Where did all the money go?

[Lost User]

Oakman wrote:

Why is that a bad thing?

I didnt say it was. The issue is if the banks need cash, and start foreclosing, which is what they would normally have started doing (but I suspect the govt is prohibiting this (as part of the bail out miney)), then the houses go to auciton, and its only those with cash who can buy, thus setting house prices at about 20% of their current value. This is the extreme case, no credit, no govt bailout, banks foreclosing, houses auctioned for whatever a bank can get, and only cash buyers available with the ex owner left with a negative equity debt of 89% of the previous value. This is one end of the stick, the other end is govt intervention so they effectively own the banks and lend regardless of profit, but only for social reasons, in order to maintain structure and stability. The UK is currently somewhere between these two extremes.

Morality is indistinguishable from social proscription

[Lost User]

I agree things are bad, but predictions of social collapse are just scaremongering mate. It is the sort of thing the right-wing rags love to stoke up the fear with. There are no grounds in reality and, to be honest, it comes across like you're gloating a little - 'Hey, I'm in France and it's paradise!, ha ha UK!' (and I apologise now if this isn't the case, but that's how it looks to me). There is no evidence that either revolution or anarchy is just around the corner. This isn't France you know! :) FWIW I think Europe is ... gasp ... a good thing! I also think that, if it's good for business, we should join the Euro ... double-gasp! I'm no little Englander. However, Europe IS flawed and corruption is rife which I feel must be addressed. We are all going to suffer in this recession to one degree or another, and we are stronger together. Others have pipe-dreams of some US/UK/Canadian/etc. (call it Oceania if you will) alliance that will be more effective but it's pie in the sky. People in this country need to let go of their xenophobia and prejudices - too many people in Britain want us to punch above their weight and I believe we are stronger in the EU than outside. However, it may take us to leave before people realise that, which could make the current recession look like a walk in the park. Anyway, I digress. I am a sceptical pro-European really, although it is easy for people to get caught up with flag-waving nationalist sentiment, especially when jobs are scarce and people are skint. Perhaps this recession will be the bitter pill we all need to swallow. Personally I see a house as a home and not as an investment, and as long as you can afford to pay your mortgage, then negative equity isn't actually a big deal. There is a good chance that my house won't be worth what I paid for it, but who cares? My mortgage is easily affordable and we have no plans to move! What's the problem?

[Oakman]

fat_boy wrote:

Our UK house has halved its euro value in the last 12 months. I fully expect it to drop another 20% in sterling, and if sterling devalues as I believe it must and it has already by 40% against the euro) then take off another 20% in euros terms.

I've owned a few houses in my life, but I never bought one assuming that it was guaranteed to increase in value, (or that I should buy one on a Russian-roulette type of mortgage.) As a result I've seen the putative value of my property go up and down, but it has always remained mine, complete with four walls and a roof - which is what I wanted when I bought it. I'm not saying that you did any different and at the same time it's obvious that a lot of people bought unwisely and that we, especially in the west, have to figure out a way of making that right. Just remember that the house you have in the U.K. is the same house it was a year ago and be glad it keeps the rain off.

Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.

[Rob Graham]

Dalek Dave wrote:

We may have our obligations to Europe, especially our obligations to save France from German domination.

Let the Germans have France. It will only give them indigestion, and the French will actually have something valid to bitch about, for a change.

[Lost User]

I'm pretty sure the current rate of repossessions is nowhere near early 90s levels simply because back then interest rates were MUCH higher. As for businesses going to the wall, I'm not sure it's as bad yet either and nowhere near the early 80s recession (remember when the Friday night News at 10 had a list of all the businesses that had gone tits up that week?). This year will be brutal for sure, but remember that confidence is king.

[Lost User]

fat_boy wrote:

negative equity

I agree that house prices are over valued presently but assessing their true value is troublesome at best. And those with negative equity will either bare the pain whilst in that condition or surrender their house and bare the pain of being sued for the difference by their finance provider. Negative equity will no doubt focus the mind but should home owners still be generally employed then such home owners will need to learn how to budget their finances better. That of course means lowering their spending on non-essentials but people being people will still want their little luxuries. However, if those home owners do lose their jobs and become unemployed, there is some salvation there insofar that Jobseekers Allowance conditions do permit a level of Government finances to support mortgage payments. But whatever value the house prices are, or will be, negative equity will sooner or later be eliminated. So not is all lost.

[Lost User]

Rob Caldecott wrote:

as long as you can afford to pay your mortgage, then negative equity isn't actually a big deal

How many firms a day are closing? 100 I heard for some small business consortium chappy on the news. If the bailout doesnt work, and banks stop lending and start foreclosing instead then house prices will collapse. And that will leave people massively in debt, by anywhere form 50,000 to 100,000 pounds. Just what sort of discussion do you think prompted a rate cut so drastic as seen last autumn? A scary one, believe me.

Morality is indistinguishable from social proscription

[Pierre Leclercq]

Oakman wrote:

Okay. We'll stop trying to bankrupt your major software companies if you'll stop trying to bankrupt ours.

hum, hum, it should not be necessary nowadays... :sigh:

You can't turn lead into gold, unless you've built yourself a nuclear plant.

[Lost User]

Dalek Dave wrote:

We speak German?,

Yes we do actually. English is a Germanic language.

Dalek Dave wrote:

drink like the Spanish

Michelob is a nice beer.

Dalek Dave wrote:

eat like the French?

Ever seen an Ebglish menu? 'en croute' 'au poivre' etc etc etc

Dalek Dave wrote:

bank like the Dutch?

You mean walking into a big building with lots of desks and giving them money to keep for you?

Dalek Dave wrote:

The only thing we have in common with the rest of Europe is that we fought them.

