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wetsleet

Listed below are comments made by wetsleet between Sunday, 22nd February 2009 and Monday, 30th March 2009.

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Is Skype on the iPhone a big deal? 7:46pm on 30 Mar 2009 I don't get this whole Skype hype in the first place. Why wouldn't you just use regular vanilla flavour SIP VoIP, instead of some proprietry locked down system like Skype? I can call (from UK) my relatives in Singapore on their mobiles for 1p/min (OK, plus VAT) on SIP VoIP, no messing with Skype in/out numbers, no hoping they will log-in in prescient anticipation of my call.
Skype? Not worth the hassle.
Brown's cautious bank reforms 10:17pm on 22 Feb 2009 Many have commented that high LTV mortgages do not matter so long as:
1) The borrower can aford the payments
or
2) house prices are rising
Both are predicated on the narrow view that the only thing that matters is that the mortgage lender gets its money back. Understandably this is the position the lenders take.
However the issue here is the wider economy, not the narrow interests of the mortgage lenders.
House prices famously have nothing to do with the cost of making them, they are determined basically by ability to buy, and are very sensitive to LTV. If you have to save up a minimum 20% deposit this puts a natural restraint on the price of house you can buy - it won't exceed 5 times the amount of money you can save up. Go to 95% LTV and you can quadruple the house price you aim for! Great, we all want a nicer house. But guess what, if the competing buyers have a 95% mortgage too then you are still buying the same old house and not a 4x bigger one - it just has a new 4x higher price. Moving LTV up to 100% will seriously inflate the price you can aim at, as long as you think you can make the payments you can aim at any price you like - and hey, with an interest only mortgage even the repayments aren't a drag.
So houses which cost 100k are now "worth" 200k or 400k or more. The extra money will leak out into the wider economy - I know, I have customers buying expensive cars on their Virgin One account, I have friends who "did up" a secound home and made a mint, now they have money to spend.
But where did all this extra spending power come from? There is no extra "value" in the econom - its all fresh air really, fanned by ever higher LTVs.
Like the ebb and flow of the tide all the extra money which washed out of houses is now flowing back in. It was always going to happen, and given the high amplification effect of LTV to house prices and the feedback effect in the economy, well ask any control engineer what happens with high amplification and feedback, it gets unstable and the down swing is very sharp. And very sharp it was, ask people in retail if they saw anything coming until it hit them suddenly.
So LTV does matter, very much, to the economy. It is a powerful factor in making the economy systemically unstable - AKA boom and bust.
And I sill want to know Mandleson's views on borrowing the mortgage deposit!
Brown's cautious bank reforms 7:32pm on 22 Feb 2009 Robert, please would you ask Lord Mandelson his views on borrowing the mortgage deposit. Does he agree with the Prime Minister that this practice contributed to our present woe?

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