Login | Register
SearchMy Stuff
My ProfileMy PreferencesMy Mates RSS Feed
1 2
4 5 ... 498 499
TOPIC CLOSED
Author Discussion

Digga

12,913 posts

163 months

[news] 
Tuesday 26th October 2010 quote quote all
NoelWatson said:
Digga said:
mondeoman said:
I'd agree that the QE isn't filtering into the economy though. 3 years ago, I could lay my hands on £50-£70k of personal credit (cards, loans, overdraft), no problem at all. Now I'm struggling to get a £2k credit card, O/D has been slashed in half on an account I've held for over 20 years that has made the bank (now spanish..) a fair fortune in interest and charges (which in general I don't have a problem with) and not offered at all for a new account.
^Multiply this precise experience accross hundreds of thousands of SMEs and you being to see why the economy is to royally fked. I've lost count of the numbers of customers and suppliers who've been through similar issues with their banks since 2008 - some survived, some didn't - but this is the real elephant in the room as far as I'm concerned.

I must stress that I can understand qwhy the banks did it - to reduce gearing, shore-up reserves, survive their own crises in some cases - but that doesn't change the fact that when the government talk about growth, especially in the private sector, I wonder which planet they've been on for the last eighteen months.

Which makes this:
groak said:
the bank was identified as the single biggest threat to my business and its prosperous survival.
a very sound piece of advice for any small business owner. Know your enemy!

There's customer risk and supplier risk - too many eggs in one basket etc. etc. - but the bank is usually not factored as such. For many now extinct businesses, this was a grave error.
http://www.cityam.com/news-and-analysis/allister-heath/rhetoric-spiralling-out-control

"It may be that lending is somehow artificially scarce – as opposed to more prudent, rational and expensive – but I have yet to be shown any real proof of this (surveys of wannabe borrowers, such as small firms, don’t count as they are not objective). Please email me if you have some real proof that banks are curtailing lending en masse for the “wrong” reasons, as opposed to making the odd stupid mistake or pricing loans more expensively to reflect the increased risk of default and the increased cost of capital and liquidity requirements."
He can suck my lovepump if he thinks SME siutation isn't a severe problem for the UK.

What proof is he expecting? A missive on bank letterhed paper saying "Dear Mr Small Business Owner Don't know why, but we won't give you any money. Now ps off. Love from, The Bank"?

What an utter tt.

If he got his shiny arse up from his desk, descended from his ivory tower and deigned to visit the many and various business parks and industrial estates of the nation and spoke to businesses, he'd get the idea soon enough.

Edited by Digga on Tuesday 26th October 08:22

turbobloke

59,875 posts

140 months

[news] 
Tuesday 26th October 2010 quote quote all
Digga said:
NoelWatson said:
Digga said:
mondeoman said:
I'd agree that the QE isn't filtering into the economy though. 3 years ago, I could lay my hands on £50-£70k of personal credit (cards, loans, overdraft), no problem at all. Now I'm struggling to get a £2k credit card, O/D has been slashed in half on an account I've held for over 20 years that has made the bank (now spanish..) a fair fortune in interest and charges (which in general I don't have a problem with) and not offered at all for a new account.
^Multiply this precise experience accross hundreds of thousands of SMEs and you being to see why the economy is to royally fked. I've lost count of the numbers of customers and suppliers who've been through similar issues with their banks since 2008 - some survived, some didn't - but this is the real elephant in the room as far as I'm concerned.

I must stress that I can understand qwhy the banks did it - to reduce gearing, shore-up reserves, survive their own crises in some cases - but that doesn't change the fact that when the government talk about growth, especially in the private sector, I wonder which planet they've been on for the last eighteen months.

Which makes this:
groak said:
the bank was identified as the single biggest threat to my business and its prosperous survival.
a very sound piece of advice for any small business owner. Know your enemy!

There's customer risk and supplier risk - too many eggs in one basket etc. etc. - but the bank is usually not factored as such. For many now extinct businesses, this was a grave error.
http://www.cityam.com/news-and-analysis/allister-heath/rhetoric-spiralling-out-control

"It may be that lending is somehow artificially scarce – as opposed to more prudent, rational and expensive – but I have yet to be shown any real proof of this (surveys of wannabe borrowers, such as small firms, don’t count as they are not objective). Please email me if you have some real proof that banks are curtailing lending en masse for the “wrong” reasons, as opposed to making the odd stupid mistake or pricing loans more expensively to reflect the increased risk of default and the increased cost of capital and liquidity requirements."
He can suck my lovepump if he thinks SME siutation isn't a severe problem for the UK.

