US mortgage crisis goes into meltdown

Post by **mikepepler** » 07 Dec 2007, 10:10

Well, at least if inflation is ahead, then we did the right thing by emptying our bank account to buy the wood and a lot of tools!

stumuz · Post by **stumuz** » 07 Dec 2007, 10:23

mikepepler wrote:Well, at least if inflation is ahead, then we did the right thing by emptying our bank account to buy the wood and a lot of tools!

Absolutely,
I think your wood and tools are firmly in the ?actual necessaries? inflation proof department.
However, if you go over to housepricecrash forum, you will find a lot of people who are sitting on savings waiting for a house price meltdown. This could be just as risky as the borrow as much as you can to get on the ladder brigade.

It will be fascinating to see which way it will go.

Post by **mikepepler** » 07 Dec 2007, 10:30

This is interesting though

There were fears in the City last night that the Bank of England has lost control of monetary policy after expectations for money market borrowing costs rose - despite the Monetary Policy Committee cutting interest rates.
...
This month's short sterling futures, which indicate where the market expects the key benchmark interbank borrowing rate to be in two weeks' time, actually rose markedly after the Bank's decision - an almost unprecedented reaction. The pound also ended the day up slightly on its trade-weighted index - another highly unusual outcome on the day of an interest rate cut.

John Wraith of Royal Bank of Scotland said: "They haven't got the control over rates in the financial system that they ordinarily have.

"Historically, a 25-basis point change in Bank rate would lead to an almost identical change in Libor [the benchmark rate in the money market]. That hasn't happened."

Aurora · Post by **Aurora** » 07 Dec 2007, 10:56

A picture is worth a thousand words.

stumuz · Post by **stumuz** » 07 Dec 2007, 11:02

We just need a speech bubble with a Homer Simpson ' Duh' coming out of Merv's mouth!!

bobthebaker · Post by **bobthebaker** » 07 Dec 2007, 12:55

stumuz wrote:
mikepepler wrote:Well, at least if inflation is ahead, then we did the right thing by emptying our bank account to buy the wood and a lot of tools!
Absolutely,
I think your wood and tools are firmly in the ?actual necessaries? inflation proof department.
However, if you go over to housepricecrash forum, you will find a lot of people who are sitting on savings waiting for a house price meltdown. This could be just as risky as the borrow as much as you can to get on the ladder brigade.

It will be fascinating to see which way it will go.

I think the other view on HPC is to buy gold, gold and more gold!!

brasso · Post by **brasso** » 07 Dec 2007, 13:29

Absolutely, couldn't agree more.

It's one of the few portable stores of wealth which the government cannot control. The more governments mess up, and destroy the financial system and their currencies, the more gold gains...

Inflation is basically a tax on cash. It's one of the simplest for governments, because there's no administration issues, and they can collect it from anywhere in the world. They simply have to create money (usually from a bond issue), then spend it. The only people it affects are those with alot of cash!

oilslick · Post by **oilslick** » 07 Dec 2007, 23:57

I think we're headed for inflation on commodities but deflation on assets.

So if you're sitting on 100k cash to use against a house it's gaining purchasing power.

If it's to buy baked beans, I'd stock up now. Get some fans too

I've got some gold as a hedge and I will add some more but as much as it seems a guaranteed win, there's no such thing. It might go to $2000 an ounce but then again....

stumuz · Post by **stumuz** » 12 Dec 2007, 20:29

A minor development in the wise V feckless dept'

http://www.telegraph.co.uk/money/main.j ... way212.xml

Post by **kenneal - lagger** » 13 Dec 2007, 01:28

Significantly, the Bank said it would accept a far wider range of collateral against the borrowing than previously, allowing banks to offer covered bonds and mortgage-backed securities in exchange for money.

Now the central banks will be embroiled in the sub prime market. who will come to their rescue?

The news sent share prices soaring, as traders speculated that the massive cash injection - replicated across the world - would help bring an end to the credit crisis.

Must get my pension out while the value's gone up a bit and before it goes down again.

Aurora · Post by **Aurora** » 13 Dec 2007, 07:48

http://news.bbc.co.uk/2/hi/business/7141632.stm

BBC News - 13/12/07

A joint plan by five central banks aimed at easing the credit crunch in financial markets has been welcomed by UK Prime Minister Gordon Brown.

Up to $110bn (?54bn) in loans will be made available to world money markets by central banks including the Bank of England and the US Federal Reserve.

In an interview with the Times newspaper, Mr Brown said there should be more focus on such co-operation.

Analysts say the unprecedented move is a sign of the severity of the problems.

Article continues ...

We really are in the sh1t now.

stumuz · Post by **stumuz** » 13 Dec 2007, 08:30

Aurora wrote: We really are in the sh1t now.

Only if you have savings, pensions etc!!

oilslick · Post by **oilslick** » 13 Dec 2007, 09:16

Aurora wrote:We really are in the sh1t now.

No, no - it's fine. Our friendly central banks are now fully on the case so if I was you I'd load up on more debt so we can keep this ship going.

Now I'm sure I need one of those fancy coffee making machines like they had on the telly. Maybe one for upstairs as well...

stumuz · Post by **stumuz** » 13 Dec 2007, 09:46

Those fantastic little deals will be back..0% interest on credit cards for 9 months. Apply for card max it up to the limit , put cash in 7% bank account, take cash out in 9 months to repay card and pocket the interest.
O' HAPPY DAYS, at the banks expense, and with the banks not so keen to lend to each other anyone who has abused this facility will be allowed to do it agian.

To illustrate the point Amex PHONED me up yesterday and asked if i wanted another 7k for 9 months at 0% with no fee. It seems that if you have a good credit history with them you are thought of as a good home for their cash montain.

However, with money supply expanding the purchasing power has just been eroded that little bit more.

RogerCO · Post by **RogerCO** » 13 Dec 2007, 14:05

stumuz wrote:Those fantastic little deals will be back..0% interest on credit cards for 9 months.

Annoyingly I tried to do this a couple of weeks ago as my bank (coop/smile) had a 0% offer but I got turned down despite good income, minimal debts, and excellent record - on second thoughts it was probably because of the last two, plus I refused all the offers of protection insurance (why don't they come clean and just call it 'protection' chicago gangster style

). They realised I was just going to take the 0% and pay it straight back at end of term.

Maybe it is the price of living a moderately low-profile life, paying cash where possible, minimal cards - they know I'm only out to screw them...