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Newbuy Statistics
Comments
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ultimately if this is a free economy then none of this would be allowed or necessary?
Ultimately if this was a free economy the banks wouldn't be restricted from lending at higher LTV-s via BASLE 3 regulations.
Nor be subject to the various new FSA rules regarding who they can and cant lend to, and under what circumstances.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Ultimately if this was a free economy the banks wouldn't be restricted from lending at higher LTV-s via BASLE 3 regulations.
Nor be subject to the various new FSA rules regarding who they can and cant lend to, and under what circumstances.
In a free economy those banks would no longer exist and many of those in charge would probably have been incarcerated or lynched."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
excellent explanation, many thanks ....... one has to wonder though why? why have all this complication .... ultimately if this is a free economy then none of this would be allowed or necessary?grizzly1911 wrote: »In a free economy those banks would no longer exist and many of those in charge would probably have been incarcerated are lynched.
We could talk all day about what would happen in a free market, but it's pointless, we don’t live in a free market and never will, we have rules and regulations, consumer rights, employment rights, etc (and these are good things)...
As the market is how it is, with rules and regulations, in order to meet political/social ends the government needs to intervene in the market.
They will do this in the most efficient manner while trying to expose the exchequer as little as possible.
At face value someone might see this scheme as crazy, expensive, a failure, it is anything but.
This scheme is a perfect example, at the end of the day in 7 years time, it will have cost the government £zero (or we have much bigger problems to worry about), but by having government backing it relaxes the markets and the banks can class these more risky loans as higher quality on their balance sheets, which helps them meet the rules on capital reserves.
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martinsurrey wrote: »We could talk all day about what would happen in a free market, but it's pointless, we don’t live in a free market and never will, we have rules and regulations, consumer rights, employment rights, etc (and these are good things)...
As the market is how it is, with rules and regulations, in order to meet political/social ends the government needs to intervene in the market.
They will do this in the most efficient manner while trying to expose the exchequer as little as possible.
At face value someone might see this scheme as crazy, expensive, a failure, it is anything but.
This scheme is a perfect example, at the end of the day in 7 years time, it will have cost the government £zero (or we have much bigger problems to worry about), but by having government backing it relaxes the markets and the banks can class these more risky loans as higher quality on their balance sheets, which helps them meet the rules on capital reserves.
I appreciate we live in a controlled world.
Smoke and Mirrors.
Why have the rules if you then circumvent them?"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »
Why have the rules if you then circumvent them?
Because the rules have had unintended consequences.
As many of us warned they would.....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Because the rules have had unintended consequences.
As many of us warned they would.....
Bingo!
you make a big change to A which flows through b-c-d-e-f-g-h-i-j-k-l-m-n-o-p and Q and you didnt want Q to be changed, so you make a small tweak to get Q back on track, its always been that way and always will.0 -
HAMISH_MCTAVISH wrote: »Because the rules have had unintended consequences.
As many of us warned they would.....
The rules have had the consequences they planned."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »The rules have had the consequences they planned.
And a few they didn't plan.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
martinsurrey wrote: »This scheme is a perfect example, at the end of the day in 7 years time, it will have cost the government £zero (or we have much bigger problems to worry about), but by having government backing it relaxes the markets and the banks can class these more risky loans as higher quality on their balance sheets, which helps them meet the rules on capital reserves.
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The underwriting criteria is actually very tight. So although a high % LTV they are considerably more secure than lending of 7 years ago.
This a good example of the Government of the day supporting a market without the need to interfere.0
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