What proof is he expecting? A missive on bank letterhed paper saying "Dear Mr Small Business Owner Don't know why, but we won't give you any money. Now ps off. Love from, The Bank"?

What an utter tt.

If he got his shiny arse up from his desk, descended from his ivory tower and deigned to visit the many and various business parks and industrial estates of the nation and spoke to businesses, he'd get the idea soon enough.
Ah ha but hang on in there, as highlighted by NoelWatson, if he (article author) was indeed to visit these small businesses and listened to what they had to say - face to face and on site and with the business around them - it would be dismissed, it wouldn't count. Small business owners are not objective and so what they say is nonsense regardless of whether it's accurate or not.

We must learn that the new business order is ruled by charts and people at desks telling other people what to think and do, and dismissing evidence that these desk sitters are talking out of the shiny seat of their pants because only desk jockies and sundry anal-ysts have objectivity.

In other words yes what a nutter tt.

Digga

12,913 posts

163 months

[news] 
Tuesday 26th October 2010 quote quote all
Absolutely tt. He's happy to tke the opinions of the "who us, not we're not 'not lending' to business" banks as objective, but somehow, the opinion from the other side of the deal is dismissed as purely subjective.

City A. M.

Business with personality rolleyes

Someone should tell them that being a gobste does not a personality make.

NoelWatson

11,710 posts

122 months

[news] 
Tuesday 26th October 2010 quote quote all
Digga said:
NoelWatson said:
Digga said:
mondeoman said:
I'd agree that the QE isn't filtering into the economy though. 3 years ago, I could lay my hands on £50-£70k of personal credit (cards, loans, overdraft), no problem at all. Now I'm struggling to get a £2k credit card, O/D has been slashed in half on an account I've held for over 20 years that has made the bank (now spanish..) a fair fortune in interest and charges (which in general I don't have a problem with) and not offered at all for a new account.
^Multiply this precise experience accross hundreds of thousands of SMEs and you being to see why the economy is to royally fked. I've lost count of the numbers of customers and suppliers who've been through similar issues with their banks since 2008 - some survived, some didn't - but this is the real elephant in the room as far as I'm concerned.

I must stress that I can understand qwhy the banks did it - to reduce gearing, shore-up reserves, survive their own crises in some cases - but that doesn't change the fact that when the government talk about growth, especially in the private sector, I wonder which planet they've been on for the last eighteen months.

Which makes this:
groak said:
the bank was identified as the single biggest threat to my business and its prosperous survival.
a very sound piece of advice for any small business owner. Know your enemy!

There's customer risk and supplier risk - too many eggs in one basket etc. etc. - but the bank is usually not factored as such. For many now extinct businesses, this was a grave error.
http://www.cityam.com/news-and-analysis/allister-heath/rhetoric-spiralling-out-control

"It may be that lending is somehow artificially scarce – as opposed to more prudent, rational and expensive – but I have yet to be shown any real proof of this (surveys of wannabe borrowers, such as small firms, don’t count as they are not objective). Please email me if you have some real proof that banks are curtailing lending en masse for the “wrong” reasons, as opposed to making the odd stupid mistake or pricing loans more expensively to reflect the increased risk of default and the increased cost of capital and liquidity requirements."
He can suck my lovepump if he thinks SME siutation isn't a severe problem for the UK.

What proof is he expecting? A missive on bank letterhed paper saying "Dear Mr Small Business Owner Don't know why, but we won't give you any money. Now ps off. Love from, The Bank"?

What an utter tt.

If he got his shiny arse up from his desk, descended from his ivory tower and deigned to visit the many and various business parks and industrial estates of the nation and spoke to businesses, he'd get the idea soon enough.

Edited by Digga on Tuesday 26th October 08:22
But as has been pointed out several times before, where can we find evidence that SMEs (much like others) haven't become accustomed to the last decade of stupidly cheap credit and are now shocked by how much credit costs now it is more accurately priced?

