Huge financial challenge for Spain

R.P. wrote:
'To put it another way, 2011 will be the year when the financial credibility of Spain - and by extension the eurozone as a whole - is likely to receive its severest test'

Or to put yet another way, 2011 could be the year when the financial credibility of the whole debt based monetary system – is likely to receive its severest test.

How bad does it actually have to get before the mainstream media discuss how money is created and the implications of it?

And for anyone who doesn’t understand the above visit:
https://www.positivemoney.org.uk/

Ever noticed how the ratings agencies move in line with the speculators?
Why are are financial journalists still throwing oil on the fire?

"To put it another way, 2011 will be the year when the financial credibility of Spain - and by extension the eurozone as a whole - is likely to receive its severest test." This is surely an understatement. Another nail in the Euro coffin. If this prognosis is the conventional wisdom it will be a self - fulfilling prophesy but one that would have implications beyond the eurozone and GB. Meanwhile in Ireland Micawber moneynomics continues to exacerbate the debt problem.

Robert, why didn't you just post the Moody's press release? Copyright, I suppose. Still, not a bad gig you have, eh?

'Moody's fears that Spanish regional government is not engaging in the kind of belt-tightening that may be necessary.'

Would it be fair to translate as 'Moody's fears the Spanish regional governments are still running schools, paying police, regulators, etc etc rather than telling their employees to go beg on the streets, fight it out for a job at a local bar or global corporation paying soon to be reduced minimum wage, eat nettles.....'?

Rather than 'Moody's fears the Spanish regional governments have still failed to whack all spivs with a 95% income tax rate' since the superspivs benefited, made the mess and can afford to pay of the global debt in a jiffy themselves?

Wonder what Jon Snow has been talking about this morning on twitter...hope he does something on the news tonight about jailing bankers, possible, maybe if the report is released, but only if he bankers say we can see it. Still, if they say the public can't see it, one of Julian's mates will get a copy and put it in the cablegate files or the bankgate files, I'm sure.......it'll just appear on a memory stick in the mail as if by magic from a garden gnome.

Spain vs UK

1. It is warmer in Spain and you can generally escape the snow at least in the south (if you can find water to drink!).

2. Their property prices have fallen unlike ours that haven't - so Spain is not burdened with an unsustainable private cost base and can respond to the economic upturn when it comes unlike the UK which is mired in the past and will remain crippled by private living costs twice what the Spanish will have so our industry will be forever crippled. We MUST get our property prices down to Spanish/Irish levels if we are even to return to being competitive. Our regulators are just plain stupid!

2a And Spain sold holiday property financed by overseas lenders the loss on secured loans will appear on the balance sheets of overseas banks not just Spanish ones - so foreign taxpayers will land up bailing out lenders to the collapsed Spanish property market - also as many of the homes are second homes lenders will be able to pursue the owners/mortgagees for full loan repayment as they have other assets.

SO a problem in Spain is really a problem for our 'wonderful' international banks hence we will have to participate in any bail out of Spain/Italy etc. That is we have all of the cost of the Euro zone without any of the benefits and that is directly the result of Tory Little Englander policies and their stupid defence of sovereignty.

(There were a particularly insane couple of rapid Tory MPs on the Today programme this am. The argument they put forward was sovereignty at all costs even if it severely damages our country and our people. With elected politicians like these everyone should leave as they have removed the light-bulb! Obscure reference to that well known Sun story "if Kinnock wins will the last person please switch off the light" headline.)

"Second, there is a pretty good chance that Spain's banks will have to raise a further €75bn or so of capital, just to bring their core equity up to new international norms, such that they will stand a better chance of raising money in wholesale markets."

So what you're saying is, in effect, that they will have to borrow more money in order to be able to borrow more money?

"To put it another way, 2011 will be the year when the financial credibility of Spain - and by extension the eurozone as a whole - is likely to receive its severest test. "

Exactly.

This is when the managers of the eurozone (ECB, European Commission, European Parliament etc.)grow up and start listening to people outside of their 'hippy-dippy land'.

It is time the grandees in Brussels started acting like adults if they want their beloved Euro to survive.

Piecemeal refinancing of the EU does not give any credibility to any of the country leaders who are trying to focus on recovery and growth.

Piecemeal financing is, however, extremely profitable for the predatory speculators who are able to individually target countries, move the euro up and down, and profit as a result.

Is the bullet not being bitten because of a lack of political will? Or is the bullet not being bitten beacuse no-one knows how big it really is?

Are the rates on the refinanced portion going to be more or less than the exisitng rates?

The third domino to fall will be Spain then. The only question remains how long before the whole debt based monetary system collapses. Of course there will be the pointless IMF EU bail out, but the creditability of that solution is beginning to wane. I see Greece is going to fail to pay back its loan, what a surprise. Taking a loan on to pay off an existing loan; you couldn't make it up. The defaults are going to happen eventually, but how much default does it take to pull the banks down, due to the interconnected nature of the debt, is anyones guess. Maybe we need Portugal as well. We shall wait and see.

Comments from 1 & 2 are in the right direction.
This is more non-news with its own agenda from RP and the mainstream. Much like the previous post on LG pensions which made no efforts to interrogate the claims quoted or their source and was couched firmly in the public vs. private debate which so riles the populus. But to what end, one might ask - sadly nothing more than distraction and control.
The real issues such as FRB and monetary alternatives to debt-based systems, the role of the ratings agencies (such as why no-one from any of the US-based cabal has been prosecuted for their role in what amounts to a direct afront on the economic well-being of billions), etc... continue to be left for the real journalists, sadly marginalised by the corporations and then doubly accused by virtue of their presence on the periphery.
Time for you the people who pay for the BBC to demand that they work for you. Time that they stopped peddling non-truths and half-truths in the interests of the few...
I would like to suggest that every one considers taking a little break from this blog for a while. Christmas is coming - the weather is about to draw in for a week or so. Turn away from this bile and concentrate on your own health and that of those you love. Perhaps if we stop paying attention, they'll try and win us back with something more deserving of our time, and worth the price we've already paid

Sorry but your blogs and those of your BBC collegues are becoming increasingly irrelevant.
You're following the press release trail rather than developing your own stories -you're fueling the myth.
The world is moving too quickly for you - current discussion is all around multi-national tax avoidance schemes - led by UKuncut, ActionAid and others.
But this requires some real investigative journalism to determine what's going on.
You won't find press releases from Moody's or the OECD on this topic.

"First is simply that the central government has to raise and refinance a very substantial sum in 2011"

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Some of us have been mentioning this for ages. Greece and Ireland are small beer compared to Spain.

In the dim, dark and distant future 2011 will be ragrded as the beginning of the end.
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#10. At 09:39am on 15th Dec 2010, Mike3 wrote:
"Are the rates on the refinanced portion going to be more or less than the exisitng rates?"

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Can't see them being lower.

'8. At 09:38am on 15th Dec 2010, EuroSider wrote:

This is when the managers of the eurozone (ECB, European Commission, European Parliament etc.)grow up and start listening to people outside of their 'hippy-dippy land'.

I'm not holding my breath as we wait for that!

Aaaahh, back to the three words that will define the last 3 years and the next 5......

