tag:blogger.com,1999:blog-5524682876220396502.post763189417221528216..comments2024-03-27T06:56:10.255+00:00Comments on Broad Oak Magazine: UK economy: between a rock and a hard placeUnknownnoreply@blogger.comBlogger6125tag:blogger.com,1999:blog-5524682876220396502.post-38682209055523454842008-07-13T09:06:00.000+01:002008-07-13T09:06:00.000+01:00Mark: I agree that you'll never eradicate folly, b...Mark: I agree that you'll never eradicate folly, but making the lender liable for gross excesses would incentivise them to take more care.<BR/><BR/>Karl Denninger has pointed out that for Americans, if the lender colluded with the borrower to falsify information for the loan application, the lender is liable; and he's urged people caught in the mortgage vice to consult their lawyers and tax advisers on this point.Sackersonhttps://www.blogger.com/profile/09410040031410954403noreply@blogger.comtag:blogger.com,1999:blog-5524682876220396502.post-50601247771592085452008-07-12T23:39:00.000+01:002008-07-12T23:39:00.000+01:00Right. So how does that deal with buyers who borro...Right. <BR/><BR/>So how does that deal with buyers who borrow money from their parents, (who themselves have remortgaged up to your chosen hilt) and who have maxed out on their credit cards? What about married couples? Should the bank assess the likelihood of Mrs having a baby and how long she might be off work?<BR/><BR/>To make this stick, you would have to include every penny of store card, credit card and family loan.<BR/><BR/>Whatever rules you dream up (and on a human level, I agree that they might make sense), people and banks will find a way round them.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-5524682876220396502.post-66787008607944869462008-07-12T18:34:00.000+01:002008-07-12T18:34:00.000+01:00Some rule on income multiples for borrowers would ...Some rule on income multiples for borrowers would have been helpful. <BR/><BR/>And how about making lenders solely liable for the loss from a self-cert default, to the extent that (after auditing the case) the loan exceeded the regulatory multiple? Something along those lines.Sackersonhttps://www.blogger.com/profile/09410040031410954403noreply@blogger.comtag:blogger.com,1999:blog-5524682876220396502.post-41357455513446245752008-07-12T14:05:00.000+01:002008-07-12T14:05:00.000+01:00I wonder what would have happened if the Conservat...<I>I wonder what would have happened if the Conservatives had won again in 1997? Can we be confident that the consequences would have been better?</I><BR/><BR/>Focussing on runaway house prices (my specialist topic), I think it would have been even worse.<BR/><BR/>Assuming that Tories had run slightly lower taxes etc, and bearing in mind their rampant NIMBYism and their role as front for the land-owning lobby, it is quite possible that house prices would have rocketed even higher - like in the Lawson boom and the Barber boom, i.e. the Tories are just as guilty of this as Nulab.<BR/><BR/>For example, see this exchange at <A HREF="http://www.johnredwoodsdiary.com/2008/06/28/why-uk-markets-and-assets-are-falling/#comments" REL="nofollow">St John of Redwood</A>:<BR/><BR/>My comment: "John, agreed. But what we have now is the fall out from the housing and credit bubbles bursting. If you had stayed in government since 1997, hopefully you would have wasted less and taxed less. But - and this is the big but - wouldn’t lower taxes have had the effect of creating an even bigger housing/credit bubble? What would the Tories have done to prevent these bubbles happening? The previous bubble was under a Tory government, don’t forget."<BR/><BR/>John R's reply: "The previous bubble was thanks to the European policy of shadowing and then linking to the DM. A Conservative government would have spent and borrowed less."<BR/><BR/>Not much of an answer, is it?Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-5524682876220396502.post-53025113229117602642008-07-12T11:23:00.000+01:002008-07-12T11:23:00.000+01:00Guthrum, I did it for self-protection.I left teach...Guthrum, I did it for self-protection.<BR/><BR/>I left teaching in 1989 to become a belated Thatcher's child, joining an insurance company just in time for the torrent of economic problems and the mania for financial services regulation (a long story in itself, that). I had my go at trying to help ordinary people save for the future.<BR/><BR/>It seems that unless you're a spiv or expat millionaire, then to put it crudely, doing business in the UK sucks.Sackersonhttps://www.blogger.com/profile/09410040031410954403noreply@blogger.comtag:blogger.com,1999:blog-5524682876220396502.post-75660373477753084302008-07-12T11:01:00.000+01:002008-07-12T11:01:00.000+01:00not sure advocating we should all rush to get publ...not sure advocating we should all rush to get public sector jobs is the answer, reducing the State and overblown state spending that is sucking cash out of the economy through incontinent spending is. We have an economy that just does not encourage savingGuthrumhttps://www.blogger.com/profile/17499979740864497256noreply@blogger.com