February 17, 2009
Credit card payments unstable
Story link: Credit card payments unstable
This is the point where many borrowers can find themselves in extremely sticky situations. Missing one payment is not to bad, but you can soon find yourself being charged fees left right and centre and finding your self in even more debt than you thought
Missed payments by UK credit card borrowers surged in the last three months of 2008 and lifted delinquency rates in bonds backed by such debt to a historical high, according to a report out on Tuesday from Fitch Ratings.
The sharp rise in missed payments, which lifted average delinquency rates among Fitch-rated bonds by 50 basis points to 4.3 per cent compared with the previous quarter comes in spite of card lenders having tightened their standards.
Banks to make Britain go bust
Story link: Banks to make Britain go bust
The structure and way that banks operate make them destined for failure. The taxpayer has footed the bill for bail outs too many times before, so the banks should be taking responsibility for their actions.
The Crunch is about to bite again.
First, the US housing market nose-dived, racking up huge sub-prime loan losses for the banks. They cut their customers’ credit lines, passing on the pain to the rest of the world economy. Property prices and stockmarkets plunged.
February 7, 2009
Interest Rates hit a record low!
Story link: Interest Rates hit a record low!
It seems that all we see in the press these days, but if you think of the impact the interest rates are having on the UK economy as a whole as well as hundreds of individuals, then you can see why.
Interest rates are now sitting at their lowest every, at 1%!
Interest Rates hit a record low!
The Bank of England fired the fifth shot in its series of panic interest rate cuts that have taken the base interest down from 5% in October 2008 to 1% today. This follows the crash in UK GDP for the fourth quarter of 2008 which contracted by -1.5% and is inline with earlier analysis that projects towards an additional 3% GDP contraction for 2009.
Monetary Policy is failing which is prompting the government to adopt quantative easing “money printing” this can take many forms, but that which has the greatest impact is the Bank of England buying government debt, which has the direct effect of devaluing the currency as the supply of money soars. Printing money has never EVER been the answer, history is littered with the political elite opting to take the short-term quick fix at the direct cost of the long-run. In today’s Britain the clear objective is for the Labour Government to work towards the May 2010 election deadline which has prompted policies that are destroying Britain’s wealth and future growth which has been reflected in the crash in sterling against all major currencies of more than 30%, for the government cannot hide money printing from the currency markets. Similarly UK debt has been marked lower in the wake of the increased liabilities of the banking system that the Tax payer is guaranteeing.
January 23, 2009
Economy and Gordon Brown are finished
Story link: Economy and Gordon Brown are finished
The old saying goes ‘Prevention is better than cure’.
The problem is, Gordon Brown and the rest of the UK Government are acting on problems after they happen and not before.
For example, interest rates are a method to stabilise the economy, on a regular basis, its not as simple as slashing them when the economy crushes itself.
Economy and Gordon Brown are finished
In these hard times, there is a lesson from Hard Times for all involved in the disintegration of Britain’s finances. Thomas Gradgrind, Dickens’ unlovable utilitarian, insists: “Now, what I want is, Facts. Teach these boys and girls nothing but Facts. Facts alone are wanted… Stick to the Facts, sir!”
Who remembers Facts? They are what I used to believe were contained in the annual reports of reputable banks. How gullible. For a start, the juxtaposition of “reputable” and “banks” forms a glaring oxymoron. If the credit crunch has taught us nothing else, we now know that the balance sheets of institutions to which we entrust our savings and investments contain precious few Facts.
January 20, 2009
Should banks lend?
Story link: Should banks lend?
This is the problem right now. Trying to get property values to their original state, may not be the correct way to go about things.
Personally I feel the excess lending was a mistake and allowed excess inflation, causing the situation we have now, this should not be repeated.
However, we don’t want house prices to become non existent, so I’d like banks to free up their lending criteria slightly.
Should the UK government really be encouraging households to borrow money to buy houses in the current climate? And should it be encouraging banks to lend to them as part of the latest bailout package?
Clearly there is considerable pent up demand for housing and this will grow over time. But a responsible government would surely be telling first-time buyers and others to put off their purchases. What is the sense in taking out a mortgage to pay for an asset that is declining in value by 15% a year?