Will we all have to go back to the UK?

[Alan Zoff]

Rightly or wrongly (whatever that means), I suspect we will see increasing support for anti-Euro parties in a lot of countries over the coming months and years which could force the issue concerning the future of the currency. But what that will mean for ex-pats will largely depend - as it does now for many - on where their income is generated.

[PaulT]

[quote user="Cathy"]I see that (whilst I was in hospital under the knife) the President, Van Rompuy, has said that if the euro fails, the E.U. itself will fail.  What then?

Over to you....

[/quote]

Now he has a vested interest in the EU so perhaps a little scare tactics?

Should countries have referenda on staying in the EU? Do people have the in-depth knowledge to make an informed choice - I certainly have not. The various political parties will give their one-sided views instead of an impartial presentation of the facts.

To me essentially the EU is similar to the US (perhaps a US bod will put me right if I am incorrect). There States have tax raising powers and set their own taxes such as purchase tax etc. There are also Federal Laws and also State Laws, such as Californian Laws on vehicle pollution (I belong to  forum for a vehicle and a large number of the members are in the US and the fears of some of their State adopting the laws of other States is high). The US seems to survive so why not the EU - but perhaps with modifications.

The one problem there does seem to be is that the EU Parliament does not understand restraint just how to squander money. 

Paul

[Sprogster]

PaulT, as someone with close US connections, I can tell you that the EU is not similar to the US at all, as unlike the US the EU does not have a common language, culture and national identity, which makes a major difference to issues like labour mobility.

[Frederick]

Paul wrote : "The one problem there does seem to be is that the EU Parliament does not understand restraint just how to squander money. "

It appears the Irish Prime Minister for running his little country believed he should take in salery  more than the U K Prime Minister.... and Obama ... And now  he will be taking it on borrowed money .

[baypond]

[quote user="Théière"]

[quote user="baypond"]Then everyone can blame bankers again

[/quote]

Yep too frequently we hear of cowboy tradesmen who "ruin" some peoples lives whilst these supposedly qualified professionals have an effect on everyone's lives. Stone them! Prisons were invented for debtors so as the bankers and economists are to blame and caused the countries debts then lock them up with a bucket to crap in (shared)

[/quote]

Erm thanks for that comment - I am a banker.

Unfortunately we live in a society that has NOT taught us that a loan is basically a tax on future earnings. As much as banks lent frivilously, people borrowed without understanding the possible consequences. Bankers are not solely to blame, it is plainly too simplistic to suggest that.

Giles

[Russethouse]

There used to be a time when borrowings were limited to a set proportion of your income... once the bank let those controls go out of the window the rot started !

[NormanH]

I thought they still were (in France at any rate).

Last time I asked for a loan the calculation was that my total repayments  of all my credits couldn't be more than 30% of my income.

[Gluestick]

Quite correct, Norman.

In point of fact, a French financial institution can lend more; however, if they exceed the recommended statutory lending limit and the borrower defaults, then the lender is unable to recover more than the lending limit.

Thus they tend not to exceed this!

[pachapapa]

[quote user="baypond"][quote user="Théière"]

[quote user="baypond"]Then everyone can blame bankers again
[/quote]

Yep too frequently we hear of cowboy tradesmen who "ruin" some peoples lives whilst these supposedly qualified professionals have an effect on everyone's lives. Stone them! Prisons were invented for debtors so as the bankers and economists are to blame and caused the countries debts then lock them up with a bucket to crap in (shared)

[/quote]
Erm thanks for that comment - I am a banker.
Unfortunately we live in a society that has NOT taught us that a loan is basically a tax on future earnings. As much as banks lent frivilously, people borrowed without understanding the possible consequences. Bankers are not solely to blame, it is plainly too simplistic to suggest that.

Giles
[/quote]

I am a simple mining engineer and would never do anything frivOlous.[:)]

I have accordingly always thought it best to treat the conventional wisdom of the modigliani-miller logic with a " soupçon" of parsimonious caution.

[Gluestick]

[quote user="baypond"][quote user="Théière"]

[quote user="baypond"]Then everyone can blame bankers again

[/quote]

Yep too frequently we hear of cowboy tradesmen who "ruin" some peoples lives whilst these supposedly qualified professionals have an effect on everyone's lives. Stone them! Prisons were invented for debtors so as the bankers and economists are to blame and caused the countries debts then lock them up with a bucket to crap in (shared)

[/quote]

Erm thanks for that comment - I am a banker.

Unfortunately we live in a society that has NOT taught us that a loan is basically a tax on future earnings. As much as banks lent frivilously, people borrowed without understanding the possible consequences. Bankers are not solely to blame, it is plainly too simplistic to suggest that.

Giles

[/quote]

Hmm...................Nice cop out!

This is rather like fag companies denying any culpability for health problems related to cigarette smoking: booze companies denying any responsibility for alcoholism and binge drinking and perhaps, Union Carbide denying any responsibility for Bhopal.

After all the people who worked in the UC plant didn't have to: and those living around it could have moved.

Etc.

