Is the Credit Crunch really bad news?

#1
Been pondering this one for a little while.
Thanks to gross mis-management by the banks and Mr Brown many things are de-valuing nigh on as quick as Zimbabwe Dollars.
On paper the value of both of our houses is going down, the car I bought a couple of months ago is depreciating a bit quicker than I would like but there is an upside.
The repayments on both mortgages have dropped, nearly 10% so far and likely to drop more.
The price of diesel is coming down steadily (I would like it to come down a lot more)
Cars, you can pick anything up for a fraction of what it was worth six months ago.

Thois credit crunch may be bad news for the banks and brokers but will the savings made to Mr Average on the street outweigh a couple of years of devalued housing prices?
 
#2
Not for the IMF. I'm really starting to get tin-foil flashes now.
 
#4
If you're in a secure, guaranteed salary type job, IE: Local Government or HM Forces, then yes you could say you're laughing all the way to the bank(read mattress).
 
#5
The Mortgage payments have gone down In the house I'm renting - unfortunately my Landlord hasn't passed those Savings onto me so my rent remains the same!
 
#6
Depends if the banks go under or not.

Imagine your bank going under with your months salary in it. Imagine your company not paying you and your workmates for the same reason. Imagine if what happened in Iceland happened here on the mainland.

The government hasn't put up that much money that this can't happen.
 
#7
Yeah, cheaper cars will be fantastic help when you lose your job.

You can press your nose against the showroom glass on the way to the dole office.
 
#8
Sven said:
Depends if the banks go under or not.

Imagine your bank going under with your months salary in it. Imagine your company not paying you and your workmates for the same reason. Imagine if what happened in Iceland happened here on the mainland.

The government hasn't put up that much money that this can't happen.
That is sensationalism and it wont happen.
 
#9
Unlucky_Alf said:
Sven said:
Depends if the banks go under or not.

Imagine your bank going under with your months salary in it. Imagine your company not paying you and your workmates for the same reason. Imagine if what happened in Iceland happened here on the mainland.

The government hasn't put up that much money that this can't happen.
That is sensationalism and it wont happen.
He's a Politician, enough said really!
 
#10
Unlucky_Alf said:
Sven said:
Depends if the banks go under or not.

Imagine your bank going under with your months salary in it. Imagine your company not paying you and your workmates for the same reason. Imagine if what happened in Iceland happened here on the mainland.

The government hasn't put up that much money that this can't happen.
That is sensationalism and it wont happen.
Why is Barclays selling 31% of its shares to the arabs then, and not even preferential shares!
 
#11
The 'credit crunch' is not the problem. The problem was a debt bubble based on banks lending money they had not got to people unlikely, or doubtful to pay it back.

In reality the 'credit crunch' is the solution. Just going to taste like a shit sandwich whilst we have to eat it.
 
#12
Sven said:
Unlucky_Alf said:
Sven said:
Depends if the banks go under or not.

Imagine your bank going under with your months salary in it. Imagine your company not paying you and your workmates for the same reason. Imagine if what happened in Iceland happened here on the mainland.

The government hasn't put up that much money that this can't happen.
That is sensationalism and it wont happen.
Why is Barclays selling 31% of its shares to the arabs then, and not even preferential shares!
Er.. The fact that someone is willing to pay for the shares is evidence that the banks have maintained at least some value is it not? The Saudis are not envisaging their investment going to the wall; I don't doubt that there is going to be a period of recession financial institutions are going to take a kicking on their share price.

The problem with a lot of this is that the harbingers of doom are issuing self-fulfilling prophecies. If enough people sh1te themselves due to sensationalism and withdraw all money from banks then of course the system will collapse. But they won’t, and it won’t and the government would to literally almost anything to stop it happening. If it were that bad then, amongst many other measures) the Army would be universally withdrawn in order to free up every penny to prop up the system.
 
#13
I have just opened a statement from a certain Scottish Bank who may or may not be having a wee drama right now.

I appear to have been charged for the following

Issuing Cheques - All cleared against funds - Charged.
Automated BACS payments in from Army. - Charged
Manual credits - Charged
Cheques paid in -Charged
Cash out from Branches over the counter - Charged.

This is the first time I have ever received a statement like this.

I have just tried to call my Business manager to give him a petite drama , to be told he's 'Taking two days off'

What a coincidence when the statements have just gone out.

It appears the RB* have reverted to the practice of nickel and dimeing their clients to death.
 
#14
Unlucky_Alf said:
Sven said:
Unlucky_Alf said:
Sven said:
Depends if the banks go under or not.

Imagine your bank going under with your months salary in it. Imagine your company not paying you and your workmates for the same reason. Imagine if what happened in Iceland happened here on the mainland.

The government hasn't put up that much money that this can't happen.
That is sensationalism and it wont happen.
Why is Barclays selling 31% of its shares to the arabs then, and not even preferential shares!
Er.. The fact that someone is willing to pay for the shares is evidence that the banks have maintained at least some value is it not? The Saudis are not envisaging their investment going to the wall; I don't doubt that there is going to be a period of recession financial institutions are going to take a kicking on their share price.