The banks are saying one thing, SMEs another - the press need to highlight some examples.

turbobloke

59,875 posts

140 months

[news] 
Tuesday 26th October 2010 quote quote all
Not necessary. Reality checks are only needed by those out of touch with reality.
Advertisement

Digga

12,913 posts

163 months

[news] 
Tuesday 26th October 2010 quote quote all
Noel, one thing I have never dodged is the long term financial problem that Banks and SME's built up prior to the crunch.

However, I do not beleive it is a black and white case of blaming one party over the other. Neither now are banks decisions to not lend entirely black and white. (I do hope you don't naiively assume - like Mr City AM - that it is in any way possible to glean incorovertable and objective proof of this in either way.)

Most small start-up businesses gow to who they know to set up their businesses banking - their 'friendly' one size fits all, high street bank. Since the early nineties, most banking relationships developed along these lines;
  1. Overdraft agreed
  2. Annual meeting to review/amend overdraft
  3. Repeat streps 1 & 2
Bank managers with discretion, experience (there were some decent ones) and authority, were replaced in the early noughties with a tick-box, centralised algorythm type process. Most existing agreements - loans, overdrafts etc. - carried on and, bar the increase in cross-selling (pensions, insurance, snake oil etc.) the annual banking arrangements continued as before.

Now we can all see the error of letting businesses rely on unstructured, immediately repayable funding - no argument - but the fact is it happened, and on a huge scale.

Trouble was that post 2008, as I have repeatedly pointed out, this funding was arbitrarily withdrawn. Openly and also by stealth, where unused facilities vanished overnight. Sometimes the bank totally cut it's funding or cut it enough to deliver a killer blow. Other times the funding gap could be worked around. In another variation on the shafting theme, overdrafts were cut but replaced by (expensive and administratively onerous) factoring arrangements.

Did the banks need to recapitalise? Yes.
Did the banks have a duty to reduce their risk, post crunch? Yes.
Was a lot of business lending unwise? Yes.

Yes to all of the above but, at the same time, for the sake of the economy and their customers, I also beleive banks had a moral commercial duty to do all of this in a way which did not cause collosal and irreversable damage to the UK SME economy. Yet this does not ever seem to have been considered. Neither, once the problem was out in the open and the subject of concern - identified as a severe risk to the UK recovery since early 2009 by Alister Darling, Merving King and even the IMF - has it been resolved.

I've heard the banks and I've heard the businesses and I know who I beleive here. I have not axe to grind - I'm not singing for my supper here - but personally beleive this to be a far bigger problem than anyone presently acknowledges.

Edited by Digga on Tuesday 26th October 09:09

XJ40

2,914 posts

93 months

[news] 
Tuesday 26th October 2010 quote quote all
So, "millionaire mansions double as house prices fall"?

This seems at odds with some of what I've read on this thread (the last volume) recently, seems quite surprising to me.

http://blogs.telegraph.co.uk/finance/ianmcowie/100...

shamrock

980 posts

70 months

[news] 
Tuesday 26th October 2010 quote quote all
I thought I’d share this encounter with you lot as it may or may not be representative of a large portion of the UK’s middle class.

Our village pub held a community event over the weekend. I took the GF and met up with a number of friends and neighbours. We soon split up into lad and lasses groups so we could talk freely.

One of our neighbours likes to rattle on about his entry level 997 being the fastest car known to man. He was soon educated by some of my mates in a rather harsh manner, in true PH style. We each offered him rides in our various motors which he declined before making an abrupt exit with his wife.

Now this where the post gets on topic.

When I walked home with my GF she told me that this chaps wife tried to pay for a round of drinks on their credit card. The credit card was refused and my GF covered it. My GF made light of the situation and blamed the technology.

Whilst walking back from the bar the chaps wife took my GF to one side and unloaded the following in a 2 minute tirade: Both her and her husbands credit cards are maxed out, the lease on their 911 has two more years to run at a cost of nearly £1,400 per month, their £230k mortgage is due for renewal early next year and is a I/O 100% mortgage, they haven’t had a holiday in nearly 4 years, rarely go out, they work every hour that god sends (long weekdays, weekends, etc) and her middle manager role for the local council could be under threat.

She wants to go to Citizens Advice as she thinks they should be helped but her husband refuses to accept there is a problem. My GF couldn’t offer much in the way of advice except just talk to the husband as she was caught off guard.

