When will UK interest rates rise? - Markets Suggest 1% is still 5 years away!

Thrugelmir

wotsthat wrote: »

Low interest rates are intended to reduce the cost of borrowing to promote investment in the economy.

Agreed. As profitability is the key to successful business investment not growth. Markets in Europe are contracting in monetary terms as austerity bites.

DervProf

wotsthat wrote: »

Sounds like you're not happy with something but aren't quite sure what it is.

I wasn't happy with the way the BoE, FSA, Government and Banks were behaving in the lead up to the credit crunch. It looked like a serious problem waiting to happen (although when I discussed this issue with most people, they dismiised it as a non-issue and that I was wrong).

Now, I'm not claiming to be some financial wizard, or have in depth knowledge of global finance. What I have witnessed is greed, especially when it comes to money. I won't be happy if we travel down the same road again.

Thrugelmir

DervProf wrote: »

Now, I'm not claiming to be some financial wizard, or have in depth knowledge of global finance. What I have witnessed is greed, especially when it comes to money. I won't be happy if we travel down the same road again.

Everyone got it wrong. Even the US Fed.

The view was that financial engineering through the use of deriatives had reduced risk. So banks were allowed to deleverage and consumers take on ever increasing levels of debt.

With hindsight the call was wrong.

Harry_Boyle

Thrugelmir wrote: »

I said asset prices (in a very general sense) not house prices.

Banks have far more on their balance sheets than just mortgages.

Exactly, and many on here would do well to remember that.

Harry_Boyle

DervProf wrote: »

although when I discussed this issue with most people, they dismiised it as a non-issue and that I was wrong.

Who did you discuss this with? Someone in a position of power who could do something about it, or Japanese tourists who stopped you in the street to ask for directions?

Incidently, the lottery numbers for last week were 07 20 27 39 46 48 49. I told everyone this two years ago but no one believed me.

wotsthat

DervProf wrote: »

I wasn't happy with the way the BoE, FSA, Government and Banks were behaving in the lead up to the credit crunch. It looked like a serious problem waiting to happen (although when I discussed this issue with most people, they dismiised it as a non-issue and that I was wrong).

That's what I mean - you're unhappy about something, not quite sure what it is, but know who's to blame. Maybe you were dismissed because of the lack of clarity?

In the lead-up to the credit crunch I was amazed at the amount of people that were MEW'ing and thought this would come back to bite them. I tried to explain to a few people that they weren't actually withdrawing equity but, in reality, were increasing their debts - I was dismissed - who wouldn't accept 'free' money?

Being a good little bear I continued living in a house I could easily afford and concentrated on overpaying my mortgage confident that this was the correct course of action. Fast forward a few years and I'm still in my easily affordable house but what of the naughty mewing friends? Well, as far as I see, they all stretched themselves bought bigger houses and are paying b***er all on their mortgages. With hindsight that's what I should've done too.

I'd like to blame the FSA et al but the fact is fortune favours the brave.

Harry_Boyle

wotsthat wrote: »

I'd like to blame the FSA et al but the fact is fortune favours the brave.

Never a truer word.

I get the impression from the tone of all of your posts that you're Ok with your decision. Shame that not everyone is the same, there are a couple on here who didn't take any risks and instead of being happy with their decision, they seem to hate those who did decide to take a risk and who are doing well. Shame because these couple of people are now blighting their own lives with their negative emotions.

Why can't they be happy with their own decisions and indifferent to other peoples? Why do they have to become so embittered?

james_toney

wotsthat wrote: »

That's what I mean - you're unhappy about something, not quite sure what it is, but know who's to blame. Maybe you were dismissed because of the lack of clarity?

In the lead-up to the credit crunch I was amazed at the amount of people that were MEW'ing and thought this would come back to bite them. I tried to explain to a few people that they weren't actually withdrawing equity but, in reality, were increasing their debts - I was dismissed - who wouldn't accept 'free' money?

Being a good little bear I continued living in a house I could easily afford and concentrated on overpaying my mortgage confident that this was the correct course of action. Fast forward a few years and I'm still in my easily affordable house but what of the naughty mewing friends? Well, as far as I see, they all stretched themselves bought bigger houses and are paying b***er all on their mortgages. With hindsight that's what I should've done too.

I'd like to blame the FSA et al but the fact is fortune favours the brave.

Harry_Boyle wrote: »

Never a truer word.

I get the impression from the tone of all of your posts that you're Ok with your decision. Shame that not everyone is the same, there are a couple on here who didn't take any risks and instead of being happy with their decision, they seem to hate those who did decide to take a risk and who are doing well. Shame because these couple of people are now blighting their own lives with their negative emotions.

Why can't they be happy with their own decisions and indifferent to other peoples? Why do they have to become so embittered?

excellent posts Harry and Wotsthat

wotsthat

Harry_Boyle wrote: »

I get the impression from the tone of all of your posts that you're Ok with your decision. Shame that not everyone is the same, there are a couple on here who didn't take any risks and instead of being happy with their decision, they seem to hate those who did decide to take a risk and who are doing well. Shame because these couple of people are now blighting their own lives with their negative emotions.

In general yes. What I think a lot of people don't do is use hindsight to see whether their past actions were the correct course or could have been better implemented. A little honest self reflection would lead most people to conclude that the biggest influence on their lives is their own actions. Concentrating on their own decisions rather than unduly worrying about other people's would have a positive effect.

Harry_Boyle

wotsthat wrote: »

In general yes. What I think a lot of people don't do is use hindsight to see whether their past actions were the correct course or could have been better implemented. A little honest self reflection would lead most people to conclude that the biggest influence on their lives is their own actions. Concentrating on their own decisions rather than unduly worrying about other people's would have a positive effect.

I'd go further and suggest that reading/conversing about other people's plans, whether they were successful or not, is extremely usefull. While it's a positive step to learn from your own mistakes, it's a much cheaper option to learn from other people's. I'm always appreciative of people who take the time to post their financial planning onto here, it's made me look at, and where appropriate, adapt my own plans accordingly.

It's a shame if we lose this valuable financial resource because a couple of embittered people missed out on opportunities because of their own fears and timidness and who take out the bitterness of that failure on others.

Human nature I guess to blame others than to look at your own decisions.