Where is Everybody?

[carlnewboult]

Well it beats watching nascar or rounders I guess

Or kevlar rugby you cannot forget that one. Would be pritty cool to watch a twister or tornado though

 

[statsman]

Being as the Yanks have almost destroyed our banking system with their wierd way of dishing out money to anyone who can breathe - it is pretty depressing and there isn't alot to smile about.

The Bank of England pumped £2 billion into the UK system today as a direct result of the Yanks banks frivolous mortgage spending.

The sooner we cut ourselves free from the Yankee dream team the better.

Col

I wasn't aware Northern Rock was a multi-national.
The problem was caused by low interest rates world wide. Banks in all countries attempted to maintain their profit margin by lending more money at the lower rates. Mortgages were a good option since even if the borrower defaulted, you still had the house to sell and reduce your loss.
This led to loans being made to people who in a normal banking environment would never have got the loan.
PS - The time to buy will be in about 6 - 10 months directly from the bank when all those low interest mortgages have to come up for renewal at a much higher rate.

 

[Rich]

I wasn't aware Northern Rock was a multi-national.
The problem was caused by low interest rates world wide. Banks in all countries attempted to maintain their profit margin by lending more money at the lower rates. Mortgages were a good option since even if the borrower defaulted, you still had the house to sell and reduce your loss.
This led to loans being made to people who in a normal banking environment would never have got the loan.
PS - The time to buy will be in about 6 - 10 months directly from the bank when all those low interest mortgages have to come up for renewal at a much higher rate.

The problem is not as straight forward as you state, the problem is very simple, the original lender kept the equity in the home but sold the debt on to other banks, who subsequently have no recourse if the original borrower defaults. Nobody knows how much of this subprime debt has been bought up by banks around the world, or how bad debt there is, that's what's making the banking industry around the world so jittery at the minute

 

[statsman]

Rich
If I understand you correctly:
Northern Rock loaned mortgage money to people at a certain rate (lets say 200,000 at5%).
Northern Rock then sold the paper to other banks at lets say 4.5%
So Northern Rock kept the extra .5% and the other banks had the problem if the home owner defaulted.
Please correct if this is incorrect.
I know in Canada if you borrow the money from Bank A, they can't sell it without your consent (unless you are in default).

 

[ajetrumpet]

As anyone with a wife will know, there's no such thing as "free" fun

I don't know about that yet (still getting free fun here)...

 

[Rich]

Rich
If I understand you correctly:
Northern Rock loaned mortgage money to people at a certain rate (lets say 200,000 at5%).
Northern Rock then sold the paper to other banks at lets say 4.5%
So Northern Rock kept the extra .5% and the other banks had the problem if the home owner defaulted.
Please correct if this is incorrect.

No Northern rock wasn't the problem per se, most of the US banks have been selling off their debts to other banks around the world. Banks have suddenly stopped lending to other banks because their gonna get their fingers burnt and so NR who relied on borrowing from other banks to fund it's lending was left without enough hard cash for new borrowers

 

[statsman]

HMMM. I think I'll start putting my millions other places.

 

[GaryPanic]

Rich
If I understand you correctly:
Northern Rock loaned mortgage money to people at a certain rate (lets say 200,000 at5%).
Northern Rock then sold the paper to other banks at lets say 4.5%
So Northern Rock kept the extra .5% and the other banks had the problem if the home owner defaulted.
Please correct if this is incorrect.
I know in Canada if you borrow the money from Bank A, they can't sell it without your consent (unless you are in default).

nearly there..

Northern Rock arranges the morgage at 6%
however it borrows from other banks at 5%
keeping the difference (1%)

which is fine -- however other banks (due to the credit crisis stateside) stopped leading -
so although they can service their debt, due to goverment ruls each bank at the end of x period of time must show a balance book - and as banks where not lending moneies out to other banks
NR had to declare this to the BofE , there was little chance of this going tits up , cos it is good business - its was down to regulations that cause the problem- not any short fall in funds

the bank relied on debt as a asset - rather than savings

 

[Friday]

My house is new! - circa 1900 - its probably around the average UK size - and has the usual UK air con - windows - not that it was warm enough to open them this summer !

