A Political Thread pt. 2

[Saintjay]

The idea that there's intelligent alien life here on Earth is... ridiculous.

You've never been to Rhyl or Welford Road.

 

[Saintjay]

I've watched the Springfield Files. How much more evidence do you lot need....

 

[pagliaccio_euforico]

Apparently average mortgage deals in the UK are far shorter than in the US and other western countries. It has been common practice for people to fix rates for 20 years in the US which I guess gives certainty. The UK mortgage market is more of a rollercoaster.

I was really confused when the truss disaster happened how it was affecting so many people. Didn't realize that uk mortgages change so often.

 

[Vieux Talonneur]

I was really confused when the truss disaster happened how it was affecting so many people. Didn't realize that uk mortgages change so often.

Not as confused as Truss and Kwarteng.

Can't claim to be an expert but have just read that over 90% of the US subprime mortgages associated with the 2008 financial crash were variable rate. If fixed rules the day stateside I guess that's the price of being seen as a bad risk.

 

[Bada-Bing!]

I was really confused when the truss disaster happened how it was affecting so many people. Didn't realize that uk mortgages change so often.

Depends on if a home owner is on a variable interest rate. That is what changes. A lot of peeps thought that interest rates would not go up and stayed on variable or their fixed rate has to an end. It was a form of betting which has now sadly is come home to roost.

 

[ncurd]

I was really confused when the truss disaster happened how it was affecting so many people. Didn't realize that uk mortgages change so often.

It also destroyed pension funds people lost 10's of thousands that was the far bigger short term impact

 

[BrokenWing]

View attachment 16929
I've watched the Springfield Files. How much more evidence do you lot need....

IT'S BRINGING US LOVE, BREAK ITS LEGS!

 

[Vieux Talonneur]

It also destroyed pension funds people lost 10's of thousands that was the far bigger short term impact

In Defined Contribution schemes, yes. In planet Defined Benefit which is now mostly closed legacy schemes, asset size is only part of the equation and, perversely, while the asset values of many took a massive hit the liabilities have moved in such a way that many employers are much closer to the schemes buying out thereby removing what is often their biggest liability from their balance sheet. Go figure.

 

[Bada-Bing!]

The other are NHS consultants, Hunt couldn't just increase the lifetime allowance for just them, so just removed it for everyone instead. No doubt you'll see a a lot of very well off piling a whole lot into their pension unless its reversed by Labour.

 

[Bada-Bing!]

Paris explosion: More than 20 injured after blast

Four of the injured are in a critical state after the blast in the historic Latin Quarter, police say.

www.bbc.co.uk

Looks like a gas explosion.

 

[TRF_Olyy]

Warning homeowners face 20% drop in disposable income

Some 1.4 million mortgage holders will see their disposable income fall by more than 20%, a think tank says.

www.bbc.co.uk

What's 20% of 0?

 

[BrokenWing]

I suppose it goes for indisposable income also.

I've always found food overrated.

 

[The Seeker]

 

[The Seeker]

 

[Which Tyler]

I suppose it goes for indisposable income also.

I've always found food overrated.

Epic post from another board

As someone who works in the market, may I take a moment to rant that reactions to the current mortgage crisis are baffling. Utterly baffling.

The Bank of England, when faced with inflation that was mostly caused by supply-side shocks (plus greedy companies taking the opportunity to massage profits while everyone's resigned to price rises happening), has decided that, while the last 11 times it's raised rates since the start of 2022 have done bog all, the 12th time will be the charm, especially if they do a really big one this time. This is not inflation that is caused by excessive demand in the economy at all, yet the BoE is determined to crush any hint of growth beneath its heels because it needs to be seen to be *doing something*, it's got no other levers, and nobody else is doing anything so they apparently have to.

The Government? They're hoping that either the Bank of England plan will magically work on the 12th time of asking, or that the Invisible Hand of the Free Market will miraculously deal with the problem, and that they won't have to do anything. They're also hoping that no-one pays attention to the fact that they have fed this crisis every step of the way. The average house in the UK cost £170k in 2010, it now costs £290k. Not only did they ignore that creeping increase with all their might, they *fed* it with every bit of intervention thye put in: Help to Buy, Interest-free equity loans, encouraging lenders to provide 95% mortgages, throttling back on social housing, allowing builders to camp on land because the profit'll be higher if they build later, because heavens forfend there even be the possibility that house prices not rise month on month - there's buy to let landlord who expect their returns, don't you know?

And the Opposition? Jesus wept. They've just come out very stridently saying that they have a plan to help the poor beleaguered homeowners and, if they were in Government, they'd be doing things in comparison to the Government's equivocating. It's *great* politics. Top theatre - looks very decisive. But let's take into account that the Bank of England is apparently just going to keep raising interest rates until demand is crushed enough that people stop buying luxuries like food, the economy crashes, and inflation is brought down to 2%. Their whole plan is to make people have less disposable money so they spend less - isn't it counterproductive to make policy that will allow people to have more disposable money?! All that's going to do is result in the same problem 6 months down the line because the BoE have raised the rate 6 more times because they haven't been able to squeeze people enough yet!

And let's not ignore the fact that their "solutions" are specious at best. Allowing mortgagers to extend their term or move onto interest only is great for providing an immediate influx of monthly budget for homeowners, but that means they're reducing their payments by paying less (or none) off their balance each month. What happens when these people hit 70 and they've still got £100k+ of mortgage left because they were allowed to defer it? That's just adding "Banks repossessing family homes from pensioners" to the looming pension crisis (and that's a whole other thing that politicians are pretending is invisible while they **** about with culture war bullshit). It's not a solution - it's kicking the can down the road in a fashion that our Brexit negotiators would be proud of.

It's just woeful. Woeful. There's going to be a horrible recession and we're all properly, properly ******.

Puja

 

[Bada-Bing!]

The days of cheap borrowing are over. We've had it good for too long. This government didn't bother to borrow when interest rates were close to zero and invest in the economy and NHS and instead relied on austerity to tell the electorate that they needed to pay back debts from the 2008 crash. This just compounds the low growth since 2010. And yes Brexit has not helped one bit.

The Governments has a ready made scape goat in the BOE because the only tool at their disposal is to raise interest rates.

And high street banks are happy to pass on these increases to mortgage holders but not to savers.

We live in a world built on debt and credit cards.

 

[BrokenWing]

The Governments has a ready made scape goat in the BOE because the only tool at their disposal is to raise interest rates.

I mean, they are PARTLY to blame aren't they.

If whacking something with a hammer doesn't fix it, the natural conclusion shouldn't be that you haven't whacked it enough.



Unless you're trying to fix Boris.

 

[Amiga500]

If the aim of interest rates is to reduce disposable income such that it reduces demand for goods and reduces inflation that way...

Why does the government not up various taxes (income, corporation etc)?

There is far more fidelity to those in terms of targeting the groups that actually have disposable income versus those struggling to put food on the table. Additionally, there isn't a several year lag on application when folks mortgage terms end.

 

[Bada-Bing!]

I mean, they are PARTLY to blame aren't they.

For not increasing interest rates fast enough?

Why does the government not up various taxes (income, corporation etc)?

To appease the right wing of their party that this government is one of low taxation.

I mean they were relying on growth to make up for paying down the debt but did little to invest to stimulate growth. Only to borrow even more now when interest rates are rising.

 

[BrokenWing]

For not increasing interest rates fast enough?

For raising them at all.

I'm not an expert, but from experts I was listening to when the BOE were first raising them it was fairly obvious that in the particular context of the problem, raising interest rates wasn't the answer.