With regards to the UK Smithsonian the blame is laid fairly and squarely on the governments shoulders
They inherited a sound economy with falling unemployment, one that had been enjoying years of growth and a budget deficit that was heading towards balance and in 11 short years have basically via their usual tax and spend policies turned the nation into a bankrupt state
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Some idiot also sold our gold reserves when the price was rock bottom.
Edited by Dynamic Dave on 11/08/2009 at 13:39
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do you think some good will come out of this...i.e. survival of the fittest.. and specifically survival of those with a decent product AND decent customer service
I think the car industry is ripe for an overhaul in that respect. I'm a reasonably confident, car knowledgeable chap, with enough miles on me to know the score...yet it doesn't stop me being considered a 'walking wallet' when i stroll into a car showroom. Maybe a good dose of decent service will build up some customer loyalty, like they used to in the old days.
... and all these management courses for hard sell can go out the window.. along with the 'let's see what we can fleece him with at service time' mentality.. as well as the traditional miserable git in the parts dept (where do they get them from).
if companies like Amazon can get it right in their field, why not the car industry?
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Some idiot also sold our gold reserves
Careful now, or you will be in to a circular debate with the two lefties Middle Britain citizens who frequent this forum and who will accuse you of talking random garbage.
Secondly, the retail price of a car is what the market will bear, not 'cost plus'.
Care to tell that to the traders? [I can guess which sector of the economy you work in. As the saying goes, "... those who can't ... "].
Edited by Dynamic Dave on 11/08/2009 at 13:38
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Well - if it does become a circular debate a hatchet will be taken to the posts. This thread has survived into its fourth volume to discuss the seismic shift around the economy and the effect on motoring.... and is of obvious interest and importance to many members.....so there.
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It doesn't matter how bad the economy is, I console myself that Gordon Brown is so worried about 'hard working families'. He must be...he uses the phrase every seven seconds!
(The other plus side is that they lose the election..and the wicked witch (otherwise known as the home secretary) has to go back to being a rather bad school teacher.
Edited by midlifecrisis on 16/11/2008 at 16:58
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the wicked witch (otherwise known as the home secretary)
Heh heh mlc... I couldn't help noticing the thing yesterday about every crime victim having to receive a visit from a police officer. Bet that was popular in the for..., er, service.
The other week we noticed that about ten feet by six inches of lead flashing had been cut off and stolen from the roof of our six-storey house. The house next door also lost a similar but different-shaped piece of lead. It was a toeraggy small-time one-off presumably by someone partying on the roof of the other house the same height at the end of the block. To get insurance we had to have a crime number, so had to report the theft. The police offered counselling which I politely declined, followed by a deeply caring letter as if one was a timid schoolchild. It doesn't seem to come naturally to plod, costs obviously a fair amount and is totally unnecessary except in the case, obviously, of people who have been traumatized by assaults or violent burglaries. What seems to be lacking is a sense of proportion in these new plaster-over-the-cracks laws and regulations. One size never did fit all. Legislators are dumber than they used to be.
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We are going into a severe recession and a flat recovery which will take 10 years until we pay off our accumulated debt...
As for whose fault it is, I refer the enquirer to the repeated - like every year - promises about Prudence and boom and bust and the explicit promises about no more housing bubbles.
So it is NOT the Government's fault.
ANy suggestion it is their fault .. is treason.. like criticising them for the collapse of sterling
It's NOT their fault. It's obvious it is someone else's fault.
And pigs fly.
Edited by madf on 16/11/2008 at 17:04
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....And now the Chancellor [the real one] is saying that he doesn't want Northern Crock to repay the taxpayer's loan [only £12B] on time.
uk.reuters.com/article/businessNews/idUKTRE4AF1GQ2...6
Apparently; all NR's cast-adrift mortgage-holders are gobbling-up too much of the other lenders' pot. This is "delaying a recovery in the housing market...."
So they really do want the house-price bubble to re-inflate - releasing more equity for an even bigger credit boom... followed by the mother of all busts. [After next March's election - of course.]
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"We are going into a severe recession and a flat recovery which will take 10 years until we pay off our accumulated debt..."
Except that we havent actually paid off our debts for years. we have been borrowing more than we have been earning (as a country as well as individuals) since the 1st world war. I think we have just finished paying off Canada ?
Until, and unless we start making stuff and selling it abroad (pound is weak so now we can) we aint going nowhere! The economy may shift worlwide and lessen our problems (or feel like it) but it wont alter our course.
