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Debate House Prices
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What needs to happen to fix this?
Comments
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Exactly, here hereYou know what really frustrates me in all of this. I work incredibly hard to earn my own money and pay my way, I have never ever claimed anything off the government in the way of benefits. However. Why am I working so hard for them when they are not working hard for me. I am having to watch every penny of my own money and have to sacrifice keeping warm to eat properly when the government is giving my money away without thought. I know that is the general feeling of anger around here and what it all boils down to, I just wanted to write it down.30th June 2021 completely debt free…. Downsized, reduced working hours and living the dream.0 -
I haven't always agreed with what you have to say, but I couldn't have put it better myself.The banks have come to depend too much on the money markets to make up the shortfall between deposits and lending - we need to get back to a situation like the year 2000 where they broadly matched.
That means people need to pay down debt and save more.
It also means no more slashing interest rates wildly (not that there is much left to slash).
Radical action needs to be taken to consolidate the banking system into something that is viable. That means proper mergers and layoffs where there is duplication of work. Shareholders get wiped out if necessary.
House prices need to fall to levels where people can buy one by borrowing a sensible amount (3.5x single, 2.5x joint) with a minimum 10% deposit saved. The sooner vendors get over the fact that peak 2007 prices are history, the better.
Businesses need to focus on producing stuff that people (in particular, foreigners) want/need to buy instead of playing with money to synthesize new 'wealth' that is merely an illusion, or flogging imported consumer goods to people borrowing the money generated from the money games in the City and Wall Street.
This will be extremely painful but we are going to have a lot of pain no matter what happens - there is no magic bullet to make it all better.
What I reckon is going to happen however is that the govt send rates to zero, print up money to recapitalise the banking system and then finish the job of nationalising it. They will then use the banks to dole out new money like Ben Bernanke was hypothetically using a helicopter and we'll end up with raging inflation as the government attempt to redistribute wealth from the sensible to the spendthrifts.
This might produce an illusion of 'recovery' in the near term but will collapse in a huge, irredemable heap a year or two down the line.
Pain is good for you, it normally means your body is healing itself and working properly. Why should those bankers have it so bloody easy.30th June 2021 completely debt free…. Downsized, reduced working hours and living the dream.0 -
Some interesting points that I do not entirely disagree with.Unfortunately, they need to cut the civil service in half.
I presume by this you mean the removal of some of the additional layers of bureaucracy and growth of quangos seen since New Lab came into power but..
... there is an argument that an increase in government spending and job creation will be a neccesary measure to counteract some of the contraction of the private economy - increased public works, regeneration projects etc etc - so I take it you are arguing for more efficiency in the public sector and a redirection of resources rather than just job cuts for the sake of a headline cut in expenditure.The money they save needs to go into re-investment of long-term sustainable business models that actually PRODUCE stuff.
History shows that nationalisation has been the worst place to entrust the future of our income producing industries so think you would agree that government should not directly own or invest in these new business models.
After all, we do not want more quangos and civil servants being put in place to try and decide (probably very badly) which industries are growth and ones the UK has the expertise and labour costs to compete effectively in (without further state subsidy) on a world stage.
We cannot compete with the likes of China in mass manufacturing so need high skill, high value manufacturing that is less dependant on low labour costs and will allow some value to be added by the item being manufactured in Britain (more wars to boost the UK arms manufacturers anyone?)
I would have thought that the money could be well spent by extending the likes of the Small Firms Loan Guarantee scheme and providing the money to fund regeneration areas to encourage the establishment of preferred businesses in the most affected areas through tax incentives, grants etc (e.g 2 years VAT and Corporation Tax holidays for start up businesses in Camarthenshire that specialise in high tech r&d and manufacturing).Reduce foreign aid to 0 until we balance the budget. Yes, its tragic, but we need to sort out our wn back yard before we move onto other nations.
Also very dangerous as your point ignores the fact that many foreign aid deals are tied up with (at least implicit) conditions to use UK 'expertise' or very commonly related to arms deals with UK arms companies who are just about our only consistent money spinner in manufacturing.
We should not underestimate the benefit of international good will to our economy. The Chinese have access to some very lucrative mineral/fuel deposits and exploration rights in Africa thanks to their very generous 'humanitarian' aid and low cost loans over the last decade or so.
