Martins Joned the scare-mongers camp

KeithEssex_2

PasturesNew wrote: »

If you liked that, you HAVE to see the video where he's being interviewed about the housing market and he's screaming "it's armageddon out there" from last August.

http://uk.youtube.com/watch?v=rOVXh4xM-Ww

Short on time? Not interested in the story and just want the rant? Cut straight to 2 minutes in.

If you've no idea what he was ranting about, it was about people in the US that were sold cheap mortgages on "teaser rates", really low, and they never had a chance of being able to afford the mortgage when the teaser rate went up; they were being repossessed in their droves. This was the American sub-prime problem a year ago.

Back to the thread

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I felt the promotion of the programme was scare-mongering, but not any of the content in itself. If it scared some people into listening then that's good. But anybody listening would have realised they're OK.

The only "pity" I thought was that Martin only managed to find a bloke with £120k cash in banks (from buying/selling property for a living). There are a lot of STR people out there, quite normal everyday people, whose pots are £200-300k. While Martin pointed out the man with £120k would need four bank accounts ... somebody with £200k would need seven and somebody with £300k would need nine!

It's a real pain in the bum setting up and managing so many accounts. Each has different ways to apply and verify. All the paperwork. All the username/password/unique answers you have to come up with ... it's a job in itself. And, if you've STR'd, you have to also manage moving all those accounts around safely if you're moving about as you're renting on 6-month ASTs.

It's costing so many banks so much money if we've all got all these spare accounts set up, JUST to protect money in £35k chunks.

That's why increasing the limit is useful. You do it on the basis that hopefully you will never have to use it. It's a bit like our nuclear deterrent !

It would be interesting to see what percentage of the banking systems deposits are covered by the £35,000 limit ... I haven't seen a figure anywhere yet but I suspect that 90% of people would be under it.

Presumably the extra undertaking would not be as significant as the original undertaking because the number of people would be small as a percentage of the total savers.

david78

I tried to recorded the program on my PVR but it didn't work (arrgghh!)

Personally, I wouldn't trust any guarantee made by the government. So far they have shown themselves to be untrustworthy in this respect.

greco_2

Hats off to Martin for the programme. He didn't tell me anything I didn't already know but there will be plenty of people who were unaware of the shortcomings of the FSCS.

Yvette Cooper was frankly awful. There was a 'system in place' she reassured us several times but couldn't tell us what it was. Sorry to have to tell you this, Yvette - there isn't.

Ulfar

Come on people, its been obvious that the compensation scheme was inadequate.

Why do you think the Government nationalized Northern Rock.

What Martin failed to push Yvette Cooper on is how the government is going to back the scheme.

How are they going to provide the funds for the scheme.

Where are they going to borrow the funds from, are they just going to get the BOE to print more money.

Either way the public will suffer either from higher tax to pay back the borrowing or from higher inflation as Sterling drops further.

agent_orange_2

Ulfar wrote: »

are they just going to get the BOE to print more money.

.

I reckon that would be the way. By the time you got the 35K it would be worth about £35 in real terms

Steve_xx

Iconic wrote: »

Only saw the end of the programme.

Won't the Government's money run out one day if they have to keep having to sure up all these schemes? Mind you they rob peter to pay paul with pensions so why not do it with everything else!

Whose money? The governemnt don't have any money. The taxpayer foots the bill for this.

RayWolfe

MSE_Martin wrote: »

Actually as you may not have realised we did the interview with Yvette Cooper late last night - having had a request in for three weeks. The Treasury contacted us just before the programme went to bed today and we hastily changed the ending as there had been NO conclusion from the interview.

A very fair point that I, as a viewer would have no knowledge of because you didn't tell us. So, if I've maligned your journalistic integrity, I apologise.

Let me then ask this: If you had the knowledge of the inadequacy of the scheme three weeks ago, why did you - the consumers champion - not tell us via the site or newsletter. Surly a journalist with integrity (contradiction in terms?) having discovered such an critical flaw would want the world to know, regardless of the fact that they were being paid to make a television program which might have less impact were the contents to be pre-announced ... wait a moment, the contents were pre-announced. Sunday Times TV critics choice "ML looks at how secure our money REALY is, examining the fine print of the ......."

