tag:blogger.com,1999:blog-29618513.post5020979509803184361..comments2023-09-13T09:59:36.013+01:00Comments on snowflake5: When will the recession end?snowflake5http://www.blogger.com/profile/14700425293614182769noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-29618513.post-34304543291566932402009-03-30T02:42:00.000+01:002009-03-30T02:42:00.000+01:00Devon chap - it's simple: the banks borrowed short...Devon chap - it's simple: the banks borrowed short in the wholesale markets to lend long to mortgagees and others. They can't roll over the wholesale loans in the current climate, and they can't sell assets (their mortgage book) to other parties because no one has money to buy. However when the mortgagees themselves repay their loans, the banks are essentially exchanging the asset(the loan) in snowflake5https://www.blogger.com/profile/14700425293614182769noreply@blogger.comtag:blogger.com,1999:blog-29618513.post-92039835758855747032009-03-29T17:47:00.000+01:002009-03-29T17:47:00.000+01:00I suppose the investigation into Jacqui Smith's ex...I suppose the investigation into Jacqui Smith's expense claim for porno films will be called wan@ergate?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-29618513.post-48947953589768739102009-03-21T07:41:00.000+00:002009-03-21T07:41:00.000+00:00Abandoning the "mark-to-market" valuation only hel...Abandoning the "mark-to-market" valuation only helps at the sidelines. If a debt is bad, a debt is bad, no matter how you value in on the balance sheet. It only makes things look better.<BR/><BR/>Your take on the current crisis is fairly unique. There are few economists or politicians tackling the recession calling on the solvent to pay down their debts.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-29618513.post-85612978661298274982009-03-21T02:49:00.000+00:002009-03-21T02:49:00.000+00:00The recession in civil liberties will end the mome...The recession in civil liberties will end the moment the noxious Labour Government gets booted out of office; I imagine the boost in morale will help the economy no end as well.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-29618513.post-11707553148845642692009-03-20T21:23:00.000+00:002009-03-20T21:23:00.000+00:00Devonchap: "I'm aware that over the medium term th...Devonchap: "I'm aware that over the medium term the some or perhaps all of the value of the toxic debt might be recovered. The problem is that right now it is an unknown quantity and it could pull down the holding insititutions."<BR/><BR/>The solution to that is to abandon the "mark-to-market" valuation, which is something the French are proposing. The current rules are idiotic and creating falsesnowflake5https://www.blogger.com/profile/14700425293614182769noreply@blogger.comtag:blogger.com,1999:blog-29618513.post-75825414216665605492009-03-20T13:52:00.000+00:002009-03-20T13:52:00.000+00:00What rubbish, if Obama turns around and says OK pe...What rubbish, if Obama turns around and says OK people in these homes will not have to repay these debts or will take longer periods it will leave the banks holding debts it cannot move.<BR/><BR/>But the silliest comment is repay your debts, most of the people I see coming into the office cannot repay the debts, I had one idiot after we told them the amount of debts they had, said it's OK I know Roberthttps://www.blogger.com/profile/05186557603493331701noreply@blogger.comtag:blogger.com,1999:blog-29618513.post-6635734329021032232009-03-20T09:01:00.000+00:002009-03-20T09:01:00.000+00:00I'm aware that over the medium term the some or pe...I'm aware that over the medium term the some or perhaps all of the value of the toxic debt might be recovered. The problem is that right now it is an unknown quantity and it could pull down the holding insititutions. The uncertainlty as to who holds what risk is holding back wholsale lending. Would you lend to someone who might not be able to pay it off? <BR/>The likelihood of recovering value Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-29618513.post-79940040403998216272009-03-19T18:30:00.000+00:002009-03-19T18:30:00.000+00:00Devon Chap, the "toxic" debt on on bank balance sh...Devon Chap, the "toxic" debt on on bank balance sheets is worthless only on a mark-to-market basis (i.e. they can sell it on at the moment) but the idea that <I>all</I> these loans will default is wrong. Most of these toxic assets are US sub-prime debt that our banks purchased, but the Obama government has announced plans to stop the rise in US foreclosures, which means that these debts may not snowflake5https://www.blogger.com/profile/14700425293614182769noreply@blogger.comtag:blogger.com,1999:blog-29618513.post-12787708365492425202009-03-19T18:11:00.000+00:002009-03-19T18:11:00.000+00:00So, in the words of the wartime poster "Keep Calm ...So, in the words of the wartime poster "Keep Calm and Carry On". This will help at the margins but overpaying mortgages won't solve the banking crisis. There is too much toxic debt on the balance sheets. The Japanese zombie banks couldn't lend because they were propped up rather than forced to deal with their non-performing debts. Once that was done then their economy started moving (slowly) Anonymousnoreply@blogger.com