FCA: Interest-only mortgage crackdown "gone too far"

the_flying_pig

HAMISH_MCTAVISH wrote: »

Eh?

You really don't understand how increasing credit availability, which enables more new houses to be built (employing people), which enables more people to move house (employing people), which means all those people will need to buy things for their new houses (employing people), or have renovations done on them (employing people), or have an extension built (employing people), or how any of this increase in consumer spending, provision of services, and secondary spend from the extra employed people, then stimulates the wider economy?

Seriously?

hand on heart, H, to what extent do you reckon that ripping yarn of yours represents anything bordering on:

(1) the full picture;
(2) a mainstream viewpoint; or,
(3) reality?

Thrugelmir

marathonic wrote: »

So now you're saying that investing is greed?

Leveraging with debt to speculate is like chasing fools gold.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Eh?

You really don't understand how increasing credit availability, which enables more new houses to be built (employing people), which enables more people to move house (employing people), which means all those people will need to buy things for their new houses (employing people), or have renovations done on them (employing people), or have an extension built (employing people), or how any of this increase in consumer spending, provision of services, and secondary spend from the extra employed people, then stimulates the wider economy?

Seriously?

Increasing credit availiablility has seen house builds FALL, not increase. We saw that in the boom years, we see it again now with all the FFL etc.

Theres some sense in your people moving and buying new goods - but it's minimal. Not sure the amount of problems associated with loose credit justify the minimal amount of employment you describe.

You are just talking of more spending again. More spending on top of higher debts (as a result of lower LTVs or I/O mortgages).

Sustainable spending is one thing. That's good. That's money earned buying goods and passing the wealth around.

Unsustainable spending and higher debts (which is what you are asking for here as you are expecting higher LTVs and more spending on top of that), not sure I'd agree that's something to aim for.

marathonic

the_flying_pig wrote: »

hand on heart, H, to what extent do you reckon that ripping yarn of yours represents anything bordering on:

(1) the full picture; Not the full picture, nor was it claimed to be
(2) a mainstream viewpoint; Not outside those within the economics world and those that understand it
(3) reality? Yes. On an anecdotal basis, I've many friends in Australia contributing to Australian economic activity because their trades within the construction industry are not in demand here

Answers in red above!!!!

Graham_Devon

the_flying_pig wrote: »

hand on heart, H, to what extent do you reckon that ripping yarn of yours represents anything bordering on:

(1) the full picture;
(2) a mainstream viewpoint; or,
(3) reality?

It's an answer to my question at least.

The answer as to how this benefits Hamish himself appears to lie in the fact that he is just concerned for the greater good.

That greater good appears to involve people taking on higher debts, at higher levels of interest and spending higher amounts (through legal fee's and homewares) to achieve it all.

I can't agree with any of that. Neither do I truely believe that's Hamish's motivation, as it appears a little...well, non-sensical.

HAMISH_MCTAVISH

the_flying_pig wrote: »

hand on heart, H, to what extent do you reckon that ripping yarn of yours represents anything bordering on:

(1) the full picture;
(2) a mainstream viewpoint; or,
(3) reality?

From the Chancellor, George Osborne.....

"A lack of credit is damaging businesses and costing jobs."

From the Shadow Chancellor, Ed Balls.....

Housebuilding is crucial to economic recovery."

Seems quite hard in fact to find anyone mainstream who would disagree.....

CLAPTON

HAMISH_MCTAVISH wrote: »

From the Chancellor, George Osborne.....

"A lack of credit is damaging businesses and costing jobs."

From the Shadow Chancellor, Ed Balls.....

Housebuilding is crucial to economic recovery."

Seems quite hard in fact to find anyone mainstream who would disagree.....

worrying isn't it?

Graham_Devon

Listing George Osborne and Ed Balls to prove the mainstream viewpoint is brilliance!

HAMISH_MCTAVISH

Graham_Devon wrote: »

Increasing credit availiablility has seen house builds FALL, not increase. We saw that in the boom years,

Absolutely false.

Housebuilding increased every year from 2001 to 2007. Indeed, had the credit crunch not sent building to 100 year lows, we'd now almost certainly be building enough homes.

It has increased since the introduction of these schemes now as well.

Theres some sense in your people moving and buying new goods - but it's minimal. Not sure the amount of problems associated with loose credit justify the minimal amount of employment you describe.

Really?

Minimal?

You think an extra million housing transactions a year will have only a "minimal" impact?

Wasn't it you that posted the average homeowner spends 9K on a move?

So that would be £9,000,000,000 pumped into the economy there, before we even get into furnishings, extensions, redecorating, etc etc etc.

It's massive.

You are just talking of more spending again. More spending on top of higher debts (as a result of lower LTVs or I/O mortgages).

Sustainable spending is one thing. That's good. That's money earned buying goods and passing the wealth around.

Unsustainable spending and higher debts (which is what you are asking for here as you are expecting higher LTVs and more spending on top of that), not sure I'd agree that's something to aim for.

That entire paragraph is so muddled I'll leave most of it alone.

Sustainable spending is of course, a good thing. And what makes spending sustainable, is increased prosperity, increased employment, increased profitability, increasing wages.

Which can all be helped greatly through an increase in credit availability, leading to an increase in employment, and an increase in economic growth.

Graham_Devon

Did house building start in 2001 then? What happened before that? Look into it, you'll son realise I'm not lying.

As for your million extra transactions, that's a fairly large number you've just pulled out of a hat to make a point there.

Aren't we averaging 55k a month or something at the moment? A million extra on top seems a bit "out there".

The last paragraph is not muddled at all, but good to know were back to your simple fall back position of shouting "muddle" as soon as you are stuck.

I have no problem with credit Hamish. I take issue with your version, which is growth fueled by credit, which, by definition, requires further credit as the fuel to keep the fire burning.