch to end?

    Hang the bankers high and tug hard at their legs.
    "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks will deprive the people of all property until their children wake up homeless on the continent their fathers conquered."
    -- Thomas Jefferson
  • ivavoucher
    ivavoucher Posts: 529 Forumite
    Part of the Furniture 100 Posts
    All banks to completely reveal the extent of their subprime commitments.

    This would then restore some confidence between the banks and would encourage lending between them.
  • Reaper
    Reaper Posts: 7,356 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    I think Phase One (banks going under) is pretty much over now. I reckon there are only a couple left to go.

    Phase Two (recession) is now starting, caused by drops in spending.

    Normally governments try to fill the spending gaps by borrowing and spending money themselves. Unfortunately on this occasion they have already borrowed up to the hilt to get us past phase 1!
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    ivavoucher wrote: »
    All banks to completely reveal the extent of their subprime commitments.

    This would then restore some confidence between the banks and would encourage lending between them.

    Or not, I don't think the banks actually know the level of their commitments.
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • 1echidna
    1echidna Posts: 23,086 Forumite
    StevieJ wrote: »
    Or not, I don't think the banks actually know the level of their commitments.

    Indeed and with asset prices falling they are a moving target.
  • Oblivion
    Oblivion Posts: 20,248 Forumite
    Part of the Furniture 10,000 Posts Photogenic
    North_Sea_Bubble wrote: »
    CONSUME. It's your duty !

    I know I have to die some time, but I'd prefer it wasn't from consumption.

    Dave.
    ... Dave
    Happily retired and enjoying my 14th year of leisure
    I am cleverly disguised as a responsible adult.
    Bring me sunshine in your smile
  • JayTee99_2
    JayTee99_2 Posts: 235 Forumite
    well... it may not be all over yet,

    Professor Nouriel Roubini (nicknamed Dr. Doom) predicting worse times to come for the markets
    This is the guy who predicted all this over 2 years ago..

    http://www.rgemonitor.com/blog/roubini

    .
  • Oblivion
    Oblivion Posts: 20,248 Forumite
    Part of the Furniture 10,000 Posts Photogenic
    JayTee99 wrote: »
    well... it may not be all over yet,

    Professor Nouriel Roubini (nicknamed Dr. Doom) predicting worse times to come for the markets
    This is the guy who predicted all this over 2 years ago..

    http://www.rgemonitor.com/blog/roubini

    .

    Shame a few more people didn't take more notice of him at the time.

    Dave.
    ... Dave
    Happily retired and enjoying my 14th year of leisure
    I am cleverly disguised as a responsible adult.
    Bring me sunshine in your smile
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