To alter that needs vision.
There aint no one (any party) up top that has got that !
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Being brutally honest, I don't give a care for politics of any side - I don't trust any of them and don't believe a word they say. Why they would want to do the job is beyond me.
However, and I don't really have anything to back this up, but I feel that at a time when the economy is in crisis, Gordon Brown comes across as someone who at least knows something about Economics, Finance, Banking etc.
His predecessor would have relied on GB, (either Gordon or George), or a million spin doctors to tell him what to do, the Tory one would panic if suddenly he was in charge and having to make decisions, and I couldn't even tell you the other parties leader's name!
As has been said at various times here as well by others, without sounding naive, my personal circumstances have not been affected by the economic problems. I still get the same pay, my mortgage will hopefully reduce with the latest interest rates cut, I don't have much savings so not worried bout the interest rates, my house is my home, not an investment. Diesel costs are starting to come down, only the domestic gas/electricity costs are high.
And I can do selective food shopping and keep that cheaper as well!
But the press are telling me there is a recession and you do start to believe it!
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Think the run up to Xmas will be the big test for many.
At the end of the day, in normal circumstances, many families stretch themselves to the limit for their kids' Christmas. Will they do the same this year? Will they put purchases onto credit cards or wait till they have physically been paid and have the cash?
Meanwhile all the big Retailers will have put their Xmas volume requests into suppliers as far back as last Jan, and these will be in the supply chain somewhere. At some point they need to go from depot to shop whether shop has space for it or not.
It will be a test of who has the best willpower! If shoppers held back till the first week in Dec, I think that would be enough to bring many Retailer's supply chain to a grinding halt and the only way it will be eased is to reduce prices. Full on Xmas sales by 15 Dec at the latest I predict!
2 years ago the store I worked in had its first delivery of Easter Eggs on Hogmonay. Scarey thought this year!
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However and I don't really have anything to back this up but I feel that at a time when the economy is in crisis Gordon Brown comes across as someone who at least knows something about Economics Finance Banking etc.
I've just choked on my Lemon Meringue!!
Do you REALLY believe that! The man is a complete buffoon. He hasn't got the slightest idea what to do, other than chuck non-existent taxpayers money at the problem he created. For ten years he's been pontificating about how HIS policies have ensured that there will be no more 'boom and bust'. Strangely, now we have 'boom and bust', it's not his fault. The UK is recognised as being in the worst state of all the developed countries.
You could also buy some very cheap gold a few years ago. Gordon was almost doing a two for one.
(And how's your pension doing since he started ripping them off. )
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Two things scare me about where we are now in this country.
1) Whatever Brown says about "global" problems he, as Chancellor, sat by and watched the banks as they got themselves more and more mired in the toxic financial products that were being sold and re-sold round the world. But of course it wasn't his fault. See "all correct procedures were followed", the current most popular excuse for dismal failure.
2) He looks as though he knows what he's talking about because he's enjoying himself. IMO this is for him what the invasion of Iraq moment was for Blair: a chance to be involved in the making of history.
Edited by Webmaster on 21/11/2008 at 00:22
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Gordon Brown knows about economics?
Next years budget deficit is likely to be £120 billion, and that dosnt include the £500 billion bank bail out or PFI
Any fool can get by for a while merely by borrowing ever higher amounts of money year by year
It all comes crashing down however when nobody will borrow you any more money, which is what may well happen soon if it looks like our economy is bankrupt
sterling could head the same way as the Zimbabwe dollar
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Just to clarify - I said that I though t he knows about finances etc, not necessarily that he had taken the right action.
All this stuff is far too complicated for any of our political leaders who are just on ego trips and are a spokesman for an army of spin doctors and advisers all with their own agendas.
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Not sure I go along with this 'it's the government's fault' line that's being constantly trotted out. They colluded yes, they acquiesced, they went with the zeitgeist - but they didn't spend the £1.2tn on houses or other stuff.
Nett govt. debt & balance of payments weren't in too bad a state (not good, but manageable) before this massive re-cap of banks & mooted 'borrow to spend' econonic stimulus package. In the final analysis, it's the consumer & financial/industrial sectors that have accrued most of this unmanageable debt - they had/have free choice in these matters: no-one was ever forced to borrow money or invest in abstracted debt obligations/products.
