The only way to fix this economic mess......

[chrispattinson]

is with a positive attitude. Lets get buying, and spending those readies, and keep the world turning, because from what I've been witnessing today here at work (no details), this situation is going to get stupidly worse!

Lets all go buy new stuff! - there's my effort to stimulate the economy.

[purpletimbo]

I would, but my sheds full and no one is buying anything out of it

Mind you it would help if I wanted to sell any of it, not just go and sit and gaze now and again

[Bungleaio]

Originally Posted by chrispattinson

is with a positive attitude. Lets get buying, and spending those readies, and keep the world turning, because from what I've been witnessing today here at work (no details), this situation is going to get stupidly worse!

Lets all go buy new stuff! - there's my effort to stimulate the economy.

This is what the government is trying to get everyone to do, hence the interest rates cut.

The credit cruch is working out quite well for me, My fuel bill has gone down by about £20 a week.

[twisty]

The world needs to go global and everyone should be employed by the global government at the very least.(An end to starvation)
There is loads of work to be done and everyone needs a place in it.
The western system has failed,the comunist system has failed,we need a new global system and to learn how to stop being so self serving and start looking after each other and the rock we all live on.


Happy happy happy

[Stu]

Originally Posted by Bungleaio

The credit cruch is working out quite well for me,

I'm hoping the same. I need a new car - I should be able to get a right good one for next to nothing.

[Southwell]

It's not made a difference to me, got an interview for a new job, which would mean i can get a new car and all my main bills are fixed in price.

[DCM]

I know, lets all borrow more money that the banks don't have, so when things finally goes tits up, it GOES tits up...

Not being funny, but we live in a credit society, and not within our means.

[Northy]

Originally Posted by Stu

I'm hoping the same. I need a new car - I should be able to get a right good one for next to nothing.

Yup, your car is badgered

G

[Northy]

Originally Posted by DCM

I know, lets all borrow more money that the banks don't have, so when things finally goes tits up, it GOES tits up...

Not being funny, but we live in a credit society, and not within our means.

I'm actually lucky that the only real debt I have is the mortgage

G

[DCM]

I have a mortgage, and what the ex left me with, thats it, and to be honest, anything more would be scary.

[Northy]

Waking up owing over 100k on the mortgage is a bit scary, but easy come, easy go

G

[Southwell]

Bah, thats nothing

[rcmadd]

if the government had give the people that money instead of the banks then we could have had a good spending spree

[DCM]

the government should of underwrit peoples mortgages and let some of the greedy banks go to the wall, that would force the other banks to sort out there finances....... grrr

[Stu]

Originally Posted by Northy

Waking up owing over 100k on the mortgage is a bit scary, but easy come, easy go

G

I don't mind having a mortgage (although ours is not that big) - because we still have the asset there in the land, bricks & mortar.

Owing money for things that have gone, like holidays & cars (that have depreciated) - that seems dumb to me. My rule on that is that if you can't afford to buy it then don't buy it.
That said, if everyone listened to me the economy would go tits almost overnight.

[SlowOne]

The way the mess is gonna get fixed is by everyone paying down their debt to a level they can afford, and then going back to the way we ran capitalism for the five hundred years prior to the 1970s.

Giving us all some money will only delay the inevitable - once we've spent this tax windfall (or worse, put it straight into a savings account/paid down the bills/etc. and not spent it) we'll be back to where we started, and then what?

I can only assume that some of the posts on here are fueled by a final fling in the offy, and not by any serious understanding! If the banks went bust, then the administrator is legally bound to recover all the assets to distribute to the HMG and the creditors. That means they call in your mortgage with immediate effect - can you pay it? So you put your house on the market... If HBOS goes under, that's possibly 3 million houses up for sale. Not the best plan...

So the Government underwrites your mortgage. Then there are still people who default because they have no job. Then you have your taxes increased to make up the difference. Still with this plan?

The Capitalist system relies on people having capital. If everything reverts to HMG, that's a socialist system. At the moment, people have no capital, they have bits of paper saying they have capital. To make it worse, the pieces of paper don't actually say what capital they own, so they have no way of putting a value on it, so everyone assumes they have no capital. Would you lend to anyone who had no means of re-paying the loan?

Which is why we got here in the first place. American banks, permitted to do so by de-regulation of the Reagan/Thatcher era (and made easier by the Clinton/Bush/Blair/Brown era) had people fill out loan forms where they declared things like their income and savings that were complete lies. These loans were bundled up into larger loans which were sold between banks on the basis that you could have 10% of the cost of buying the loan, and borrow the rest. You ended up owning a loan book worth (say) £100m for only £10m, with an income of £10m a year to pay the loan off at a rate of £7m a year. By doing nothing, you made £3m a year.

Great, until someone stops paying you. And then someone else does, and then... Now, the banks won't lend to you, and you can't pay the £7m and you default, so teh bank loses its money and it defaults and... Ah, no problem, I hear you say, I'll sell the assets that backed the loans! Top idea! Except that the assets are in Detroit, or some other place where there are no jobs, and so the asset is worthless. And hten someone says that these loans are the 'Emperor's New Clothes', and the whole thing seizes up.

No one will lend anything to anyone because they are frightened that it is to prop up these loans that are now worthless, and that includes us wanting to borrow to move, replace the car, keep ancient rellies in old-folks homes, etc. Yet, in Spain, this is not a problem, because the Spanish Government didn't relax the Rules like we did.

It just has to work itself out. There is nothing anyone can do that will do anything more that delay the inevitable. When this happened in Japan in the early 1990s, it took ten years to work out. Today, the Japanese Stock Market is back to where it was in 1993. For many years, they had 0% interest rates, yet there was no money to borrow. When it happened in 1929, it took fifteen years to fix, and then arguably only because of a World War in which most RC racers would have to fight and in which 2m people were killed.

So, there is, history tells us, no way to fix this but wait until it works itself out. Anything that the Government does with our money in the sort term, we will have to pay back in the long term. Stand by for a hard time for many years to come, for some very strict regulation of the financial community, and for tax levels we thought we'd left behind in 1980. If you have a job in Manufacturing, a reasonable (affordable) mortgage and some savings, you'll get by. For anyone else, it's going to get hard.

Sorry about the lengthy rant - it's a nice relaxing afternoon here chez mois, and I work in Manufacturing... with an affordable mortgage... and some savings... In the Thatcher and Blair years I got royally screwed because I wouldn't borrow like crazy, work in the financial community adding no value, or start my own business; and then Brown rogered my pension - all because I had the temerity to believe that making things and adding value was a worthwhile way to earn a living, and make money for UK plc. I, and many like me, never believed their vision was any way to run a country, yet we were in the minority. Now, it seems, they are all talking about manufacturing and fiscal prudence as the best way to right things. (John Biffen famously said "You can't build a world-class economy by selling each other hamburgers." That still makes me smile!)

People go crazy in congregations, but they only get better one by one. It's a long way back...

[Lee]

I'm about as safe as anyone in my job at the moment, i have cut my mortgage down to 240k . im trying to keep the economy ticking over, since friday i have spent £170 on petrol and only done 600 mile, but the north east is slightly warmer for it

If i lost my job and my home then thats life, it happens, i dont want it to happen but there really is nothing you can do in that situation. Plus in a couple of years time you will be back up to speed and probably better off for it in the long run.

Rumour has it inserest rates will drop another % next month and fall to 0%