Darling considers new Bank Bailout...how many can we afford?

[Martial Arts Man]

So yesterday we are told that the level of mortgage approvals has dropped to record lows.

Today it seems the Chancellor is considering another bailout package.

Whether right or wrong, surely this now confirms suspicions that the country is financially on its knees?

How many more of these can the taxpayer sustain?


I am getting rather more worried by the day!


MAM

ETA: http://business.timesonline.co.uk/tol/business/ind...

Edited by Martial Arts Man on Saturday 3rd January 01:30

[dilbert]

They were talking about this two weeks ago, as being a part of the expected package of measures.

[Plotloss]

So we lend, alright, give, the government money, for them to lend to banks so they can lend to us.

Brilliant.

[Martial Arts Man]

dilbert said:

They were talking about this two weeks ago, as being a part of the expected package of measures.

The article implies that the decision was made yesterday following a BOE announcement.

I didn't realise the proposal had been seriously considered till this point.

Apologies for posting old news!

MAM

[jimbo65]

If I haven't got any money and the banks don't have it, where the fk is it?

[Fittster]

Why does the government care what the banks are doing? It's got its own nationalised banks now who can be told to dance to whatever tune Darling likes. He could also instruct NRK to stop winding down it loan book.

[glazbagun]

Surely this is all pointless, though: the banks arent lending because they're not going to give you £100,000 so you can buy a house that's falling in value by 17% a year, and they're not going to give you a big (or small) business loan so you can go tits up & leave them with nothing. Unless you have a big, fat deposit to ensure that it'll be you that takes the hit, not them. So it isnt a credit problem Its a value/price of assets problem, which is nothing to do with banks.

The govt would be better (though probably not by much) offering low-interest BNPL deposits directly to homeowners if thats what they're into. Am I missing something here?

Edited by glazbagun on Saturday 3rd January 01:54

[dilbert]

Martial Arts Man said:

dilbert said:

They were talking about this two weeks ago, as being a part of the expected package of measures.

The article implies that the decision was made yesterday following a BOE announcement.

I didn't realise the proposal had been seriously considered till this point.

Apologies for posting old news!

MAM

Oh!
Don't get me wrong, I'm not critical of you, I'm critical of them.
Certainly I heard Darling or someone on the Andrew Marr show (sunday am - used to be david frost) talking about the proposals for another big bailout in early January.

If you believe the hype, then it's everybody but the governments fault. This has been spun to sound like the BOE make all the big financial descisions. The reality is that it's all coming from the centre. If you look closely the whole crisis is a string of scapegoats, but now they have a really big problem.

It's not that the banks are failing, it's that the banks are failing, they *have* to do something and they have to do it fast. That means it's harder for them to obscure who is making decisions that have to be made.

It's a really big problem, because if they are seen to be making the decisions, and then they go wrong (as they are) then they are accountable.

If there is one thing a politician does not like, it's being accountable for something that went wrong.


IMO that's one of the best outcomes of this whole sorry mess.

Edited by dilbert on Saturday 3rd January 02:01

[DELLSMITHUK]

The whole thing is going tits up!!!
Wrote to my local MP, and the prime minsters office the other day, for the first time ever(don't suppose it will do much?? But you have to try!!)
How do the government imagine that the way to fix the problem of the majority of the population not being able to pay back their credit commitments, is going to be fixed by trying to get us to borrow more? Should we not just try and ease back a bit?
If company's have borrowed too much and can't service their dept then why should the tax payer bail them out? (JLR, the banks etc?)
This IS going to get VERY messy!!!!
And to think i have just brought my first child into this world!!
Oh sorry????
HAPPY NEW YEAR

[Somewhatfoolish]

been thinking about this a bit.

credit was a way of wealth distribution kind of... taking from the rich (who had the capital) to give to the poor... and now the poor won't give it back.

er, drunk, can't remmeber where i was going with this.

[Somewhatfoolish]

ah yes I remember.

So the wealth gap from recent years comes about from 'receivables' based upon what the poor were supposed to give back to the rich, but now that is looking increasingly unlikely,

So basically we have just had some decent wealth redistribution post-war style.

Fine, whatever. what we need now is Certainty then everything is sorted really.

[Iain328]

Plotloss said:

So we lend, alright, give, the government money, for them to lend to banks so they can lend most of it to people who'll never pay it back.

Brilliant.

EFA

[Brown and Boris]

Fittster said:

Why does the government care what the banks are doing? It's got its own nationalised banks now who can be told to dance to whatever tune Darling likes. He could also instruct NRK to stop winding down it loan book.

Too true, if they are made to start tghe ball rolling markets wil do the rest.

If I had a mate I had lent money to to pay off his debts and he pissed it up the wall or didn't pay them back and just sat on the cash, I am sure I wouldn't lend again.

[Engineer1]

DELLSMITHUK said:

If company's have borrowed too much and can't service their dept then why should the tax payer bail them out? (JLR, the banks etc?)

Because a lot of these companies haven't borrowed too much, they have simply got caught out when the cheap debt is no longer available. Now i may view it as a great financial idea to juggle credit card debt between 0% deals, this is all well and good provided the 0% deals continue and I can keep paying just enough. The companies have in effect had the 0% deals pulled before they where ready and with no warning.