And the US.

Dalek Dave wrote:

You should read Winston Churchill's book

He was a pugalist.

Morality is indistinguishable from social proscription

[Rob Graham]

Ka?l wrote:

a growing number have no access to health care.

Really? So there are EU countries that would turn someone away at the Emergency Room Door? What happened to Universal Health Care in the EU?

[Lost User]

Rob Caldecott wrote:

I'm pretty sure the current rate of repossessions is nowhere near early 90s levels simply because back then interest rates were MUCH higher. As for businesses going to the wall, I'm not sure it's as bad yet either and nowhere near the early 80s recession

We will see.

Rob Caldecott wrote:

when the Friday night News at 10 had a list of all the businesses that had gone tits up that week

Yes, it was grim. Perhaps its just age. I recall the miners strikes, the garbage strikes, the ambulance strikes. I guess then to a 40 year old it looked like the UK was falling apart. I hope the situation isnt as bad as I suspect it could be. Of course I do. I have interests in the UK too. But right now, I wouldnt buy, and I wouldnt keep cash in sterling. (I did buy a pile of cheap UK stocks though last october that over 5 to 10 years should start to do OK)

Morality is indistinguishable from social proscription

[Lost User]

Richard A. Abbott wrote:

assessing their true value is troublesome at best.

Yes. It seems to be determined by how much a bank is prepared to lend. Hence the potential for a bug drop.

Richard A. Abbott wrote:

bare the pain of being sued for the difference by their finance provider

Personaly, I would declare myself bankrupt. Just walk away from it.

Morality is indistinguishable from social proscription

[KaRl]

Richard A. Abbott wrote:

EU without UK participation is unthinkable

I don't think so. On the contrary, I even believe it would boost the union by removing one of the less cooperative country, one who always blocked a greater integration, one who always have been an obstacle to every non-economic aspect of the union Because UK didn't want to integrate to the rest of Europe but wanted to keep the illusion to be in charge of Europe's equilibrium, it had to find a way not to be excluded of that movement which led ex enemies to find a way to build something new . That's why historically, UK entered the EU to block its political evolution and to make it a common market only. Getting rid of this adhesion would give opportunities to the other members to go forward.

The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread Fold with us! ¤ flickr

[Lost User]

Britain under Ted Heath's premiership joined the "European Economic Community" not what the EEC transformed into. And this transformation is IMO illegitimate insofar that it has never received the British public's acceptance by national referendum. If Europe wishes to go in a particular "political" direction, then so be it but only after each and every member country has gained acceptance of such by its peoples by democratic vote. And where a country chooses to vote "NO" they are free NOT to join in. But, the remaining countries who voted "Yes" can go off on their collective selves in that relevant direction. I would have no problems accepting a two-speed EU no more than I accept the £ sterling and the Euro as currencies.

[Lost User]

fat_boy wrote:

Personaly, I would declare myself bankrupt. Just walk away from it.

Not a step to be taken lightly. It has far reaching implications.

[KaRl]

Dalek Dave wrote:

We may have our obligations to Europe, especially our obligations to save France from German domination.

:laugh: Remind me the strengh of the BEF in 1940 please?

The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread Fold with us! ¤ flickr

[Dalek Dave]

Weaker than the Germans, but even so we lasted longer than the French, and we returned. FOR SALE: French Rifle, never used, only dropped once. Also for sale Box of White Flags, Military Grade, Soiled. Contact : The Vichey Government, Surrender Avenue, France.

------------------------------------ "Your manuscript is both good and original. But the part that is good is not original, and the part that is original is not good." Dr Samuel Johnson

[KaRl]

Richard A. Abbott wrote:

If Europe wishes to go in a particular "political" direction

This political direction what at the basis of the EEC - The EEC was created to reach a political integration through an economical integration. And that since the creation of the ECSC/CECA in 1951! The goal of this Union was never to be economically only - economy was just a mean, not a goal.

Richard A. Abbott wrote:

it has never received the British public's acceptance by national referendum

Maybe 'you' are way too soft with your governments. The people can force a government to take certain decisions if it really wants too.

Richard A. Abbott wrote:

And where a country chooses to vote "NO" they are free NOT to join in

UK said 'no' to the european monetary union (Euro), no to a common place of circulation (Schengen), and it also refused the Charter of Fundamental Rights of the European Union. UK is the blacksheep of european cooperation[^]. In fact, most of the time UK just says 'no'. What positive steps originated from UK?

The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread Fold with us! ¤ flickr

[Lost User]

Ka?l wrote:

UK said 'no' to the european monetary union (Euro), no to a common place of circulation (Schengen), and it also refused the Charter of Fundamental Rights of the European Union. UK is the blacksheep of european cooperation[^]. In fact, most of the time UK just says 'no'. What positive steps originated from UK?

The British Government did but the British people have not been consulted. And consultation of the people is what I would deem as appropriate before any changes to Britain's status with the EU is done. However, if France so wishes to be dragged by the nose in whatever direction the EU so chooses, then, that's fine. But, Britain or any other country MUST be allowed to say NO and mean NO, and sometimes saying no is the correct answer. One size does not fit all like the Maarstricht Treaty would like you to believe.

[Lost User]

Many people become more conservative with age. My parents were lifelong Labour voters until 1979, when they thought the country had gone to the dogs and changed their vote. The country recovered, albeit painfully, and I don't see any difference now really (in fact there are many parallels with the 1970s), apart from the financial system, but as I said in an earlier post, governments won't let it fall and it might mean more responsible lending. So, it's going to hurt but I don't think were looking at the apocalypse just yet. :) Once property prices bottom out there are going to be some bargains to be had and the market will begin its inevitable upturn - perhaps at a slower pace this time though!