Gordon Brown - Cometh the hour cometh the man...discuss

[carl0s]

I can't believe they're fucking paying two year's worth of interest off stupid people's mortgages.

 

They will give you two years of not paying, and if at the end of the two years, you can't afford to pay the whole lot, they'll pay it for you. Sorry, we'll pay it for you.

 

What about us unstupid fuckers who didn't get a mortgage because we knew they were too expensive, but saved and saved to /one day/ get a mortgage ? Where's our little bonus? House prices going through the floor would be our bonus but they're trying to prevent that righting of wrong.

[Gazboy]

Run that one past me again?

[carl0s]

Run that one past me again?

 

Today's news. The government is forcing banks to stop repossessions and allow 24 months hold on mortgage interest payments. If by the end of the 24 months the home owner can't pay the backlog, the government will pay it.

[carl0s]

I can only presume, and hope, that at that point the house will be repossessed, but who knows ?

[Lbm]

I can't believe they're fucking paying two year's worth of interest off stupid people's mortgages.

 

They will give you two years of not paying, and if at the end of the two years, you can't afford to pay the whole lot, they'll pay it for you. Sorry, we'll pay it for you.

 

What about us unstupid fuckers who didn't get a mortgage because we knew they were too expensive, but saved and saved to /one day/ get a mortgage ? Where's our little bonus? House prices going through the floor would be our bonus but they're trying to prevent that righting of wrong.

 

I can only presume, and hope, that at that point the house will be repossessed, but who knows ?

 

I suppose partially as the banks don't want to be in a situation where they have many repossessions, because they don't want to own thousands of houses which are low in value and not receive any regular (even if somewhat reduced) income from mortgage payers.

 

Also, not everyone is stupid/greedy. Some people have genuinely lost their jobs. But I take your point

[carl0s]

I just can't get over it. Where is all this money coming from? We really are fucked.

 

p.s. folks, don't forget that there is a profanity filter in your UserCP

[stuohy]

When injustice becomes law, resistance becomes duty

 

Adam Kokesh said this I believe... Maybe we should be thinking down these lines?!

[Gazboy]

Bloody hell.

 

Dragonball thinks Gordon the Moron is 'the man'?

 

 

Fuck!

[JustGav]

I can't believe they're fucking paying two year's worth of interest off stupid people's mortgages.

 

They will give you two years of not paying, and if at the end of the two years, you can't afford to pay the whole lot, they'll pay it for you. Sorry, we'll pay it for you.

 

What about us unstupid fuckers who didn't get a mortgage because we knew they were too expensive, but saved and saved to /one day/ get a mortgage ? Where's our little bonus? House prices going through the floor would be our bonus but they're trying to prevent that righting of wrong.

 

Amen to that...

 

I sold my house because I saw the market tumbling and I am glad I did, now all of sudden for being prudent when everyone else was going crazy I won't benefit from the fact that I've done the right thing....

 

Seems to be the way in this country though lately, if you need help you won't get it, and if you can scam, lie, cheat and basically mug the system, you will...

[Charlotte]

 

Also, not everyone is stupid/greedy. Some people have genuinely lost their jobs. But I take your point

 

 

Exactly. It doesn't affect me but some people, lots in my industry have lost their job through no fault of their own. What if that happened to you? Would you have enough money to continue to pay your mortgage?

[carl0s]

 

Exactly. It doesn't affect me but some people, lots in my industry have lost their job through no fault of their own. What if that happened to you? Would you have enough money to continue to pay your mortgage?

 

I suppose I am being too harsh, but how many people took 110, 120 per-cent mortgages on houses that were already overvalued in the first place?

[Charlotte]

I suppose I am being too harsh, but how many people took 110, 120 per-cent mortgages on houses that were already overvalued in the first place?

 

Yep you're right. There are loads of people that shouldn't have purchased a house that did. But there are also normal average people who have lost the bred winner in the house and still have a mortgage to pay.

[Snooze]

I'm sorry - I really am, but the suffering of these "normal, average people" (which may yet include me! ) are also part of the pain that the UK is going to have to go through if we're going to let the economy settle back down (weakening GBP, proper rates for lenders, realistic house prices) to a sensible level.

 

By these short-term decisions artificially propping up the economy, it's just being set up for an even bigger drop in the future.

[Charlotte]

By these short-term decisions artificially propping up the economy, it's just being set up for an even bigger drop in the future.

 

What are you basing that on? I'm sorry, I'm not going to get into a big debate about the economy, this particular topic about mortgage doesn't even affect me because I don't have one, I just thought it was a decent measure to stop people being homeless, kids not being fed etc etc.

[Snooze]

I'm trying to ignore the food and housing issues and separate my (albeit admittedly small) humanitarian (feminine? ) side from my problem-solving, heartless (male?) side, btw! I don't think I really could be the person who actually makes the decision to throw people out onto the street, myself.

 

What I'm wondering is:

Let's assume that we give these people a 2-year repayment holiday, we borrow loads of money to keep the economy going (ie. to keep as many businesses afloat as possible), we keep house prices up as high as possible (by reducing interest rates), we keep borrowing money at the same rate, etc. etc.

