Never thought I would see the day.

Generali

treliac wrote: »

That's paying it down earlier than necessary?

Then there's those who can't afford to pay what they owe when they owe it. So how easy is it to declare bankruptcy and have debt wiped out? What effect does the level of unpaid debt have on the Thrift Paradox and the economy in general?

Given that most banks are being supported by Governments in one way or another and that in many cases banks don't have much or even any equity left, a default to a bank is effectively a shift in debt from the private to the public sector - where the debt had been owed by an individual it is now bourne by all taxpayers.

We are seeing now what happens when people default en masse - those defaults eat into bank reserves and prevent them from lending. That is effectively the same as the Thrift Paradox as net lending falls and so GDP and the money supply fall with it.

kennyboy66_2

Thrugelmir wrote: »

This only makes sense if we know the figures for savings. Building Societies have suffered net withdrawls of deposits. Suggesting that people in part are repaying debt.

Though any reduction is good news.

Building societies recorded net withdrawrals of £2.2bn, but Banks reported increase in personal deposits of £3.2bn. Both are June figures - not sure if both are identical measures.

Thrugelmir

kennyboy66 wrote: »

Building societies recorded net withdrawrals of £2.2bn, but Banks reported increase in personal deposits of £3.2bn. Both are June figures - not sure if both are identical measures.

Shows that sizable amounts of money is being transferred around. Money in banks is more likely to be in current accounts than savings. Possibly to repay debt or just pay bills in the case of the unemployed.

lemonjelly

VERY interesting thread...

Waas out with a friend yesterday. Started discussing debt. Friend was amazed to learn that I'd never had any formal debt (only the odd tenner owed to mum/dad/bro).

Friend is in a situation where over the past 12 months he's been overpaying his car loan - cleared it this month to end it a year early.
He's now focussing on clearing his student loan, as it will be the first time in about 20 years he'll be debt free.

He doesn't appear to be the only one. A number of friends appear to be using pay rises they got a year ago to pay off debt, rather than spend on treats.

Here's a thing I've noticed recently. As many of you know, I work in this field. Colleagues & I were reviewing trends recently. When you help someone complete bankruptcy forms, there is a question asking if any of the debts are gambling related. Historically, very few have said yes to this. The impact, is that the discharge period is a lot longer. However, we noticed that a hell of a lot of people in the last 12 months had to say yes to this, as although they had credit card debts, they existed due to online gambling...

I still think consumer borrowing will have some skeletons it has yet to show us.

kennyboy66_2

lemonjelly wrote: »

VERY interesting thread...



Here's a thing I've noticed recently. As many of you know, I work in this field. Colleagues & I were reviewing trends recently. When you help someone complete bankruptcy forms, there is a question asking if any of the debts are gambling related. Historically, very few have said yes to this. The impact, is that the discharge period is a lot longer. However, we noticed that a hell of a lot of people in the last 12 months had to say yes to this, as although they had credit card debts, they existed due to online gambling...

I still think consumer borrowing will have some skeletons it has yet to show us.

This is interesting.

I'm not sure that this site is wise to promote matched betting / Gambling Introductory offers, despite all the warnings.
I would expect a significant minority who start doing this to end up losing more then they can afford.

Caveat Emptor and all that, I know, but it just doesn't sit right with me.

Generali

kennyboy66 wrote: »

This is interesting.

I'm not sure that this site is wise to promote matched betting / Gambling Introductory offers, despite all the warnings.
I would expect a significant minority who start doing this to end up losing more then they can afford.

Caveat Emptor and all that, I know, but it just doesn't sit right with me.

I'm with you on this one. I speak as a long time gambler who has no problem getting up and walking away (for example I use my Betfair account pretty much every week for all of my sports/political betting and have not put any money into it since before the Ashes.........in 2005!)

I know a lot of problem gamblers though. I lost a friendship because I wouldn't lend someone money to put into a fruit machine in a pub having watched him put what must have been the best part of a week's wages in there already.

lemonjelly

kennyboy66 wrote: »

This is interesting.