What’s worse is I’m sure one of my mates mentioned a house selling on that road for £180k earlier this year. All the houses are fairly similar 2 bedroom new builds.

I was gobsmacked when I heard how this couple managed to get themselves into this situation. I do feel for families that genuinely struggle but I find it hard to have much sympathy for couples that live beyond their means through keeping up with the neighbours.

I know this won’t sit well with the PH community but I think their car is a noose around their necks. I’ve spent a sickening amount of money on cars over the years when I look back, particularly in my younger years. However, I can’t imagine for a second that I would put a car ahead of security and quality of life as an adult.

I do wonder if this is an isolated case or is this common amongst a portion of the middle classes.

Apologies for such a long winded and downbeat post, I thought it might be worth sharing with you on this topic as it could be a factor in the future for house prices if this is a common situation.

tonker

46,071 posts

128 months

[news] 
Tuesday 26th October 2010 quote quote all
Savills for one have had a stern talking to a number of their sellers recently. We've received a number of revised prices, down around 60K to 100K - from properties that were, in my view, 75K to 125K overpriced..... and have been on the market for a while. These were 600K to 750K properties - they've simply not sold this year.

Plus, I've referred this one before... - up at £750K to sell (was nearly a million at the start) - rent £1,650

http://www.rightmove.co.uk/property-to-rent/proper...


and another

£1,700 rent

http://www.rightmove.co.uk/property-to-rent/proper...

for sale at £695K

http://www.rightmove.co.uk/property-for-sale/prope...

these are crackers rents in my view, clearly someone's only pricing in peanuts financing for a long while yet... with transaction fees, who would buy them at these rents ?

mondeoman

7,599 posts

146 months

[news] 
Tuesday 26th October 2010 quote quote all
shamrock said:
an interesting tale
Personal experience suggests that this is more common than most people would expect. I know a couple of people in a very similar situation, where the mortgage is I/O on a quite high rate, with no real option to remortgage due to reduced income from the good years, car finance where the car is worth substantially less than the outstanding finance, resulting in significantly higher payments when the original finance agreement ends - all to "save face", credit cards maxed out to maintain the appearance of wealth, and unless things pick up fairly quickly, I think a lot of these will get very badly burnt and you will see a fair few properties coming onto the market.

Digga

12,913 posts

163 months

[news] 
Tuesday 26th October 2010 quote quote all
shamrock said:
I know this won’t sit well with the PH community but I think their car is a noose around their necks. I’ve spent a sickening amount of money on cars over the years when I look back, particularly in my younger years. However, I can’t imagine for a second that I would put a car ahead of security and quality of life as an adult.

I do wonder if this is an isolated case or is this common amongst a portion of the middle classes.
It's very common.

Visiting teh BIL and driving through their new 'exec' estate, the evidence is plain to see everywhere - £200k to £250k houses, with two new or nearly new motors on the drive, combined value at purchase of at least £50k.

I also have some friends who live in a (very nicely appointed) semi, worth IMHO between £250k and £300k; he has an 09 RS6, she's just got a Q5. I sincerely hope they're okay. I [io]think[/i] they're doing well, they're about ten years younger than me (I used to put far more priority on 'enjoying' my cars), so it might all be fine...

Digga

12,913 posts

163 months

[news] 
Tuesday 26th October 2010 quote quote all
tonker said:
and another

£1,700 rent

http://www.rightmove.co.uk/property-to-rent/proper...

for sale at £695K

http://www.rightmove.co.uk/property-for-sale/prope...

these are crackers rents in my view, clearly someone's only pricing in peanuts financing for a long while yet... with transaction fees, who would buy them at these rents ?
Toppy for a 3 bed, but then it's a nice period property (the 'Boden' middle classes love this) in a very scenic (unless it's an artful EA shot) setting.

I'm looking at the map, the golf clubs, the commuting potential and guessing this is not a bad area? But it's still probably £50k to £100k over IMHO.

tonker

46,071 posts

128 months

[news] 
Tuesday 26th October 2010 quote quote all
Digga said:
I'm looking at the map, the golf clubs, the commuting potential and guessing this is not a bad area? But it's still probably £50k to £100k over IMHO.
it's on the local 100mph racetrack, it's on the edge of the windswept moors with nowhere apart from a nice italian in walking distance and it's the sort of place that will terrify people (oh and all the local doggers don't help...). there is also another one right near it (IIRC).

