RBS: Panic! Sell everything! Meltdown looming!

[Digga]

The only truism of property crashes is that the majority of market participants operate under the misguided assumption that "it can't happen here". never is a very long time, empires grow and then crumble, such is history.

[irocfan]

fido said:

FartKong said:

Our house is almost sold and its looking like it may be a good idea to hold off buying anything if its anything like the 2008 crash.

Tricky one. I would probably hold off from buying if I was selling. But then you still have to pay rental in the meantime and for how long? Unless you have more than 1 home - then you play the long game.

but then if we are potentially looking at financial institutions crashing surely having the proceeds of a house sale in even various banks could be rather sphincter puckering no?

[FartKong]

That's another issue. We're with HSBC but if they go tits up with the equity of our house sitting in their accounts is there a chance we could lose it?

[Zod]

FartKong said:

That's another issue. We're with HSBC but if they go tits up with the equity of our house sitting in their accounts is there a chance we could lose it?

The equity of your house is not in their accounts. They have a mortgage over your house that gives them the right to proceeds of sale of your house with the residue (the equity of redemption) due to you. No creditor of HSBC can get its hands on your equity once your mortgage is redeemed.

[anonymous-user]

FartKong said:

That's another issue. We're with HSBC but if they go tits up with the equity of our house sitting in their accounts is there a chance we could lose it?

Seriously?

[FredClogs]

fblm said:

FartKong said:

That's another issue. We're with HSBC but if they go tits up with the equity of our house sitting in their accounts is there a chance we could lose it?

Seriously?

Yes, he's serious, that's how a "run on a bank" works... There's no logic or rational in trusting a system which has proven to be inherently flawed and prone to failure and which to the vast majority of the public (me included) seems to be run on voodoo by men in suits which cost more than my car.

[anonymous-user]

FredClogs said:

Yes, he's serious, that's how a "run on a bank" works... There's no logic or rational in trusting a system which has proven to be inherently flawed and prone to failure and which to the vast majority of the public (me included) seems to be run on voodoo by men in suits which cost more than my car.

[Justayellowbadge]

Dogs and cats living together.

[TTwiggy]

fblm said:

FartKong said:

That's another issue. We're with HSBC but if they go tits up with the equity of our house sitting in their accounts is there a chance we could lose it?

Seriously?

I wonder if he actually means the proceeds from a sale? Surely nobody thinks that their equity is actual 'cash' money sitting in a bank?

[Digga]

TTwiggy said:

I wonder if he actually means the proceeds from a sale? Surely nobody thinks that their equity is actual 'cash' money sitting in a bank?

^That was my take on it too. In which case, the sum would likely be well above the bank guarantee limit.

[turbobloke]

Based on the apocalyptic bank circular, warning of dire gloom and doom, issued by a bank that couldn't foresee their own imminent mild inconvenience, what level of concern is appropriate?

1 Make another cup of tea
2 Tut while nodding at the monitor
3 Suck teeth and frown pensively
4 Check bank balance(s) just to be sure
5 Sell shares, sell pets
6 Sell body on street corner
7 Withdraw all cash and stuff under mattress
8 Find long lost love for long last shag
9 Board up after buying tinned food / bottled water plus ammo

We should be told.

[FartKong]

TTwiggy said:

I wonder if he actually means the proceeds from a sale? Surely nobody thinks that their equity is actual 'cash' money sitting in a bank?

This, perhaps a stupid question and not worded the best but I don't trust the banks at all.

[FredClogs]

FartKong said:

TTwiggy said:

I wonder if he actually means the proceeds from a sale? Surely nobody thinks that their equity is actual 'cash' money sitting in a bank?

This, perhaps a stupid question and not worded the best but I don't trust the banks at all.

There is a deposit guarantee on British bank accounts (supposed to stop "runs on banks" like what happened to Northern Rock) it was about £80k but has been reduced to about £70k ish... If you have more than £70k ish on deposit in a single account (or joint name account) it might be worth splitting your money between several accounts at several banks so that in the event there is a collapse of any single bank or multiple banks you'll be covered - in theory. In practice I'm not sure, in a real world event, whether the deposit guarantee is actually worth owt, let's hope we never need to find out.

