Other than the traumatic Northern Rock collapse wiping out my nestegg, I'm not affected too badly in that I don't have a mortgage or any credit card/overdraft debts. Obviously the cost of living going up is going to affect me, but this will be largely balanced by house prices going down the toilet meaning I will be able to get out of the rental trap three years or so down the line. (Apologies to anyone who bought a house in the last couple of years)
Obviously none of my business but I thought all the Northern Rock deposits were safe since the government stepped in to guarantee them? I wasn't aware anyone actually lost their money. Perhaps worth your checking into it? (sorry if a sensitive topic--I'd just hate to think of anyone missing out on their own money)
"Northern Rock has withdrawn a number of savings deals to new customers to ensure it does not abuse any competitive advantage.
The nationalised bank is one of few financial institutions that has a 100% guarantee for the safety of customers' savings, as it is government-backed."
I think the US bail out is a good idea, because broadly speaking I don't have to pay for it. I know there is the whole 'moral hazard' argument, which normally I would completely support. But when exercising that involves a general run on US banks and all round economic meltdown I think it can be put to one side. I'm pretty sure the worlds regulators will be on this particular case fairly strongly in years to come, assuming civilisation doesn't break down to Mad Max levels.
As for which things I understand. I think I understand them, but its probably superficial. Although that would appear to put me ahead of many of the people trading in the things....
I ma slightly surprised by the results from the finical instruments. CDOs are the really complex one, where's LABS is probably the simplest and the one most people are actually to have come in contact with. (basically you borrow money and put up an asset as security against the debt or put it another way a mortgage (of course you can put up other assets). The leveraged version is slightly more complexed, but runs on the idea you buy a 100k house you borrow 90k, you sell for 110 you have doubled your money since you only had 10k staked.
That's easy to explain. I'm familiar with what you described, but haven't heard it described in the terms in the poll. Whereas everyone has heard of CDOs by now! :o)
I suspect I would be aware of, or at least understand if explained, most of the things you listed. But I answered based on the phrases I recognised off the top of my head.
I'm affected to the extent that one of my credit cards just had its limit cut by 90% to about £700. But as a) I only use that one for amazon and b) my other Mastercard still has a stupidly large credit limit, as does my Visa, I'm really not that fussed. It's at times like this that I'm very happy to be a government employee. During boom years it's depressing, though.
One major advantage of the crunch is that it's easier to find somewhere to sit in a City pub of an evening.
it is not a surprise with credit drying up, that if do not use the credit on the credit card the banks are going to withdraw and place it with someone who will use it/make them profits.
It's a bit peculiar that the size of the thing is so vast, without anyone actually defining what it will be used for and where. It is in essence the world's largest ever blank cheque.
I had an odd thought that perhaps the Republican party has accepted that they are going to lose in November and decided to thourghly shaft the US economy before the Democrats take over.
It's amusing that the deal has been blocked by the Republicans. The deal does appear to be that the us government will buy all the bad debts from the banks which will pretty much bancrupt the US government. If i were the chinese i'd be asking for the billions they lent the us back asap before the whole country goes into administration :)
Well another interesting analysis is that China is sitting on a big old pile of cash, and is pretty much immune from the current problem (at least until the retail downturn feeds through to thier manufacturing). In fact I think they have enough money to essentially buy the entire US and UK economies if they chose to, and with the current desperation for free cash, they probbaly have the opportunity.
On my answer to the first question, it hasn't affected me yet, but if government spending is cut back on a large scale - as it will be: even if everything immediately and magically sorted itself right now, the corporations tax take is going to be vastly smaller this year, and that's just the start - then HE can fully expect to get shafted.
Well the government appear to be the last people spending, so if they stopped it could be pretty bad. Worryingly the Tories have gone back to saying they will cut spending...
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"Northern Rock has withdrawn a number of savings deals to new customers to ensure it does not abuse any competitive advantage.
The nationalised bank is one of few financial institutions that has a 100% guarantee for the safety of customers' savings, as it is government-backed."
http://news.bbc.co.uk/1/hi/business/7647914.stm
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I think the US bail out is a good idea, because broadly speaking I don't have to pay for it. I know there is the whole 'moral hazard' argument, which normally I would completely support. But when exercising that involves a general run on US banks and all round economic meltdown I think it can be put to one side. I'm pretty sure the worlds regulators will be on this particular case fairly strongly in years to come, assuming civilisation doesn't break down to Mad Max levels.
As for which things I understand. I think I understand them, but its probably superficial. Although that would appear to put me ahead of many of the people trading in the things....
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I suspect I would be aware of, or at least understand if explained, most of the things you listed. But I answered based on the phrases I recognised off the top of my head.
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One major advantage of the crunch is that it's easier to find somewhere to sit in a City pub of an evening.
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I had an odd thought that perhaps the Republican party has accepted that they are going to lose in November and decided to thourghly shaft the US economy before the Democrats take over.
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