Re: Debt Slavery : Thu Nov 17, 2011 11:12 am  

El Barbudo wrote:

I think you'd agree though, that only the initial borrowing is a voluntary transaction.
Thereafter, the actions of the banks and the vagaries of the financial markets etc. are outside the control of most of us.
Unfortunately, no-one ever has "full information", which is why the economists' favourite, the so-called "perfect market", is an unachievable fiction.

That's true its outside most people's control but part of the voluntary transaction is that both parties accept some risk. The mortgage lender accepts the risk that the borrower may default. The borrower accepts the risk that the interest rate may vary or if he wants to insure himself from the risk, sign up to a fixed rate mortgage.

In fact in terms of mortgages a lot of people have benefited by paying lower mortgage rates than expected in recent years due to the low interest rates.

I think in terms of mortgage slavery the bigger problem is the shortage of supply of housing that is driving up house prices and meaning owners of property have a huge advantage in being able to make money off those that don't own property, because everybody needs somewhere to live.

Re: Debt Slavery : Thu Nov 17, 2011 11:36 am  

sally cinnamon wrote:

The mortgage lender accepts the risk that the borrower may default. ..

... on the basis that if it goes pear shaped, the taxpayer will stump up a billion or two to see them right; the bankers can sack a few thousand staff to look as if they're doing something, and continue to trouser obscene pay packets. Trebles all round. Some risk.

Re: Debt Slavery : Thu Nov 17, 2011 11:38 am  

sally cinnamon wrote:

... I think in terms of mortgage slavery the bigger problem is the shortage of supply of housing that is driving up house prices and meaning owners of property have a huge advantage in being able to make money off those that don't own property, because everybody needs somewhere to live.

But that shortage in supply, what is the root cause?
Builders aren't building, but that's not the cause, that's a symptom.

The cause is the fact that first-time buyers (on whom the whole structure depends) can't get mortgages.
If they could get mortgages, builders would be building homes a whole lot cheaper than the existing stock is currently selling for.
One thing that Dally did get right is that house prices will erode but IMHO that will be slow.

Cameron says that it's planning regs and process that are the problem.
But Cameron is a lying n0bhead who wants to help the likes of Tesco to build on land they have stockpiled.

Re: Debt Slavery : Thu Nov 17, 2011 11:44 am  

El Barbudo wrote:

But that shortage in supply ... what is the root cause?
Builders aren't buidling, but that's not the cause, that's a symptom.

The cause is the fact that first-time buyers (on whom the whole structure depends) can't get mortgages.
If they could get mortgages, builders would be building houses a lot cheaper than the existing stock is currently selling for.

Cameron says that it's planning regs that are the problem.
But Cameron is a lying n0bhead who wants to help the likes of Tesco to build on land they have stockpiled.

The last thing the BoE and Government want at the moment is a big increase in housing supply. Policy is aimed at trying to keep property prices artificially high for the medium term.

Re: Debt Slavery : Thu Nov 17, 2011 11:45 am  

El Barbudo wrote:

But that shortage in supply ... what is the root cause?
Builders aren't buidling, but that's not the cause, that's a symptom.

The cause is the fact that first-time buyers (on whom the whole structure depends) can't get mortgages.
If they could get mortgages, builders would be building houses a lot cheaper than the existing stock is currently selling for.

Cameron says that it's planning regs that are the problem.
But Cameron is a lying n0bhead who wants to help the likes of Tesco to build on land they have stockpiled.

[tb]

Re: Debt Slavery : Thu Nov 17, 2011 11:49 am  

LeighGionaire wrote: Who'd have thought it, a mainstream news source explaining how banks create money from nothing . . . . http://www.guardian.co.uk/commentisfree ... ed-stealth Just think about this as an example. Say it takes a days work for a bank employee to process a mortgage application for a customer. If the mortgage is over a period of 25 years and one days pay per week is needed to repay the mortgage, the customer is essentially giving up 5 YEARS of work for the initial days work it took the bank sorting out the paperwork to conjour up the money out of thin air in the first place! This is debt slavery in a nutshell. Letting nutters from the Occupy movement take over CiF is probably one of the silliest things the Grauniad has ever done. The fact that the Gruadian chose to do it does not mean that 'mainstream media' have suddenly become converted to their idiot ideas. There's a good repost to the whole nonsense here

LeighGionaire wrote: Who'd have thought it, a mainstream news source explaining how banks create money from nothing . . . . http://www.guardian.co.uk/commentisfree ... ed-stealth Just think about this as an example. Say it takes a days work for a bank employee to process a mortgage application for a customer. If the mortgage is over a period of 25 years and one days pay per week is needed to repay the mortgage, the customer is essentially giving up 5 YEARS of work for the initial days work it took the bank sorting out the paperwork to conjour up the money out of thin air in the first place! This is debt slavery in a nutshell. Letting nutters from the Occupy movement take over CiF is probably one of the silliest things the Grauniad has ever done. The fact that the Gruadian chose to do it does not mean that 'mainstream media' have suddenly become converted to their idiot ideas. There's a good repost to the whole nonsense here

Re: Debt Slavery : Thu Nov 17, 2011 11:55 am  

There is some very confused thinking on here. People bemoan the fact that we got into a mess due to credit being freely available and most policy suggestions involve growth via further deabt but at the same time bemoan the fact that mortgages for first time buyers are not given away!

Re: Debt Slavery : Thu Nov 17, 2011 12:06 pm  

Dally wrote:

There is some very confused thinking on here. People bemoan the fact that we got into a mess due to credit being freely available and most policy suggestions involve growth via further deabt but at the same time bemoan the fact that mortgages for first time buyers are not given away!

But we appear to have gone from a situation where money was being thrown around, to one where it's kept under lock and key and nobody can have any. I guess banks have never heard of a happy medium?

Re: Debt Slavery : Thu Nov 17, 2011 12:50 pm  

Chris28 wrote:

But we appear to have gone from a situation where money was being thrown around, to one where it's kept under lock and key and nobody can have any. I guess banks have never heard of a happy medium?

They have no choice. Things went wrong now they need fixing. If we take, say, a 25 year period - previous 15 years and next 10 you will probably see there was a happy medium on average - just dramatically skewed between the first and second half of that period.

Re: Debt Slavery : Thu Nov 17, 2011 1:22 pm  

Dally wrote:

They have no choice. Things went wrong now they need fixing. If we take, say, a 25 year period - previous 15 years and next 10 you will probably see there was a happy medium on average - just dramatically skewed between the first and second half of that period.

That average will really help businesses who are struggling to get finance to expand and boost growth.

Banks do have a choice. They chose to throw money around and now they choose not to. My main problem with the latter (whether it's better for the economy or not) is that banks' profligacy and bad decisions led in part to their problems, yet when the taxpayer helps them out, keeping them in jobs and bonuses, their answer to the taxpayer seeking to borrow money (not asking for it back - BORROW) is almost always NO.

Would Gideon's growth forecasts and figures be as bad if the banks were made to lend at least some of it back?