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Hey y'all!!

Just reading another post and some comments made on it got me thinking....

Right now please keep in mind the follwing facts here:

1) I am fairly young

2) I am alarmingly dim

3) I have no morgage/credit cards/loans

4) I am ALARMINGLY DIM

I keep reading that Gordon Brown is under pressure to act on the state of the economy and how Labour has pretty much fucked us all with increases on this that and the other (well thankfully not the other)

I read today that on average we have a personal debt of 25k each. a few weeks ago before all of this started I visited a friend of mine,who has not got a pot to piss in (in fact his wife is a bankrupt) and he was telling me how he could have waited three days for his TV to be repaired for ?80 but decided to go out and get finance on a new ?500 TV because a new series of his favourite show started that night!!

This is a story that I can keep on repeating,just changing the names,items and costs. Every thing from holidays to whole new wardrobes....just on a wim and on fecking credit!!

So I just really wanted some one to clear up for me a few things. Is it really fair to blame the government? Did we all just get caught up in "The feel good factor"? Are we now just trying too pass the blame onto some one else?

sorry if this is all a little random and vauge. There was alot of other things I kinda wanted to put in....but I have had a drink I'm afraid. If i have come across as a complete fucktwit.....please be gentle with me!!

Peace out

BB

Funny thing the economy. If its doing "well" its because the Govt's clever but if it's doing badly it's down to "the hidden hand of the market" , "the global turndown" or some such. Shame we cant do what historically made Britain Great and go to some country and steal a few bob.

I am fairly old BB and don't have a credit card either but do have a mortgage, which lucky for me was taken out many moons ago and comparable to prices is now is just tiny.

The economy always confuses me because every time I hear it discussed its all about credit.

There was a program on tv the other night about the economy so I thought I'd watch and hopefully learn.

The first person in it was complaining about how she had bought 4 houses up north and couldn't afford the mortgage on them.

The second was a women who had bought a house for ?450,000 or something in the belief that her own home would be bought.

I switched off because the reason the economy baffles me is that I was brought up to think that if you can't afford it then you don't buy it, hence the simple reason why I don't have a credit card.

If and when I want something but can't afford it I do without and save up until I can.

I appreciate muswell's point extremely well and agree that when the economy is doing well the Government brags and when its not its someone else to blame but I can't help wondering if there wasn't so many people using credit if the shit would be as big.

I recall tax etc being very high when the Tories were in and my parents always complaining and understand that its much lower now and apparently the Government achieved this but not sure what's what.

No doubt some economy minded person will give a better reply and let me know as well if its as simple as if everyone didn't borrow so much for things like cars and 'normal' shopping if the problems would still exist.

Everyone shares a portion of the blame

Governments for not regulating private enterprise enough
Some of the billion dollar corporate catastrophes illustrate just how impotent regulatory bodies really are and how complex private enterprises have become

Private enterprise for making credit too easy to get
lending a 100% of a properties value is just ludicrous
Offering existing credt card holders limit increases that require nothing more than a signature is beyond silly its criminal negligent imho.

Public for living off the equity in their homes via lines or credit & credit cards

I worked in the banking industry and saw people go on shopping sprees with lines of credit(cars,boats,homes,shares,gambling,investments)acting like they'd won the lottery but never thinking about how long it would take to pay it back.

When the economy was doing well Gordon Brown took all the credit but now its turned pear shape its nothing to do with him, funny that !thumbsdown!

Thats what politicans do

In Australia we saw housing prices increase in value big time over the last decade and the govt said well done to us

Now very few can afford to get into the market they are no longer trumping that one out

The amount of affordable public housing that has been sold off to private enterprise is a disgrace

Every month we are told that our personal wealth has increased because house prices have gone up yet again.
So people up their mortgages based on the increased value of their property..... and spend the money on plasma TVs, holidays, etc
Two catches to all this bollox.

1. Your personal wealth isn't real until you've sold your house.... then where are you going to live?
2. The mortgage has to be paid from your real money not the hypothetical value of your property.