 

What jobs do you think these people will have in 2-years time? Why should all the jobs that are being lost now suddenly re-appear?

The problem is that for the last 20 years, through "economic growth", the country and all it's residents have been spending much more money than they generate. That is NOT a sustainable model (how can the cost of living - house buying, etc. - go up so much faster than the generation of income?), so trying to do everything we can to drag it out just makes no sense to me!

 

The only solution I can see is for the average person, and the government, is to come back down to a sensible level of spending.......

 

 

 

 

Edit:

This post by SteveR in the GBP-YEN currency discussion summarises nicely what the effect of continuing to drop the interest rate will have too!

Japan's recovery over the last 20 years, and the US recovery from the great depression last century were only because the countries had good manufacturing export industries to fall back on.

[AndrewOW]

The only solution I can see is for the average person, and the government, is to come back down to a sensible level of spending.......

 

 

Bring back rationing, I say!

[Charlotte]

The only solution I can see is for the average person, and the government, is to come back down to a sensible level of spending.......

 

And what of all the debt that has accumulated - written off...?

 

I don't know what happened during the last recession because I was too young. Apart from that my dad lost his business and went bankrupt, moved into a rented house and eventually abroad.

 

Presumably once the panic has died down consumer confidence will go up, people will start spending, businesses will get back on their feet, people will start to move house (people always move house) and things will balance out - hence people will be in a better work situation in two years? I don't agree with the taxpayer having to fork out if after two years those people still do not have a job and aren't able to pay back the interest on their mortgage. It just seems to me like a good short term measure.

[Snooze]

Presumably once the panic has died down consumer confidence will go up, people will start spending.

 

But where will these consumers get their money from to spend? I don't think it's the case that people are stockpiling money instead of spending it now - they've just stopped borrowing more.

 

The over-spending up until now has all been done so by borrowing (for individuals mainly against the "pretend" equity in their houses, for the government borrowing from overseas).

[Hermit]

To use a cliche, it's throwing good money after bad. Sometimes, and I believe it's the case now, people have to face facts and come up with plan B. I have sympathy with those losing jobs, but none for those who took out 5x salary mortages in the last couple of years.

 

Have a look at this graph: http://www.housepricecrash.co.uk/graphs-average-house-price.php

 

See how in 2004 prices faltered? That's when the crash should've happened, if it hadn't been for irresponsible lending (and therefore borrowing... it's not all the lender's fault).

 

It's a dilemma though - we need the correction to happen fairly quickly, but if it happens too fast the overshoot will be larger, and prices will take longer to recover. I know there are other factors, but comparing the last two crashes, the most recent one crashed quicker, but went a lot deeper took a lot longer to recover.

 

On the other hand, smoothing out the crash too much could lead to a decade or more of stagnation, with noone investing in anything. I think that basically happens when noone can believe the bottom has been reached, which maintains a steady downward pressure.

 

Just my 2p worth, but I don't expect the assistance to make much difference to house prices. There will still be people who realize they're stuffed, and hand back the keys rather than take the handout and suffer the consequences further down the road.

 

My feeling is that we've got at least 3 or 4 truly gruelling years to come, regardless of what economic measures are taken

[carl0s]

Yep you're right. There are loads of people that shouldn't have purchased a house that did. But there are also normal average people who have lost the bred winner in the house and still have a mortgage to pay.

 

Aren't there insurance schemes for this though?

[SteveR]

lol, I've just seen this and thought I'd share

 

http://www.z5net.com/robbie-gordon.jpg

 

He's clueless, and doing ANYTHING he can to try to stay in power rather than help UK PLC and its citizens, IMHO.

[SteveR]

http://www.moneyweek.com/news-and-charts/economics/interest-rates-cut-by-one-third-but-will-that-help-14199.aspx

 

...here in Britain, whatever our political masters tell us, we seem to be in just about the biggest mess around. Don't just take our word for it - look at probably the best financial barometer there is for confidence in a country, our currency.

 

The pound is heading right down the drain. Today it has hit an all-time low against the euro and its weakest level in more than six years against the US dollar. And rate cuts to zero will only weaken sterling further as the full ghastly story emerges.

 

What do I mean?

 

Britain's boom was a fraud. It was based, quite simply, on debt. We're much more individually indebted than most of the rest of Europe. We now personally owe more (£1,455bn) than we've ever owed before, and have bigger debts to the banks than we produce every year.

 

And our government's solution? Spend money like water, and run up public borrowing to new highs as well. Yet the plunge in sterling is going to make this much harder to achieve. Much of the cash will have to be borrowed from abroad. Yet investors are going to shirk away from buying gilts if they think they'll lose out on the exchange rate.

 

So the bottom line is that despite the dramatic nature of these cuts, the actual impact they'll have won't be that great. Sure, some mortgage borrowers will find their monthly payments coming down. But for new lending, most of the government's public pressure on the banks is just showboating. Banks will carry on the way that they always have. Lower base rates aren't going to increase the amount of credit available.

 

As David Wighton says in The Times, "the mechanism that turns official interest rate cuts into a boost for the economy is broken". And the real problem is very simple indeed. However much cash is dangled in front of us, and regardless of the rate of interest, we literally can't afford to borrow any more money.