Looking for someone to blame

Umm, no.

I\’m also losing patience with countless attempts to create some sort of moral equivalence between bank bosses who were paid a lot of money to run their institutions professionally, and consumers who suddenly found themselves with more debt than they could handle.

It is one thing to chastise style-obsessed shopaholics who run up massive credit card bills by living beyond their means. But pouring scorn on people who, struggling to climb on the housing ladder, jumped at the offer of 100 per cent mortgages peddled by the banks, seems grossly unfair. Gearing up to buy a thin-walled, two-bedroom flat a stone\’s throw from the North Circular looks more like desperation than greed to me.

In these madness of crowds, these popular delusions, moments, no, those who speculate are not innocents. Sorry, they just ain\’t.

For of course if they hadn\’t been there then there wouldn\’t have been the bubble.

 

16 thoughts on “Looking for someone to blame”

  1. But the point is they aren’t speculating – they are trying to buy somewhere to live nearish to where they work. That’s her point, and I think it has some validity.

  2. Matthew, renting has been cheaper than buying for several years now, jumping aboard the housing ladder because prices are going up (and in the delusion that they would go up for ever) is speculating. And the gummint cheerfully encouraged this.

    OTOH, bank directors were not speculating. They were making hay while the sun shone. They don’t make the rules, they just exploit them, which is human nature.

  3. “But the point is they aren’t speculating – they are trying to buy somewhere to live nearish to where they work”

    But they’re fine.

    I know people who bought at the height of the boom, aware that it was the height of the boom but getting three- or five-year fixed-rate deals and not planning to sell up. Nothing’s changed for them, despite their paper losses.

    The people who’re screwed are the ones who thought they’d be able to flip the houses within 2 years for more than they paid – and that’s being a speculator, not just trying to find a place of your own to live in.

  4. Mark, but you don’t know people were buying houses because they wanted to speculate on them going up. You’re just asserting that. They might just have wanted to own the place they lived in and placed a premium on that (if renting was cheaper which I think is not proven). I expect most people who bought a house since about 2006 expected prices to decline to some extent.

    In any case a rental property is owned by someone, who more obviously is speculating on rising property prices than an owner-occupier.

  5. I do, btw, think the system needs reforming as the great amount of leverage a mortgage will always has does encourage speculation.

    I expect this is one thing a Land Value Tax might actually be good for, if I could understand it.

  6. While we’re here, what do people think of the idea of the government just giving away its shares in the bank to the public, something like £500 each. The banks still get the money, the public can sell the shares and spend the cash if they so wish.

  7. I’m also amused at the opprobrium being heaped on so called City ‘fat cats’ who award themselves huge dividends and bonuses, and the triumphalism expressed over claims that they won’t be able to do that now that ‘government is in charge’.

    Anyone remember how Parliament deals with the tricky subject of pay rises and expenses…? 😉

  8. “Mark, but you don’t know people were buying houses because they wanted to speculate on them going up. You’re just asserting that. They might just have wanted to own the place they lived in and placed a premium on that ”

    In which case, they aren’t speculators and they should be OK – assuming, of course, that they arranged a the mortgage that they could afford to pay.

    They need to sit tight for a while, but as John B has it, they’ll be OK.

    But if either of those two conditions does not hold (they were looking to flip in 2 years or they couldn’t afford the mortgage they signed up to when they signed up to it) then they’re speculators or irresponsible or both.

  9. JuliaM,

    “I’m also amused at the opprobrium being heaped on so called City ‘fat cats’ who award themselves huge dividends and bonuses, and the triumphalism expressed over claims that they won’t be able to do that now that ‘government is in charge’.”

    Yup. They ran rings around the doctors over their contracts, didn’t they?

  10. I don’t think it is unreasonable to hold people financially accountable for such decisions, because reasonable people consider both the present and probable future states of the market before purchasing something as big as a house. I did. I bought nearly five years ago and it was obvious even then that there was going to be a significant downturn at some point.

  11. Matthew, the distribution of shares had also occurred to me – an x% rebate on our income tax bills, paid in shares, would do nicely. Or even better, an x% rebate on our National Insurance plus Income Tax? Or to suit me better, an x% rebate on my Council Tax bill.

  12. Whilst the idea is appealing, what happens when everyone decides to sell their shares, which would probably happen immediately after they were handed out?

  13. Why Winston? You are being given shares for nothing in an institution backed by assets worth considerably more than n thing (provided you do not read the Sun or Mail). Hold them for a few years – what does it cost you to do so? Then sell them for something approaching real market value? If you want to sell now, go ahead and be a fool – that is the prerogative of what little freedom is left to us.

  14. renting has been cheaper than buying for several years now

    Not when and where I bought, c. 2001/2. A mortage was around £100 per month cheaper than renting.

  15. I remember there was a chap using the screen name of “dearieme” who used to go around wanking on about giveaways from the public treasury. Obviously some other chap.

    PS, why the hell would a local authority give you a rebate from council tax when they haven’t had anything to do with the nationalisation? Wouldn’t that just put a hole in their budget for no apparent purpose?

    I see, oiks use council services, not the likes of dearieme, so that’s fine.

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