The problem with a lot of this is that the harbingers of doom are issuing self-fulfilling prophecies. If enough people sh1te themselves due to sensationalism and withdraw all money from banks then of course the system will collapse. But they won’t, and it won’t and the government would to literally almost anything to stop it happening. If it were that bad then, amongst many other measures) the Army would be universally withdrawn in order to free up every penny to prop up the system.
The Saudis are holding a revolver to Barclays head. They are getting so much more for their investment and yes, in the long term they will make a lot of money - but because they have brought about a rescue. I believe they may have seized control of a blue chip bank for a fraction of its cost.
 
#15
Sven said:
Unlucky_Alf said:
Sven said:
Unlucky_Alf said:
Sven said:
Depends if the banks go under or not.

Imagine your bank going under with your months salary in it. Imagine your company not paying you and your workmates for the same reason. Imagine if what happened in Iceland happened here on the mainland.

The government hasn't put up that much money that this can't happen.
That is sensationalism and it wont happen.
Why is Barclays selling 31% of its shares to the arabs then, and not even preferential shares!
Er.. The fact that someone is willing to pay for the shares is evidence that the banks have maintained at least some value is it not? The Saudis are not envisaging their investment going to the wall; I don't doubt that there is going to be a period of recession financial institutions are going to take a kicking on their share price.

The problem with a lot of this is that the harbingers of doom are issuing self-fulfilling prophecies. If enough people sh1te themselves due to sensationalism and withdraw all money from banks then of course the system will collapse. But they won’t, and it won’t and the government would to literally almost anything to stop it happening. If it were that bad then, amongst many other measures) the Army would be universally withdrawn in order to free up every penny to prop up the system.
The Saudis are holding a revolver to Barclays head. They are getting so much more for their investment and yes, in the long term they will make a lot of money - but because they have brought about a rescue. I believe they may have seized control of a blue chip bank for a fraction of its cost.
So if it has been rescued it will not collapse - so we can stop saying that monthly pay packets are in danger because they are not.
 
#16
PartTimePongo said:
I have just opened a statement from a certain Scottish Bank who may or may not be having a wee drama right now.

I appear to have been charged for the following

Issuing Cheques - All cleared against funds - Charged.
Automated BACS payments in from Army. - Charged
Manual credits - Charged
Cheques paid in -Charged
Cash out from Branches over the counter - Charged.

This is the first time I have ever received a statement like this.

I have just tried to call my Business manager to give him a petite drama , to be told he's 'Taking two days off'

What a coincidence when the statements have just gone out.

It appears the RB* have reverted to the practice of nickel and dimeing their clients to death.
FFS PTP that's ridiculous; are you receiving a particular preferential service offering from them such as Royalties? That's absolutely awful. Presumably you're doing most if not all of your transactions in the UK?

Feel free to PM me; you might find that HSBCs service offerings, or even Citibanks might be a useful place for your accounts (note: I don't work for either of these).
 
#17
Alf

That's great if you bank with Barclays - but they aren't the only bank on the block are they.

My example was not a prediction, but an example of what could happen. I could just as easily have commented on banks no longer doing short term lons to business and the latters folding as a result.
 
#18
To answer the "core" question (i.e., is the credit crunch a bad thing) will take a lot longer to answer than we can give time or space to here but here's a list of pros and cons (not exhaustive) from me.

Caveat: please note that this is opinion only and that, as I would need to be FSA registered to provide this advice on a professional basis (which I am not), this is not "advice", merely a personal opinion:

Pros

- market has reduced from its ridiculously overheated state, meaning that company and stock valuations are amended into a state of something approaching reality
- first-time buyers will be able to get onto the property ladder in the short time window when the Venn diagram of property valuation and mortgage availability co-mingle, meaning that there will be bargains to be had (note: I don't think that time's now, quite yet).
- the merry-go-round of major US investment banks (BS, ML, JPM, GS and LB) have been pared down - with GS being the only one that's really not had to adopt major structural change (JPM have had some structural change with the adoption of BS)

Cons

- inflation; the UK won't get to the state of S American countries but it is going to have a difficult time in the next couple of years (although I'd be disappointed if the UK, like Iceland, Hungary and Ukraine, end up at the IMF for a bail-out) as a consequence of this. It'll be a deep recession but current forecasts show it to be less severe that the 1920s depression (thankfully!)
- government decisions to recapitalise retail banks without letting the market take its course meaning that £50bn of taxpayers cash has been dumped onto the banks with the government not realising how much power they now have; them calling on banks to start lending again is a very mild form of what they could do!
- unemployment will increase and GDP will continue to fall for another 2-3 quarters; unemployment will take 2-3 years to clear out
 
#19
Sven said:
The Saudis are holding a revolver to Barclays head. They are getting so much more for their investment and yes, in the long term they will make a lot of money - but because they have brought about a rescue. I believe they may have seized control of a blue chip bank for a fraction of its cost.
Given that this has been engineered by Cyclops and his party in several ways, I'm surprised you adopt this attitude.
 
#20
whitecity said:
Sven said:
The Saudis are holding a revolver to Barclays head. They are getting so much more for their investment and yes, in the long term they will make a lot of money - but because they have brought about a rescue. I believe they may have seized control of a blue chip bank for a fraction of its cost.
Given that this has been engineered by Cyclops and his party in several ways, I'm surprised you adopt this attitude.
Yawn
 

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