I'm not sure that this site is wise to promote matched betting / Gambling Introductory offers, despite all the warnings.
I would expect a significant minority who start doing this to end up losing more then they can afford.

Caveat Emptor and all that, I know, but it just doesn't sit right with me.

Originally posted by Generali
I'm with you on this one. I speak as a long time gambler who has no problem getting up and walking away (for example I use my Betfair account pretty much every week for all of my sports/political betting and have not put any money into it since before the Ashes.........in 2005!)

I know a lot of problem gamblers though. I lost a friendship because I wouldn't lend someone money to put into a fruit machine in a pub having watched him put what must have been the best part of a week's wages in there already.

I agree with both of you.

We were all very suprised. It can be very interesting some of the trends you can pick up when as a group you discuss some of the clients you've seen/issues you've been dealing with. I have regularly learned all sorts of tricks & tips by informally chatting with colleagues about how their day has been.

As a group, we were suprised by the above, but were very suprised at how quickly this change has happened. I wonder if the people we are seeing is the tip of the iceberg?

I've watched friends gamble what to me is a horrendous amount. I used to work in a pub. There was a guy who would come in every friday, nurse about 2 pints between 4pm-11pm, & the whole of the rest of his wages went in fruit machines. I've stood with friends as they play, and been amazed at how aggressive they can become, especially as time to leave is approaching.

Part of me wonders what is the difference between stocks & betting. However, I'm less comfortable with the threads on there too.

Generali

lemonjelly wrote: »

Part of me wonders what is the difference between stocks & betting. However, I'm less comfortable with the threads on there too.

The main difference between stocks and betting is that with the former you are buying something tangible - an actual part of an actual company.

Now it is perfectly possible to gamble on the stock market - to trade a series of short term bets that you hope will make you a lot of money quickly but where the down side is nothing at all.

The reality is however, if you buy shares, bonds, property etc; diversify properly; and look to hold for the long term then that's a very sensible way to manage your wealth and a way that is likely to pay dividends (if you'll excuse the horrible pun).

That most of the financial service industry is staffed by spivs and spruikers (to use the local word here) doesn't make buying shares the same as gambling. It just means you need to be careful about how you swim in those shark infested waters.

kennyboy66_2

lemonjelly wrote: »

I've watched friends gamble what to me is a horrendous amount. I used to work in a pub. There was a guy who would come in every friday, nurse about 2 pints between 4pm-11pm, & the whole of the rest of his wages went in fruit machines. I've stood with friends as they play, and been amazed at how aggressive they can become, especially as time to leave is approaching.

Part of me wonders what is the difference between stocks & betting. However, I'm less comfortable with the threads on there too.

Well it is at least possible to "win" in the long term buying shares. Whereas fruit machines, FOBT's, and roulette, by definition you will always lose.
Perhaps 1.5% of people can find an edge to win on horse or sports betting (according to betfair).

The gambling culture in Australia is astonishing (even for someone who like a bet).
TAB (Tote machines) in most pubs & "pokies" (slot machines) in RSL clubs.
Alcohol and gambling - not a good mix.

Pubs & Clubs, gambling and lap dancing. The only businesses that this government has helped grow over the last 10 years.

lemonjelly

Generali wrote: »

The main difference between stocks and betting is that with the former you are buying something tangible - an actual part of an actual company.

Now it is perfectly possible to gamble on the stock market - to trade a series of short term bets that you hope will make you a lot of money quickly but where the down side is nothing at all.

The reality is however, if you buy shares, bonds, property etc; diversify properly; and look to hold for the long term then that's a very sensible way to manage your wealth and a way that is likely to pay dividends (if you'll excuse the horrible pun).

That most of the financial service industry is staffed by spivs and spruikers (to use the local word here) doesn't make buying shares the same as gambling. It just means you need to be careful about how you swim in those shark infested waters.

Fair point Generali.

I think what I was trying to uneloquently get at, was that I understand neither. Because of this, I don't engage in either of them. (NB, doesn't mean I have no interest or do not observe).

However, there are many who think/believ they understand, and therefore do partake.

As well, with gambling, the odds are already (IMO) stacked against you in favour of A N Other before you start.