'worse than expected'.

Until banks and financial institutions - and the general public get back to the old ways of counting the money they have, rather than the money they think they have, things will always be worse than expected.

When will our elected representatives open their eyes to what is going on?

How much longer are they going to bury their heads in the sand?

We are in a recession, the banking system we have is the worst we could choose.
Riots in Italy-Burlessconi free to dine with his young friends?

Students on the streets in London- It's about time they got some support from more of us.

All the pretend money we created in those boom years either has to be paid off, like the poor Irish are being made to, or written down/off. Hubris still favours the former and will render us all beggars before long. History will not judge us a clever bunch at all.

So out of interest, whos loan due date is next ??? Italy perhaps with all the scuffling going on there ???

We are being drip fed the bad news, in the hope i suppose that we wont notice.....

What i still find astounding is that its business as normal , just stick it on the credit card and off we go again.

Who actually is the " last domino " place your bets....

As there is not much new to see here today these might prove a worthwhile read for those that have not seen them before;

https://bilbo.economicoutlook.net/blog/?p=7554

https://www.newdeal20.org/2010/11/13/banks-get-bailouts-we-get-shared-sacrifice-26885/

https://www.debtdeflation.com/blogs/2010/08/29/what-bernanke-doesn%e2%80%99t-understand-about-deflation/

https://www.guardian.co.uk/commentisfree/2010/nov/07/myths-swallowed-by-george-osborne

Even bigger beer than Spain are the Trillion quid or two of trash entangled derivatives floating around. Musical derivatives, where will they land, no one knows.

Doomed - DOOMED I tells ya!

This is like watching an episode of House, where all the doctors give their inaccurate analysis and guesswork to try and establish the cause of the patients pain - and in many cases....make it worse!

Spain, Portugal, Ireland, Greece, Italy - all the PIIGS are going to default (just because they have replaced the term 'default' with the term 'bailed out' doesn't mean the facts are any different)

I hear there was a 'surprise' jump in inflation yesterday - surprise FOR WHO EXACTLY?

After watching the John Pilger documentary last night, clearly the only people who are surprised are the witless media morons who are so easily fooled by Government spokesmen making outlandish and uncoroborated claims - which they suck up and spit out - unedited - into peoples homes and minds.

"To put it another way, 2011 will be the year when the financial credibility of Spain - and by extension the eurozone as a whole - is likely to receive its severest test. "

Robert - I am growing tired of you - I used to think you were a journalist, but now I have my doubts. Shall we just take the sentence above and change is each December to reflect the next coming year?

When are you going to break free of the director general's command and actually start reporting on the reality of the situation.

You know as well as I do, the PIIGS will default, they cannot pay back their debts. The whole plan was based on rampant growth coming this year and next - but what a surprise, growth is heading in the opposite (or rather no) direction.

Jobless recovery - falling house prices - rising inflation....come on Robert, you're old enough to know what's coming next - why not take a chance and simply say it?

If you really want a laugh - here's one for you.

The Government is defending the existence of a 'plan B' - but set that aside for a minute - if you look at the proposed 'Plan B' - you might notice it's almost identical to 'Plan A'!

https://www.bbc.co.uk/news/uk-politics-11990664

QE, Buying bonds and tax cuts - all FAILED PREVIOUS RESPONSES.

Sadly I think the lack of a Plan B is possibly better for the nation than this Plan B (which is plan A with tax cuts)

Who says politicans and economists are mindless morons who don't know what they're doing? - look how perceptive they are - 6 months after everyone else has already worked it out.

...now someone drag out a journalist from the BBC to quote a Government spokesman and report it as 'news' on this matter - the sheeple need to be informed that everything will be alright - or it might ruin their Christmas!

(not that it's not already ruined, the sheeple have no money and despite the BBC advertising every morning this week that "we must go shopping before it's too late" - the retailers are going to start failing in the new year - especially when they cut their own throats by raising prices above the VAT increase due to increased input costs)

...now I wonder who was banging that drum sometime ago? You know these revolutionaries - they're always wrong....they're just jealous at all the 'cleverness' the state and corporations show on a daily basis!?!?!?!?

I think I now know why RP doesn't moderate the posts of Credit Copper, WOTW, North Sea et al. Aside from the entertainment value, I think he knows we get it - whereas so many people don't because they are too stupid or too ignorant.
Wakey wakey - Spain broke which anyone could see coming and Italy broken as the War Criminal survives just, in the last 24 hours - how long until the penny (that will all we will be left with) drops with the mindless Capitalist Apologists?

5. At 09:24am on 15th Dec 2010, copperDolomite wrote:

Would it be fair to translate as 'Moody's fears the Spanish regional governments are still running schools, paying police, regulators, etc etc rather than telling their employees to go beg on the streets, fight it out for a job at a local bar or global corporation paying soon to be reduced minimum wage, eat nettles.....'?

Rather than 'Moody's fears the Spanish regional governments have still failed to whack all spivs with a 95% income tax rate' since the superspivs benefited, made the mess and can afford to pay of the global debt in a jiffy themselves?
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Comment of the day for me!

13. At 09:48am on 15th Dec 2010, porgy

Very good progy - did you also know that 'investigative journalists' are on a list of 'threats' to the Government?

...so Robert shall have no worries there then...

Robert, could you quickly ask around the office to see what your fellow "journo's" began journalism for in the first place?.....and then ask them how many (and how close) they are to achieving that?

Politicans - FAILED (well to be expected)
Bankers - FAILED (tripped up by their own greed)
Economists - FAILED (too busy singing the tune of the master that pays them)
Journalists - FAILED (too busy taking the word of lying Governments without question and relaying it as fact)

The only investigative journalist is currently banged up in Wandsworth prison - how's that for solidarity amongst journalists? You continue to support the Government who attack the last remaining truth in your industry.

Journalists should hang their heads in shame - you have taken the side of the rats - but like all pests carrying the black death you will no doubt be exterminated as you only spread diseases and are a danger to all of humanity.

Stop worrying about Spain.

I see disunited kingdom unemployment is UP.

The tories inherit falling unemployment and record economic growth (no thanks to labour, it's just the up turn after the global recession).

In the course of 6 months their ideologically driven cuts slow and possibly reverse the recovery.

Well done.

Never mind, at least they still have their 'once in a generation opportunity' to destroy the evil public sector.

Want to see something even funnier?

The 'intelligent' journalists of the world are still struggling to comprehend the chaos and what caused it - but this guy has it down to a tee.

[Unsuitable/Broken URL removed by Moderator]

WARNING - there is a little foul language in this video so beware - moderators I hope this will suffice in allowing it through.

I went to Benidorm this year - it was clearly over for Spain then - so why has it taken Moody's this long to work it out?

The endless empty apartments, closed shops, barren shopping arcades, pickpockets, squatters and endless 'for sale' and 'to let' signs gave you a big clue.

Clearly though I cannot be taken as a credible source as I am not 'paid by the banks' for my analysis.......oh wait a minute - YES I AM!

Robert, what about the few hundred billion that our UK banks are meant to find by early in the new year for balance sheet and support repayment purposes?
Surely we are not immune to the 2011 meltdown potential?