[Soft Top]

Fittster said:

Why does the government care what the banks are doing? It's got its own nationalised banks now who can be told to dance to whatever tune Darling likes. He could also instruct NRK to stop winding down it loan book.

This is something that winds me up. Mr Darling or to be more technically correct - Gordy, is telling the banks to lend, lend, lend and keeps calling the top bods in to give them a talking to but NRK is lending less and less.

[sa_20v]

Soft Top said:

Fittster said:

Why does the government care what the banks are doing? It's got its own nationalised banks now who can be told to dance to whatever tune Darling likes. He could also instruct NRK to stop winding down it loan book.

This is something that winds me up. Mr Darling or to be more technically correct - Gordy, is telling the banks to lend, lend, lend and keeps calling the top bods in to give them a talking to but NRK is lending less and less.

I don't blame the banks for not lending, I wouldn't. Since 1993 a huge number of people have lived beyond their means, taken credit they are totally unable to pay back, and now everyone is screwed. It's been like pass the parcel with a grenade and gold leaf wrapping paper. Labours idea of encouraging the Country to continue spending money to save itself from collapse is suicidal - add to this the fact Brown wants to throw money into public spending and green initiatives (so probably more public sector workers poking around your house, penalising you for over peeling a potato) and you have a catastrophe on your hands.

It's a right old situation - people can't get credit, are unable to move the credit they have to 0% offers now all have been withdrawn, the assets they have loans against are falling in value, the £ has lost 30% against the Euro and Dollar so any savings you do have, which are now losing money due to inflation and low interest rates, can't be easily moved into safer economies, no one is buying anything due to lack of credit and job uncertainty, and the Country's deficit increases astronomically with every passing day meaning we will have higher taxes for years to come, the banks are becoming state owned, the state couldn't manage a BBQ, and our Country is run by people so woefully out of depth in terms of even the simplest economics, who are also out of touch with society and still blinded by their socialist aspirations.

[Zod]

They are just desperately trying to get the banks to free up consumer lending to bring back that "good feeling" from the last ten years and get themselves another election victory. It won't work.

[DELLSMITHUK]

sa_20v said:

Soft Top said:

Fittster said:

Why does the government care what the banks are doing? It's got its own nationalised banks now who can be told to dance to whatever tune Darling likes. He could also instruct NRK to stop winding down it loan book.

This is something that winds me up. Mr Darling or to be more technically correct - Gordy, is telling the banks to lend, lend, lend and keeps calling the top bods in to give them a talking to but NRK is lending less and less.

I don't blame the banks for not lending, I wouldn't. Since 1993 a huge number of people have lived beyond their means, taken credit they are totally unable to pay back, and now everyone is screwed. It's been like pass the parcel with a grenade and gold leaf wrapping paper. Labours idea of encouraging the Country to continue spending money to save itself from collapse is suicidal - add to this the fact Brown wants to throw money into public spending and green initiatives (so probably more public sector workers poking around your house, penalising you for over peeling a potato) and you have a catastrophe on your hands.

It's a right old situation - people can't get credit, are unable to move the credit they have to 0% offers now all have been withdrawn, the assets they have loans against are falling in value, the £ has lost 30% against the Euro and Dollar so any savings you do have, which are now losing money due to inflation and low interest rates, can't be easily moved into safer economies, no one is buying anything due to lack of credit and job uncertainty, and the Country's deficit increases astronomically with every passing day meaning we will have higher taxes for years to come, the banks are becoming state owned, the state couldn't manage a BBQ, and our Country is run by people so woefully out of depth in terms of even the simplest economics, who are also out of touch with society and still blinded by their socialist aspirations.

EXACTLY!!!
Borrowing more than we could afford to service has gone on WAY too long. How do they think that getting the banks to lend us more is going to fix it?? Like i mentioned earlier, i think this is going to get very, very nasty in the next 6/12 months!

[Dracoro]

Engineer1 said:

DELLSMITHUK said:

If company's have borrowed too much and can't service their dept then why should the tax payer bail them out? (JLR, the banks etc?)

Because a lot of these companies haven't borrowed too much, they have simply got caught out when the cheap debt is no longer available.

Any sensible and cautious business would anticipate that the cheap credit wouldn't last forever. If they can't "ride out the storm" then they aren't running a good long term business. In effect, YES they HAVE borrowed too much if they can't afford the more expensive credit.

When you get mortgage quotes on the internet, there's often the "if interest rate was 10%, your monthly payment would be X amount", this applies just as much to businesses running a lot of debt.

The *real* current problem, such that it is, is the financials not lending full stop. However, this IS short term as if they don't lend, they don't have any business, after all they make money by lending it!!! Anyway, as I say, if a business can't survive short/medium term financing shortages then it's not as well run as it could/should be.

[Mon Ami Mate]

jimbo65 said:

If I haven't got any money and the banks don't have it, where the fk is it?

It's money you will (may) earn in the future. We will all spend years paying back huge chunks of our future earnings, just to try to fill Gordon's black hole.