It’s the argument that people put across, blaming the person that encouraged them to do something stupid or illegal. Why can’t people take responsibility for themselves and their actions?
Good point, but i never said that personal responsibility isn’t a consideration one should discard when borrowing money. Naturally some people will borrow more if the system allows and even encourages, which it does. However, whilst there is a responsibility on the borrower, there is also an equal or greater responsibility on the lender. But that responsibility has never been taken up and never will be, because the banks know that Govnts will not let them fail.
The reason they couldn’t fail before is because the commercial and personal banking systems were intertwined, and if it failed it would cost the public their personal money, savings etc. That’s why the banks have now been split, so they are now allowed to fail (or at least the commercial arms).
Originally posted by @Numptyboi
Originally posted by @Chertsey-Saint
I’m sorry, but I see that as the same argument as ‘she was encouraging me by wearing a short skirt’.
How can you consider a sexual assault on a woman to be equivalent to borrowing money? Christ, Cherts, there’s some strange logic on forums, but that takes the biscuit!
Thanks for saving me the bother of posting that.
Try being born without access to vast sums of money and then trying to get access for anything without borrowing. The whole system is predicated on people not having enough money of their own.
So like yourself, I was amazed to see the everyday activity of borrowing money lumped in with the not so everyday activity of sexual assault.
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The point is not the offence, it’s the excuse for it.
Even ignoring the bloody awful analogy, i still fail to see any similarity between any “excuse”.
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I don’t see why the banks should take all the blame for people’s personal misgivings? Nobody forced them to take a mortgage worth more than the house. Nobody forced them to take a loan which they could not afford to pay back.
I think this is one of the main arguments between left and right. The left believe people should be molly-coddled and excused because the majority are unable to look after themselves responsibly. The right believe people should suck it up and take responsibility for their actions.
Originally posted by @Chertsey-Saint
I don’t see why the banks should take all the blame for people’s personal misgivings? Nobody forced them to take a mortgage worth more than the house. Nobody forced them to take a loan which they could not afford to pay back.
Referring to the point I made before, and one that you ignored, there is an entire industry devoted to determining the credit risk of individuals.
This level of risk was ignored and as a consequence, a lot more credit was made available to the market. Prices rise to what the market will bear, and thanks to the no questions asked culture of the boom age, the market would bear quite a lot. The unchecked practices of the banks worked in tandem with huge demand to push prices up to unrealistic levels.
The test of affordability used to be three times the salary of the main breadwinner, or around £78K in today’s money (on average salary), which gets you bugger all.
Letting the market dictate prices and in the case of social housing, ownership, has been a complete disaster. The government will proudly boast of keeping inflation down while praising the rising prices of housing stock at the same time, a cost that everyone has to bear.
I think this is one of the main arguments between left and right. The left believe people should be molly-coddled and excused because the majority are unable to look after themselves responsibly.
The right believe people should suck it up and take responsibility for their actions.
I believe you need to develop a bit more nuance in your appreciation of both sides. I don’t recognise either generalisation, and neither does much of history.
Besides, what you really need to be worried about is the extreme centre, the form of government we’ve had for the past 36 years.
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That’s not quite true, though. I remember when 105% Mortgages were available from quite a few lenders and I’ve had the credit limit upped on my card from my bank without and application from me. Encouragement from Banks to spend has certainly never been in short supply.
I don’t see this in any way as a political argument. Banks behaved disgracefully both before and after the crunch. Fixing LIBOR rates, mis-selling inappropriate financial products, laundering foreign dirty money, fixing interest rates, how many more times do they need to be found out. I’m sure they are dreaming up the next raft of nawty behaviour as I type. But perhaps their best magic trick was to hoist the whole blame for the recession on the guy who maxed out his credit card because he lost his job when the Bank closed down his business after the crunch and he couldn’t get any benefits because the Government had run out of money by giving it to the Bank to repair their balance sheet. You couldn’t make it up.
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I don’t know who has blamed the people for the recession? I think a lot of people were irresponsible with their money, and although it was the banks faults to lend them that much, it was peoples greed that didn’t help.
If people didn’t take 105% mortgages, then we wouldn’t have had as many problems.
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She planning to go further towards the centre then?
Families hit by George Osborne’s tax credit cuts should “go without” certain things like subscriptions to television services, a Conservative minister has said.
Tracey Crouch said some people would need to make “savings” and that she had come across households where cut-backs were necessary.
Rupert Murdoch won’t be happy at this minister breaking ranks 
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“I have not done anything wrong”
Er, ok then.
