George Osbourne (et al) in Parliament atm

[MrGecko]

Black Swan, the voice of reason.

"The chancellor thinks a cap should be put on how much people should be able to borrow (in terms of their income) for buying a house. B@stard, not like overborrowing (or overspending) on property did us any harm".

"Public workers union's, ever the pragmatists, have decided that they don't like the (handsome) pay and conditions they are rewarded from the public purse. However, instead of resigning from their jobs and plying their trade in the private sector, they have all just decided to stop working and let everybody else foot the bill".

You even quote in red dude.

 

[JRP2891]

are you a child?

Bad form.

 

[bevok]

Whilst I think 25% might be slightly high, there is going to be great consternation if mortgage limits come in. Great idea. In the old days you had to justify getting a mortgage by showing you had adequate means to pay, and sufficient margin to cover both a downturn and bad luck (e.g. job loss). The massive property bubble over the past ten - twenty years was largely caused by the banks facilitating overleverage. It is time to move back to a more responsible system. Will there be a drop in property prices? Almost certainly. Are property prices grossly overvalued by dispassionate metrics such as price/household income? Absolutely. Price will move back to some semblance of value at some point (maybe this will be the trigger) anyway as it always does after irrational exuberance. Its just been delayed by the desparate government intervention to avoid anyone having to experience too much pain after 20 years of financial irresponsibility and incompetence.

 

[Black Swan]

Whilst I think 25% might be slightly high, there is going to be great consternation if mortgage limits come in. Great idea. In the old days you had to justify getting a mortgage by showing you had adequate means to pay, and sufficient margin to cover both a downturn and bad luck (e.g. job loss). The massive property bubble over the past ten - twenty years was largely caused by the banks facilitating overleverage. It is time to move back to a more responsible system. Will there be a drop in property prices? Almost certainly. Are property prices grossly overvalued by dispassionate metrics such as price/household income? Absolutely. Price will move back to some semblance of value at some point (maybe this will be the trigger) anyway as it always does after irrational exuberance. Its just been delayed by the desparate government intervention to avoid anyone having to experience too much pain after 20 years of financial irresponsibility and incompetence.

Mortgage rationing has been in place for at least 18 months, the BTL madness, which in part fuelled the boom, was killed once lenders en masse demanded 25% deposits. If this measure is introduced then the mortgage market will revert back to the 70's, and with it thousands, if not hundreds of thousands of jobs will go. House prices were IMO scheduled for another 25% drop, this measure (if introduced) would ensure a collapse of circa 40% as activity would simply collapse Now given the tax payer banks own circa 65% of the UK mortgage market it wouldn't make much sense to force roughly half of UK mortgages and the holders of those mortgages underwater... The damage it would do to the already fragile psyche of the UK home owner and his/her confidence to spend/thrive would be incalculable...The madness of King George...

 

[montmorencyt2w]

Well back to Gideon George for a minute, he has said that the functions of the former FSA will be replaced by two new agencies (or quangos) (salaries? pensions? I assume these will be in the public sector, or will Terence Leahy or Richard Branson do it for free in their spare time?), plus a new committee imposed on the Bank of England (ditto on salaries, pensions, plus what happened to the "independence" of the Bank of England, if it is being told what committees to set up?).

 

[meanreversion]

When I read about his speech, I lost count of the number of new agencies he was setting up, and to whom they reported. He has dismantled the much discredited "tripartite" system and replace it with, what, a quintartie system?? We have now gone from having the BoE, FSA and Treasury to

BoE
OBR
Prudential Regulator
Financial Policy Committee
Consumer Protection and Markets Authority

What the ?!??!

Surely this will involve increased confusion and the required hiring of many additional bodies??

 

[meanreversion]

Just read the article again, and it looks like the Prudential Regulator is a subset of the BoE.

So Unswevin' Mervyn will chair the MPC and the PR committee. The FPC is "independent". The CPMA is new, but then they're combining the Serious Fraud Office and the Office of Fair Trading.

Goodness me, could it be any more complex?

 

[montmorencyt2w]

Just read the article again, and it looks like the Prudential Regulator is a subset of the BoE.

So Unswevin' Mervyn will chair the MPC and the PR committee. The FPC is "independent". The CPMA is new, but then they're combining the Serious Fraud Office and the Office of Fair Trading.

Goodness me, could it be any more complex?

Plus, according to http://news.bbc.co.uk/1/hi/business/10338178.stm

He added he was confident that the transition to the the new authority would work - especially as FSA chief executive Hector Sants had agreed to stay on and oversee the transition, having previously said he would be leaving.

Mr Sants will then be head of the new "prudential regulator" charged with regulating banks and other financial institutions.

The parts that are supposed to protect consumers and crack down on crime will be injected respectively into a new Consumer Protection Agency and an Economic Crime Agency.

So, not only is the head of the discredited FSA, not going, he's got a brand new job, doing precisely what the FSA failed to do.

"Prudential Regulator" - he's bound to become known as "the man from the Pru", plus shades of Gordon Brown's "Prudence".


Nice one George. While you may have got a couple into the other side's net, I think I can count at least three own-goals.

 

[meanreversion]

Hector Sants is held in high regard and Osborne apparently was delighted to keep him. But, um, why are you disbanding the FSA if Sants was so good?

This is along the lines of "he is a good and honorable man", directed by Cameron at David Laws. If that is true, why is he leaving?

I think one just has to hold one's nose and see how this pans out. I always struggle with the addition of complexity to situations, such as these proposals. It only muddies the water. I'm sure this will be repeated on June 22, when they will change CGT from being very simple (flat 18 pct) to something incredibly complicated.

 

[scose-no-doubt]

"this is not about economics it's an ideological battle versus socialism that they are determined to win at whatever cost" from what I've seen so far I'm inclined to agree with this sentiment.

