Mansfield Offers 100% mortgage

Generali

Thrugelmir wrote: »

Is that why the Chinese save 45% of their GDP?

My post was meant to be tongue-in-cheek. Sorry if that didn't come across.

The Chinese save such huge proportions of the wages for several reasons. The biggies AIUI are that there isn't much of a welfare state so they have to save in case of sickness or unemployment and that so many people have been recently risen out of absolute poverty by their conversion to Capitalism that people want to save to make sure that they never end up without food on the table again (I guess they want to insure against another Mao gaining power).

Conrad

I said last year the crash would bottom in Autumn 09, and here we have signs I might have called it right.

This is definitely the bottom.

Generali

Conrad wrote: »

I said last year the crash would bottom in Autumn 09, and here we have signs I might have called it right.

This is definitely the bottom.

We'll see.

Things definitely seem to be on the up so on that point you would seem to be right.

But.....

Interest rates are at all-time lows, the Bank of England is engaging in actions that I hoped that I would never see (seriously, the UK is printing money) and the Government is running the sort of deficit that has only previously been seen in times of Total War.

How does the UK get from the current mess to normalcy without slipping up? I just don't see that things have been resolved as the policy response isn't sustainable I believe.

Having said that, the policy response has wrong footed me pretty badly so perhaps I'm just plain wrong about things.

Thrugelmir

Generali wrote: »

My post was meant to be tongue-in-cheek. Sorry if that didn't come across.

The Chinese save such huge proportions of the wages for several reasons. The biggies AIUI are that there isn't much of a welfare state so they have to save in case of sickness or unemployment and that so many people have been recently risen out of absolute poverty by their conversion to Capitalism that people want to save to make sure that they never end up without food on the table again (I guess they want to insure against another Mao gaining power).

It did. :beer:

I didn't have time to reply in detail......;)

Also shows the divergence between the economies of the US and UK, and China since the late 1800's. The ones built on debt are now dependent for funding from the East. The old Hare and Tortoise fable.

Thrugelmir

Generali wrote: »

Having said that, the policy response has wrong footed me pretty badly so perhaps I'm just plain wrong about things.

What's tripped you up ?

Generali

Thrugelmir wrote: »

What's tripped you up ?

The aggressiveness of the policy response; it's amazing.

All this printing of money (or QE if you prefer not to use a metaphor), interest rates at record lows and so on. It's incredible.

I wonder if it'll work. I have my doubts but then what do I know?

Thrugelmir

Generali wrote: »

The aggressiveness of the policy response; it's amazing.

All this printing of money (or QE if you prefer not to use a metaphor), interest rates at record lows and so on. It's incredible.

I wonder if it'll work. I have my doubts but then what do I know?

The UK banks would have collapsed. There is a huge hole in the international wholesale money markets. Not helped by foreign banks based in the UK providing funding back to their own domestic markets.

The banks will survive by contracting their asset books, and continuing to build capital reserves. A long slow process.

kennyboy66_2

Thrugelmir wrote: »

The UK banks would have collapsed. There is a huge hole in the international wholesale money markets. Not helped by foreign banks based in the UK providing funding back to their own domestic markets.

The banks will survive by contracting their asset books, and continuing to build capital reserves. A long slow process.

I think thats right. QE money doesn't rebuild bank balance sheets in any real sense, it just gives them liquidity to survive.
Higher margins, no dividends and further capital raising is the only way to improve balance sheets.
That takes at least 3 years, then on top of that they will have to meet the stricter capital reserve requirements that are promised.

Generali

kennyboy66 wrote: »

I think thats right. QE money doesn't rebuild bank balance sheets in any real sense, it just gives them liquidity to survive.
Higher margins, no dividends and further capital raising is the only way to improve balance sheets.
That takes at least 3 years, then on top of that they will have to meet the stricter capital reserve requirements that are promised.

My take on QE is that it does rebuild bank balance sheets because it means that the Bank of England can overpay for Gilts in the marketplace and thus subsidise the banks.

baby_boomer

The squeeze is on for the BSs on both fronts.

Does anyone want to borrow from them?

Does anyone want to save with them? My instant access money has recently gone to A&L 3.1% and ING 3.2%.

Anyone with children should check their interest rates at BSs. They are universally appalling .