Head Honcho Posted 5 November 2008 Posted 5 November 2008 We've heard so much about the credit crunch lately but who is to blame? It wasn't that long ago when banks used to lend money and borrow money! That was it simple. They used your savings to finance loans to other users of the bank. They'd then invest any profit the bank made elsewhere. The problem began when they decided to use our savings not their profit to finance investments elsewhere. Eventually these investments got risky and they realised they were up shit creek without a paddle. The banks stopped lending to each other and hey presto here we are. So who's to blame?
AmericanScott Posted 5 November 2008 Posted 5 November 2008 Yo' momma so fat, she thought Credit Crunch was a cereal and chowed down. Sorry, i've only just woke up an that sprung into mind.
hairy Posted 5 November 2008 Posted 5 November 2008 We all are (depending on your age). We dont have, we borrow. Why wait. So we borrow and borrow and borrow. All of a sudden we cant / dont want to pay it back and everything goes tits up. The economy has been running on borrowings for such along time that when it went tits up it really went tits up.
Alexikokopops Posted 5 November 2008 Posted 5 November 2008 There was a news night special on this a few weeks ago. I can't remember the conclusion they came to. What a useful post.
Zingari Posted 5 November 2008 Posted 5 November 2008 the daily mail kept running stories about a property price crash , and subsequent knock on effects , so i blame them .
The People's Hero Posted 5 November 2008 Posted 5 November 2008 Media spin, which in tuen worryies people Do you do the proof reading for The Sun by any chance?
Jimmy2Drags Posted 5 November 2008 Posted 5 November 2008 I work for a reputable mortgage advice service & many of our senior staff have been worried about companies doing up to 130% mortgages for a very long time. With the property prices dropping, the poor/stupid sods who took out these risky mortgages are finding themselves unable to re-mortgage & owing alot more than they ever anticipated. You can't blame the customers too much as they've been given 'professional' advice by a qualified advisor, so you have to blame the banks for offering such ridiculous products in the first place. Obviously the 100%+ mortgage market is not souley to blame, but when you look at how easy it has been to get credit over tha last 10 years, you realise it had to end at some point. Even with BTL (buy to let) mortgages, you could get a 110% mortgage, with no need to prove your income.....you didn't even need a job, you just had to prove that the rental potential (£600 p.c.m for example) would cover the mortgage payments. How fu*cing stupid is that. You could be unemployed & on benifits, but if you wanted to buy a house, you could do it with no deposit & no way of paying the mortgage if you could not rent it out.
Head Honcho Posted 5 November 2008 Author Posted 5 November 2008 Media spin, which in tuen worryies people
Corky Posted 5 November 2008 Posted 5 November 2008 Patrick Kisnorbo and Steve Howard- one way or another they are being blamed for what seems like everything, so I say it's their fault for this too
James. Posted 5 November 2008 Posted 5 November 2008 We've heard so much about the credit crunch lately but who is to blame?It wasn't that long ago when banks used to lend money and borrow money! That was it simple. They used your savings to finance loans to other users of the bank. They'd then invest any profit the bank made elsewhere. The problem began when they decided to use our savings not their profit to finance investments elsewhere. Eventually these investments got risky and they realised they were up shit creek without a paddle. The banks stopped lending to each other and hey presto here we are. So who's to blame? It wasn't so much about banks using savings to finance investments elsewhere, after all it was the banks without the large deposit bases that got ****ed as they relied on money markets for financing. It's more about the fact they basically had far too much exposure to the US housing market and through structured credit products managed to proliferate this exposure throughout the financial system. Media spin, which in tuen worryies people In whatever language that is, it's nonsense. --- The public, the banks and the governments have to share the blame for this. As much as the media want to pin it on the evil investment bankers it's not really that easy.
Bellend Sebastian Posted 5 November 2008 Posted 5 November 2008 I blame the mortgage lenders for operating on the naive assumption that property prices would just go up and up and up forever, so it would therefore be ok to give mortgages to people that couldn't afford them because if you repossessed the house, it would ALWAYS be worth more than the mortgage. The general public for the most part are pretty stupid and struggle to cope with the fact that the value of assets can move both up and down (whichever one it happens to be doing at the time is what they will think it will do forever), but the lending institutions really should have known better. They've proven that they're every bit as irrational and greedy as everybody else. The fact that property prices have collapsed is hardly a surprise, is it? It's marginally less surprising than the price of oil falling through the floor. If something looks like it's out of control, it probably is, and that there will be an 'adjustment' (i.e. a massive drop) in values at some point
Dr The Singh Posted 5 November 2008 Posted 5 November 2008 It's everyone's fault!! The banks\bankers for high risk high reward strategies The government who in the past have glossed our economy, giving the consumers added confidence to overspend. Have grossly mispend and mismanaged our monay!! Mortgage sellers, for knowingly selling mortgages that were beyond payment Mortgage buyers, who purchase mortgages beyond there means General public who have been enticed to live of credit and never bother saving for a rainy day
Webbo Posted 5 November 2008 Posted 5 November 2008 the daily mail kept running stories about a property price crash , and subsequent knock on effects , so i blame them . Tbf the Daily Mail is to blame for everything, AIDS, (non existent) crime and Britney Spear's last CD.
dandannieldanok Posted 5 November 2008 Posted 5 November 2008 My limited knowledge and interest leads me to the blinkered conclusion that banks are to blame with careless lending and the general public's lack of confidence is fueling the fire.
Kilworthfox Posted 5 November 2008 Posted 5 November 2008 People's fear! Major issue for my line of work
Daggers Posted 5 November 2008 Posted 5 November 2008 People's fear! Major issue for my line of work Are you that bloke from Heroes, the second series? The one who gains super strength when people are afraid? That would be a kickarse super-power to have in the Square Mile during a recession.
Raj Posted 6 November 2008 Posted 6 November 2008 Personally i blame Raj. Wasnt me promise.. It was however them bastard Bankers and mortgage lenders in America. BANKERS
Alexikokopops Posted 6 November 2008 Posted 6 November 2008 1.5% cut from the Bank of England.Bloody nora. Where have you seen that? Snot on BBC yet
James. Posted 6 November 2008 Posted 6 November 2008 Where have you seen that? Snot on BBC yet BBC? Pah! I have a live feed on my Bloomberg terminal. It gets released at 12pm on the dot.
Monk Posted 6 November 2008 Posted 6 November 2008 Incredible, I never expected 1.5%.... inflation here we come.... wish I still had a BBG terminal NI ODD best command on the whole of Bloomberg. Give it a whirl James and find us an amusing story.
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