You're damned if you do and you're damned if you dont

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speedysnail

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Jul 12, 2009
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Found my way out of the Pennines......but ended up
LTSB - profits up
Barclays - profits up
Northern Crock - profits up
RBS - profits up

Headlines in the papers: "Why aren't the banks lending again"???

Lessons learned about the recession...

NONE

The 7 deadly sins include greed and gluttony, even a recession doesn't seem to have taught us that we can't always have what we can't afford.
 
J

Jiglo

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Mar 21, 2005
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But what are banks for then Anne?

Back in 1974, my parents bought a big 5 bedroom house for £2400. That's just shy of £30,000 in todays money. If house prices weren't extortionately priced these days, then some people wouldn't even need a bank to give them a mortgage and those that do would have a sensible loan that they could easily pay.

The trouble in many ways is that we changed from a more socialist model to a capitalist model within my lifetime. People saw the potential of snapping up underpriced houses and renting them out, buying and selling shares, setting up their own businesses etc.

You need capital to afford a house, or set up a business and that is what these banks are built on. I can understand the sensible approach the banks are taking now to a point and if they'd taken them before the banking crisis then they wouldn't have got into that mess that they did and us taxpayers wouldn't have needed to bail them out with our future taxes. The problem is if they aren't lending to responsible people with a good business idea, or expansion plans, or even Joe Bloggs wanting to buy a home.
 
S

speedysnail

New member
Jul 12, 2009
442
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Found my way out of the Pennines......but ended up
Hola Jim :)

You make some very good points :thumbsup:. If the banks had good lending strategies post credit-crunch then you're right, we wouldn't have been in the mess we are in right now.

The point I was trying to make was, why repeat the same mistake again? The fire is warm and nice until your hand gets burnt right....then it heals....so do you immediately put your hand in the fire again? Unlikely

Did the people who borrowed the money think they were risky? They were probably legitimate people who thought they could make ends meet but wanted more and had a good business idea. Just like me and you really. They probably had a secure job and were ambitious, and wanted more out of life than they already had. The issue was the credit to fulfil their ambitions was equivalent to the risk associated with the investment - lots of credit and high payments in return for high rewards (if you decided to take the chance). Its a bit like the roulette wheel really, who dares wins...or in most cases...in the end they lost because didn't take into account all the variables.

I like dominoes, straightforward, easy and at 10p a hand not too risky :p

We need to catch up soon you funky footstepper :D
 


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