@1 Dempster asked "How bad does it actually have to get before the mainstream media discuss how money is created and the implications of it?"

It has to get a lot worse. There would be panic in the streets . It would signal the collapse of the civilised western world. There's a a great deal of vested interest in keeping the system going. The livelihood of all those men in grey suits depends on it. It doesn't even bear thinking about - let alone discussed in the mainstream media.

Lehman's would seem like losing money down the back of the sofa....

...lets not forget sheeple - the same people who claim that we will recover (or are recovering) from this - are the same monkeys who assured us that Saddam Hussain had weapons of mass destruction and was a threat to us....

Lies created by 'bought' economists, compounded by backward (but greedy) politicians and sold to the public by a media who wouldn't know the truth if it ran up to them in a riot and slapped them with a rainbow trout.

23. At 11:01am on 15th Dec 2010, writingsonthewall wrote:
...(not that it's not already ruined, the sheeple have no money and despite the BBC advertising every morning this week that "we must go shopping before it's too late" - the retailers are going to start failing in the new year - especially when they cut their own throats by raising prices above the VAT increase due to increased input costs)
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On the subject of high street activity I have noticed that more shops are empty in my local area (part of SW London) than last month. More stalls are vacant in the covered market. If there is increased spending it is in less outlets. This could be one aspect of the jobless "recovery".

Re Comment 5.

Jon Snow has just blogged. And he is a touch peeved, I think. Rightly.

Banks:Publish and Be Damned
.....
'So Britain tips nearly £100bn into RBS (most recently another £4bn into bad RBS investments in Irish banks) because of, at the very least, gross mismanagement and then pays a few million pounds to investigate what led to it…and must then ask those who participated in it all for permission to identify publicly what they did.

Does anyone know where Alice in Wonderland is playing this Christmas?'
https://blogs.channel4.com/snowblog/banks-publish-damned/14291


I'm looking for a ticket myself!

24. At 11:03am on 15th Dec 2010, M_T_Wallet wrote:

"how long until the penny (that will all we will be left with) drops with the mindless Capitalist Apologists?"

Oh they will back Capitalism to the last minute - before they switch clothes and don their red (or black) shirt to join whichever they feel will be their 'new masters', claiming their dedication to the cause all along.

Such is the life of the capitalist apologist - all bottom feeders have to be prepared to dive under the nearest rock in times of crisis - even if it means pushing out the existing resident.

(and I would suggest it's not the knowledge of Robert that keep my posts in - but the solidarity of the moderators. Just as with Wikileaks - even those within the establishment are revolting - a fascinating and unexpected consequence of continual deception by the state)

32. At 11:21am on 15th Dec 2010, writingsonthewall wrote:
"...lets not forget sheeple - the same people who claim that we will recover (or are recovering) from this - are the same monkeys who assured us that Saddam Hussain had weapons of mass destruction and was a threat to us....

Lies created by 'bought' economists, compounded by backward (but greedy) politicians and sold to the public by a media who wouldn't know the truth if it ran up to them in a riot and slapped them with a rainbow trout."

Don't remember economists warning us about WMD, just Mr Blair. BTW, who 'bought' which economists? Was there a sale on? Or perhaps different economists just have different points of view.

Regarding the SLS paybacks, I think good old RBS & Lloyds are the pnes who will be most worried for I read that HSBC and Barclays have both been raising money on the public markets this year. Granted, RBS & Lloyds have as well, but the price they are having to pay is a lot higher

28. At 11:10am on 15th Dec 2010, You wrote:

"Your comment has been referred for further consideration. Explain"

Spoke too soon!

Clearly there are those who fear the repercussions of the establishment more than their freedom.
I wonder which nation 'called down' to complain about that post? Was it at the Director general level, or just your own boss moderator?

You know what I wrote - you have to live with the fact that someone has 'defined' to you that it's not appropriate.

30. At 11:19am on 15th Dec 2010, Kit Green wrote:

"Robert, what about the few hundred billion that our UK banks are meant to find by early in the new year for balance sheet and support repayment purposes?
Surely we are not immune to the 2011 meltdown potential?"

What about the 'billions' were going to make in 'profit' from our stake in the banks?
(you'll be hearing this Christmas miracle story ever year for the foreseable future I'm afraid)

https://www.cityam.com/news-and-analysis/uk-banking-bailouts-break-even

Why do bankers, economists and economic journalists all forget about opportunity cost and inflation when calculating the Governments 'profit' in rescued banks - but are very careful to include it in their own investment returns?

Moodys have certainly intervened in the debate over Spain's financial position and it does provide some insight as you point out Robert,particularly for those who do not fllow the situation regularly. However I notice that the more analytical thinkers such as notayesmanseconomics are considering the implications of this such as the timing.

"Also the reasons behind it were on this occasion mostly things which had been debated on here for some time. For example to say that Spain has a lot of funding to do in 2011 is an odd thing to raise in mid-December 2010! Where have you been Moodys? Is the obvious response to that........... . Traders are likely to have greeted this report with the cry “Mafeking has been relieved”, in case you are wondering the siege of Mafeking was lifted in 1900!"

I am not sure that Moodys have covered themselves in credit here.
https://notayesmanseconomics.wordpress.com

'31. At 11:19am on 15th Dec 2010, The-itinerant-ex-pat wrote:
@1 Dempster asked "How bad does it actually have to get before the mainstream media discuss how money is created and the implications of it?"

It has to get a lot worse. There would be panic in the streets . '

We've got panic in the streets already. It just isn't the starving, hungry hordes, quite yet. That'll be soon enough though (heard on the radio this morning some shopkeepers in Wales were already 'raising concerns' about the homeless sleeping on the streets).

I like this one myself, rather than some of the crass reports
https://www.independent.co.uk/opinion/commentators/mark-steel/mark-steel-a-clear-case-of-attack-by-wheelchair-2160454.html

Or this one https://news.bbc.co.uk/local/sheffield/hi/people_and_places/newsid_9276000/9276699.stm

Panic is only panic when it is reported as panic. If it is reported as 'anarchists' or revolutionaries, then we're OK. Maybe.

33. At 11:24am on 15th Dec 2010, Kit Green wrote:

"On the subject of high street activity I have noticed that more shops are empty in my local area (part of SW London) than last month. More stalls are vacant in the covered market. If there is increased spending it is in less outlets. This could be one aspect of the jobless "recovery"."

Even in the bastian of the middle classes in SW London (southfields) there are empty shops - I have never seen a shop stay empty for more than a month down there - and now some have remained empty for 6 months or more.

Still - it must be your imagination - the BBC would be reporting it if it were true - just like they FAILED to report the lies told by the Bush and Blair administrations about the wars we're involved in.

90% of people killed in Iraq are civilians - the geneva convention states.

Article 48 — Basic rule
Parties shall at all times distinguish between the civilian population and combatants and accordingly shall direct their operations only against military objectives.

Article 51 — Protection of the civilian population
Indiscriminate attacks are prohibited. Indiscriminate attacks are:
(a) Those which are not directed at a specific military objective;
(b) Those which employ a method or means of combat which cannot be directed at a specific military objective

Among others, the following types of attacks are to be considered as indiscriminate:
(a) An attack by bombardment which treats as a single military objective a number of clearly separated and distinct military objectives located in a city, town, village or other area containing a similar concentration of civilians;
(b) An attack which may be expected to cause incidental loss of civilian life, injury to civilians, damage to civilian objects, or a combination thereof, which would be excessive in relation to the concrete and direct military advantage anticipated.


