BOE say's Banking Crisis Easing

Graham_Devon

CLAPTON wrote: »

Virtually every significant company in Britain (and elsewhere ) is foundered in debt. Without it we would all still be hunter gathers.

Companies go into debt to buy assets so they can add value and make a profit.
To discount assets as somehow not being real is somewhat odd.

No ones discounting assets. Only saying the asset prices are also falling. Assets are only worth what someone will pay for them.

Thrugelmir

CLAPTON wrote: »

Virtually every significant company in Britain (and elsewhere ) is foundered in debt. Without it we would all still be hunter gathers.

Companies go into debt to buy assets so they can add value and make a profit.
To discount assets as somehow not being real is somewhat odd.

Agreed. Companies require working capital and often long term investment loans. Also raise equity from investors which is cheap finance.

Though I'm unsure as to the relevance of this to high levels of consumer debt that we have in this country. Companies are recapitalising, Consumers can't do this.

StevieJ

Thrugelmir wrote: »

Agreed. Companies require working capital and often long term investment loans. Also raise equity from investors which is cheap finance.

Though I'm unsure as to the relevance of this to high levels of consumer debt that we have in this country. Companies are recapitalising, Consumers can't do this.

But they can live in the assets bought with their consumer debt, I assume you include mortgages in this debt figure in addition CC debt (as well as mortgage debt) is reducing due to low mortgage rates (I suppose this is a form of recapitalising ).

Graham_Devon

StevieJ wrote: »

But they can live in the assets bought with their consumer debt, I assume you include mortgages in this debt figure in addition CC debt (as well as mortgage debt) is reducing due to low mortgage rates (I suppose this is a form of recapitalising ).

So long as they can afford to service the debt, yes.

Thrugelmir

StevieJ wrote: »

But they can live in the assets bought with their consumer debt, I assume you include mortgages in this debt figure in addition CC debt (as well as mortgage debt) is reducing due to low mortgage rates (I suppose this is a form of recapitalising ).

Look at the wider picture. There are winners and losers in every market. Easy to find one point to support a view. Is the norm ....... far from it.

StevieJ

Graham_Devon wrote: »

So long as they can afford to service the debt, yes.

They should do as on average it only takes 31% of income to service debt (long tem average 37% )

Graham_Devon

StevieJ wrote: »

They should do as on average it only takes 31% of income to service debt (long tem average 37% )

Yes, but it's hardly average times

Kinda in a recession, people loosing their jobs and stuff

StevieJ

Graham_Devon wrote: »

Yes, but it's hardly average times

Kinda in a recession, people loosing their jobs and stuff

You mean like 1990 when you have needed 65% of your income to pay the mortgage, they went into recession that year also

Graham_Devon

StevieJ wrote: »

You mean like 1990 when you have needed 65% of your income to pay the mortgage, they went into recession that year also

I'm not sure what your point is Stevie.

It's HPI which has wiped out debt and wage inflation. You are ignoring all those who have recently taken on huge debts etc.

It's pretty obvious to most that we are now a country which is deep in debt, deeper than most other countries.

Percentages based on an average over time, do nothing apart from try and make a dire situation look better on paper.

Out there in the real world though, it means nothing. We are fubbered, no matter which way you try and make it look better.

In the real world, those who took mortgages 10 years ago, will most probably service theiur debt fine during this.

Those that took mortgages in the last 5 years, will find it tougher.

That's real world. That's what's happening, no matter what spin is put on it.

Thrugelmir

Graham_Devon wrote: »

I'm not sure what your point is Stevie.

It's HPI which has wiped out debt and wage inflation. You are ignoring all those who have recently taken on huge debts etc.

It's pretty obvious to most that we are now a country which is deep in debt, deeper than most other countries.

Percentages based on an average over time, do nothing apart from try and make a dire situation look better on paper.

Out there in the real world though, it means nothing. We are fubbered, no matter which way you try and make it look better.

In the real world, those who took mortgages 10 years ago, will most probably service theiur debt fine during this.

Those that took mortgages in the last 5 years, will find it tougher.

That's real world. That's what's happening, no matter what spin is put on it.

Graham...... Stevie is trying to blame the Tories for our troubles now. But there's nothing to worry about as Old Labour is going back to its roots and attemting to cause a sterling crash to get the debt inflated away. :rolleyes: