UK faces second credit crunch

[morganist]

The UK faces a second credit crunch.

http://uk.finance.yahoo.com/news/br...-official-survey-warns-tele-173033c7a3b7.html

I have been expecting this for a while. However rather than domestic causes that this article indicates I thought it would be due to the international issues. The alt a and option arm mortgages are expected to default over the next two years at high levels. This was my expectation for the shortage. I now worries me that the domestic explanations are in addition to this.

Any thoughts. Any suggestions for what the central bank should do if a similar position arises again?

 

[Sanaz3]

Quote from morganist:



Any thoughts. Any suggestions for what the central bank should do if a similar position arises again?

They should just abolish the money/barter system once and for all. Also all those people "working" in the financial districts of every big city should get off their butts and do something useful to fellow humans. Instead of just staring at multiple monitors and keep clicking the mouse: Buy, sell, short, cover...

Yours truly,

-A concerned citizen of planet Earth

 

[QuikrRetirement]

Quote from Sanaz3:

They should just abolish the money/barter system once and for all. Also all those people "working" in the financial districts of every big city should get off their butts and do something useful to fellow humans. Instead of just staring at multiple monitors and keep clicking the mouse: Buy, sell, short, cover...

Yours truly,

-A concerned citizen of planet Earth

pls keep your bizarre comments to yourself and stay in the other thread

 

[jem]

Quote from morganist:

The UK faces a second credit crunch.

http://uk.finance.yahoo.com/news/br...-official-survey-warns-tele-173033c7a3b7.html

I have been expecting this for a while. However rather than domestic causes that this article indicates I thought it would be due to the international issues. The alt a and option arm mortgages are expected to default over the next two years at high levels. This was my expectation for the shortage. I now worries me that the domestic explanations are in addition to this.

Any thoughts. Any suggestions for what the central bank should do if a similar position arises again?

1. tough question what is an appropriate goal of UK's central bank?

2. are they a privately held bank like the US. Fed or are they owned by the people of England. ?

3. Is it better to risk a quick crash and then a fresh start or is better to risk a 20 year stagnation?

 

[morganist]

Quote from jem:

1. tough question what is an appropriate goal of UK's central bank?

2. are they a privately held bank like the US. Fed or are they owned by the people of England. ?

3. Is it better to risk a quick crash and then a fresh start or is better to risk a 20 year stagnation?

It is owned by the state in theory. I issue relates to whether they should lend to a bank that faces a shortfall unlike last time when they left it to the government.

 

[jem]

I do suspect that there as here there has been a crazy mis allocation of resources into real estate in England... but I realize I really do not know enough to give a good answer.

In the end all service and financial economies have to work off the excess they created. How they work it off will be a tug of war between the invisible hand, bankers and politicians.