BBC appear to be complicit in the covering up of war crimes - now I wonder if the moderators will be TOLD that this is 'inappropriate' too? I mean speaking the truth often is inappropriate isn't it?

#27 well said

as usual in British politics the Guvt takes power on the back of a supreme failure by the predecessor in this case the collapse of the UK economy and as usual within months of taking office they are bogged down in the same_old-social issues, police, NHS, social services and they think that after a few spending cuts the UK 'economy' will miraculously somehow 'regenerate'.

Bereft of novel thinking and process, utterly. Same in every country as far as I can see.

GC

Belgium just got downgraded. Any bets on Austria being next? Followed by Italy - due to political crisis and then Spain. So would it not be prudent to tackle these soon to be beggar countries in their probable order of monitory collapse RP?

#38. At 11:47am on 15th Dec 2010, writingsonthewall wrote:

"Why do bankers, economists and economic journalists all forget about opportunity cost and inflation when calculating the Governments 'profit' in rescued banks - but are very careful to include it in their own investment returns?"

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Not forgetting the devaluation of the government investment caused by the mere act of dumping zillions of bank shares onto the market.

I lived in Spain for 16 years and sold up and moved out in June this year.
Its fair to say I've the ups and downs of the boom and bust during that time.

I can only say I was very happy to get my money out of euro's and out of Spanish banks. Whether I've put into the right banks I suppose only time will tell!

At the time of me leaving Spain every second buisness and every third house seemed to be for sale, and I expect the situation is no different now.

JFH makes the point about about house values needing to come down, a point I strongly agree with. However, in Spain the house prices are well down but nothing is selling because regardless of how much prices are down, no one seems willing to buy there, other than Russians!

Intrestingly Spanish banks were offering me typically 6% on a one year deposit of euro's in June. Sound too good to be true? Thats what I thought.

The euro has killed Spain, and started doing so on its first day as a useable currency. Prices of almost everything you consumed went up by 65% overnight as the general conversion used was 100 pesatas is now one euro, rather than 166 pesatas to a euro. Wages however were cconverted at 166! Everyone, locals and foreigners alike went crazy about it but nothing changed.

I suppose I could go on write a book about the corruption that goes on there, especially at the local government level, but thats not for this post.

All I can say is I enjoyed my 16 years there, didn't come out of it badly at all, but it really is the beginning of the end for Spain, and probably the euro.

36. At 11:42am on 15th Dec 2010, yam yzf wrote:

"Don't remember economists warning us about WMD, just Mr Blair. BTW, who 'bought' which economists? Was there a sale on? Or perhaps different economists just have different points of view."

..I was talking about journalists - clearly I forgot everything needs to be spelt out carefully for those in the ranks of the sheeple - otherwise DEY GO DUN GET CONFUZED.
You'll find economists agreement is usually aligned to their background or where they went to study (in the case of the US).

"Regarding the SLS paybacks, I think good old RBS & Lloyds are the pnes who will be most worried for I read that HSBC and Barclays have both been raising money on the public markets this year. Granted, RBS & Lloyds have as well, but the price they are having to pay is a lot higher"

Paybacks? - don't make me laugh.
Don't you think it's a bit coincidental that the stock market is rising but the job losses are increasing and growth is pitiful?....oh and all there has been is liquidity injection from QE and ultra low interest rates?
If you only account for inflation (lets leave out OC from this, considering you could have lent Portugal £850 Billion at 6% instead of handing it to the banks) - our £850 Billion investment is actually 929 Billion in today's inflation adjusted amount (and I've not even counted any of 2007 in that and assumed a 3.3% inflation rate this year)

https://www.rateinflation.com/inflation-rate/uk-historical-inflation-rate.php?form=ukir

...coincidences seem to be rife in your world - how lucky it is all these things are unconnected....still only a economist or an economic journalist could spot this fruad coming - and as I said before - strangely they're awfully quiet on this subject.....just another coincidence I suppose....

How long will you continue to dance in the face of hard facts before you wake up and realise what is coming?
I said that money was gone when they handed it over - just as the Irish money was.

Understand this - NEVER, EVER GETTING IT BACK!

@ 26. At 11:07am on 15th Dec 2010, writingsonthewall wrote:

> The only investigative journalist is currently banged up in Wandsworth prison

I can see the headline now: Hacks hate Hacker!

They can't stand to see an Interney jockey leaping over them all to instant fame and fortune, while they sweat it out on rags like the Torygraph and The Daily Snail. What a bunch of saddos they are.

an old quote but apt:

Moody's chief executive Raymond McDaniel admitted to the commission that his company "is certainly not satisfied" with the performance of the ratings it gave the mortgage-linked debt.
He added that it was taking steps to improve its ratings process.
However, he had earlier said in written testimony that investors should only use credit ratings as a guide, "not a buy, sell or hold recommendation".

it is all pantomime...
here is the letter A children...
(if you go along with the pantomime then Moodys and others give 'legitimacy' to the ruinous actions of 'the market' )

I am - still - hoping for the timely investigative report on the IMF (hmmm that is a scary big one) and, eventually, commodities...?

40. At 11:53am on 15th Dec 2010, copperDolomite

Ah the glories of mis-reporting.

I had the unpleasant experience of watching Theresa May talk of "extreme violence" being used by the protestors last Thursday (after congratulating the police on their 'efforts').

I thought 'extreme violence' was more like murdering innocent unarmed civilians from a mile away from your helicopter - not really breaking some windows and trying to break out of imprisonment without trial!

https://www.kalam.tv/ur/video/21720/

...orr maybe the 'extreme' part is when you murder the people trying to pick up the bodies - even though there are children in that van who are summirarily executed with the same cold brutality.

I'm going to buy Theresa a thesauraus for Christmas - she's going to need it as the superlatives will need to be progressively more and more 'extreme' throughout 2011.

23. At 11:01am on 15th Dec 2010, writingsonthewall wrote:
If you really want a laugh - here's one for you.

The Government is defending the existence of a 'plan B' - but set that aside for a minute - if you look at the proposed 'Plan B' - you might notice it's almost identical to 'Plan A'!

.............
Now that really did make me laugh. Tax cuts thats new, mmmm, sounds like an America idea to mine. Of course, they tend to go for the cutting the taxes of the rich over the masses dont they. Expecting the masses to pay for the blunders of the rich, that’s a recipe for a class war if ever there was. Expect ever more civil disturbance

Yeah if Julian is such a villain how come every media organ is quoting from his source?

G

40. At 11:53am on 15th Dec 2010, copperDolomite wrote:
'31. At 11:19am on 15th Dec 2010, The-itinerant-ex-pat wrote:
@1 Dempster asked "How bad does it actually have to get before the mainstream media discuss how money is created and the implications of it?"

It has to get a lot worse. There would be panic in the streets . '

We've got panic in the streets already. It just isn't the starving, hungry hordes, quite yet. That'll be soon enough though (heard on the radio this morning some shopkeepers in Wales were already 'raising concerns' about the homeless sleeping on the streets).

I like this one myself, rather than some of the crass reports
https://www.independent.co.uk/opinion/commentators/mark-steel/mark-steel-a-clear-case-of-attack-by-wheelchair-2160454.html

Or this one https://news.bbc.co.uk/local/sheffield/hi/people_and_places/newsid_9276000/9276699.stm

Panic is only panic when it is reported as panic. If it is reported as 'anarchists' or revolutionaries, then we're OK. Maybe.
.............
Britian is beginning to look more like the movie "V for Vendetta" every day. Where's V when you need him though. If someone preacefully demonstrating dies at a demonstration I would expect the situation to explode.

47. At 12:12pm on 15th Dec 2010, Jacques Cartier wrote:

"They can't stand to see an Interney jockey leaping over them all to instant fame and fortune, while they sweat it out on rags like the Torygraph and The Daily Snail. What a bunch of saddos they are."

I would argue that none should be so desperate to keep a job like that - and yet here we are - where if Hitler re-emerged then the mainstream media would publish his thoughts like they did in 1936 - without questioning and without challenging what was being said.

I bet these journalists are making their predecessors so proud.

And just what part of the Financial Markets does anyone not understand? Put simply GREED, and alwyas looking for more ways to GLUT on its GREED. As for Spain its looking like RIP.........

Looks like the Greeks are continuing to resist the constraints imposed by Economic Fascism.

https://www.irishtimes.com/newspaper/breaking/2010/1215/breaking25.html

https://www.bbc.co.uk/news/business-11998364
"The surprise increase was driven by public sector job losses". Suprise? for who? Only the government could be surprised. Just maybe the cutbacks are not going to fix anything and merely make it worse. Doh

Where are all the Capitalist Apologists today? It seems that the thinking people are adding much to this reasoned debate.

Then again with Inflation up, Unemployment up, Vat about to go up, House prices about to fall, record fuel prices on the way and 100bn shortfall in Public Sector Pensions I'm not surprised they seem to have ducked for cover.

52. At 12:40pm on 15th Dec 2010, Averagejoe wrote:

"Britian is beginning to look more like the movie "V for Vendetta" every day. Where's V when you need him though."

Oh 'he' is everywhere....he is in the crowds at the protests, he is marching on Parliament - but most of all he is operating the "low earth orbit Ion cannon" which is pointing at the corrupt marriage of government and corporation ready to destroy them for suppressing democracy and the truth.

55. At 12:49pm on 15th Dec 2010, M_T_Wallet wrote:

"Looks like the Greeks are continuing to resist the constraints imposed by Economic Fascism.

https://www.irishtimes.com/newspaper/breaking/2010/1215/breaking25.html"

I can see a direct warning for one Mr T. Blair in that little story....

You see folks, the only way to rid yourself of the parasite is to down tools and stop what you're doing and take TO THE STREETS!

Enjoy this christmas, it will be the last you enjoy for sometime I'm afraid.

46. At 12:11pm on 15th Dec 2010, writingsonthewall wrote:

"our £850 Billion investment is actually 929 Billion in today's inflation adjusted amount"

what £850bn would that be and over what period are you adjusting for inflation? Are you using CPI, RPI or RPIX?

This is all very positive.

Slowly but surely we are getting there. No amount of media postulating and denial is going to halt the complete collapse of the fraudulent money system that we have.

How can that be anything else but a good thing.

Historically, only calamitous events force us as a species to look at ourselves. The pointless materialism and the truly ridiculous concept of "personal wealth" that has no real function for the human race but to feed the cancer called greed.


Maybe this time .. hopefully .

There is only one caveat. This "dawn of social enlightenment" may only be possible after a US incited war as it is the only possible path they can take in order to wipe clean their unpayable debt mountain.

57. At 12:56pm on 15th Dec 2010, M_T_Wallet wrote:

"Where are all the Capitalist Apologists today? It seems that the thinking people are adding much to this reasoned debate.

Then again with Inflation up, Unemployment up, Vat about to go up, House prices about to fall, record fuel prices on the way and 100bn shortfall in Public Sector Pensions I'm not surprised they seem to have ducked for cover. "

Thinking people? Where are they? I see lots of anarchist/marxist/leftist/anti-capitalist repetition, but not a lot else.....

Inflation is not a think to worry about at the moment as it is by no means "high". Yes, it needs to be kept an eye on, and pieces put in place to temper it if that is what is wanted, but compared to what happened in the attempt to clear up Labour's last bankrupting of the country, then inflation is not doing too bad is it.

As for VAT rises - surely that is the fairest thing to put up as then all pay according to the value of the purchase. ie an extrat 2% on £10 purchase is a lot less than 2% on a £1000 purchase

And perhaps if the public sector had not been bloated over the last 13 years and were not on Final Salary pensions, then things would not be as bad there either. Oh, and GB's tax raid on pensions over the past 13 years as well.

However, I am called a capitalist apologist, so what do I know - other than nothing anyone has suggested here would have given me the opportunity to advance as I have

55. At 12:49pm on 15th Dec 2010, M_T_Wallet wrote:
Looks like the Greeks are continuing to resist the constraints imposed by Economic Fascism.

https://www.irishtimes.com/newspaper/breaking/2010/1215/breaking25.html
.................
"We will not yield, we will prevail."
Not convinced the public have bought into the austerity measures. What did Gerald Celente say; "If the people loose everything, they loose it". This is a class war, expecting the masses to pay for the mistakes of rich was never going to work. If Greece is not heading towards a revolution, then I will be genuinely "suprised".

#6 John from Hendon said "We MUST get our property prices down to Spanish/Irish levels if we are even to return to being competitive"

Never a truer word and all the estate agents, banks and others with vested interests who keep talking our housing market up need to catch a grip.

If anything it needs to become even harder to get a mortgage, although the massive deposits being requested are a silly obstacle.

I reckon house prices need to drop at least 20% further in real terms if the youth of today are to stand a chance and if that means a few greedy types suffer negative equity for a while then so be it

"Huge financial challenge for Spain" is the title of Mr Peston's blog.

Post 02 on 15 Dec - very relevant points.
--------------------------------------------------------------------------------
Furthermore, my own view is that there is a very healthy 'shadow' property boom for those other speculators buying up property, with cash in a depressed lending market?

As for the Euro - there are no definative answers - other than it's obvious that for Northern and Southern countries - a single currency appears to be failing everyone?

60. At 13:07pm on 15th Dec 2010, yam yzf wrote:
46. At 12:11pm on 15th Dec 2010, writingsonthewall wrote:

"our £850 Billion investment is actually 929 Billion in today's inflation adjusted amount"

what £850bn would that be and over what period are you adjusting for inflation? Are you using CPI, RPI or RPIX?
=================================================================

To hard to work out is it?


62. At 13:18pm on 15th Dec 2010, yam yzf wrote: .

However, I am called a capitalist apologist, so what do I know - other than nothing anyone has suggested here would have given me the opportunity to advance as I have
================================================================

Waiting for the next spoon-fed housing bubble of illusion are you?

