What do you think about the credit crunch?
How long do u think it will last? How high do you think mortgage rates will go and when do you think they will start to come down? What effect does the fact that only 56% of mortgages were agreed by the banks last month in the UK compared to the same period last year? Also, what about fuel prices, the BBC news last night said to expect a 40% rise in fuel bills by the end of the year, how much of a disgrace is this?
And finally, is there any ways that we can minimise the effects of the credit crunch?
In reality, there is no way of knowing how long this will last, and seeing as there is no defined way of measuring 'the crunch' itself, you won't actually know when it's over. It's more of an adjustment than an actual event.
In the case of the existing scenario, it is primarily about the problems with the sub-prime mortgage market impacting on the reserves available for lending - but it is accentuated by rising prices (especially fuel) and static wages. It is also 'fueled' by the general acceptance of credit as a way of life and persistent overspending on credit.
The rising fuel bills are not a 'disgrace' as the fuel Companies are not making a killing on it, they are just passing on the advancing costs to the consumers. Mortgage rates are linked to the Bank of England base rate which is currently stable. The problem with lending is that the financial institutions have suffered from overselling mortgages in a declining market, and they don't have the capital reserves to lend out. House prices are fairly stable, it's just that houses are not selling… This tells us that first time buyers are finding it more difficult to get mortgages, now I have to say that compared the the situation where 100% mortgages were freely available in a falling market - that's actually NOT such a bad thing. The people in trouble will be those that took the 100% mortgages and find themselves unable to meet the payments.
What can we do? Well, we can make budgets and NOT spend more than we earn, pay off our debts so that we are financially healthy - this will have the impact of slowing down the economy and people are going to lose jobs… this is inevitable.
How long will it last? put it this way, how long have governments been trying to stave off the inevitable (just so they wouldn't get the blame and lose the next election?). I estimate they have been trying to 'fix' this for two to three years - I would not be surprised if it takes two or three years for the economy to be able to rise again.
Don't be fooled, our economy works on rises and falls, the only time there is a problem is when government tries to intervene to prolong a rise when it should let the fall happen.
I think I've said enough - more advice and info here:
http://www.thecreditcruncher.com
6 Responses to “What do you think about the credit crunch?”
A lot of this is our own fault. For too long now, people has just spent money that they don't have, and got mortgages that they cannot really afford and now it is coming back to bite us on the arse.
Fuel prices are rising due to many factors, but the main one is SHORTAGES! Oil is going to run out at some point, and the sooner we realise that and make alternative arrangements the better.
To minimise the effects of the credit crunch, only spend what you can afford.
Comment made on March 8th, 2009 at 2:29 pmReferences :
I think the whole financial situation in the UK is completely messed up! For too many years greedy corportions have been gaining power and influence and now we have a situation where they have more power than the government theres nothing we can do about it! 40% hike in cost of living expenditure and average wages remaining stationary. As long as the fat cats rake in their billion pound profits we'll all have to suffer
Comment made on March 8th, 2009 at 2:56 pmReferences :
I think the worst of the credit crunch will last upto 2011 and hopefully then things will recover.
Comment made on March 8th, 2009 at 3:08 pmGet your finances in order. Things on the highest rates of interest pay off as quickly as possible 1st. Close down all credit cards you dont use, just because you havent used them for so long, they are not closed automatically, you have to call them up to get them cancelled. If you have credit cards you do use then get the limits reduced down to only what you need to use on them. Doing all this will cut down your liability and help your credit rating. Use the cards you have and try not to apply for any new credit as everytime you do you have a credit search done and too many of these is not a good idea, again affecting your credit score.
