House market final props could soon collapse

DervProf

wotsthat wrote: »

That's a reflection of just how bad the economy is - just think what it would be like if rates had risen.

Risen around 2005 ?

And the FSA had been doing their job at the same time ?

I think things wouldn't be in quite such a mess as they are now.

wotsthat

DervProf wrote: »

Risen around 2005 ?

And the FSA had been doing their job at the same time ?

I think things wouldn't be in quite such a mess as they are now.

Ahh I see. The BoE should raise rates as a moral signal now to make up for not doing it in 2005?

I think rates should have risen before 2007 too. Whilst I'm at it I wish the government had spent less money, paid down some national debt and let HBOS, Northern Rock & Bradford and Bingley go bust.

I think things wouldn't be in quite such a mess as they are now.

An interest rate now won't make up for any of that.

Thrugelmir

wotsthat wrote: »

let HBOS, Northern Rock & Bradford and Bingley go bust.

With it the UK property market. Which would have decimated the remaining solvent banks as well.

wotsthat

Thrugelmir wrote: »

With it the UK property market. Which would have decimated the remaining solvent banks as well.

Depositors could have been protected and the mortgage books sold off. Virgin were itching to get into retail banking even then and there were rumours at the time that Tesco were trying to get into retail banking too. Santander seem to have been sniffing out bargains too.

Lloyds may not have needed bailing out if they hadn't made the suicidal decision to take over HBOS.

I'm not so sure that the UK property market would have gone bust (supported by a shortage of availability) and the total bailout cost to the UK tax payer may well have been lower.

HBOS, Northern Rock and Bradford and Bingley were exactly the type of businesses that capitalism should have been allowed to destroy with the minimum of government intervention.

DervProf

wotsthat wrote: »

Lloyds may not have needed bailing out if they hadn't made the suicidal decision to take over HBOS.

Was it Lloyds themselves who made the decision, or could there have been a little "persuasion" by Mr. G. Brown & Co. ?

DervProf

wotsthat wrote: »

Ahh I see. The BoE should raise rates as a moral signal now to make up for not doing it in 2005?

I think rates should have risen before 2007 too. Whilst I'm at it I wish the government had spent less money, paid down some national debt and let HBOS, Northern Rock & Bradford and Bingley go bust.

I think things wouldn't be in quite such a mess as they are now.

An interest rate now won't make up for any of that.

Doing what you don't want to do now, can often make life better in the future.

"Light touch" (no touch, more like) regulation by the FSA was a large reason for our banks getting into bed the those naughty Americans. Had the FSA being doing what they should have been, then maybe our banks would not have been caught out so badly. Of course, many of those "clever" mortgage products may not have been available, with wouldn't have help to stoke the property market. I sat there watching the financial news, waiting for the carnage.

CLAPTON

DervProf wrote: »

Was it Lloyds themselves who made the decision, or could there have been a little "persuasion" by Mr. G. Brown & Co. ?

the board of Lloyds were paid millions of pounds a year because they there the best that money could buy

it was their job to do proper due diligence and resist pressure from Brown and Co.

they failed miserably because they were no better than a guy earning 100k (bear that in mind everytime very high salaries are paid because we need the 'best' people)

but walked off with lots of money so I guess they will have a comfortable retirement

wotsthat

DervProf wrote: »

Was it Lloyds themselves who made the decision, or could there have been a little "persuasion" by Mr. G. Brown & Co. ?

The Lloyds directors had a responsibility to their shareholders who they failed. Gordon Brown was in a pickle as he found himself in the position of contemplating another bailout of another bank of limited strategic importance.

Lloyds had been looking at HBOS for years and just couldn't resist. About this time they increased their dividend - idiots.

wotsthat

DervProf wrote: »

Doing what you don't want to do now, can often make life better in the future.

Agreed. I'm struggling to see how this applies to increasing interest rates when we're facing a recession and seeing inflation falling though.

DervProf

wotsthat wrote: »

Agreed. I'm struggling to see how this applies to increasing interest rates when we're facing a recession and seeing inflation falling though.

I`ve suggested that rates should be increased if there is a hint that he economy will allow it. I suspect, given recent history, that the BoE won't be able to resist the urge to enjoy "just one more wafer thin mint".