Whether you agree with the thinking people's comments or not at least we are asking the right questions rather than slavishly swallowing the rubbish spoken and penned by the political, economic and media elite.

And please dispense with your lazy labelling - above all I am a compassionate human being who is bothered with the future direction of this country and the broader world.

This comment was removed because the moderators found it broke the house rules. Explain.

RE 27. Unemployment is up

Dont worry, that nice Mr Cameron is bringing in the biggest back to work scheme in 70 years.
Quick sum...2010 - 70 = 1940!!

Ahha - I can see how he is going to get us all back to 'work' - I dont understand why he's scrapping the Ark Royal and harrier fleet unless he has other weapons for us in mind.

RE state of Spain - I was in Barcelona this week and I didnt see too much obvious poverty though there seemed to be a lot of offices to rent but there were fewer beggars than I've seen in cities round here (NW England). I suspect that it looks really bad where the excesses of development has occured - my brother in California says it is much the same over there - prices on speculative new developments have collapsed (i.e. fallen >>50% in price).
It seems to me that things will bounce - the PIIGS countries will get hammered by the gilded lemmings. Then they will realise there has been an overreaction and that the economic basics are perhaps not so bad and will pile back in to make a killing and the economies will rebound strongly. Speculators will make money both ways, but the productive economy wont be able to respond fast enough (build new facilities, provide additional capacity, replace jobs shed in downturn etc.) and will miss out. Makes you think it was almost planned...

'50. At 12:27pm on 15th Dec 2010, Averagejoe wrote:

Now that really did make me laugh. Tax cuts thats new, mmmm, sounds like an America idea to mine. '


Of course. I call it government-franchise-in-a-box.

They get a box of CDs, copy all the word docs to a hard drive.
Change some key words and away you go.

ie . Gove's schools (free schools I think he calls them) = Charter schools
(been selling that to the Latin Americans, no doubt they'll appear all over Africa as they force their government-franchise-in-a-box down everyone's throats.


And we pay them how much to solve problems by merely doing a find and replace' then making an announcement?

bloobell & JFH re: property prices

The market will adjust property prices in the UK as it has done and will continue to do in Spain: parts of the country are wealthy and can wait out the trough in the cycle, where as others who are forced to take the hit, forced to sell in a buyers market, and will lose out.

Right now it's just not cost-effective to sell your house in the UK, so everyone who can is sitting tight. So I don't see how your argument to "bring" the prices down works. In the UK we have a shortage of housing whereas in Spain they over-estimated the demand (ie, they forgot to count the number of people in the market and just kept on building) so now they have an over-supply of over 1 million homes. That is what's bringing the prices down in Spain. And the current 20% average unemployment (45% in some areas and rising) will keep them low for the foreseeable future. No doubt we will see some effects from unemployment in the UK too, but to me the property situation in the UK looks very different to the situation in Spain.

#70 4FoxAche - you said "So I don't see how your argument to "bring" the prices down works"

I'm no Economist but the link provided earlier to an article called "What's the Problem?" states that in 1960 a house would cost 3.6 times the average yearly wage, in 2010, a house would now cost 9.8 times the average yearly wage.

https://www.positivemoney.org.uk/

This has largely been brought about by a financial system which was so bent on greed that people's ability to pay their debts was an afterthought, a financial system which has had to be bailed out on an unprecedented scale and continues to be so to this day.

Given that to a degree the brakes have been forced on as banks re-capitalise (may be short term) there is less money going around so if you couple this with great uncertainty about employment prospects it's inevitable house prices will fall - some people will choose to sit tight but many won't be able to.

Going forward unemployment will rise significantly and interest rates will rise again and these factors will add further to the downwards pressure on house prices.

I may be oversimplifying it there but that's how I see it and I sincerely hope I'm right and we see a drop of 20-30% in real terms so my kids can have the same chances I did when lenders were more sensible.

The real story is that its taken Moody this long to "consider" downgrading Spain's debt. Spain are planing to raise €170bn for the central government -thats roughly 15.8% of Spains GDP. If you take a step back and look at the bigger picture - they are broke, and have no plan to repay their loans appart from taking on more loans.

How can you expect someone who is living off the loans of others to be able to repay their loans if they continue making a loss year on year? This problem is not unique to Spain, pretty soon you will see a lot of European nations (ours included) facing increased borrowing costs and threats of bankruptcy.

Who would want to lend money to someone who will probably not pay them back?

62. At 13:18pm on 15th Dec 2010, yam yzf

With fantasy like that you should be in line to write the next Harry Potter trilogy!
Inflation is 'not high' - please tell me, when in your LIFETIME has it been higher?

66. At 13:34pm on 15th Dec 2010, M_T_Wallet

...what's worse is I even gave him the link where I got the inflation figures!!! I could have been mean and included half of 2007 - but I wanted to give the poor guy a break - he's on his own now and it's not going to get any easier for him.

"And please dispense with your lazy labelling - above all I am a compassionate human being who is bothered with the future direction of this country and the broader world."

You lefties are everywhere - where do you get off with all this compassion and nonsense, surely the way forward is to stab everyone in the back until you're the last one left alive???

64. At 13:26pm on 15th Dec 2010, Bloobell wrote:
"#6 John from Hendon said "We MUST get our property prices down to Spanish/Irish levels if we are even to return to being competitive"

Never a truer word and all the estate agents, banks and others with vested interests who keep talking our housing market up need to catch a grip"

Perhaps some of those with "vested interests" are those who will need to sell as they wish to move to another part of the country. So are you advocating that all people should lose a few thousand pounds?

Wow, that's a nice thought isn't it

66. So no answer to the questions then?

70. At 14:15pm on 15th Dec 2010, 4FoxAche wrote:

"Right now it's just not cost-effective to sell your house in the UK, so everyone who can is sitting tight. So I don't see how your argument to "bring" the prices down works. In the UK we have a shortage of housing.... "

I think you will find that should be 'affordable housing'.

You need to stop repeating the diatribe of the press, there are 500,000 homeless people in the UK and 1 million empty properties - that's not a housing shortage by any stretch of the imagination.

it's amazing how one lie is repeated, repeated and repeated until it becomes 'fact'.

72. At 14:54pm on 15th Dec 2010, Qasim wrote:

"Who would want to lend money to someone who will probably not pay them back?"

Governments - because they're not lending their own money and they are still deluded that further lending will solve this crisis.

...oh and madmen...

#74 yam yzf - "Perhaps some of those with "vested interests" are those who will need to sell as they wish to move to another part of the country. So are you advocating that all people should lose a few thousand pounds?"

Well as many of them even have the cheek to tell us they will move to Switzerland if they don't get their way then yes, I suppose I am advocating that lol

74. At 15:02pm on 15th Dec 2010, yam yzf wrote:

"Perhaps some of those with "vested interests" are those who will need to sell as they wish to move to another part of the country. So are you advocating that all people should lose a few thousand pounds?"

Only those who bought houses as a short term investment or with interest only mortgages will lose money.
Those of us who did neither can both stand a lot further falls in prices and a return to payments at 5%.

However the people who come on here banging on about keeping interest rates low are often BTL speculators who bought, remortgaged to the hilt and used the money as a deposit on the next one. They are what are known in the trade as 'greedy idiots'.

