Interest Rates - BoE should cut them or the governer should go!

Turnbull2000

SuperV wrote: »

There is a huge difference. Saying that something is inevitable just is an excuse to be immoral.

And your post is immoral.

Re how much clue I have - read the whole thread, it is now 3 months old - 3 months ago I predicted that the end of summer will be bloody.

Does that give Gordon Brown, The City, Wall Street, Northern Rocks/B&B/HBOS directors the moral high ground? They were, and some still are, in denial of the problems we have and allowed it to reach breaking point. Afraid you're talking !!!!!!!! again.

casper_uk

Francesanne wrote: »

The mortgage rate hit 15% in the 1980's - that's what I'd call high.

What was the average mortgage back when the rates got so high? 50k at 15% is the same as 150k at 5% in my book! Am afraid the crash will happen as house prices NEED to return to normal levels. Yes there will be pain but it's not the end of the world, it's not even going to be the end of the UK so your USSR bit is invalid. We will continue to plod on.

Ask your self what would happen if they fix this mess and keep house prices high and linked to the economy as it is now? A few more years of getting into even more debt and then an even bigger mess when it all gets to much to handle? The weak need to be weeded out and we can not at any cost, go back to how it was. We need to move forward and make sure that the bankers never repeat their past business practises as they do not work.

I know it sounds cruel but like the bankers if people have acted stupidly and borrowed more then they can pay back then repositions need to happen as it's not morally right to bail out stupid people imo. I wouldn't bail out bankers either if it was up to me!

SuperV wrote: »

There is a huge difference. Saying that something is inevitable just is an excuse to be immoral.

And your post is immoral.

Re how much clue I have - read the whole thread, it is now 3 months old - 3 months ago I predicted that the end of summer will be bloody.

Yes your were right about the end of summer but if interest rates would of been lowered it would be even worse then it is now! Look at the US 1% interest rates have done them a lot of good have they! Talking about people predicting things, did you know that Mr King predicted this mess a few years ago but the chancellor at the time (guess who that was! lol) didn't do anything to stop it?

SuperV

casper_uk wrote: »

What was the average mortgage back when the rates got so high? 50k at 15% is the same as 150k at 5% in my book! Am afraid the crash will happen as house prices NEED to return to normal levels. Yes there will be pain but it's not the end of the world, it's not even going to be the end of the UK so your USSR bit is invalid. We will continue to plod on.

Ask your self what would happen if they fix this mess and keep house prices high and linked to the economy as it is now? A few more years of getting into even more debt and then an even bigger mess when it all gets to much to handle? The weak need to be weeded out and we can not at any cost, go back to how it was. We need to move forward and make sure that the bankers never repeat their past business practises as they do not work.

It will take much longer to get to any level that you can believe is normal. Who says anything about more absolute debt?

casper_uk wrote: »

I know it sounds cruel but like the bankers if people have acted stupidly and borrowed more then they can pay back then repositions need to happen as it's not morally right to bail out stupid people imo. I wouldn't bail out bankers either if it was up to me!

Don't bail them... bail the system. I think it would be fair for them to provide CDS in the future for all investments.

casper_uk wrote: »

Yes your were right about the end of summer but if interest rates would of been lowered it would be even worse then it is now! Look at the US 1% interest rates have done them a lot of good have they! Talking about people predicting things, did you know that Mr King predicted this mess a few years ago but the chancellor at the time (guess who that was! lol) didn't do anything to stop it?

I thought so since 2001... now it just became so incredulously obvious. Mr King didn't complain about bonuses till, again, it become obvious what will happen. As for Gordon Brown, I didn't notice that Mr King resigned in protest against that decision.

As I suggested, higher inflation will help more than depression as suggested. North of England and Midlands are the best examples what will happen - it is not possible to change human beings as a hardware in a huge service centre.

So, be careful when you ask for week to be weeded out. It will not be just few thousands.

SuperV

Turnbull2000 wrote: »

Does that give Gordon Brown, The City, Wall Street, Northern Rocks/B&B/HBOS directors the moral high ground? They were, and some still are, in denial of the problems we have and allowed it to reach breaking point. Afraid you're talking !!!!!!!! again.