Here's my rant on the housing situation in U.S.A: All the houses with any character are being allowed to rot into the ground, sitting in high crime areas, while the offerings in the safer parts of town all look the same, cost a fortune, and have are being built with no thought to green construction, we just keep making the same mistakes over and over. Take for example this house, currently priced at 21,900 US Dollar (15,547.6 Euro, I believe). I looked at this house and it is simply magnificent, though needing a lot of repair. But the bones are still good, would love to have it. Bad bad bad neighborhood. Don't go outside after dark...

 

[Rich]

The link doesn't work

 

[statsman]

nearly there..

Northern Rock arranges the morgage at 6%
however it borrows from other banks at 5%
keeping the difference (1%)

which is fine -- however other banks (due to the credit crisis stateside) stopped leading -
so although they can service their debt, due to goverment ruls each bank at the end of x period of time must show a balance book - and as banks where not lending moneies out to other banks
NR had to declare this to the BofE , there was little chance of this going tits up , cos it is good business - its was down to regulations that cause the problem- not any short fall in funds

the bank relied on debt as a asset - rather than savings

In banking, debt is an asset.
When a bank quotes it's "assets", thats the amount of money it has out on loan, not the amount of money it has on deposit.

 

[Rabbie]

Here's my rant on the housing situation in U.S.A: All the houses with any character are being allowed to rot into the ground, sitting in high crime areas, while the offerings in the safer parts of town all look the same, cost a fortune, and have are being built with no thought to green construction, we just keep making the same mistakes over and over. Take for example this house, currently priced at 21,900 US Dollar (15,547.6 Euro, I believe). I looked at this house and it is simply magnificent, though needing a lot of repair. But the bones are still good, would love to have it. Bad bad bad neighborhood. Don't go outside after dark...

That seems pretty cheap here in the UK. Where I live you need to pay at least £130,000(approx 250,000$) for a pretty basic small house.

 

[ColinEssex]

In Colchester (South East UK) you need £200,000 ($400,000) for a normal 2 bedroom semi - nothing special - if you want 3 bedrooms, look at £220,000 ($440,000).

To rent a 1 bedroom flat will set you back £700 ($1400) per month.

Col

 

[scott-atkinson]

In Colchester (South East UK) you need £200,000 ($400,000) for a normal 2 bedroom semi - nothing special - if you want 3 bedrooms, look at £220,000 ($440,000).

To rent a 1 bedroom flat will set you back £700 ($1400) per month.

Col

There are still bargains to be had but if you move out of the area, Essex is just too damn expensive now, which is why I am getting out.

I have a 3/4 bed semi-detached chalet bungalow in Essex, and where I am moving to Corby which is 1.5 hours north by car, I am buying a 5 bed detached for £10000 less.

 

[GaryPanic]

Scot..
you've been listening to the radio adverts

 

[Friday]

The link doesn't work

Sorry.

I'll try to attach a couple.

 

[Alc]

I have a 3/4 bed semi-detached chalet bungalow in Essex, and where I am moving to Corby which is 1.5 hours north by car, I am buying a 5 bed detached for £10000 less.

Forget the cash saving. It'll be nice to have a whole number of bedrooms (sleeping in a fraction must get wearing)

 

[MrsGorilla]

Sorry.

I'll try to attach a couple.

That does look pretty cheap for a house that size. Must need a lot of work both inside and out. The real kicker is the neighborhood. Nobody wants to live in a high crime area.

 

[Rich]

Sorry.

I'll try to attach a couple.

Hey they look pretty good, shame about the area, do the authorities not try to clean the area up?

 

[Rich]

There are still bargains to be had but if you move out of the area, Essex is just too damn expensive now, which is why I am getting out.

I have a 3/4 bed semi-detached chalet bungalow in Essex, and where I am moving to Corby which is 1.5 hours north by car, I am buying a 5 bed detached for £10000 less.

You should have bought this one Scott
http://news.sky.com/skynews/picture_gallery/picture_gallery/0,,70141-1273225-1,00.html