Who’s a leftwing liberal?

I think only John B “got” this post. Still…

Except it won’t happen. They’ll all get their bonuses regardless of how they perform so there is no need for jumping out of the building.

How about - ”IF there is no meltdown, what proposals can we come up with for reform of the financial system. ”?

Or, ” IF there is financial meltdown and a re-run of the Great Depression, what should a new New Deal look like, and should Socialism be reconsidered”?

Or shall we just carry on wittering about house prices? Does this blog just exist to prove that everything that people say about liberals is true?

Except that with average property prices in many parts of the country approaching seven times earnings, hard-working people without considerable savings or parents willing to release some of their own equity have naff-all chance of ‘enjoying the good times’ insofar as that involves purchasing a home.

In fact, the main beneficiaries of this ‘boom’ have been those who bought before the current explosion in values began - mainly older, mainly middle class. Those who have been merrily re-mortgaging time and time again to finance holidays, foreign second homes and mid-life toys are, in fact, not only the beneficiaries of the boom but part of the cause, since as a group they are very unlikely to use their undoubted political clout to push governments in the direction of encouraging accelerated house building through planning relaxation etc.

Add to that the disgraceful buy-to-let explosion, encouraged by banks as a sales driver for loans, but, by removing hundreds of thousands of entry-level properties from the market, effectively locking millions out of these ‘good times’ and it starts to become easy to see why some of us are looking forward to watching the bankers demonstrate the ‘dead cat bounce’.

So I agree with your wider point that we want an open system that offers a way in for the poor. But boom and bust is not the way. Primarily you want to control inflation so that people are able to predict how much they are being paid in real terms, while keeping a flexible labour market so that there are more ways for the poor to better themselves. Mere consumer spending is not a way to achieve longterm happiness or prosperity - I thought people on the left would understand that most of all!

Banks tend to sell off repossessed properties in distress sales at greatly discounted prices and then write off the debt. The people that end up enjoying the property’s growing equity are the lucky speculators (often part of a buying ‘ring’) who get a bargain at auction.

If, as is the case now, it is difficult for first time buyers to get a mortgage then the demand for housing will diminish. The real pressure will be felt in the rental sector. Movement through the housing ladder depends on first time buyers continually coming into the market .

Some of us have been here before and although it’s unlikely to be as bad as it was in the early nineties it will follow a similar pattern, I suspect.

Access can’t just be emplaced or enacted with guarantees, it must be justified before we can be confident enough in our taking action: the rates and prices of the products must relate to actual level of risk involved. From the moment risk and price became disassociated realignment became inevitable.

So what you’re saying is that NR fell foul because banks indulged in dangerous lending?

That aside, nice satire. I almost thought you were serious for a bit… ~ John B

0:-)

Banks *want* mortgages to be paid.

Must society mollycoddle people, or do they have some personal responsibility? They took the risks, they would have enjoyed the rewards, no?

One wonders what ‘getting onto the housing market’ entails. Of course, iof a house is repossessed then the only entity that ‘enjoys its growing equity’ is the bank that repossesses it. With repossessions having risen every year since 2004, it appears that 27,000 people last year did not ‘get onto the housing market’, but found an incredibly expensive way to rent a property, in effect.

For if you lend money to someone who can’t repay it, no matter how much they deserve to be ‘on the housing market’, they will never own what they buy with what they borrow. You will.

That may well be true, but it has naff-all to do with Northern Rock. NR had/has a pretty good mortgage book and isn’t in much danger of default, but relied overly on short-term debt purchased in credit markets rather than on savers’ deposits for its funding - so when the short-term debt market went mental after the *actual* irresponsible lending bubble burst in Yankland, it couldn’t pay its creditors even though its assets were sound.

That aside, nice satire. I almost thought you were serious for a bit…