Bank of England says British banks need fresh capital

shortchanged_2

Graham_Devon wrote: »

All based on the value of a house, the value of which is inaccesible!?

LOL Hamish, you're loosing it old chap.

Yes Hamish, a little track just for you.

http://www.youtube.com/watch?v=trfYjucLGj0

Don't it just make you want to spend, spend, spend.

Thrugelmir

Emy1501 wrote: »

I suspect that banks have to recapitalise to remain credible in the market so i suspect the BOE opinion on this isn't going to make much difference.

Nothing to do with credibility. More to do with taking further write downs and losses. Europe may not be on the front pages currently but is still bubbling under. Debt defaults may yet hit us all.

HAMISH_MCTAVISH

Graham_Devon wrote: »

All based on the value of a house, the value of which is inaccesible!?.

Yep.

It's called the "wealth effect", and it's an established economic principle.

Rising asset values cause a positive increase in consumer confidence, which leads to a self fulfilling cycle of positive economic activity.

Just as excessive savings make a country poorer, as detailed in the paradox of thrift.

Your problem Graham is that your worldview is so narrow you can't understand complex or counter intuitive economic principles.

Graham_Devon

It's not narrow.

It's just you are taking the wealth effect to a whole new extreme. Theres truth in it, but not to the amount you place on it.

HAMISH_MCTAVISH

Graham_Devon wrote: »

It's not narrow.

It's just you are taking the wealth effect to a whole new extreme. Theres truth in it, but not to the amount you place on it.

Either it's true or not Graham.

Either rising asset prices lead to increasing consumer confidence, increased spending and economic growth or not.

Which is it?

Graham_Devon

You are starting to look desperate again Hamish.

I've already stated it's true, but it could simply mean the difference between buying Tesco's own coco pops vs Kellogs.

You are taking it far to far, and if anyone wishes to look into how much of an effect it may have, you will just drill the argument down to "true or false".

crash123

HAMISH_MCTAVISH wrote: »

There will be no significant and sustainable recovery in the UK economy until there is a significant recovery in UK house prices.

How can we have a recovery if they haven`t crashed. Sorry reduced in price?

HAMISH_MCTAVISH

Graham_Devon wrote: »

You are starting to look desperate again Hamish.

Abusive ad hominem (also called personal abuse or personal attacks) usually involves insulting or belittling one's opponent in order to attack his claim or invalidate his argument.

This tactic is logically fallacious because insults and negative facts about the opponent's personal character have nothing to do with the logical merits of the opponent's arguments or assertions.

I've already stated it's true, but it could simply mean the difference between buying Tesco's own coco pops vs Kellogs.

Now multiply that effect over dozens of products and millions of households, and you've got a recovery.

You are taking it far to far, and if anyone wishes to look into how much of an effect it may have, you will just drill the argument down to "true or false".

OK, lets look into how much of an effect it has.

wotsthat

Graham_Devon wrote: »

And I would like you to explain to me how if the value of your house rises 20% in a year, but your wages are static and inflation 5%, how on earth you think households will feel better off.

Why does it need an explanation?

In this situation most people would just do the rough sums to work out whether they are better off.

Some people would be worse off with your scenario but others would be better off. I'd sign up in a shot.

Thrugelmir

Graham_Devon wrote: »

You are starting to look desperate again Hamish.

Again? I would have said continually for a while now. Same old record playing