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Bank Bailout, is this how it works if it goes wrong?
Comments
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Privateis the profits nationalise the losses at our expense!
Someone on here said we'd make a profit out of the Northern Rock except I still havent recievd my cheque
Theres more chance of the pope winning the 100metres at the Beijing olympics than us making a profit
Why do you think they just binned off the 10p tax threshold?0 -
Does anyone else think the measures being implemented by the government is as much an attempt to prevent a housing crash as it is to bail out the banks? In so doing they are effectively attempting to shut out a whole generation from the housing market by keeping price levels where they are just to save their political careers.:mad:0
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Does anyone else think the measures being implemented by the government is as much an attempt to prevent a housing crash as it is to bail out the banks? In so doing they are effectively attempting to shut out a whole generation from the housing market by keeping price levels where they are just to save their political careers.:mad:
The "It'll make mortgages and loans cheap and easy to get again" line is just to curry favour with the voters and distract attention from the fact that the banking system is in a precipitous state and we are close to financial disaster.
Under the rules laid out, it's difficult to see how the banks can use the system to provide cheap mortgage loans but more importantly, nor would they wish to now.
They need to recapitalise and they can get much higher, less risky returns by ploughing the cash freed up into commodities and energy markets - thus raising prices and pushing up our food and fuel bills. :rolleyes:
The main priority now is to prevent banking meltdown which would have calamitous consequences for the economy. The next priority once the crisis has passed should be to put in place regulatory checks and balances to make sure that the banks never get the chance to make highly risky one-way bets at the taxpayers' expense ever again.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
Does anyone else think the measures being implemented by the government is as much an attempt to prevent a housing crash as it is to bail out the banks? In so doing they are effectively attempting to shut out a whole generation from the housing market by keeping price levels where they are just to save their political careers.:mad:
No. There is no real indication that anything is actually being done to prevent a housing crash (or 'correction' in media speak).
Now brown, et all might say that the bank rescue package is designed to bring stability, and kickstart the mortgae market, and ease worries for home owners, but the fact is that it isn't. It is puerly designed to stop UK banks from going bust.
Darling is having the mortgae banks in to try persuade them to drop mortgage rates, in line with BoE. But that is more to do with stopping people being repossed.
Every credible indication is that house prices will fall by between 20% and 30% over the next two years0 -
The "It'll make mortgages and loans cheap and easy to get again" line is just to curry favour with the voters and distract attention from the fact that the banking system is in a precipitous state and we are close to financial disaster.
Under the rules laid out, it's difficult to see how the banks can use the system to provide cheap mortgage loans but more importantly, nor would they wish to now.
They need to recapitalise and they can get much higher, less risky returns by ploughing the cash freed up into commodities and energy markets - thus raising prices and pushing up our food and fuel bills. :rolleyes:
The main priority now is to prevent banking meltdown which would have calamitous consequences for the economy. The next priority once the crisis has passed should be to put in place regulatory checks and balances to make sure that the banks never get the chance to make highly risky one-way bets at the taxpayers' expense ever again.
Yes - and the CDO sell-on market, which seems to have been one of the main causes of the current difficulties, doesn't look as if it will pick up anytime soon.
Even WITHOUT all these financial problems, I don't think the housing lunacy could have been sustained, as prices were at the peak of affordability - they simply couldn't find any more ways to blow up the bubble, this was shown by the fact that nonsense like 'buy with four friends' was being pushed.'Never keep up with Joneses. Drag them down to your level. It's cheaper.' Quentin Crisp0 -
The "It'll make mortgages and loans cheap and easy to get again" line is just to curry favour with the voters and distract attention from the fact that the banking system is in a precipitous state and we are close to financial disaster.
Under the rules laid out, it's difficult to see how the banks can use the system to provide cheap mortgage loans but more importantly, nor would they wish to now.
They need to recapitalise and they can get much higher, less risky returns by ploughing the cash freed up into commodities and energy markets - thus raising prices and pushing up our food and fuel bills. :rolleyes:
The main priority now is to prevent banking meltdown which would have calamitous consequences for the economy. The next priority once the crisis has passed should be to put in place regulatory checks and balances to make sure that the banks never get the chance to make highly risky one-way bets at the taxpayers' expense ever again.
So there is no condition that the bonds being made available by the BoE are to be used to kickstart mortgage lending? They can be used in any way the banks decide to use them?0 -
So there is no condition that the bonds being made available by the BoE are to be used to kickstart mortgage lending? They can be used in any way the banks decide to use them?
The bonds can only be used as (highly secure) collateral, that the banks can borrow against, as they are an asset that the lender knows will retain it's value.
Notwithstanding hyper-inflation goverment bonds are about as secure as you can get that's why they are called gilts. There is virtually no circumstances, other than in the case where an economy goes into hyper inflation, where goverment bonds value can be wiped out.
Once the banks have the cash from the loans they secure using the bonds, they are free to use it how they like. The feeling is that they will be plowing it into markets that are on the way up, like commodities, and energy, and not propert which is very much on the way down.
The goverment can't instruct them what to do with it because then they would be in effect, nationalising the UK banking system, rather than just one bank (northern rock).
The facillity has been put in place soley to prevent the banks, some of which are at at great risk of failing, from actually doing so. As tthis would cuase a great deal more of a problem, for the banking system, than we have already.0 -
So there is no condition that the bonds being made available by the BoE are to be used to kickstart mortgage lending? They can be used in any way the banks decide to use them?
It won't be used for mortgages, except maybe a little as a nod towards Downing Street, but only then for good risks who have substantial deposits.
Crash Gordon had the bankers in for a power-chat the other day... and impressions I get is he doesn't really understand the severity of what's going on.
Breakfast with GordonMike Geoghegan of HSBC said his bank was not in any particular difficulty, whereas it was clear, said a banker present, "that if you're Alliance & Leicester, you're s******g yourself". This was news to Brown. He'd not appreciated the squeeze was affecting organisations differently.0 -
Privateis the profits nationalise the losses at our expense!
Someone on here said we'd make a profit out of the Northern Rock except I still havent recievd my cheque
Theres more chance of the pope winning the 100metres at the Beijing olympics than us making a profit
Why do you think they just binned off the 10p tax threshold?
Quite clearly the 10p has nothing to do with this.
It was announced back when ol' grumpy guts was chancellor not PM.... long before any of this current palaver.
It was simply done to grab headlines for spin purposes. Only now is it biting him on the @rse... and funny it is too.... all his own doing :rotfl:0
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