oh dear oh dear. No end in sight. 0% here we come

BlondeHeadOn

maninthestreet wrote: »

We heading for some sort of catastrophic event, in line with the Catastrophe Theory, creating what physicists would call a 'singularity'.

Er .... meaning what?



What sort of catastophic event?

What is a 'singularity' ?



I like the direction of this thread, I just want to know more!

maninthestreet

BlondeHeadOn wrote: »

Er .... meaning what?



What sort of catastophic event?

What is a 'singularity' ?



I like the direction of this thread, I just want to know more!

We're doomed, doomed!!

piggeh

I singularity sounds pretty exciting. a)no more worries about house prices (probably) b)it's easier to count a singularity as there's only one of them.

MrDT

Dithering_Dad wrote: »

The majority of the money banks lend out is not connected with the amount they have under deposit.

Not at a 1:1 ratio, but my understanding is that the amount they can lend out is limited to a multiple of what they hold as deposits? http://en.wikipedia.org/wiki/Capital_requirement

Thrugelmir

MrDT wrote: »

Not at a 1:1 ratio, but my understanding is that the amount they can lend out is limited to a multiple of what they hold as deposits? http://en.wikipedia.org/wiki/Capital_requirement

....and that's why LIBOR is so important to the banks. On a daily basis they either borrow or lend in the wholesale markets to balance their books and meet regulatory captial ratio requirements.

Wholesale Money Markets dry up = banks become technically insolvent.

Generali

BlondeHeadOn wrote: »

Er .... meaning what?



What sort of catastophic event?

What is a 'singularity' ?



I like the direction of this thread, I just want to know more!

AIUI, a singularity is a point (in a black hole?) where the Gravitational Force effectively becomes infinite.

I'm not sure what this has to do with finance.

stevetodd

Conrad wrote: »

We need zero rate now.

Of my last 20 enquiries, only about 5 can get a mortgage! Many of those declined have above 25% deposits.
Not that zero rate will encourage lenders to lend, but we need every stop pulling out now.

What were the reasons given for them being declined? and if different what do you think the truth is?

Thrugelmir

Generali wrote: »

AIUI, a singularity is a point (in a black hole?) where the Gravitational Force effectively becomes infinite.

I'm not sure what this has to do with finance.

Does this have anything to do with why the City employs "rocket scientists" ?:huh: :huh: :huh: :huh: :huh:

mower5

Generali wrote: »

It seems better to me that you severely restrict the size of banks so that if a few go bust now and again there's no systemic problem. If people lose money when the banks go bust then so be it. If you lend money to someone in return for a rate of interest (or services in the case of a current account) then you're taking a risk.

This whole thing about the greed of bankers is a bit of a red herring in my opinion. If your employer said to you it would be possible for you to quintuple your income if you took a small risk individually which was perfectly legal and indeed approved by the industry regulator would you do it? You would and you know you would.

There used to be dozens of building societies, unfortunately the management and members sold out, demutualised and merged. All in the name of efficientcy and savings by scale. Now, after less than 10 years, most have gone bust or begging to the tax payer.
The publics trust has been undermined by the big high street banks, they have been trying on the red braces (of city investments) for size and the fall out is not pretty.

Thrugelmir

mower5 wrote: »

There used to be dozens of building societies, unfortunately the management and members sold out, demutualised and merged. All in the name of efficientcy and savings by scale. Now, after less than 10 years, most have gone bust or begging to the tax payer.
The publics trust has been undermined by the big high street banks, they have been trying on the red braces (of city investments) for size and the fall out is not pretty.

None of the "floated" building societies now remain.