Only those who have bought recently and have since lost their job are the really unlucky ones - it's unfortunate that the estate agent still prattles on about 'you can't lose money on property' which encourages the lemmings to the cliff.

I have a funny few cases at the moment, people who bought their 'bargain' flats in London about 4 years ago in high rise blocks suddenly finding that lenders are now refusing mortgages to prospective buyers based on the type of construction and floor level (over the 7th floor is difficult to get a mortgage)

Oh yes, I said, didn't you know that? The lender is within their rights to refuse it for that reason, the fact they lent to you in 2006 isn't really relevant.

...and you actually borrowed £250,000 without finding out that first???

Cripes - there are some seriously misguided people out there - I have never bought a high rise flat - but I knew that from researching my own property purchase.

I tried to be gentle with them - but they just wanted to stamp their feet and complain about 'how unfair it all is' and tell me 'how someone should sort it out'.

That 'someone' is you I am afraid, did you not know the rules of the game you were entering?

This is just the start - one person is facing a 25% chop off her 'desired' asking price - and the market is falling as inflation is rising...

What a load of doom-mongers! Imagine what we'd have thought of ourselves if 3 or 4 years ago we were told we'd be writing stuff like this in late 2010..

Anyway, thanks to #1 for the very interesting link: https://www.positivemoney.org.uk/ which shows very clearly why the doom-mongers are probably a little optimistic if anything.

75. At 15:03pm on 15th Dec 2010, yam yzf wrote:
66. So no answer to the questions then?

================================================================

Lots my friend - starting with an overhaul of the current system It doesn't seem that you have any other than defend the status quos?
Check out my fellow posters for some ideas though I see WOTW has tried to engage you somewhat unsuccessfully on your part. Then I suggest you iterperate comprehend and conclude. Open your mind and start deciding things for yourself unlike the mindless non thinking Capitalist Apologist like the party (I assume) you support who slavishly back an Illegal War thereby doing Blair's spade work for him.

75. At 15:03pm on 15th Dec 2010, yam yzf wrote:

"66. So no answer to the questions then?"

you must be joking surely?

I have obviously given you too much credit in the past.

You could pick ANY MEASURE OF INFLATION and the result would be about the same - I suppose it matters what you intend to spend the money on in the future. As the Government is probably going to be buying rations for the starving citizens - I'd go with RPI myself - however if you think the Government will end up directly buying peoples mortgages - to prevent a financial revolt - then I'd go for CPI.

Fortunately there are still vacancies at the big top - you just need one of those cars with square wheels to nail it!

73. At 14:59pm on 15th Dec 2010, writingsonthewall wrote:
"62. At 13:18pm on 15th Dec 2010, yam yzf

With fantasy like that you should be in line to write the next Harry Potter trilogy!
Inflation is 'not high' - please tell me, when in your LIFETIME has it been higher?"

Let's think shall we. The late 60s, throughout the 70s and the early 80s

73. At 14:59pm on 15th Dec 2010, writingsonthewall wrote:

“62. At 13:18pm on 15th Dec 2010, yam yzf
Inflation is 'not high' - please tell me, when in your LIFETIME has it been higher?”

If you look at RPI (for which more historical data is available) for the 500-odd months of my lifetime, RPI has been higher than now in about 245 months.

To put it another way, in about 40 years, RPI has been higher about half the time and lower about half the time.

Using CPI figures from your source at

https://www.rateinflation.com/inflation-rate/uk-historical-inflation-rate.php?form=ukir

then, depending on whether one is concerned with annual or monthly figures, one would have to be either 18 years old or about 6 months old to have experienced higher CPI figures.

I’m not sure it is possible to exactly determine (solely from the comments on this blog) where other posters fall on this scale.

79. At 15:23pm on 15th Dec 2010, writingsonthewall wrote:

"Only those who bought houses as a short term investment or with interest only mortgages will lose money......

and you actually borrowed £250,000 without finding out that first???

Cripes - there are some seriously misguided people out there - I have never bought a high rise flat - but I knew that from researching my own property purchase.

That 'someone' is you I am afraid, did you not know the rules of the game you were entering?"


SO you agree that there are such things as reckless borrowers then.

But not everyone bought houses as short term investments. Some have changes in their life that mean they have to sell up and move on when they had not planned to and these people will also be hit by a fall in prices. I find it surprising that many on here who make out that they are for a caring society are more than happy to let these people suffer as "collateral damage" as JC puts it.

83. At 15:33pm on 15th Dec 2010, yam yzf wrote:

"With fantasy like that you should be in line to write the next Harry Potter trilogy!
Inflation is 'not high' - please tell me, when in your LIFETIME has it been higher?"

Let's think shall we. The late 60s, throughout the 70s and the early 80s"

My mistake - I didn't realise you were and ADULT!

Now you can prove how clever you are by telling us...

What happened in the 60's (here's a clue https://en.wikipedia.org/wiki/Pound_sterling%29
What happened in the 70's (here's a clue https://en.wikipedia.org/wiki/Winter_of_Discontent%29
...and what the Economy was doing when we had high inflation in the early 80's?

(the last one's the trick question, because the answer is GROWING - which is exactly what the Economy is NOT DOING at the moment.)

...but you're clearly too clever for all that - you don't need to look at history when you're making it up as you go along!

83. At 15:33pm on 15th Dec 2010, yam yzf wrote:
73. At 14:59pm on 15th Dec 2010, writingsonthewall wrote:
"62. At 13:18pm on 15th Dec 2010, yam yzf

With fantasy like that you should be in line to write the next Harry Potter trilogy!
Inflation is 'not high' - please tell me, when in your LIFETIME has it been higher?"

Let's think shall we. The late 60s, throughout the 70s and the early 80s
================================================================

And wage levels were also rising unlike now when they are falling.

I'm not sure how many Harry Potter books there are as prefer Philip Pullman - but there are more than 3 (Trilogy)

82. At 15:28pm on 15th Dec 2010, writingsonthewall wrote:
"75. At 15:03pm on 15th Dec 2010, yam yzf wrote:

"66. So no answer to the questions then?"

you must be joking surely?

I have obviously given you too much credit in the past."

The question remains unanswered. What is the 850 are you talking about and what inflation measure are you calculating by to make 929. Just seeking clarification as to what you were commenting upon, nothing more

86 - yes, in most cases it was the effect of a rampant tax and spend Labour government that caused high inflation.

My point, therefore, stands - inflation is not 'high' at only 4.7 on the RPI scale

Ah the usual Christmas cheer....

Looks as if we should all kill ourselves and have done with it.
How about something positive for a change???

85. At 15:45pm on 15th Dec 2010, yam yzf wrote:

"SO you agree that there are such things as reckless borrowers then."

...no - everyone is a reckless borrower - the tap is controlled by the lender (as they have the capital) so they are the ones who make the lending decision (or did you think you could borrrow money simply by asking for it?)
Maybe I was indicating that some of the PROFESSIONAL ADVICE people pay for when buying property should have been pointing these facts out (solicitors, surveyors, estate agents) - none of which detracts from the IRRESPONSIBLE LENDING which banks must have engaged in previously (by their own admission) as they no longer want to lend on the same properties - due to their position as a 'responsible lender'.

