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mikerants

Listed below are comments made by mikerants between Tuesday, 16th September 2008 and Monday, 23rd February 2009.

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Rock revival 10:26am on 23 Feb 2009 For a change the government seems to be making a good call here. However, mortgage lending comprises two fundamentals - LTV and income multiple.

For the majority, house prices remain too high for would be buyers to secure a mortgage because they simply don't earn enough. Prices need to fall further before "prudent" lending can commence.

Any attempt to stabilize prices at current levels is naive. My personal view is that house prices will settle at around the level they reached in 2000/2001 before we can confidently move forward.
Varley: credit to shrink for up to two years 08:02am on 20 Dec 2008 I have to agree with an earlier commenter that the banks have perpetrated the greatest ponzi scheme of all time.

In their short term rush for riches long term investors have been well and truly (place appropriate swear word).

As a result of the largess and the unparalleled culture of greed my "long term" savings have been decimated wit a 60% fall in the value of my pension and the collapse of endowment values (so much for the smoothing effect).

Indeed my pension pot is worth less than the total I'd invested more than 10 years ago having effectively been stolen by short term speculators.

To make matters worse those with final salary pensions (post office) see the government proposing to take over the pension deficit which I as a taxpayer will have to make up the shortfall whilst personally heading for retirement of poverty.

It's criminal and any executive with any sense of moral fibre would pay back the bonuses they effectively defrauded. But oh, if they'd had any morals or common sense we wouldn't be in this mess in the first place would we?

And if I hear one more MP blaming short sellers for the mess (David Blunkett radio 5) I'll die of despair. How stupid are these people - no really?
Massive mortgage squeeze 08:37am on 25 Nov 2008 On one hand this is worrying on the other it makes sense.

Mortgage lending had lost site of reality as indeed had house buyers.

The contraction is needed to bring house prices down to more sensible levels and to avoid people overstretching themselves (which despite the math they seem hell bent on doing).

If lending principles such as 3+1 times salary had been maintained and landlords forced to take repayment mortgages much of this unsightly mess could have been avoided.

I appreciate that this is a simplistic view to a complex problem but bottom line had the banks/buidling societies have followed their traditional business models without getting greedy none of this would have ocurred.
B&B: end of an era 4:10pm on 28 Sep 2008 Robert

I have a another distinction. Whilst money was no doubt lent cheaply. What was criminal was the artificial distortion of house prices due to the lending of sums which stretched income multiples to 4 x Salary, 5 x Salary.

It was argued that we were in a low inflationary environment and increasing multiples was prudent. Claptrap.

In the not too distant past it was considered prudent to lend a maximum of 3 x 1 or 2.5 x joint. Over the last 20 years this has been stretched further and further creating a bubble that had to explode.

Buy to let contributed further to the problem but only because of the artificial rise in property prices enabled would be landlords to raise deposits via remortgaging thier own property.

Had lending disciplines been maintained property price rises would have been far lower keeping a lid on buy to let which has priced all but a select few first time buyers out of the market.

I still think we are at the beginning of the unwinding of this so called credit crunch which is going to run throughout 2009 at least.

On a separate note I feel that any financial institution unloading toxic debt to the government should handover a significant percentage of their profits for the next x years until they have met their liabilities to the tax payer in full.
Bank spanked - who weeps? 09:34am on 16 Sep 2008 What I'd like to know is who was the idiot who convinced the worlds banks that debt was an asset?

Perhaps the worlds bankers need to get back to school and relearn the basics.

What really hurts is that so called "top executives" picked up millions in bonuses and themselves laugh all the way to the bank with no recourse.

Such is their incompetence that they should be personally bankrupted for the mess they've created. It's one thing to oversee the demise of your own business but to walk away with millions is an absolute disgrace.

As usual the middle classes well end up paying whilst newly "retired" bankers will thumb their way through the latest yachting gazette wondering which to try next.

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