I understand people want to acquire a mortgage for a home (or investment), but the risks to borrowing have always been there - if you can't guarantee your continuing income you'll be at risk. The problem was/is that many, many people & industries blithely assumed that leveraged debt was a one-way bet & when their ability to pay was compromised, simply borrowed more. It's a Ponzi scheme, 'Pyramid' economics.
What I find most disturbing, is that continuing bleat, 'oh, but they kept offering me more credit' - the sub-text being 'it's not my fault, I have no free-will , I am being taken advantage of' . The bankers are nearly as bad, worse in some ways. I should say 'most of' the bankers, some institutions have fared better than others - HSBC being one. When did it dawn on ( or not) the many aggressive building-societies-cum-banks, that the earnings' multiples of 7 to 10 necessary for house purchase were simply not sustainable or even serviceable in the long term?
Didn't the penny (or Yen) start to drop, when many investment/hedge funds & banks made their living by borrowing Yen at or near 0%, & investing @ 4% elsewhere? All that did (apart from generating the short term profits) was further pump-up the asset bubble here (with cheap money) & accelerate the inevitable slide into a to deflationary depression.
I can see the social, industrial & financial 'landscape' changing beyond recognition. Start re-reading your William Cobbett for details.
Edited by woodbines on 16/11/2008 at 17:55
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Credit Crunch. Man is it easy to blame the government, and like some of the folks have already posted on this thread, i too have a basic distrust of politicians of all parties. But surely folk must have some personal responsibility for their actions.
One fact you don't need to know is I'm 2 and a half stone overweight according to my last physical. For this I don't blame the government, health minister, food companies or advertising companies - JUST ME.
I saw a program recently that said 1.2 million households in this country had a mortgage that was 6 times the joint income of the household. 38,000 houses had a mortgage of 10 (TEN!!!) times joint income of the household.
And self certified mortgages - what's that all about and I wonder why we need them. I mean, why would you not be able to prove what you earn by means of previous tax returns etc?
This is clearly madness for all parties, borrowers and lenders. Now governments could legislate but surely we must take some personal responsibility. That is lenders AND borrowers need to take responsibility.
I moved house last November - as it's looking, maybe not the smartest decision as regards timing. But we bought our 1st house in the Thatcher era and the interest rate at that time was 15.8% - ouch! So when we moved this time we only took a 50% mortgage on our new place knowing that things can change and I wanted to be able to afford my mortgage should interest rates go bananas.
Given the drop in house prices we shouldn't fall into negative equity, but this is a home, not an investment. Negative equity would only becomes a problem if i lose my job and have to sell.
To give this a car slant, my wife has just done her bit for new car sales by buying a new Ford Fiesta Zetec Blue and god bless her, she loves her cars so much she'll keep changing - WAY too regularly:-))
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One of the plus sides of course is that for the purchaser with dosh you'll never have had it so good
I had an offer through the letter box yesterday from Marlborough Jeep, brand spanking new 2litre auto Dodge Caliber for £9k!
I know I know, you'd have to be paid to drive one but you know what I mean
And as for Gordon Brown you do know he used to be a reporter for Scottish tv!
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Of course it's not all the Governments's fault.
BUT
(and there is always a but).
they claimed they would stop boom and bust, irresponsible housing bubbles and set up the mechanisms to control the banks and the money supply and lending..
And guess what: they did not work.
I have little sympathy with my son's friend who borrowed £12k to buy a car only to sell it 5 montsh later as he couild not afford it..
BUT the FSA was supposed to stop that sort of thing. (irresponsible lending: make sure consuemrs do not take on debt they could not afford)
Well they consistently fail on everything including N Rock, insider dealing etc so to rely on them is plain idiocy. Their track record is consistent failure over more than a decade...Like depending on Joey Barton to police team discpline in nightclubs..
SO yes: consumers are to bleme and the banks... BUT the Government claimed it would prevent it happening and put the mechanisms in place to stop it... And then watched as the controls did not work .. and did nothing....
As for the Bank of England: supposed to know what is going on.. forecat 2.3% GDP growth this year and are shocked at the speed of deterioration in the economy....panic 1.5% cuts in rates.
Words fail me... a tale of simple errors repeated time after time and IMF warnings ignored repeatedly - and lied about..
Edited by madf on 16/11/2008 at 19:58
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>I saw a program recently that said 1.2 million households in >this country had a mortgage that was 6 times the joint >income of the household. 38,000 houses had a mortgage of >10 (TEN!!!) times joint income of the household.
