OUCH

[AnOther]

£ JUST PLUMMETED TO 1.22 !!!!

[allanb]

TRIPS TO UK NOW EVEN CHEAPER !!!

[parsnips]

[quote user="ErnieY"]£ JUST PLUMMETED TO 1.22 !!!!

[/quote]

11:40; Now 1.238!--- We really must try to stop looking at this all the time, for the sake of our nerves!!

[Bugsy]

It was 1.30 just two days ago then dear Gorgon opens his mouth and down it goes....................[:(]

edit: 1.24 now and hopefully climbing......................[Www]

[Jay]

Gordon Plonker Brown needs to keep his big trap shut. Everytime he opens it out comes doom and gloom and the markets react accordingly. The exchange rate actually dropped below 1.22 for a while. On the brighter side oil prices have dropped again so let's hope fuel prices follow.

[Jazzer]

How long will the oil price remain low? OPEC have just announced a cut in priduction  in order to obtain a higer price.I am about to order oil, see that Brent Crude is at a 4 year low, and yet 1000 litres will cost me approx €150 extra. Can't quite follow the logic.

[parsnips]

[quote user="Jay"]Gordon Plonker Brown needs to keep his big trap shut. Everytime he opens it out comes doom and gloom and the markets react accordingly. The exchange rate actually dropped below 1.22 for a while. On the brighter side oil prices have dropped again so let's hope fuel prices follow.

[/quote]

While I have no love for Gordon P.Brown, I must say I think the present drop in the £ is down to remarks made by Mervyn King, Gov. of B.O.E.

[JMB]

Brent spot is trading at $59.67. Wheat is down maybe with oil prices down wheat will be there to eat not to pour into vehicles.

[allanb]

Jay wrote: "Gordon Plonker Brown needs to keep his big trap shut. Everytime he opens it out comes doom and gloom and the markets react accordingly."

You apparently don't think highly of Mr Brown's observations; I don't either. He's nothing but a politician; why do you imagine that the markets pay any more attention to him than we do?

[Bugsy]

[quote user="allanb"]Jay wrote: "Gordon Plonker Brown needs to keep his big trap shut. Everytime he opens it out comes doom and gloom and the markets react accordingly."

You apparently don't think highly of Mr Brown's observations; I don't either. He's nothing but a politician; why do you imagine that the markets pay any more attention to him than we do?[/quote]

Perhaps its just coincidence the the very day Gorgon mentions the 'R' word, the value of the pound dropped dramatically.

Not !!!

[Frederick]

I suspect its a case with the price of fuel that when it was at its highest ... it was seen that we paid for it without taking to the streets and  manning the barracades...  So.... the producers will stop pumping  as they want to keep the price up ....and ...Gordon will start up the fuel tax rises again and keep putting a couple of pence a litre on...they know we are only going to moan about it ...and then pay up !

[Gastines]

I still can't grasp how the whole situation has got as bad as it is.Apparently started by Sub-Prime something in USA.The question being ,where are all those USofA people  living who were in those thousands of boarded up houses? As a house in the States seems to cost a fraction of a house in UK,there spending power is supposed to be better,judging by the size of some of them,[the people not the houses] how come that so many seem to have got in arrears all at the same time?

There seems to be absolutely nothing us mere mortals can do,that Gordon,Mervyn plus Lord Mandy can't bu--er up.

Anyway ,I must pay my Contributions and accept my fate.

Regards.

[united]

The roots of this crisis lie in bad Government policies, stupid laws, and ineffectual regulators.

Back in the days of President Carter in the US a law was passed called the Community Reinvestment Act which forced banks including Fanny Mae and Freddie Mac to give loans out to low credit, no hope families. Sensible bank lending policies were called racist and discriminatory.

More recently, President Clinton added further teeth to that legislation, and banks were judged on how much they gave away in these NINJA loans (no income, no job, or assets). Legislation by Democrats also created ACORN (the Association of Community Organisations for Reform Now). ACORN, backed by this law, were activists intimidating lenders judged not to be giving sufficient loans to low credit, no hope families (sub prime). In the late 1990s, a leading light of ACORN was Barack Obama.

Bad as that sounds, it gets worse. Following the collapse of Enron, Western Governments forced through new accounting practices known as mark to market. Under this directive Banks must base their profits not on how much income they expect to receive in future, but on how much money they can raise immediately if they sold all their loans in the marketplace at the best price they could fetch at the time. In the current wildly volatile conditions of the last 12 months, it’s estimated this artificial accounting method has contributed 70% to the current crisis. Currently, banks are forced to evaluate their loan books on a fire sale basis. This leads to a spiral of credit unworthiness driving loan book values down close to zero. Hence the run on the Banks, their shares, leading to the present crisis.

