So are Labour on their way out?

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cdd
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On the contrary. What I'm saying is that the banks have a mutual long-term interest in preventing debt that can't be paid back. By contrast, McDonalds has no interest in stopping people getting fat - they don't pick up the tab for it in the end.
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Gavin Scott
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Chie wrote:...the fact that a lot of people are now in a stupid amount of debt seems to be the banks fault, for some reason. :?
Think of all the people in the UK and US who were given mortgages they simply couldn't afford - who now are in the process of having their homes repossessed.

How many of them do you think actually considered this would happen?

No one wants or expects their home to be taken off them.

The banks were offering 5x and even 6x salary on self-certified mortgages to people across the US and UK on meagre incomes.

The punter may not know what a terrible risk of default they were in but the banks sure as fuck did.

You can only feel sorry for the punter who thought - "wow I'm finally on the property ladder - I didn't think I could ever afford it but I finally got it!"

Well he couldn't afford it - and the banks knew it but didn't care.
Stuart*
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Gavin Scott wrote:You can only feel sorry for the punter who thought - "wow I'm finally on the property ladder - I didn't think I could ever afford it but I finally got it!"

Well he couldn't afford it - and the banks knew it but didn't care.
I do have sympathy for those who are having their dreams shattered when their homes are repossessed; it could be argued that they were misled into accepting the opportunity of easy credit when they didn’t really have any realistic prospect of repaying what they had borrowed.

However, they can walk away and declare themselves bankrupt.

I’m struggling to understand who will ultimately be incurring the loss for all these sub-prime loans, in the UK and elsewhere. The taxpayer, through UKFI, is underwriting most of these loans in this country so I’m not sure how the lending institutions are losing out. They’ll still get their money, but you and me will be paying for it for the next decade or so without any return whatsoever.
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Stuart*
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Tsk - I think I actually answered my own question there, but as I lack the ability to edit I can't back-track and change it!

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However, I'm not quite sure why we should all be paying through the nose to cover someone else's debts.

I'm the first to admit that during my impetuous youth I ran up some hefty debts, and I've spent the last decade of 'boom' paying them all off instead of laminating my floors and enjoying fab holidays in the Maldives. Perhaps my prudence was misplaced if I'm now having to pay for those who decided to live the high life!
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Gavin Scott
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Stuart* wrote:Perhaps my prudence was misplaced if I'm now having to pay for those who decided to live the high life!
You're not. You're paying to keep the banks afloat, because the alternative would be unthinkably bad.

Those who took out mortgages they couldn't afford will probably be left with nothing.
Stuart*
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Gavin Scott wrote:
Stuart* wrote:Perhaps my prudence was misplaced if I'm now having to pay for those who decided to live the high life!
You're not. You're paying to keep the banks afloat, because the alternative would be unthinkably bad.
We’ve been told that the alternative is unthinkably bad, but nobody has actually explained to me what that is. Perhaps it’s quite ‘thinkably palatable’ compared to the prospect we face.
Gavin Scott wrote:Those who took out mortgages they couldn't afford will probably be left with nothing.
Indeed, they don’t even walk away with the debt. Somebody is servicing those loans and it’s us, not them. Perhaps they will bear some loss along with other taxpayers, but that’s hardly commensurate with their degree of responsibility.

The banks seem to be in a winning situation here on the basis of an as yet unproven threat of what happens if they fold. I’m not sure that propping up a defunct system with public cash is really the best way forward; everyone seems to be negatively affected except those who encouraged or took advantage of this situation in the first place.

I’m not an economist, and I don’t claim to have any great insight into the financial apparatus of the world, but I probably have the same view as many others who seem to be experiencing the disadvantages cause by the actions of others.

As an aside, Gav, you will probably find that you have a credit rating based purely on your payment of utility bills and council tax. It's all noted, whether you ask for credit or not!
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Chie
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I do find it incredible that in those 10 years of unmitigated wealth and spending, the height of aspiration came to be a claustrophobic rabbit hutch in one of many thousands of anonymous apartment blocks. £200,000 for a canal side flat?? Good grief, thank God that trend's nearly over.
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Sput
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Stewart Lee put it very well:
"What kind of creature makes his home an investment opportunity? Only man. Home and investment are not the same thing. Home is a basic requirement of life. Like food. When squirrels hide acorns they are not trying to play the acorn market".
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Stuart*
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Sput wrote:Stewart Lee put it very well:
"What kind of creature makes his home an investment opportunity? Only man. Home and investment are not the same thing. Home is a basic requirement of life. Like food. When squirrels hide acorns they are not trying to play the acorn market".
No, the squirrels gather acorns for their offspring and themselves! They have some foresight and an inbuilt ability for survival. Some humans seem to be lacking that.
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Sput
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Yes. That's what he's pointing out.
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Gavin Scott
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Stuart* wrote:
Gavin Scott wrote:
Stuart* wrote:Perhaps my prudence was misplaced if I'm now having to pay for those who decided to live the high life!
You're not. You're paying to keep the banks afloat, because the alternative would be unthinkably bad.
We’ve been told that the alternative is unthinkably bad, but nobody has actually explained to me what that is. Perhaps it’s quite ‘thinkably palatable’ compared to the prospect we face.
If the banks collapse, everyone loses their deposits.

How much of an explanation do you need?
Stuart* wrote:
Gavin Scott wrote:Those who took out mortgages they couldn't afford will probably be left with nothing.
Indeed, they don’t even walk away with the debt. Somebody is servicing those loans and it’s us, not them.
Err... their property is repossessed by the lender and is sold to recoup the debt.

Why would the buyer be left with a debt after that point, having lost their property, any deposit paid as well as the payments they've made up to the point of defaulting?
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