Unfortunately, not everyone in the World possesses and more critically, exercises, discretion, wisdom and judgement in their consuming habits.

The reality, particularly in Britain, is that once Eddy George and the MPC drove down base rates and encouraged massive lending, to stave off an incipient economic recession, the world and his wife were encouraged to borrow like the prodigal son.

Banks and mortgage providers threw off the shackles of probity and competed with each other to expand safe lending parameters.

The unsecured consumer credit market went mad: as it did in the early 1970s and mid 1980s.

Hot flushes of consumer credit money from the USA mainly, besieged the UK: new cards and loan companies and credit card operators deluged the UK economy.

The retail finance industry blitzed the consumer with offers daily for "cheap" loans, new credit cards and the rest: those sitting on a paper asset which had increased ridiculously  - their house - were encouraged to engage in MEWING (Mortgage Equity Withdrawal): and buy boats, cruises and holiday homes.

Unfortunately for Britain, NuLab took away the regulatory powers of the Bank of England and vested them in a new, untried, and extremely naive agency called the FSA.

A whole load of grief could have been prevented and ought to have been prevented if the B of E had have still enjoyed the power to invoke such as the Corset (Special Deposits).

Eddy George admitted his culpability in March 2007 in evidence to the Treasury Select Committee.

See here:

Unfortunately for Britain, Blair and Brown promoted the myth of Brown's much vaunted "Miracle Economy" and instead of actually earning their collective keep, allowed the synthetic boom to build: aided and abetted by bankers abusing Fractional Reserve Lending to the hilt.

The Sub Prime Crash and the abuse of evermore arcane derivative products was centred in the USA and its residential mortgage lending market: not Britain. Unfortunately, far too many British institutions were involved in the fun.

And such as Northern Rock were operating a totally gung ho growth strategy built on borrowing short term from the global interbank market and securitising the resultant debt obligations, from a burgeoning mortgage book and ridiculously under-capitalised right through.

What were the FSA and the auditors doing throughout?

And in many case British banks having held out the begging bowl to government for vast chunks of our taxes, they continue as before and pay ridiculous bonuses, which are, in themselves, a slap in the face to the British taxpayer!

And just to make things even better, SME (Small and Medium Sized Enterprises) in the UK, who create circa 49% of private sector employment and circa 50% of GDP, cannot borrow any money, much: and in many cases are pressured to redeem extant overdrafts!

The day I read a British bank has taken its cojones in its hand and lent risk money on Technology Start-Ups and actually helped to build a forward economic base and employment, rather than wheeling and dealing on what already exists (And adding cost layers at every turn) and, inevitably, destroying employment and saver's value, then I might have some respect for banks and bankers.

I'm not holding my breath, meantime!

[Www]

[Sprogster]

In response to the OP, if statistics are to be believed, most seem to do anyway!

[woolybanana]

It is not just money that gets 'em going back, but the dreaded word 'grandchildren' which act like some sort of a magnet. Can't see it myself.

[Richard51]

[quote user="Gluestick"]

Hmm...................Nice cop out!

This is rather like fag companies denying any culpability for health problems related to cigarette smoking: booze companies denying any responsibility for alcoholism and binge drinking and perhaps, Union Carbide denying any responsibility for Bhopal.

[/quote]

Of course the cigarette companies didn't force the idiots to put the things in their mouths and puff away - the idiots themselves did that as they thought it would 'make them look cool and sophisticated'.  Kinda like the idiots that knowingly borrowed way more than they could afford, often lying about their earnings, to buy the smart pad, latest car, TV, iPlayer etc. that would 'make them look cool and sophisticated'.  Clearly we all still need a nanny state...to mother the poor little sods that now can't pay off their debt...and rap the knuckles of the big bully banks.  Kinda like the parents of spoiled brats who indulge them by forever paying off their debts for them.

Mrs R51

[Gluestick]

So you clearly believe then, Mrs Dick, that cigarette advertising ought not to have been severely curtailed?

And pubs should be able to sell to anyone of any age?

And the pathetically lax regulations on rates charged for lending and lending controls exercised via such as Money Brokers licenses and etc ought not to ever have been instituted?

Libertarianism and zero state intervention?

Caveat Emptor in its widest possible ethos ought to apply?

Perhaps we could also repeal the laws that, for example, prevented vendors of various goods using cocaine (Coca Cola and King Edward cigars as two examples) in their products?

Abandon all this nonsense about consumer protection laws and trading standards officers and weights and measures.

All a waste of time and employs simply oodles of civil servants.

Problem is, now where does a morally conscious society draw its lines?

I fear the core problem, for me, with your perspective is whilst I do, of course agree that many consumers and debt obligors in the 1980s and 2000s were hugely stupid and quite irresponsible, many were not and relied upon their mortgage adviser for, well advice: as is required by law.

And perhaps worse, savers rather than debtors have been right royally screwed!

[Alan Zoff]

No, none of that nonsense is necessary, just so long as I am protected, of course.

[Gluestick]

[quote user="Alan Zoff"]No, none of that nonsense is necessary, just so long as I am protected, of course.[/quote]

Absolutely right, Alan.

