Oh Darling,
 

Where have we heard that plan before ?! :rolleyes:

I'm now left in no doubt we have a bunch of idiots running the country. I'd hoped prices would fall far enough to allow us first time buyers to have even the smallest of chances to buy. What an ********.

Re: Oh Darling,
 

Why don't they just print some new money off completely....oh..no....that's what they're doing. Balls.

I better get that wheelbarrow out the garage, to start wheeling carts of useless cash around.

Re: Oh Darling,
 

Yep, we definitely have a "sub-prime minister".

The one that got me was the idea of "up to" £2.5k for employers to take on people who have been unemployed for at least 6 months. Note the "up to", as in £1.25 is "up to" £2.5k.

With that incentive (depending on how many strings are attached) what employer is going to take on any unskilled workers who've been unemployed less than 6 months. In other words, all the retail workers from Woolies etc won't stand a hope in hell of getting a similar job for at least 6 months. Bright lot aren't they?

Re: Oh Darling,
 

It's a system that can work. It can also, of course, explode and torpedo the world banking system. I suppose all things considered it might be better not to try it again just now :D But since we're deep in a credit restricted period, some action to get mortgage and business lending moving would be good, I think that's hard to deny.

Re: Oh Darling,
 

But northy, there are far more savers than borrowers, and also a lot of people live in rented accommodation - maybe because it's temporary, maybe because they can't afford to buy, maybe because they don't see a home as an investment - loads of reasons - so why should they, as taxpayers, underwrite other peoples' debt? Why are we creating a system by which we start it all over again, getting ready for potentially another huge loss? Why favour just mortgage holders?

G2D is right I think...

Re: Oh Darling,
 

We're all going to hell in a hand basket, I'm just trying to enjoy the ride before my job runs away and leaves me impoverished. There's not a lot I can do about it either way so why worry?

Re: Oh Darling,
 

Big Foot me old cheese, you have a vote - use it. If everyone just wrung their hands and said 'ain't nothing I can do 'bout it' then nothing would ever change.

You can't build a different world with indifferent people.

...and on the mortgage thing, investment banks see a Government backed mortgage as a different species because it has a good credit rating, and so they start trading them, and fat cats get rich at everyone else's expense. And those that aren't Government backed don't get the same treatment, interest rate might be higher on them because the investment yield is less. Er... haven't we been here before?

Re: Oh Darling,
 

New householders buy new houses, which need built. They buy furniture, TVs, etc etc. Hire solicitors ;) Slowing down house purchasing impacts a lot of other industries.

But mainly, it's a good way for banks to borrow from each other- mortgages are basically a long-term asset, so you use them as security for lending, mortgage the mortgage essentially. It's only a problem when the value of the asset is overestimated. Which is what happened last time, and no doubt would happen again sooner or later.

It's neccesarily not a bad concept, it did work for years. They're not under-writing the mortgages as I understand it, they're underwriting the mortgage bonds. Remember that it's the total stop of inter-bank lending which really kicked things off here, this is potentially a way of securing the inter-bank lending and getting things going again. If it's done right it'd be a good use of money, because underwriting a loan is cheaper than lending the full sum.

(I don't personally think this is a good thing, but it's needed if we want to have a pre-recession economy model again. Personally I think we should be moving on, not rebuilding the failed system so that it can make a small minority richer then collapse again in 2030 and make everyone else poorer, but then I am a commie pinko liberal ;) I think instead of baling out a banking system that's reliant on inter-bank lending, we should have a crack at making one that isn't, so it can't just break in half one afternoon for no particular reason)

I'm not actually arguing in favour of this, just throwing out a counter-argument, I don't really have a good enough grasp of the actual economics to comment on whether it's a good idea. It did work for years but maybe that's just a long mean time to failure rather than a solid system at work.

Re: Oh Darling,
 

No. All it does it reduce the debt by way of mega inflation. It's just promoting more foolish borrowing, and postpone the inevitable housing correction.

Savers NEED to be rewarded, not penalised. The Sub Editor of the times announced last week that he thinks savers should be taxed so heavily that they are forced to spend their money. I've never heard anything so preposterous in all my life.

Re: Oh Darling,
 

I'm worried...is there any chance me and maria will be able to buy a house ever?!?!

:(

G2D - I agree. People who save lots generally save for a reason; retirment, to purchase a house, holidays, other stuff. Why penalise savers? Its our money, if we don't want to spend it then why should we be made to pay for it?

Tempting to just get the cash and stick it in a safe...the goverment can't do anything then