So - what in principle is wrong with that? I've been at 6 times - wife got pregnant and my job moved to another part of the country - the mortgage was repaid in full.
You need to understand the facts and circumstances. In fact the failure rates on high multiple and high percentage borrowing is only slightly higher than that on normal mortgages and after taking into the account the higher rates generally charged were more profitable for the banks.
I remember back to the dark old days of 1991/92. I was paying 15.4% on an interest only mortgage. Now I'm paying 3.5%. So 3 times income as it was was painfully. But a hell of lot more painful than 10 times at 3.5%.
Plus I was also one of those outrageous idiots who took out a 120% mortgage back then as well. We had negative equity on our previous house, needed to move - three kids don't go in to a small two bedroom house very well.
Went to the building society and they lent me the money. They got every penny of it back.
Everyone was happy.
Most high income multiples are as a reult of either a job loss, or a parent guaranteeing the mortgage. One is unpredicable and the other is perfectly acceptable surely?
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Had the banks restricted mortgage lending to a lower earnings multiple it would have kept a ceiling on house prices without hurting anyone. As it was, prices went through the roof, keeping lower income families from any chance of becoming home owners and benefitting no-one but speculators.
Now the bust has come, all the wealth that only ever existed on paper for most peope has gone and many are left trying to service mortgages they can't afford because the bonuses, overtime, second jobs and indeed the main employment they were relying on is disappearing rapidly.
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We re-mortgaged around six years ago going for an offset mortgage with a well known ex-Bank. Mrs P was horrified that whilst they quibbled about the change in a Postcode, they never asked for evidence of earnings or a copy of the (now binned) endowment policy - she was actually staggered.
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When I took out our mortgage with my wife some years ago (not that long ago) with a big bank - never asked to prove my income either. Shocking and surprised me. I took paperwork with me but never asked to see it.
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I remember the guy's words on the phone "they've refused Doctors, you know,... for no reason"
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Bank manager knew a sure thing when he saw it, rtj70...
"What are your prospects, young man?"
"When I grow up I'm going to be a back room moderator."
'Nuff said.
Edited by ifithelps on 16/11/2008 at 20:38
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An obscure economist proposed a radical solution to the uk's ills, he advocated that the government paid off the mortgage debt of everybody in the uk (exclduing second/holiday/buy to let homes)
Its not such a crazy idea when you go into it
Car sales would certainly recover iof we didnt have that monthly mortgage killing the bank balance
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Oh dear - all the "I told you so's" and "I was wise" mongers are hitting the floor now. I don't recall you lot moaning when you were asking what 100" LCD HDTV to buy at 900 quid a pop, or if a 1500 quid sat nav was a worthwhile option on a 40 grand beemer.
Only Mapmaker is clean on here, he has maintained his cheapskate, tight tig stance throughout despite having shedloads of money tucked away in some interest bearing source.
Edited by Altea Ego on 16/11/2008 at 20:47
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No credit at PU's home - only a loan taken on the Roomie on direct advice to strengthen credit rating.
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The root of the problem was that the banks were allowed to invent too much money and it had to go somewhere.
As their "structured," mathmatician-devised, investments exponentially expanded in notional value - like something nasty in the hold of a sci-fi spaceship - and they invented even better ways of circumventing limits on their fractional ratios [some were reported to be at nearly 60/1] - it meant that they could invent huge amounts of money that had to be lent.... or no massive bonus for anybody.
As these dodgy loans were then securitized and thus became "someone else's problem" [usually another bank - unfortunately] everyone was far too enthused in the madness of bonuses to give a fig for what happened when it all grew too big and fell over.
In the old days; behaviour like that would have caused the bank's chairman to receive an invitation to coffee with Mervyn - where he would have got the "eyebrow" and would have scuttled back, chastened, to put things right.
Then some idiot took bank supervision away from Mervyn and gave it to a bunch of toothless amateurs that the banks held in nothing but contempt.....
Edited by Screwloose on 16/11/2008 at 20:48
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A lot of people Alter ego have been complaining about unsustainable government spending and borrowing the extra million public servants the public service pension deficit of £1 trillion for quite some time
The IMF in fact have been warning Brown about it for a number of years
Labour have been spending money we dont have, hundreds of billions of pounds worth and a lot of it not included as debt on the balance sheet (PFI etc)
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