I know you don't put out ITV's press releases, but it read a little scary to me and you obviously thought so too. BUT, you didn't want to tell us so that we may be even more aware than we are through your help.

Anyway, don't want to be too controversial, just playing devils advocate and not allowing this "lapse" to ruin my very high regard for the good work that you do.
Cheers
Ray

Steve_xx

PasturesNew wrote: »

If you liked that, you HAVE to see the video where he's being interviewed about the housing market and he's screaming "it's armageddon out there" from last August.

http://uk.youtube.com/watch?v=rOVXh4xM-Ww

Short on time? Not interested in the story and just want the rant? Cut straight to 2 minutes in.

If you've no idea what he was ranting about, it was about people in the US that were sold cheap mortgages on "teaser rates", really low, and they never had a chance of being able to afford the mortgage when the teaser rate went up; they were being repossessed in their droves. This was the American sub-prime problem a year ago.

Back to the thread

---

I felt the promotion of the programme was scare-mongering, but not any of the content in itself. If it scared some people into listening then that's good. But anybody listening would have realised they're OK.

The only "pity" I thought was that Martin only managed to find a bloke with £120k cash in banks (from buying/selling property for a living). There are a lot of STR people out there, quite normal everyday people, whose pots are £200-300k. While Martin pointed out the man with £120k would need four bank accounts ... somebody with £200k would need seven and somebody with £300k would need nine!

It's a real pain in the bum setting up and managing so many accounts. Each has different ways to apply and verify. All the paperwork. All the username/password/unique answers you have to come up with ... it's a job in itself. And, if you've STR'd, you have to also manage moving all those accounts around safely if you're moving about as you're renting on 6-month ASTs.

It's costing so many banks so much money if we've all got all these spare accounts set up, JUST to protect money in £35k chunks.

I'm not sure how you conclude that the program promotion was scare-mongering. There was no untruth in what was said on it. The facts are that the UK government has all but admitted that it has a FSCS in place that is wholly inadequate. However, in order to mitigate a possible run on the banks as a result of the program, the government declared that there are "systems" in place that would prevent a catastrophe. That's veiled speak for thinking on the hoof, meaning that they plan to deal with these issues on an individual basis should one or more arise. In addition, and after the fiasco at Northern Rock, it is more likely that an ailing bank would be dealt with quietly by the Bank of England and the public may not gain any knowledge of it.

agent_orange_2

Steve_xx wrote: »

it is more likely that an ailing bank would be dealt with quietly by the Bank of England and the public may not gain any knowledge of it.

I'm pretty sure this was actually stated, that the BOE would 'assist' ailing banks without it ever being made public. It's probably a fair bet this has happened.
I just wonder how this stacks up with the Banks having to inform shareholders of adverse trading etc. Mind you, they'll probably tell more lies like the RBS board who increased dividend payments and stated there was no need for a Rights issue - five weeks later they announce the biggest rights issue in uk corporate history.

Meltdown_2

MSE_Martin wrote: »

The initial commentary said "and the shocking discovery that the fund mightn't have enough money to pay out" this is TRUE - it doesn't."

I haven't seen the programme as yet, but I don't see why anyone (particularly those connected with MSE) would find this shocking. (Perhaps it was said to keep people watching.)

The fact that the FSCS wouldn't have enough money to pay out depositors of a major failed Bank/BS has been regularly mentioned by many posters on the "Are your savings safe?" threads - a typical one was this in Oct 2007.

The fact is I am very proud of the journalism here, both the discovery and that by doing the programme we've now gained confirmation that the government will back up the scheme - something that didn't exist in the past.

Well, it did (but only sort of) and the major question (perhaps) is whether the government's words are likely to be put into practice.
If you have extracted from them a total backing of deposits (up to £35K) for all banks registered with FSCS, then it might be seen as a small advance, but it would need to be backed up with the explanation of how this might happen for the "real biggies"

The FSCS lack of funds was a true worry, and to have resolution was great.

Yes, I will be very interested to see how they propose to protect HSBC (say) depositors.