"But not everyone bought houses as short term investments. Some have changes in their life that mean they have to sell up and move on when they had not planned to and these people will also be hit by a fall in prices."

These are a very small number of people - and they are going to get hit, but then maybe some of them wouldn't have borrowed the money if they had been advised corectly by the array of professionals involved in every house purchase.

"I find it surprising that many on here who make out that they are for a caring society are more than happy to let these people suffer as "collateral damage" as JC puts it."

I'd happily help out those few - I mean £850 Billion would pay off every mortgage in full of those people you describe - what a shame that money went to back fill bonuses already paid out to bankers.

85. At 15:45pm on 15th Dec 2010, yam yzf wrote:

"SO you agree that there are such things as reckless borrowers then."

...no - everyone is a reckless borrower - the tap is controlled by the lender (as they have the capital) so they are the ones who make the lending decision (or did you think you could borrrow money simply by asking for it?)
Maybe I was indicating that some of the PROFESSIONAL ADVICE people pay for when buying property should have been pointing these facts out (solicitors, surveyors, estate agents) - none of which detracts from the IRRESPONSIBLE LENDING which banks must have engaged in previously (by their own admission) as they no longer want to lend on the same properties - due to their position as a 'responsible lender'.

"But not everyone bought houses as short term investments. Some have changes in their life that mean they have to sell up and move on when they had not planned to and these people will also be hit by a fall in prices."

These are a very small number of people - and they are going to get hit, but then maybe some of them wouldn't have borrowed the money if they had been advised corectly by the array of professionals involved in every house purchase.

"I find it surprising that many on here who make out that they are for a caring society are more than happy to let these people suffer as "collateral damage" as JC puts it."

I'd happily help out those few - I mean £850 Billion would pay off every mortgage in full of those people you describe - what a shame that money went to back fill bonuses already paid out to bankers.

It looks like the clueless, unaccountable, untransparent and driverless EU juggernaut is heading off of a cliff. Hurray! Let's just hope that it is an orderly unwind rather than a crash. But wait, EU member states didn't think about how to exit (should something go wrong) when they joined the Euro? Sounds like it won't be orderly then.

And they denied the EU public a vote on the Lisbon Treaty. Are any of those in charge (i.e. the ECB, EU, Merkel, Sarkozy and Brown etc ) going to apologise to all the 500m citizens of the EU? They thought that they knew best but have proved to be woefully short of any common sense whatsoever.

Good riddance I say.

88. At 16:03pm on 15th Dec 2010, yam yzf wrote:

"The question remains unanswered. What is the 850 are you talking about and what inflation measure are you calculating by to make 929. Just seeking clarification as to what you were commenting upon, nothing more"

850 Billion is the estimate by the ONS on the bank bailout costs.

2008 inflation 3.6132%
2009 inflation 2.1662%
2010 inflation 3.3% (est)

If you compound the devaluation of the original £850 billion - you will need an equivalent of 929 billion today as equivalent - it's about a 8.5% fall in the value of the original 850 billion.

Some numbers have been rounded but I think you'll find it about right. Of course when the media and Government talks of 'profit' is will be basing it on the increase over the original £850 Billion - not accounting for the loss in purchasing power.

...and it hasn't been paid back yet.
......oh and the inflation rate for 2010 looks to be quite generous (it's going to be higher)
.........oh and the rate early next year will be worse - and I can't see the Government shedding their stakes in the banks before the end of 2011 - which means they will probably need over a trillion (a thousand billion) to 'break even'.

Are we clear now?

89. At 16:08pm on 15th Dec 2010, yam yzf wrote:

"86 - yes, in most cases it was the effect of a rampant tax and spend Labour government that caused high inflation."

...one was the same Labour Government - the second time (the early eighties) was under Thatcher - so I don't know how you then make that 'most cases'.
I'm not playing rogues gallery with you - you can pin inflation on Labour, the Tories or the bogeyman for all I care - what matters now is we have inflation, we cannot raise interest rates and there is no growth - but you don't think this is anything to be concerned about (or you're too busy trying to score political points to worry about it)

"My point, therefore, stands - inflation is not 'high' at only 4.7 on the RPI scale"

...and my apology still stands - I cannot believe you're more than 50 years old and you haven't worked out that no matter which Government we get - the result will be the same.

This is because it's the system you know - not the people who pretend to run it!

92. At 16:23pm on 15th Dec 2010, writingsonthewall wrote:
“£850 Billion would pay off every mortgage in full of those people you describe - what a shame that money went to back fill bonuses already paid out to bankers.”

Financial services sector bonuses over the last ten years totalled £97bn.
(source – National Statistics).

It seems unlikely that all £850bn “went to back fill bonuses already paid out to bankers”.

Just as an aisde there are some bloggers who persisently use the income multiple argument for house prices being too high. If you look back at the time when house prices were 3.5 times income you will find that interest rates were probably double what they are today.

At that time there were also a number of arguments for a link to european interest rates which were then about half of our own.

That change to low european style interest rates happened and those in home onwership at the time experienced a windfall gain. There were a number of articles about it at the time - one of the most ememorable I read by David Smith in the Sunday Times. He described the price of a home as being either the capital sum required to pay for it outright or the monthly sum needed to buy it with a mortgage. If you apply that logic to the lower interest rates we now have as standard then the 3.5 times salary argument falls.

If inflation does become the dog that barks loudest, and rates have to go up - and for a sustained period not just a corrective one - then the windfall could be wiped out. But that is a different argument.

I don't think that using the current interest rate, which is far and away the lowest we have ever seen in this country, is the best way to disprove the income multiple - the simple fact is that house prices are massively inflated and have become so as people at all levels in the financial sector stuffed their pockets as almost everything they did was pro-rata linked to property prices. In simple terms it was a self-feeding monster.

I re-mortgaged with a lifetime tracker at 0.17% above BoE base just before the crash started and at that time interest rates were 5.75%. I had factored into my equation that they could easily go up further (I recall them rocketing to 15% in the 80's) so as you can imagine I'm not unhappy with rates dropping to 0.5%, although in fact I have INCREASED my monthly payments to take advantage in full.

There will always be winners and losers but it's essential we get house prices back to affordable levels and as I said earlier that will mean there are some losers - tough

We are all being led by the nose by the political/financial elite who are ably assisted by our lazy, dumbed down media. Our wonderful rulers don't believe we should have the temerity to question what they do. Just look at the smears, threats etc that have descended upon Julian Assange at Wikileaks. Unfounded smears that are eagerly reported by our wonderful media without question. Our so called journalists should hang their heads in shame and start doing what they are paid to do - not just report the guff they are fed, but to actually question it and let the people know what REALLY is going on.

Are there any plans to prosecute Moody as a terrorist organization? They seem to be fostering fear, terror and doubt instead of helping to build confidence...are they aware that everytime they do this staments they pretty much kill most chances of that economy getting anywhere? The last thing we need is a fella going around looking at the wounded going...'I don't know about this one...I think it could die soon, better not waste too much time on him...' it is really criminal what Moody is doing...speculating with the future of millions, playing the market and giving a view on an economy as one rates a cheese and wine dinner, totally irresponsible people, truants!