Banking and the economy in general is just one giant ponzi scheme, if we all wanted our money back at the same time the whole thing becomes ridiculous and the value of money would drop to zero anyhow... It's a load of old bks in essence.

[anonymous-user]

FartKong said:

This, perhaps a stupid question and not worded the best but I don't trust the banks at all.

HSBC is far too big to fail. If it did, every bank and business in the UK would go under. You would be fighting for food in the streets, not worrying about you bank balance. It won't be allowed to happen. That said if you don't trust them fair enough. The FSCS (UK government bank and BS guarantee) covers £75k deposits in each account. Once you sell your house split the equity between HSBC, RBS, Lloyds and Barclays such that you have only 75k in each. You won't get any safer than that. If you have more than that you should know this already! (ps its double for a joint account)

Edited by anonymous-user on Tuesday 12th January 15:01

[Murph7355]

fblm said:

... covers £75k deposits in each account. ...

You allude to it, but the accounts must be under separate banking licenses (I know you know this, but there are others on here less well advised).

So if you have two accounts under HSBC, you only get 1 lot of 75k protection.

If anyone's in doubt:

http://www.fca.org.uk/consumers/complaints-and-com...

[markcoznottz]

fblm said:

FartKong said:

This, perhaps a stupid question and not worded the best but I don't trust the banks at all.

HSBC is far too big to fail. If it did, every bank and business in the UK would go under. You would be fighting for food in the streets, not worrying about you bank balance. It won't be allowed to happen. That said if you don't trust them fair enough. The FSCS (UK government bank and BS guarantee) covers £75k deposits in each account. Once you sell your house split the equity between HSBC, RBS, Lloyds and Barclays such that you have only 75k in each. You won't get any safer than that. If you have more than that you should know this already! (ps its double for a joint account)

Edited by fblm on Tuesday 12th January 15:01

Like you say it's either a mad max world or business as usual. The bank guarantee is just a pr stunt, it's not intended to be implemented. When Northern rock went under the deposits went from being the least safe to the most safe in the UK, maybe the world, as the treasury implicitly guaranteed all deposits, gives you some idea how keen any government is to prevent a run.
http://www.thisismoney.co.uk/money/saving/article-...

[anonymous-user]

markcoznottz said:

The bank guarantee is just a pr stunt, it's not intended to be implemented.

Very true; it is there to try to prevent a run (the previous 30k limit clearly failed). In the event of a run on a sizable bank the government have and would step in and guarantee all deposits by taking the bank over by hook or by crook; moral hazard aside it is by far the cheapest way to mop up the mess in the short term. In the US where there are many more smaller banks their equivalent insurance (FDIC) gets hit up regularly...

[drainbrain]

fblm said:

RBS doesn't exactly have a good track record of making financial predictions!

[davepoth]

irocfan said:

fido said:

FartKong said:

Our house is almost sold and its looking like it may be a good idea to hold off buying anything if its anything like the 2008 crash.

Tricky one. I would probably hold off from buying if I was selling. But then you still have to pay rental in the meantime and for how long? Unless you have more than 1 home - then you play the long game.

but then if we are potentially looking at financial institutions crashing surely having the proceeds of a house sale in even various banks could be rather sphincter puckering no?

All this stuff about house prices suddenly becomes irrelevant if you stop considering your home as an investment vehicle.

Do that, and the only concern is "Can I afford the mortgage?".

[irocfan]

davepoth said:

irocfan said:

fido said:

FartKong said:

Our house is almost sold and its looking like it may be a good idea to hold off buying anything if its anything like the 2008 crash.

Tricky one. I would probably hold off from buying if I was selling. But then you still have to pay rental in the meantime and for how long? Unless you have more than 1 home - then you play the long game.

but then if we are potentially looking at financial institutions crashing surely having the proceeds of a house sale in even various banks could be rather sphincter puckering no?

All this stuff about house prices suddenly becomes irrelevant if you stop considering your home as an investment vehicle.

Do that, and the only concern is "Can I afford the mortgage?".

Oh I agree - however I was talking about the proceeds of a house sale while you're waiting for your 'dream house' to come on the market.