As another example what about Endowment Mortgages: were those who scrambled to take them "Stupid and irresponsible"? And people we should have absolutely zero sympathy with and for?

How about Equitable Life's pensions? No one forced the investors to go there: they could have gone to say, the Pru.

And how about those (Including many local authority treasurers) who placed their savings in Icelandic banks?

[Richard51]

Most of the above were driven by greed - the prospect of a nice fat lump sum on maturity of an endowment mortgage, the hoards of NHS etc idiots who traded in their public sector pensions for a promised bigger private pension, the much bigger returns offered by the Icesave.  I don't think any of them should have been given compensation. If you want to take a chance for the bigger money then it carries a risk.  If you loose out - tough.  Why should everyone else have to pick up the tab?

Mrs R51

If the government really wants to save people from themselves, maybe introducing the subject of basic finance and budgeting into the school curriculum would be a better option?

[Richard51]

Just come into this.

Gluestick - I can't see the logic in your deductions from the comments made by Mrs R5. Greedy consumers or people wanting to make a fast buck by say investing in the property market (buying a house they can't afford) must be equally, if not more, to blame.

Mr R51

NB not just defending Mrs51

[NickP]

[quote user="Richard51"]Most of the above were driven by greed - the prospect of a nice fat lump sum on maturity of an endowment mortgage,  If you loose out - tough.  Why should everyone else have to pick up the tab?

Mrs R51

[/quote]

Not true, Abbey National made it a condition of giving us a mortgage that we took out an endowment .

[Gluestick]

The concept of "A nice fat sum" was always an illusion: excepting on the original Endowment Mortgages.

These were usually written for professionals and the successful self-employed/company director; and the core concept was that in those far off days of relative financial probity Assurance carried a tax benefit: thus the Whole Life element of an endowment earned a tax deduction.

The downside was an original Endowment Mortgage was much more expensive, over time, than a repayment mortgage.

The modern form of an Endowment Mortgage was written on the projected value of the investment in the endowment, maturing, with what are called annual and reversionary bonuses, meeting and hopefully slightly exceeding the capital sum outstanding on the mortgage on maturity.

In theory..................

Endowment Mortgages as Nick stated were pressure sold: and assurance companies piled into the market.

Indeed, this was around the time assurance and investments industry was heavily regulated and new groups (Which became IFAs) were tasked by major assurance companies to pressure sell their products: particularly Endowment Mortgages.

Estate agents also piled in solely because in courting outlets, the assurance companies paid huge commissions, up front, on the expected life of the mortgage product: and even lent interest free, large capital sums to estate agents.

My practice acted in advising various groups of ethical insurance, assurance and investments groups and particularly for a multi-partner estate agency in the late 1980s and early 1990s: and we had to unwind the "clawbacks" (Advance commissions) and the repayment of the capital sums advanced.

It was truly a blood bath: and far from ethical practice on the part of the pressure selling assurance companies.

Clearly, regulations is essential IMHO.

The alternative, as we now see, is that everyone suffers for the greed, venality and lack of probity of financial institutions: and the latent cupidity of the consumer.

[Quillan]

Its greed on two parts, lender and borrower. One very large UK bank is about to be taken to court for miss-selling loans, Mrs 'Q' has spent the last six months transcribing the recorded phone conversations between the bank and the borrowers and quite frankly you wouldn't believe the 'strokes' this bank pulled to lend money to people that did not meet its criteria to lend money too. I have listened to some of the phone conversations, people owing £20k already trying to borrow more money, the bank guy says that he has no record of the debt so if the borrower does not tell him/her they won't add it in to the calculation to access if the borrower can afford the repayments on the new loan and so it goes on. That's just one example of what they get up to. This is just one major UK high street bank that she is working on, the others have been doing much the same, it's an absolute scandal. The problem was that the banks used contract staff who were on commission to sell these loans so anything goes to get the loans signed up. So if you want an inside tip, if you have any shares in a bank that uses a black horse sell your shares before the end of this year. In fact if you have any shares in any UK high street bank sell them.

[Richard51]

NickP - then why not go elsewhere.

Gluestick - So now we are blaming the salesmen (women) rather than the bankers. That I agree with - but remember the buyer can always say no.

Mr R51

[Richard51]

Would have added that I agree Quillan.

I'm slow at typing, especially after a cigarette (outside in the freezing cold) and vino.

Mr R51

[NickP]

[quote user="Richard51"]NickP - then why not go elsewhere.

Mr R51
[/quote]

Because at the time I knew no better and believed what the "professionals" told me.

[Quillan]

[quote user="NickP"]

[quote user="Richard51"]NickP - then why not go elsewhere.

Mr R51
[/quote]

Because at the time I knew no better and believed what the "professionals" told me.

[/quote]

Funny how 'fad's' change, when I got a mortgage with them it was pension mortgages they were pushing and I bought in to the 'professional person', I was very naive at the time. The pension mortgage was just like the endowment mortgage, a total rip off. The pension, without even using it to pay back the loan, is now worth nothing or not far off.