References :
my job!
we are getting a 35 percent rise in fuel bills in Missouri for winter .Mortgage problems are a mess.Good decent people are being thrown out of there homes instead of helping them boy never did i think americans would do this to there own.Prices are higher than we can afford for gas and no one seems to listen.All congress does is talk and fight about it.All the while kids are going with out adults are hurting nope never thought id see this in america.But wait half the stuff that we have here is owned by another country or another country is involved we need to take back our country.Too many people outside the usa own stuff here.But in this giant mess we can cut back and we should to bring all this down We need to let our senators and congressmen know we are unhappy and that they need to quit fighting and start doing.We can quit driving as much spend less at the store and just stay mellow about holiday spending watch what we buy.And i personally dont think it will be any better anytime soon
Comment made on March 8th, 2009 at 3:18 pmReferences :
Yeah .. well it's our OWN FAULT .. the good times are well and truly over .. better check the 'rainy day' savings account because theres a storm on the horizon ..
1) Mortgages .. a lot of people regarded their house as a 'free money machine' .. want some cash for a holiday / new car ? no problem, just re-mortgage .. everyone's doing it .. and guess what ? payments too high ? well just switch to a different provider on another 'special deal' .. or even better why not switch to 'Interest Only' (and you never have to pay it back, ever) .. not earning enough to get a standard mortgage ? well go 'self certified' and get a 110% mortgage
2) Mortgage companies are no longer interested in handing out free money .. those days are over .. now they expect you to pay some back, so no more special deals, no more 'interest only', no self certified '110%' offers ..
As for fuel bills .. again, WE did it to ourselves .. our mass opposition to Nuclear Power and 'environmental' concerns (which killed off coal & USA Oil exploration in Alaska / Antarctic) means we are now stuck with Oil and Gas fired power stations (for the next 10 years or so) = so up goes the cost of domestic energy ..
What can we do about it ?
Well first of all, STOP SPENDING .. no new car, no foreign holidays (see if you can get a holiday house swap with some-one in the next state if you must go away) .. check out charity shops /car boot / garage sale / ebay for stuff you have to have .. and sell off stuff you don't need .. cut out all unnecessary luxuries (like drink & tobacco
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1) Write to your MP / Congressman demanding a crash Nuclear Power station building program (in the meanwhile, here in UK maybe we can buy some more power from France = they have LOTS of Nuclear Power stations)
2) Reduce your home energy consumption .. lucky it's the summer .. start by turning off the central heating. Use a shower, not a bath (and make sure it's the type where water is heated 'on-demand', not taken from a central tank ..). Only use the washing machine / dish washer when it's full, only boil water as needed and so on ..
Comment made on March 8th, 2009 at 3:37 pmReferences :
In reality, there is no way of knowing how long this will last, and seeing as there is no defined way of measuring 'the crunch' itself, you won't actually know when it's over. It's more of an adjustment than an actual event.
Comment made on March 8th, 2009 at 4:24 pmIn the case of the existing scenario, it is primarily about the problems with the sub-prime mortgage market impacting on the reserves available for lending - but it is accentuated by rising prices (especially fuel) and static wages. It is also 'fueled' by the general acceptance of credit as a way of life and persistent overspending on credit.
The rising fuel bills are not a 'disgrace' as the fuel companies are not making a killing on it, they are just passing on the advancing costs to the consumers. Mortgage rates are linked to the Bank of England base rate which is currently stable. The problem with lending is that the financial institutions have suffered from overselling mortgages in a declining market, and they don't have the capital reserves to lend out. House prices are fairly stable, it's just that houses are not selling… This tells us that first time buyers are finding it more difficult to get mortgages, now I have to say that compared the the situation where 100% mortgages were freely available in a falling market - that's actually NOT such a bad thing. The people in trouble will be those that took the 100% mortgages and find themselves unable to meet the payments.
What can we do? Well, we can make budgets and NOT spend more than we earn, pay off our debts so that we are financially healthy - this will have the impact of slowing down the economy and people are going to lose jobs… this is inevitable.
How long will it last? put it this way, how long have governments been trying to stave off the inevitable (just so they wouldn't get the blame and lose the next election?). I estimate they have been trying to 'fix' this for two to three years - I would not be surprised if it takes two or three years for the economy to be able to rise again.
Don't be fooled, our economy works on rises and falls, the only time there is a problem is when government tries to intervene to prolong a rise when it should let the fall happen.
I think I've said enough - more advice and info here:
http://www.thecreditcruncher.com
References :
http://www.thecreditcruncher.com
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