Read again... and find when I mentioned that they managed to do one thing right... except for their own profit.

But - you can't destroy the whole system because of them.

By the way - are you for one obvious solution nobody mentions - cut military spending. For example, USA military budget is US$600 billions. What do you think about that figure?

Interesting - it was a war in Afghanistan that ruined USSR's economy. Same place, different actors, same result? Why???

SuperV

"Separate official figures also showed productivity growth in the second quarter sinking to its lowest level since 1990, as output stalled but companies were reluctant to lay off employees. Economists tended to ignore the slightly better news on services on Wednesday and began to predict the Bank of England’s monetary policy committee was likely to cut interest rates from their current 5 per cent at its meeting on October 9.
Many economists now think the outlook is so bad that companies, which have refrained from cutting staff as they wait to see how the economy fares, will soon start making large redundancies – pushing the economy into a deeper recession than appeared likely only a few weeks ago.
Malcolm Barr of JP Morgan downgraded his forecast for the UK economy to show a total fall of 1 per cent between the third quarter of 2008 and the first quarter of 2009 – a recession a little over a third as severe as that of the early 1990s. In these circumstances he expected interest rates to fall to 3.25 per cent by this time next year, with “the first cut coming next week”.
Michael Saunders of Citi also changed his prediction for interest rates, saying “it now seems highly likely that the MPC will cut rates at the October meeting next week... the only debate now is whether the MPC cuts 25 basis points or 50 basis points”."

http://www.ft.com/cms/s/0/0851f0ce-8fa0-11dd-9890-0000779fd18c.html

Maybe there is a small chance if they act now to avoid complete mess. Maybe...

lisyloo

How will cutting interest rates help people who can't borrow because they don't have a big enough deposit?
It will help those with loans and mortgages but I can't see how it will help the mortgage generally if lots of people still can't get mortgages.

SuperV

lisyloo wrote: »

How will cutting interest rates help people who can't borrow because they don't have a big enough deposit?
It will help those with loans and mortgages but I can't see how it will help the mortgage generally if lots of people still can't get mortgages.

If they don't have jobs, they will not be able to borrow anything at all.

SuperV

http://www.guardian.co.uk/global/2008/oct/01/manufacturing.manufacturingdata

Good luck.

SuperV

"Central banks launch rate cut

By Ed Crooks and Norma Cohen in London
Published: October 8 2008 12:15 | Last updated: October 8 2008 13:10

Central banks around the world announced a co-ordinated cut in interest rates on Wednesday, in response to mounting fears about the impact of the financial crisis on the world economy.
The US Federal Reserve, the European Central Bank, the Bank of England, and the central banks of Canada, Switzerland and Sweden and the United Arab Emirates all cut their main lending rates by 0.5 percentage points.
The People’s Bank of China also announced a rate cut of 0.27 percentage points. The Bank of Japan, which already has a main lending rate of 0.5 per cent, did not cut its rate, but expressed “strong support” for the other banks’ moves.
The Fed, ECB and Bank of England issued statements with identical explanations for the move, saying inflationary pressures had started to moderate, and the recent intensification of the financial crisis had “augmented the downside risks to growth”
The euro and sterling, which have fallen in recent weeks against the dollar, gained following the announcement, while the yen, which is seen as a reserve currency, lost ground."
http://www.ft.com/cms/s/0/5fce75b2-949f-11dd-953e-000077b07658.html
So much for all talks how interest rate directly affects currency...
And now, we can only imagine what would the difference be if this action was undertaken 3 months ago! Now it may be too little, too late!
p.s.
By the way, Halifax consultant is still around?

SuperV

“We expect the Bank of England to cut interest rates by a further 25 basis points in both November and December, taking them down to 4.00 per cent by the end of this year. Furthermore, we would not rule out deeper cuts if there is no easing in the financial sector problems”

FT.com

Mr King should go! He obviously didn't understand the size of the problem.

Interesting enough, the size of the cut now is about the size of the cut I suggested as the first step awhile ago and the whole suggested amount is about the size of the cut I suggested as needed.

Unfortunately, it may have to go down to 3% as it is 3 months late.