You don't think Shell are in Nigeria just because they are better than everyone else do you?We need to get rid of the namby pamby state, slash bureaucracy and legislation (HSE, working hours regs, minimum wage repealed) for small/medium businesses.
as a small business owner I cannot help but agree with this but I also wonder if this will help. We have one of the most liberal employment markets in Europe which has seen firms invest here rather than elsewhere as it is - will making it more liberal encourage any more investment without us officially sanctioning sweatshops.
I need to cut costs but current legislation forces me to consider alternatives to redundancy which means it is harder to just make someone redundant and add them to the ranks of the unemployed and associated burden on the state.slash benefits and incentivise work instead of sitting on ones @rse.
Agreed on the incentivising work bit, but how do we ensure that the genuinely disenfranchised are protected if benefits are so low? This balance is not an easy one to strike.Banks and shareholders need to understand they will be paying back their dues to the state for a VERY VERY long time. Preferably with interest.
I think it is important not to underestimate just how many banks will be doing this already; government funding has been reputed to be costing Northern Rock 8%; Barclays turned down government funding to accept UAE money at 14%.
The treasury stands to do very well out of some of the deals that have been done - how long before there is a series of adverts encouraging us to "Tell Sid" about the full re-privatisation of RBS or one of the other banks?Seeing as reduced IRs havent done anything, we need to raise them to at least above the ECB rate, to stop the slide on the pound and encourage foreign savers to invest their sov wealth funds with the banks to help them with capital requirements.
agreed - further drops are unlikely to be reflected in the cost of borrowing and will only reduce the attractiveness of saving which could protract the 'banking crisis'.But, they will only do this if they see us going through the pain and making a real concerted effort of paying off debt.
Not convinced of this as although the City of London's reputation has been damaged UK Plc is still seen as a relatively safe bet as evidenced by the fact that we have not (yet) seen a downgrading of the national credit rating like Spain, Greece etc.Government must achieve a balanced budget across the cycle at least, and must have a framework in place which includes items such as PFI and other off balance sheet unfundeds (public sector pensions). If it cant afford them, then state spending must be cut.
That would involve a wholesale change of the national psyche - we have PFI and other off balance sheet schemes because we don't like to pay tax, especially in a recession.If this means granny cant have a hip replacement and the average life expectancy for the country drops, so be it.
Wow. To agree with that I'd have to be either very old and sick (I've lived my life) or very young (I'm immortal and will never die).Tax HPI at 90% rate for first home ownership and 95% for second home ownership and beyond.
Would this not have to be accompanied by a massive social housing programme? kind of against the spending cuts you want (but possibly in line with a public works programme to kick start the economy).Set targets for immigration; the nation is overpopulated and needs to shrink.
More effective to euthanise everyone once they get to 65. Our pensions time bomb means that we need immigration to maintain the balance of workers/pensioners. The Pig is getter fatter and the python much thinner.Increase Tax thresholds for couples to 15000 tax free on single salary if they work full time, re-introduce joint income calcs for married couples taxation.
do we really want to encourage fewer people to work in the current climate? after all child minders and nursery staff contribute to the economy too.
I like the idea though - my wife may finally let me be a stay at home dad if it becomes reality.Reduce benefits for those out of work longer than 3 years to 30 pounds a week. Individuals on benefits will have to pay for prescriptions and if they are out of work for longer than 5 years and revert to 25 pounds of food vouchers a week. No extra benefits for families with more than 2 kids with father not in fll time work. Father in full time work = extra benefits for extra kids.
Wow. quite harsh there. But even if a govnmt could retain power after introducing this would it not be inordinately expensive to administer and police? Should we not be looking at a simplification of the benefits system to cut down on layers of the civil service?QE should be used for one purpose only; pay off banks toxic debt on the understanding that these loans will need to be paid off for the next 150 years. Thus, liabilities on balance can be reduced to a much smaller payment charged at a rate of BOE BR + 1%.Pay it off in total and fully nationalize for 20 years to shake up the bank system.
Not sure that the treasury could stand the bank funding to be over as long as 150 years. I bet they are thinking more like 5 - 10 years and they are getting better than BBR + 1% as it is. To reduce it and make the term essentially infinite would actually reward the banks for their indiscretions.
