Wildcat Posted October 6, 2011 Share Posted October 6, 2011 You have a problem with people putting a roof over their heads? Blimey. My own short and consistent answer is that so long as the advance doesn't exceed the value of the security - yep. Sadly the previous government didn't care much for such a simple formula so they had to save the world. Not sure what the previous Govt has to do with this? They borrowed money against GDP and kept it below 40%. Compare that with banks who lend money with a fractional reserve less than a ninth of the value of what they lend. Who is it again running the reckless system? Link to comment Share on other sites More sharing options...
upinwath Posted October 6, 2011 Share Posted October 6, 2011 Dave telling us to somehow magic yet more cash out of thin air to pay off our credit card balances. :loopy: Yeah , good one Dave. Please tell us what planet you are living on. Tell what planet you're living on. You spend money you clearly don't have and have to pay interest at a daft rate to cover your greed. The advice to pay of debt is good. Only a ruddy idiot would suggest otherwise. As for the fools who get credit they can't afford, tough luck for being greedy. Link to comment Share on other sites More sharing options...
Wildcat Posted October 6, 2011 Share Posted October 6, 2011 Tell what planet you're living on. You spend money you clearly don't have and have to pay interest at a daft rate to cover your greed. The advice to pay of debt is good. Only a ruddy idiot would suggest otherwise. As for the fools who get credit they can't afford, tough luck for being greedy. If paying off debts was really good he would be advising banks and all institutions to do so, rather than just the trite folksy advice to individuals. The only reason he is doing this is to deflect blame for the credit crisis on to the victims rather than the financial backers of the party that used fraud and dishonesty to sell the toxic products that brought the global economy in to crisis. Link to comment Share on other sites More sharing options...
I1L2T3 Posted October 6, 2011 Share Posted October 6, 2011 I think if you look through the whole of this thread you get the whole picture 1. People borrowing irresponsibly 2. Sound advice for people to pay off their personal debts if they can. 3. Sound advice that people should try and live within their means 4. banks lending irresponsibly Wildcat's point is very important. There is a clear attempt to deflect the blame away from banks and onto consumers. That is very wrong because it's a joint responsibility. The truth is, like I said above, on each side of a bad deal there are two parties. If people knew they shouldn't have borrowed they were wrong. Lenders also know through credit checking that what credit exposure people have and they can match that to income evidence that applicants provide - it is how they are now able to justify refusal. The bit that is missing from this thread is that many lenders simply did not care who they lent to. Credit card debts were bundled up as financial packages and sold on as collateralised obligations (CDOs) to other institutions and investors. The more the lenders could lend the more there was to be bundled and sold on. When the bundles were sold on the lender was effectively paid off for the amount of the debt, promising to divert part of future interest payments to the purchaser of the bundle. These CDOs then became tradeable items in their own right, passed between instutitions the price rising ever higher thanks to the AAA ratings that the lenders effectively purchased from ratings agencies. A great big credit sausage machine, supplying the fuel for irresponsible borrowers and fuel for the casino banks. The more bundles they sold, the more credit cards they could issue. Much the same thing happened with mortgages too but that's another story. If Wildcat is right that this is a Tory attempt to deflect attention away from banks it is utterly shameful. It ignores key root causes of the problem and does the country a disservice. Link to comment Share on other sites More sharing options...
upinwath Posted October 6, 2011 Share Posted October 6, 2011 Wildcat is half right. The banks lent out the cash but wouldn't have if the punters had the brains to know they were being stupid. I ditched all my credit cards as soon as the first interest rate rise was announced. It was so easy to see what was coming. Link to comment Share on other sites More sharing options...
I1L2T3 Posted October 6, 2011 Share Posted October 6, 2011 Not sure what the previous Govt has to do with this? They borrowed money against GDP and kept it below 40%. Compare that with banks who lend money with a fractional reserve less than a ninth of the value of what they lend. Who is it again running the reckless system? One ninth? Oh, no. Citibank in the US was leveraged 280:1 Link to comment Share on other sites More sharing options...
I1L2T3 Posted October 6, 2011 Share Posted October 6, 2011 Wildcat is half right. The banks lent out the cash but wouldn't have if the punters had the brains to know they were being stupid. I ditched all my credit cards as soon as the first interest rate rise was announced. It was so easy to see what was coming. There are studies on this. For example an American worker now is in relative terms worse off than an american worker in 1973. It is argued that to breach the widening gap between real wages and the cost of living people resorted to credit. Of course in recent decades there were lenders happy to step in to supply that credit. It was immensely profitable to do so. It aslo gave the workers credit to buy new shiny things they could no longer afford on depressed wages. I'm with you however in that I cannot get my head around why people could ever think taking on stacks of debt would make them happy. I just stepped back from that and I'm much happier for it. But....the blame doesn't lie solely with the borrowers - there are always two sides to every deal. As illustrated above. Link to comment Share on other sites More sharing options...
upinwath Posted October 6, 2011 Share Posted October 6, 2011 There are studies on this. For example an American worker now is in relative terms worse off than an american worker in 1973. It is argued that to breach the widening gap between real wages and the cost of living people resorted to credit.. I'm skint so I'll borrow money I can't afford to pay back. Of course in recent decades there were lenders happy to step in to supply that credit. It was immensely profitable to do so. It aslo gave the workers credit to buy new shiny things they could no longer afford on depressed wages.. I'm skint and can't afford to live (see bullcrap above) but I'm greedy and stupid enough to want a new car on credit I can't afford to pay back. I'm with you however in that I cannot get my head around why people could ever think taking on stacks of debt would make them happy. I just stepped back from that and I'm much happier for it. But....the blame doesn't lie solely with the borrowers - there are always two sides to every deal. As illustrated above. I don't blame the lenders at all. They made a fat pile of cash from the stupid. Just good old fashioned capitalist exploitation. The lenders were out to make a profit and that's what they did. Only daft people lost out. Link to comment Share on other sites More sharing options...
MrSmith Posted October 6, 2011 Share Posted October 6, 2011 If paying off debts was really good he would be advising banks and all institutions to do so, rather than just the trite folksy advice to individuals. The only reason he is doing this is to deflect blame for the credit crisis on to the victims rather than the financial backers of the party that used fraud and dishonesty to sell the toxic products that brought the global economy in to crisis. David Cameron as already condemned the banks for irresponsible lending, there is little to be gained by continuing with the condemnation. He wants banks to lend responsibly too businesses and individuals, although he knows it would be good for people to pay down their debts he will also be aware that if they do, they will have less to spend which isn’t good for the economy. The country needs solutions to the problem and further condemnation isn’t a solution. The government aren’t deflecting blame they are trying to solve the problem. Link to comment Share on other sites More sharing options...
mj.scuba Posted October 6, 2011 Share Posted October 6, 2011 If paying off debts was really good he would be advising banks and all institutions to do so, rather than just the trite folksy advice to individuals. The only reason he is doing this is to deflect blame for the credit crisis on to the victims rather than the financial backers of the party that used fraud and dishonesty to sell the toxic products that brought the global economy in to crisis. But don't the banks need us (the public) to pay our debts so that they can in turn pay their debts? Link to comment Share on other sites More sharing options...
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