“I use a big accountancy firm in Scotland.
They’ve looked after me for 12 years.
I have checked with them since the divorce –
‘Have I done anything that I shouldn’t have done?’
‘Michelle, no.’”
So the accountants that signed you up for your Employee Benefit Trust, and invested over £500K into it on your behalf, have squared your behaviour off, eh?
Well, it’s a bit like co-defendants on a trial using themselves, and only themselves, as an alibi, but we’ll look past that.
“And everyone knows my ex dealt with all
the finance and dealt with all the lawyers.
I was never, ever allowed to get involved
in his side and he never got involved in my side.”
So now you never had anything to do with it, and it’s all your ex-boyf’s fault anyway?
The lady doth protest too much, I reckon.
“Hello, I’m voting to cut tax credits”
This sort of defence worked for Harry Redknapp just fine.
This post is sponsored by post-work, Punk IPA (blame ant for that).
Sorry Bucks, but to my eye that is naive.
Not the part about sharing the blame between loanees and loaners - I agree that some of the responsibility has to be shared by those recklessly borrowing money and those recklessly lending it
But, and stop me if I’m patronising you or talking down to you, to see the financial crisis through the prism of individuals overstretching themselves due to an individual company not assessing individual risk is, again, naive.
Firstly, the entire financial system was ‘rated’ by credit agencies and they carried on giving triple-A ratings to banks right up until the point they went bang.
Too much emphasis was put on the say-so of these credit agencies.
Secondly, banks are not naive - unscrupulously stupid, but not naive.
As a result, they came up with the perfect solution - when they loaned money to risky individuals or companies, they would insure themselves against the risk of the loanee defaulting.
Once this loan (or more accurately a bundle of toxic loans) was insured in this way, it actually became, in a the warped financial world, an asset.
That’s right, the risk of default was eliminated by getting another financial institution to underwrite the potential loss. All good.
Then, the clever bankers realised that if these toxic loans were underwritten, then they had a default value, so they these could be traded with other financial institutions.
That’s right. In the hunger to turn a quid and make even more profit, these toxic debts were traded between banks.
So, if they could turn a bad debt into profit in this way, why bother looking closely at the people they were lending to?
The banks concluded that as these sub-prime loans were manageable, then they might as well keep lending money to sub-prime loanees.
Nobody stopped to think whether this game of high-stakes pass-the-parcel was going to end in a bad way.
So to the lay eye, this looks like alchemy - turning a crock of shit loan that at some point would undoubtedly be worthless, into a cast-iron, copper-bottomed asset.
Now, in steps the credit rating agencies who looked at this and said. Welll, nothing. They looked at the assets these instutions possessed to meet their positions and said “yep, no problem.”.
They didn’t bother to ask themselves “Hold on, if this mess of toxic loans is being passed back and forth between financial institutions, what happens when the music stops?”
Guess what, they music stopped.
The credit rating agencies realised, all too late, that these sub-prime, toxic loans had been traded as assets to such an extent that the entire asset base that banks were holding to meet their liabilities were likely to be insufficient.
So, those credit rating agencies started to downgrade banks’ ratings. The market got spooked. Organisations were called to make good their positions, and slowly a lot of Michelin-starred shit hit the fan.
Banks thought they were protected against bad debts.
This meant they lent recklessly.
This meant they were exposed.
If they hadn’t lent recklessly, we wouldn’t have a trillion quid national debt now.
As I say. There’s grey, Bucks.
But still, you acknowledging that the bankers were at least some way responsible means that we have come a long way from the suggestion that it was another government that left the cupboard bare.
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Ye Olde “honestly I’m actually the dumb cunt you’ve always suspected me to be” defence.
I know it well.
Bletch again you speak the truth, but only in part. Most of our well known banks and building socities lost ever increasing money due to defaulting borrowers during the boom / crash period. A few lost more than most. Not all lending was insured, or securitised. I spent six months on secondment at Barclays in its debt recovery unit and part of my role was to work with other banks to see how they handled recovery work. It was a boom time for these particular teams, which was bad news for the P+L overall and I can assure you that whole chunks of debt, from sundry mortgages, to unsecured loans, to credit cards, sat fairly and squarely on the Banks’ books without any leverage at all.
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Toxic debt caused this.
Many in the sub prime mortgage market were absolutely desperate for a basic human right, a home, they weren’t told the small print had no education in such matters and were taken advantage of, it is a massive example of capitalism pissing all over the small man.
Desperate people do desperate illogical things.
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