One of the reasons the 'banking crisis' has continued as it has is that the govnmt has insisted that capital adequacy be increased as a condition of funding (all the while telling us that they are putting pressure on the banks to lend).People defaulting on debt need to have their rates slashed and be made clear that individuals that took out debt WILL pay it off, even if it takes them a lifetime of eating gruel.
Probably better to reverse recent moves and make Bankruptcy and IVAs a more difficult option - discharge after only one year no matter the circumstances? How nuts is that?
interesting take on thingsI am an IFA (and boss o' t'swings idst)You should note that this site doesn't check my status as an IFA, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Any ideas what the government should actually do to fix this problem?
Although on a whole I don't like the labour government one bit because I do believe that they have gone round this problem the wrong way. They have thrown money at the problem all too late. Rather like shutting the gate after the horse has bolted. I was just wondering if anybody has any super ideas on how to actually fix these problems that we have
Fix what?
nothing is wrong with house prices.
They are simply realigning to where they should have been in the first place.
houses should be homes firt and an investment vehicle second.
It will be a VERY long time before this mistake is made again.0 -
Why?
We earn money, we pay our bills. Anyway, i said don't bail the banks outs. Not all of them need bailing out. Why should our money be used to bail out the share holders so they don't lose any money?
I get paid, I buy my food, pay rent, save , buy a house cash. why do I need a mortgage or bank for those? Postal system works well to cover all bill payments.
so who's your employer? I guess they don't use a bank then?
Who's yoiur supermarket? I guess they don't use a bank either?
Who's your landlord? I guess he doesn't have a mortgage?
Its not all me, me, me. I'm fine, who gives a f*** about the others. Look at the bigger picture.
If companies can't gain credit and they lose the money they have in the bank (depositers) then they can't buy stock, if they can't buy stock, you can't buy food. This leads to lower food stocks, immediately increasing prices and therefore inflation starts to grow.
Civil unrest begins and before you know it, theres widespread looting and huge amounts of crime.
I don't fancy that, do you?0 -
so who's your employer? I guess they don't use a bank then?
Don't have to use a bank - but I didn't say there wouldn't be a bank!
Who's yoiur supermarket? I guess they don't use a bank either?
Farmer's shop
Who's your landlord? I guess he doesn't have a mortgage?
Why can't he be someone who's saved and paid cash?
Its not all me, me, me. I'm fine, who gives a f*** about the others. Look at the bigger picture.
I do look at the bigger picture, its those morons who don't that are screwing up this country just to make it look a little bit better than it was the day before.
If companies can't gain credit and they lose the money they have in the bank (depositers) then they can't buy stock, if they can't buy stock, you can't buy food. This leads to lower food stocks, immediately increasing prices and therefore inflation starts to grow.
Why does inflation have to go up? smaller businesses and more of them will be a blessing to this country - split up the big supermarkets and let people buy locally.
Civil unrest depends on other factors, not just banking !!!!-ups that the government are trying to make a bigger mess.
I'm not being an a*se, just trying to put in other possibilities. At the end of the day this is just my view, and, as everyone else on this forum, I can only guess as to what will and won't happen of the course of this recession and the following 5-8years until around 2017 - 9
30th June 2021 completely debt free…. Downsized, reduced working hours and living the dream.0 -
Unfortunately, they need to cut the civil service in half.
The money they save needs to go into re-investment of long-term sustainable business models that actually PRODUCE stuff.
Reduce foreign aid to 0 until we balance the budget. Yes, its tragic, but we need to sort out our wn back yard before we move onto other nations.
We need to get rid of the namby pamby state, slash bureaucracy and legislation (HSE, working hours regs, minimum wage repealed) for small/medium businesses, slash benefits and incentivise work instead of sitting on ones @rse.
Banks and shareholders need to understand they will be paying back their dues to the state for a VERY VERY long time. Preferably with interest.
Seeing as reduced IRs havent done anything, we need to raise them to at least above the ECB rate, to stop the slide on the pound and encourage foreign savers to invest their sov wealth funds with the banks to help them with capital requirements. But, they will only do this if they see us going through the pain and making a real concerted effort of paying off debt. To that end, the government must legislate maximum loans to values on mortgages, Minimum deposit requirements, maximum unsecured lending at around 25% of the larger salary for couples and 20% for singlies; Government must achieve a balanced budget across the cycle at least, and must have a framework in place which includes items such as PFI and other off balance sheet unfundeds (public sector pensions). If it cant afford them, then state spending must be cut. If this means granny cant have a hip replacement and the average life expectancy for the country drops, so be it. Tax HPI at 90% rate for first home ownership and 95% for second home ownership and beyond. Set targets for immigration; the nation is overpopulated and needs to shrink.
