Handy little website courtesy of the IFS - "Where do you fit in"?

julieq

No I'm not backtracking at all, I'm explaining my position clearly. It hasn't changed since the first post on this thread.

What were your predictions in January this year? How close to the mark were they? Why should the next clutch fare any better?

Thrugelmir

HAMISH_MCTAVISH wrote: »

It's the sort of money an experienced teacher or lorry driver is on. It's not big money.

If a lorry driver and teacher couple are in the top 10% of household income, then I find that surprising.

Not saying it's not true, just that it's surprising.

You are hopelessly out of touch.

A few oil tanker drivers perhaps.

Knock £10k off would be nearer the mark, and that includes all allowances.

HAMISH_MCTAVISH

Thrugelmir wrote: »

You are hopelessly out of touch.

A few oil tanker drivers perhaps.

Knock £10k off would be nearer the mark, and that includes all allowances.

:rolleyes:

Yes, you'll note I said "a lorry driver", not "all lorry drivers"....

For sure a lot of tanker drivers are on that much, but not only them. I know a guy that just delivers beer, and he's on 35. He's been doing it a while, and I imagine he's in the better paid bracket, but he tells me that specialist drivers, cranes/heavy loads etc make a lot more.

Thrugelmir

julieq wrote: »

Supply of mortgages, obviously, i.e competition between mortgage providers.

Competition? What competition ?

The large 6 lenders in the UK controlled 78% of the market in 2008 , against 72% in 2007. (This allows for merger of Lloyds & HBOS for comparison). Over 50% of the lending capacity has either gone bust, gone home, or scaled back their operation. Building societies are struggling to raise deposits.

Only signs on the horizon of potential large lenders are Tesco, Bank of China and AIG. Though they will cherry pick quality existing business initially.

Lending wil become profitable again. Retail banking in the UK is currently not profitable for the High street banks.

tommy75

HAMISH_MCTAVISH wrote: »

:rolleyes:

Yes, you'll note I said "a lorry driver", not "all lorry drivers"....

For sure a lot of tanker drivers are on that much, but not only them. I know a guy that just delivers beer, and he's on 35. He's been doing it a while, and I imagine he's in the better paid bracket, but he tells me that specialist drivers, cranes/heavy loads etc make a lot more.

Oh please stop making things up, you compulsive liar. The class 1 HGV jobs generally pay around £12ph if your lucky enough to be full time employed. Some can pay slightly better but they are few and far between, most pay around £8-9ph. Class 2 pays between minimum & £8ph on average. Try looking on jobcenter. Most haulage companies are struggling and now resort to taking on agency drivers (which are fully booked up as theres no work) for between minimum wage and £15ph depending on experience, class and work involved. This includes your Tesco's and Argos.
I know permanent shell tanker drivers are on good money ie 'average wage in your book, around 35k' but the rest...
Please stop making friends up who are on massive salarys. Do you think we are all stupid?

Framps

Competition will return at the point that lending becomes profitable again - i.e. at the point at which: the banks have rebuilt their balance sheets, are sufficiently capitalised, and that wholesale market rates fall back to longer term averages.

Those banks that have gone home will come back, those that have scaled back their operations will scale up and new entrants will join the market. Outside of recessions and new regulations notwithstanding, mortgage lending is relatively easy money - why wouldn't any bank want a piece of the action.

As for deposits - these tend to increase during and after recessions, as consumers rein in expenditure and save cash for fear of losing their jobs. We are already seeing saving rates increase as the competition for these deposits increases. Similarly mortgage rates will converge with base rates via a similar mechanism in due course - the current disparity between mortgage rates and base rates is a blip, but a necessary one as it helps the bank recovery process.

Thrugelmir

Framps wrote: »

Competition will return at the point that lending becomes profitable again - i.e. at the point at which: the banks have rebuilt their balance sheets, are sufficiently capitalised, and that wholesale market rates fall back to longer term averages.

Those banks that have gone home will come back, those that have scaled back their operations will scale up and new entrants will join the market. Outside of recessions and new regulations notwithstanding, mortgage lending is relatively easy money - why wouldn't any bank want a piece of the action.

As for deposits - these tend to increase during and after recessions, as consumers rein in expenditure and save cash for fear of losing their jobs. We are already seeing saving rates increase as the competition for these deposits increases. Similarly mortgage rates will converge with base rates via a similar mechanism in due course - the current disparity between mortgage rates and base rates is a blip, but a necessary one as it helps the bank recovery process.

I think you are understating the severity of the situation, and most certainly the sums involved.

At the the end of 2008 the UK banks had a shortfall of over £700 billion between customer deposits and mortgage lending. A rebalancing of a figure this large is going to take years to self correct.

If investors want a piece of the action as you call it. There is around a £120 billion of paper , issued by Northern Rock through its Granite operation in securitised mortgages out in the market. No need to set up a bank. When you can invest in mortgage paper. The market is choked with it. Very little secondary market activity, as no one wants any more.

michaels

Thrugelmir wrote: »

Lending wil become profitable again. Retail banking in the UK is currently not profitable for the High street banks.

I think this report by the bba (or similar) is a little disingenuous - yes banks are not making on their retail operations but this is only because losses on existing lending which in hindsight did not have a large enough risk premium are being crystallised - new business with a nice healthy (read low competition) spread between deposit and lending rates should be extremely profitable. You just have too look at how much further top savings rates have fallen than mortgage and loan / credit card rates (which have actually risen) despite much stricter lending criteria.

michaels

Would be interesting to run this poll on some of the other boards - may be we could do a board at a time but before posting up the poll have a little wager on here as to what that board's distribution will look like...

mbga9pgf wrote: »

Good site to show how distorted prices have become

http://www.ifs.org.uk/wheredoyoufitin/


Updated last year.


Just out of interest, can we have a consensus as part of the poll which area of the curve people exist in? IE 0-9%, 10-19% etc? Its anonymous, so Dan doesnt have to worry about his minimum wage becoming public.

Thrugelmir

michaels wrote: »

I think this report by the bba (or similar) is a little disingenuous - yes banks are not making on their retail operations but this is only because losses on existing lending which in hindsight did not have a large enough risk premium are being crystallised - new business with a nice healthy (read low competition) spread between deposit and lending rates should be extremely profitable. You just have too look at how much further top savings rates have fallen than mortgage and loan / credit card rates (which have actually risen) despite much stricter lending criteria.

I agree in the longer term. Though it will take a few years for new business to rebalance the books of say HBOS which had around 22% of the mortgage market in 2008. Whereas Lloyds only had 6%.

Barclays only made £278 million on a huge asset base in 2008. It wouldn't take much for this to turn into heavy losses even now.