Credit Crunch Smoke Screen

[buttercup]

Having worked with the markets for a long time (not anymore) I honestly think that the Credit Crunch is providing all the institutions with the perfect smoke screen.
They can withdraw all the rubbish products (125% mtg) they have been trying to get rid of for years but could not
They can hord their money & pull the shutters up whilst they have a facewash & Bingo they will introduce a lots of new products in say 6-12 months with new names (Same old products)and by then should have lots of money to start lending again.
With the government saying they can swop mortgage debt for gove bonds should start the ball rolling.
Lets hope the banks have learnt from this

[janderson]

Hi

I do not think they will learn, the banking industry treat us the general public like village idiots. They soak us whenever possible and kick us into the long grass when they have had all they can get. We were with a well known high street bank for years and they were very helpful, they sold us insurance with a consolidation loan insisting it was compulsary. Later when things got difficult they could not help. The member of staff who had been there years and had supported our accounts would not even come out of their office to tell us, they sent a minion to say "there is nothing we can do to help you" got to the CAB. Tha bank moved money out of our accounts to service debt, which then forced the account over the overdraft limit and then stuck us with a charge. The list goes on. I think you are right when they have finished conning the government they will be back to soak the customers some more. My advice is, show no loyalty other than to yourself and family. A selfish attitude I know but one I believe the industry lives to as their code.

[animaleyes76]

and when it all goes wrong, they will ask the government to bail out their losses by converting their mortgages to government backed bonds so that they no longer have the risk and can start doing the saem again.

it's scandalous

http://news.bbc.co.uk/1/hi/business/7355754.stm

[kallis3]

Been there, done that!

We were with HSBC for years, becoming customers of Midland Bank originally. They were great then when I had problems, but they are now just a big corporation who care nothing about us little ants at the bottom of the pile.

When we first started having problems we approached them as most of our money seemed to be going towards the overdraft (we were over our limit). They refused to help, but suggested that we take out an additonal loan with our mortgage company in order to put our account back in order. All they were interested in was us repaying their loan.

We did what they said and took out a further loan. We did not pay them out, but did settle some of our loans and cards and replaced our car. Result was that we ended up doubling the term of our remaining mortgage in order to keep the repayments down, were still in deep doo doo with the bank and managed to run up more debts afterwards.

What we should have done was admitted defeat then instead of putting ourselves further in debt. HSBC was only looking out for itself, as are all the banks.

[jpj]

The scary thing is the banks are looking at swapping credit card debt for government secured bonds too!! and when the credit cards go belly up it will be the good old tax payer who will foot the bill again... Its now the government that is lending foolishly (after slagging the banks off for doing the same!) Still its not their money,it ours,so that doesnt matter!!
The papers today are saying the credit crunch might last 18 months, not 6-12....hold onto your hats folks!! )

[kallis3]

Doesn't surprise me. Just annoys me that us poor tax payers have to foot the bill every time. Keep watching the housing market go belly up as well. Went through this the last time as we bought at the end of the boom and ended up in negative equity straight away. That shouldn't happen this time, but as we have a mortgage and a secured loan on the house we have about 30,000 equity at present (will need to refinance in year 4 if our IVA's go through) and I can see that going down rather than up in the short term.

[janderson]

Hi All

it is not the government that is to blame here, we are in the fallout from America on this one. The banking system in the UK is not geared the same way so to reduce pressure on the system the only way is the bond issue. In the US it is the federal reserve that can step in. In some respects the US system is better geared for intervention. The UK system is all about the old laise faire capitalist model that has left us all in the mess we are now in. I do get furious when people on TV say it is our fault for borrowing and spending too much. I saw last night the grumpy old men repeat on Tv. One of the grumpys was spouting on about this and saying it is all our fault. Typical P***T attitude. As you can see i too am a grumpy old G*t

[kallis3]

It is no wonder that people get into trouble financially when we get bombarded with tv adverts and junk mail inviting us to apply for loans etc and basically guaranteeing acceptance in some cases. The same goes when you go shopping. At one point in the not too distant past you could go down the High Street and come away with loads of store cards and potentially thousands to spend, perhaps you still can.
Whilst I accept that we should be strong and say no, it is hard not to be drawn into that 10% off when you first use the card whilst promising to yourself that you will pay it off when you get the bill.
Years ago credit was much better regulated, indeed the first car I ever bought, I had to have my father as a guarantor as I had no credit history. I was 19 at the time. My daughter at 18 went out and bought herself a laptop. She had no credit history at all, and they were quite happy for her to take out this loan. What hope do the younger generation have when money is being thrown at them?

[Robbiecat]

Kallis3, I believe it was Melanie who conducted an experiment to see how much credit she could get in one afternoon shopping. IIRC, she managed to come away with £85,000 worth of credit in storecards and credit cards!

How scary is that!!?? [:0]

[rollercoasterride]

I'm really going to rock the boat here, but whilst I agree that the banks are to blaim in some way for our situations, I personally shoulder most of the blaim with my situation myself. I should have been stronger and said no. I should have lived within my means and not wanted everything new from day 1, all the latest gadgets when they came out etc. I cannot and will not hold the banks and financial institutions responsible for my errors.
I have probably upset and angered a lot of people by saying this, but I don't apologise cos it's the way I feel and my own personal point of view. I sometimes think we live in a "who can I blaim" society instead of putting our hands up and admitting we were wrong.

[kallis3]

I quite agree, we should be stronger and say no and live within our means, an awful lot of people do. Unfortunately I like those expensive new gadgets and foreign holidays and I have never been good at saving. Before credit cards and huge loans for any purpose were freely available to anyone, I managed to live within my means.

My hubbie and I do accept that we should not be in this position, but I also think todays free and easy 'I want it now' should shoulder some of the blame

[animaleyes76]

No argument to that here.

How do you rack 38k and not even hardly have anything to show for it?

Mad..

Won't happen ever again i can tell you lol
[:)]

[kallis3]

Too right! I had always managed to sort myself out before somehow (more debt!) but this time I hit a brick wall. I do not want to go through the worry again and having to scrimp and save and fill in online surveys to get vouchers to give out as presents 'cos I can't afford anything else. I can see a glimmer of light and I intend to work towards it and then live within my means.

Been there, done it and don't want anymore T shirts!

[cat 1]

I totally agree with Rollercoasteride and Kallis.I should have exhibited far more self control, but more importantly I should not have buried my head for so long.
Whilst burying my head I took out several more credit cards.This is the bit that I get angry about alot...someone should have said no sooner.And when I was asking for an increase in my cridit limit and getting it, whilst only just managing minimum payment (often using another crodit card to achieve this)
This is not responsible lending and I was not acting rationally.So a combination of things lead to my current situation.Initially however, I had all the choices and all the control.Cat

[kallis3]

Hi Cat1,

I have done exactly the same thing. Between me any my hubbie we had five credit cards on the go, three of them with £10,000 limits! Managed to pay them off with a loan, then ran two of them up again! I was even going to one bank, withdrawing money on my credit card from the hole in the wall, then going into the same bank and paying my credit card bill.

What made things worse was that I was keeping all this from my husband. When he did find out (on my birthday!) when both Barclaycard and Lombard Direct called, it made him ill as he thought we were managing. I felt awful and we sat down and talked about it.

It is about time there was more regulation about unsecured loans and credit cards which would make it more difficult for people to get them.

People (myself included) can be very weak willed and it is very tempting to be able to go out spending, after all, it's only plastic isn't it? Not like using real money (until the bills come in)