Mart

THE major problem is to do with credit, and the greed that credit allows.

At the highest levels, the greed of the banks and the people who work in the markets has resulted in problems caused by, for instance, sub-prime loans going belly up (the people who originally sold these mortgages made billions, as did the first few waves of banks who packaged and re-packaged the deals selling them on as "safe" investments to other banks).

The trade in "futures" is no more than a spin on the roulette wheel, but while you or I may bet ?10 or ?50 in a casino, traders bet millions. All well and good if it were their money, but it's not! It's YOURS!!! The money they bet with comes from pension funds and such like. They are in a win-win situation. They get paid well, and if they lose, they get to have another go... but if they win, their bonuses are astronomical. The same goes with hedge funds. All anyone in the upper echelons of the banking system does is bet with OTHER PEOPLE'S MONEY!!! The really crap ones will eventually lose their jobs, but not before their actions have caused misery to thousands, if not millions, of other people.

Then we come to the greed of the individual who wants everything NOW. Havn't got the money for a new car? I'll borrow it. Havn't got the money for a holiday? I'll borrow it. And so the story goes on, until we realise that, on average, we all spend about 125% of our annual earnings!!! This rate of borrowing CANNOT go on indefinitely!

When he became Chancellor, Gordon Brown made the brave but correct decision to allow the Bank of England to decide interest rates. No longer would they be decided on the whim of a government to try and curry favour with the electorate when necessary. Sadly, at the same time he deregulated other parts of the banking system, which has led to the "light touch" approach to regulation that now threatens our own banking system.

Without regulators who could properly impose rules and regulations, banks have seen a steadily increasing stream of revenue from selling loans to clients. The fact that these clients already have loans elsewhere is of no matter to the banks... all they see is the potential revenue from those who are given credit cards who end up having to pay interest on their lines of credit. The result is people having half a dozen credit cards, another half a dozen store cards, plus various loans for a car, a conservatory, a holiday, a giant plasma TV... not to mention a mortgage!

30 years ago if you needed a loan you went to see your bank manager. He would then look at your file and decide yes or no. If he thought you couldn't repay the loan, you didn't get it. Now if you want a loan you have hundreds, if not thousands of options. Been refused credit? We'll lend you money!

If anything, the down-turn in the housing market is a GOOD thing. People think, oh my God, last week my house was worth ?250,000, but now its only worth ?225,000. SO WHAT? If you're selling to move elsewhere, the chances are that the house you were looking to buy has also decreased in value... so what have you lost? If you're not thinking of moving, what does it matter what your house is worth today? Markets have ALWAYS fluctuated, so while values are dropping now, so they will rise again later.

The good news is for those wanting to get on the first rung, as a drop in values will make it easier for a new generation of home buyers.

You cannot blame the Government for what is a global recession; and if they have allowed too much credit in the past, that was only responding to public demand.

The fact is that Britain is awash with debt- it is part of the chav culture that we now have; and the days of easy credit are coming to an end.

In a way, as painful as it sounds, maybe people moving from mortgage to rent would give long-term gain for short-term pain.

House prices are unsustainably high- in some places 8 times the annual wage; and a reduction in prices will reduce both inflation and allow people to buy houses again. Of course there will be substantial pain- but that happens with many things.

The BIG problem is that credit is SO EASY to obtain.

I am sure like the rest of you, I get letters every day asking me to take out a loan, or take out a credit card.

There is an advert on TV showing a man taking out a ?20,000 loan, and he has a big smile on his face.

Companies are falling over themselves to lend money to everyone, and that has led to the current credit crunch.

With the middle-class in credit up to their eyeballs the loan companies looked for new business, so decided to lend money to the poor, the unemployed, those who are not used to paying back a loan every month.

And guess what, these people began to default on their loans, and soon (in the US at least) there were thousands of empty houses that nobody could afford to buy.

I guess if anyone is to "blame" it is unregulated capitalism.