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NewsletterPDF Jan 09.pub.pdf
Latest
interest rate cut pure PR 26 January 2009
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Latest interest rate cut pure PR : 26
January 2009
Do our MPs realise how stupid they appear when they demand that banks make
mortgages more readily available because they have been given £37bn?
Do they not know that the cash was just to stop
them from going bust, and to cover losses they had incurred?
All that has happened is that those with tracker
mortgages are paying virtually nothing, due to the low interest rates. Banks are
still not prepared to lend to each other and and are relying on savings balances
and overnight funding.
We are now 18 months into the economic crisis.
The global debt market for mortgage-backed securities closed around August 8
2007. It was only in September 2008 the the Government felt compelled to step in
to rescue the UK banking sector from complete meltdown.
RBS appeared to be just days away from collapse.
It was this and not HBOS that prompted the Government action. You have to ask
yourself how could they have handled it so badly.
Now we appear to have two immediate priorities.
The first is still the same as 18 months ago i.e. the wholesale markets need to
be opened.
We already own Northern Rock, so why not allow
them to purchase all the remaining UK toxic assets. The TARP_ in the US is doing
just that. Of course they should not pay the face value of the bad sub-prime
mortgage. They should pay the market price for the asset as it now stands i.e.
it may now be just 50p in the £.
The second priority is the Repro numbers which
are rising and are only of benefit to Hedge funds and their legal partners.
Deals need to be made with the householders to allow them to stay in the
property. If we do not then we will have to re-house up to 1100,000 families, at
a far higher cost to the taxpayer.
Small Building societies will end up closing
branches, due to the low savings and no mortgages being approved, due to the
rate cuts and the liquidity ratios being forced onj them by the FSA.
The UK high streets are turning into ghost towns.
The Government need to do something, and fast
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