It gets even worse. It’s widely reported the $700 billion bail out is about US taxpayers saving the skins of greedy bankers and Wall Street fat cats. But it’s far from that. One of the world’s most respected Bond managers, Bill Gross of PIMCO, makes it clear it’s actually a great deal for the US taxpayer. The plan is to buy up the loan books from Banks, freeing up liquidity and allowing the economy to grow again. Because the US taxpayers can buy at significant discount currently, he’s estimated over the next two years taxpayers could earn, including income and profits, somewhere in the region of $200 billion. I think the same will be true in the UK the Government(or us!) will make big profits from the equity and preference shares they will have in RBS & LLoyds TSB

[parsnips]

Hear,Hear, United,

          I have no great respect for bankers, but I have been getting a bit fed up with all the ill-informed carping and sniping at the banks when ,as usual, it is the economically illiterate, populist, P.C., politicians who are to blame--and now have the nerve to present themselves as the saviours of mankind while they try ,at other peoples' expense, to dig themselves out of the s**t-heap they themselves created!

[Gastines]

Thankyou UNITED,even I can understand the situation a little clearer after your response.

Regards.

[AnOther]

[quote user="Jazzer"]How long will the oil price remain low? OPEC have just announced a cut in priduction  in order to obtain a higer price.I am about to order oil, see that Brent Crude is at a 4 year low, and yet 1000 litres will cost me approx €150 extra. Can't quite follow the logic.[/quote]Unfortunately the drop in the price of oil has been largely negated by the drop of the £ against the $ which of course oil is priced in.

[quote user="united"]The roots of this crisis lie in bad Government policies, stupid laws, and ineffectual regulators.[/quote]Don't forget the feckless spend now pay never public.

[quote user="united"]he’s estimated over the next two years taxpayers could earn,

including income and profits, somewhere in the region of $200 billion.

I think the same will be true in the UK the Government(or us!) will

make big profits from the equity and preference shares they will have

in RBS & LLoyds TS[/quote]A nice little warchest with which to bribe the gullible electorate into voting for them again [:'(]

[allanb]

United wrote: "Following the collapse of Enron, Western Governments forced through new accounting practices known as mark to market."

You got that wrong. The mark-to-market idea goes back a long time before Enron; one of the accounting sins that Enron committed was to misuse the mark-to-market principle to hide losses and create fictitious gains.

In any case, I think you're being much too nice to the bankers. I agree with what you say about the faults of government, but the banks surely made their contribution to the problem, e.g. by buying bundles of sub-prime loans and apparently overlooking the fact that "sub-prime" means "risky".

[UlsterRugby1999]

To assume that someone would come on to this forum and deliver an open minded and fair view of the current financial crisis would, of course, be Utopian. United delivers one of the worst cases of one sideness I have ever seen. As allanb and ErnieY have already exposed glarring weakness or inaccuracies in United's delivery.

The banks, with whom I have had very close relationships over a 25 year period in Financial Services, have to a very large degree, been allowed to run ahead virtually unchecked. The decisions to lend were, generally, based on ability to repay, sufficient assets to secure the loan, credit worthiness and ultimately the earning potential for the bank, the individual and the shareholders. It is, IMHO, this last aspect which (as in any equivalent situation) produces the weakness and greed which we all have witnessed over the past 10 - 15 years. The shareholder is king and is the ultimate driver of banking operation especially when you consider how little regulation (either direct or self) there has actually been in the banking world.

Yes government policies have influence but I feel that the shareholders have as much a responsibility for the current fiasco than your Prime Minister.

[united]

Well Ulsterrugby I wonder if you decide that anything you disagree with is not open minded or fair even if its true.

I can trump your 25 years in Financial Services by some margin. You say the banks have been allowed to run ahead unchecked this is a regulation issue so I take it you agree with my first point about ineffectual regulators .

Another  point you are make is essentially a micro point lending at an individual bank level. This has been impacted on a number of fronts by the points I made. The borrower faces a downturn and has reduced ability or confidence in the repayment. The bank because of the erosion of its asset quality and the degredation of its capital ratio reviews its past decisions in the light of the current situation and it becomes a vicious spiral. On top of that banks not lending to each other compounds the problem.

You say shareholders have as much responsibility well that pretty much all of us as pension funds and income unit trusts are significant holders of  bank stock.

My reponse was to the question raised by Gastines, you disagree that is the nature of fora such as this one......but it does not mean you are right!

[Gastines]

Interesting, very interesting but where are all the ex-homeowners living now?Is it too simple an answer for the local council to take over the REMAINING debt on the property,aquire ownership and rent it back to the occupants.Obviously the rent would be deducted at source from wage or benefit. I presume someone is still responsible for housing them? I note that in UKsville ,the local council house the lucky ones in £ 1MILLION+ houses and pay for all the extras. Why don't they house these parasites  in areas of cheap housing .The amount given to them in benefits might even help the local shops.

Regards.

[Graham & Brenda]

Despite having spent all my working life in banking, I have to say that the banks have lent much too freely. I fail to understand the sense in providing mortgages without a deposit being necessary, let alone mortgages for more than 100% of the property value. To me, that is tantamount to pyramid selling - which I believe is illegal. Sure enough the almost inevitable collapse has followed. The situation is not helped by people who borrow and/or remortgage to the hilt, ignoring the fact that interest rates may rise, making their repayments unafordable. Again, it has to be said that they couldn't have done so if the banks had had tighter lending criteria.