I'd say, for the local market, it's nearer £250K overpriced. The quality is too good and too modern for the local market...

paulrockliffe

3,601 posts

107 months

[news] 
Tuesday 26th October 2010 quote quote all
tonker said:
Digga said:
I'm looking at the map, the golf clubs, the commuting potential and guessing this is not a bad area? But it's still probably £50k to £100k over IMHO.
it's on the local 100mph racetrack, it's on the edge of the windswept moors with nowhere apart from a nice italian in walking distance and it's the sort of place that will terrify people (oh and all the local doggers don't help...). there is also another one right near it (IIRC).

I'd say, for the local market, it's nearer £250K overpriced. The quality is too good and too modern for the local market...
But if you're in to Mountain Biking it is at the bottom of a cracking descent!

tonker

46,071 posts

128 months

[news] 
Tuesday 26th October 2010 quote quote all
paulrockliffe said:
But if you're in to Mountain Biking it is at the bottom of a cracking descent!
It's on the edge of where the Commonwealth Games mountain biking course was.... on the slopes of Winter Hill...

Deva Link

26,934 posts

125 months

[news] 
Tuesday 26th October 2010 quote quote all
tonker said:
these are crackers rents in my view, clearly someone's only pricing in peanuts financing for a long while yet... with transaction fees, who would buy them at these rents ?
I know we've discussed this before, but the (lack of a) relationship between the asking price for sale and rental price is surely just insane?

tonker

46,071 posts

128 months

[news] 
Tuesday 26th October 2010 quote quote all
Deva Link said:
I know we've discussed this before, but the (lack of a) relationship between the asking price for sale and rental price is surely just insane?
I think it reflects

a) an acceptance it won't sell at the moment
b) an understanding of what their financing cost is; and
c) a belief from the vendor that it will be worth more or the same next year

there are lots of them - you'd simply never buy them because of how little you can pay rent. And many of them are the people who have bought somewhere new and are simply using the rent as 'bridging' - these are the people I fear for most - yes, it could all pay off, but they are doubly exposed and most of them aren't exactly smart cookies (most of us aren't) and all they will see is that it covers their mortgage (at 2.5%).

Digga

12,913 posts

163 months

[news] 
Tuesday 26th October 2010 quote quote all
tonker said:
Digga said:
I'm looking at the map, the golf clubs, the commuting potential and guessing this is not a bad area? But it's still probably £50k to £100k over IMHO.
it's on the local 100mph racetrack, it's on the edge of the windswept moors with nowhere apart from a nice italian in walking distance and it's the sort of place that will terrify people (oh and all the local doggers don't help...). there is also another one right near it (IIRC).

I'd say, for the local market, it's nearer £250K overpriced. The quality is too good and too modern for the local market...
I see, so, to qoute the League of Gentlemen, it's very 'local'.

Deva Link

26,934 posts

125 months

[news] 
Tuesday 26th October 2010 quote quote all
tonker said:
And many of them are the people who have bought somewhere new and are simply using the rent as 'bridging' - these are the people I fear for most - yes, it could all pay off, but they are doubly exposed and most of them aren't exactly smart cookies (most of us aren't) and all they will see is that it covers their mortgage (at 2.5%).
...so you think there are a number of people who, while already owing a circa £750K house have gone off and bought another one - presumeably of similar or greater value? And these people buying second million pound properties using mortgages?


tonker

46,071 posts

128 months

[news] 
Tuesday 26th October 2010 quote quote all
Deva Link said:
...so you think there are a number of people who, while already owing a circa £750K house have gone off and bought another one - presumeably of similar or greater value? And these people buying second million pound properties using mortgages?
I know the buyers of my parents gaff (500K plus) are renting out their old one as it didn't sell..... I know my BIL has kept his N1 flat to spend well a lot on a townhouse, I know that the majority of the properties my parents are looking to rent are still owned by sellers and have been on the market for sale for a while earlier this year.

So I do think a number of people are holding their old properties - of course if you talk to them they are all keeping it as a long term investment... I doubt, in many cases, that's true.
1 2
4 5 ... 498 499
TOPIC CLOSED