Increase Tax thresholds for couples to 15000 tax free on single salary if they work full time, re-introduce joint income calcs for married couples taxation. Reduce benefits for those out of work longer than 3 years to 30 pounds a week. Individuals on benefits will have to pay for prescriptions and if they are out of work for longer than 5 years and revert to 25 pounds of food vouchers a week. No extra benefits for families with more than 2 kids with father not in fll time work. Father in full time work = extra benefits for extra kids.
QE should be used for one purpose only; pay off banks toxic debt on the understanding that these loans will need to be paid off for the next 150 years. Thus, liabilities on balance can be reduced to a much smaller payment charged at a rate of BOE BR + 1%.Pay it off in total and fully nationalize for 20 years to shake up the bank system.
People defaulting on debt need to have their rates slashed and be made clear that individuals that took out debt WILL pay it off, even if it takes them a lifetime of eating gruel. Quality of life will suffer, but bearing in mind we will be using the knowledge economy to produce stuff, we will hopefully become a nation of net exporters and hopefully start nibbling away at the humongous balance of trade we have built ourselves.
It would be tough, but bearing in mind we fought off the might of the Nazis, I am sure we will overcome. We all need to stop whining and get on with fixing this country.
If you ever run for political office would be okay to divulge your real identity to me so I make sure I don't vote for you?0 -
so who's your employer? I guess they don't use a bank then?
Don't have to use a bank - but I didn't say there wouldn't be a bank!
Do not underestimate the importance your employer will attach to being able to pay you via BACS and the reliance they will have on overdraft funding etc to meet your wages from time to time.Who's yoiur supermarket? I guess they don't use a bank either?
Farmer's shop
Who will definately have a bank - rich farmers need one just as poor ones do.Who's your landlord? I guess he doesn't have a mortgage?
Why can't he be someone who's saved and paid cash?
Because the real world says that is very unlikely. Most landlords have mortgage financing of some type.Its not all me, me, me. I'm fine, who gives a f*** about the others. Look at the bigger picture.
I do look at the bigger picture, its those morons who don't that are screwing up this country just to make it look a little bit better than it was the day before.
Fair enough, I feel your anger, but I think you are standing very close to it when you are looking at the bigger pictureIf companies can't gain credit and they lose the money they have in the bank (depositers) then they can't buy stock, if they can't buy stock, you can't buy food. This leads to lower food stocks, immediately increasing prices and therefore inflation starts to grow.
Why does inflation have to go up? smaller businesses and more of them will be a blessing to this country - split up the big supermarkets and let people buy locally.
Small, local businesses are the ones most at the mercy of the banks and their propensity to withdraw funding lines at very short notice. A small electrical contractor I know had his £10k overdraft cut to £5k with virtually no notice. It meant he had to wait to start jobs and ask staff to wait for their wages for a couple of weeks while he waited for invoices to be paid by a large multinational to give him the cashflow again.Civil unrest depends on other factors, not just banking !!!!-ups that the government are trying to make a bigger mess.
It does, but the banks enable the majority of people to fulfil the first two layers of Maslow's hierarchy of needs. With those gone Civil unrest is a certainty - just ask SquatNowI am an IFA (and boss o' t'swings idst)You should note that this site doesn't check my status as an IFA, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Our scientists need to make some amazing new medical discoveries or we need to develop some alternative source of fuel to oil. Whatever it is, we need valuable and innovative products and commodities that we can sell to the rest of the world.
We can input every possible known factor into the equation, but it's the future unknown that we cannot foresee and these unknowns will emerge and enter the picture.
In the history of mankind, the unexpected has regularly happened and changed the course of events. We need to set our sights high, value the contribution of everyone to society and make sure we don't waste even the smallest of opportunities.0 -
I think the thing that sums up how ridiculous this country has begun is a programme that I watched just before all this blew up, It was about a woman who got paid £500 a day to tidy your wardrobe. This is the madness that this country has come to. Everybody needs to spend a little less time naval gazing and get down and get their hands dirty.0
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