I'm lukewarm on this issue of issue of public sector pay. I know there need to be cuts but I also know people who are working as in-home carers, in nursing homes etc for 60hrs weeks to clear 23k gross. Whats glamarous or gold plated about that? Personally I think the people who kill themselves looking after the old or those that are unable to look after themselves deserve a pension. Contributions @7% come to 1600 so call it a gross of 24600. Greedy bast*rds eh. IMO the top end public sector is where the cuts should be made. This top down b*llocks they keep spouting about needing to be able to secure the best candidates for the jobs. Worked will in the financial sector didn't it lol. Who needs a pension of more than 35k a year if you've been earning high 5 or 6 figures 20 years anyway?

 

[scose-no-doubt]

I'm sure this will be repeated on June 22, when they will change CGT from being very simple (flat 18 pct) to something incredibly complicated.

Hopefully. You know how much I've been losing out on since people have been able to do their own tax returns?

My trading losses have to paid for some how!

 

[montmorencyt2w]

"this is not about economics it's an ideological battle versus socialism that they are determined to win at whatever cost" from what I've seen so far I'm inclined to agree with this sentiment.

I'm lukewarm on this issue of issue of public sector pay. I know there need to be cuts but I also know people who are working as in-home carers, in nursing homes etc for 60hrs weeks to clear 23k gross. Whats glamarous or gold plated about that? Personally I think the people who kill themselves looking after the old or those that are unable to look after themselves deserve a pension. Contributions @7% come to 1600 so call it a gross of 24600. Greedy bast*rds eh. IMO the top end public sector is where the cuts should be made. This top down b*llocks they keep spouting about needing to be able to secure the best candidates for the jobs. Worked will in the financial sector didn't it lol. Who needs a pension of more than 35k a year if you've been earning high 5 or 6 figures 20 years anyway?

Plus nurses, teachers, firefighters, police officers, librarians, road-gritters, armed forces, etc. As well as direct contributions, these people all pay income tax, NIC, VAT and the other miscellaneous taxes most of us pay. The attack on public sector pensions is a red herring for the failure of the private sector in so many ways, not least pension provision for those not at the top.

 

[Black Swan]

Bad form.

Yes it was out of order and I've sent a pm to MR apologising...

 

[montmorencyt2w]

As usual, ZH has its own take on this, and as ever, the comments are the most fun part:

http://www.zerohedge.com/article/uks-new-chancellor-has-abolished-english-sec-equivalent-fsa

"English" Well, I suppose one thing the election has done has been to get rid of some of the Scottish political mafia anyway.

 

[Black Swan]

Plus nurses, teachers, firefighters, police officers, librarians, road-gritters, armed forces, etc. As well as direct contributions, these people all pay income tax, NIC, VAT and the other miscellaneous taxes most of us pay. The attack on public sector pensions is a red herring for the failure of the private sector in so many ways, not least pension provision for those not at the top.

Agreed and nudging this on I read a report a couple of years back suggesting that welfare spend (the other battle line conveniently drawn) was zero cost to a government, even less of a drain than keeping inefficient huge state operated industry in business..iirc it concluded that 99.9% of welfare doled out is spent back into the economy inside the month it is given...

The govt acutally receive close on 35% back on VAT and taxes. Welfare spend is generally done locally given the mobility of those on benefits is impaired due to ilness and or lack of transport funds/options..Therefore if welfare is severely restricted one of the immediate effects is the collapse of the local business infrastructure that welfare dependents rely on..increasing the economic downward spiral...

As a grown up society we need to accept that the problem of how to care for/ feed/house long term sick or unemployed has become an impossible area to re-trench on. The long term unemployed, those having to choose self employment, those who have simply given up trying, we need solutions that do not involve bullying ideology..They are casualties of an arguably fractured society and (in particular) the 1.5ml that have suddenly found themselves jobless over the past 18 months should be used as a stress test for the system..

 

[scose-no-doubt]

As a grown up society we need to accept that the problem of how to care for/ feed/house long term sick or unemployed has become an impossible area to re-trench on. The long term unemployed, those having to choose self employment, those who have simply given up trying, we need solutions that do not involve bullying ideology..They are casualties of an arguably fractured society and (in particular) the 1.5ml that have suddenly found themselves jobless over the past 18 months should be used as a stress test for the system..

Are you sure its not their own fault for not "doing the right thing"? :clap:

 

[Trader333]

it concluded that 99.9% of welfare doled out is spent back into the economy inside the month it is given...

Unlikely in my view as there has been an explosion of illicit drug use which is not cheap and does not come back into the economy.


Paul

 

[Black Swan]

Are you sure its not their own fault for not "doing the right thing"? :clap:

LOL, yep that's right, do the "right thing"; buy a pension, buy a couple of BTLs, buy bank shares, buy investments, pay your taxes, work the first 6 months of each year for nothing...then watch it all go up in smoke as it's trashed and you fight your degree educated grandaughter to the death for a job (part time contracted) displaying plant pots in B&Q.. After all you need it more than her, you've got debts and contributions to pay at the age of 80...50 is the new 40, so she can always start a family in her 50's...

Oops, gotta go, EU looks like a short scalp...

 

[megamuel]

Basically all you old gits have borrowed beyond your means and stuffed it up for us young ones!

 

[meanreversion]

Basically it's every man/woman for him/herself and never rely on anyone to help you out, I think is the ultimate message. Inflation is north of 3 pct and BoE base rate is 0.5 pct ... we are seeing a significant transfer between savers (who did "right") and borrowers (who did "wrong").

I have a subscription to Private Eye .... the first ten pages of that are always devoted to how corrupt everyone is and what a scam everything is ... maybe it's true, but it makes for depressing reading.