The Global Financial Crisis Is Over

Thanks for the gee-up Bruce. A few hardy souls will take heart from your words but in 15 years time we will probably have another financial crisis. Human nature and all that; we are always far too optimistic with our personal finances and think that they will "just turn out alright". Not correct. Marx may have been incapable of balancing his cheque book and wrote some strange badly argued stuff but he was right in saying that crisis after crisis was endemic in the capitalist system; its what helps it function!

It won't feel like it if you've lost your job or can't afford the mortgage, but this is a good thing in the long run. We had got to the stage where two professional people, both working full time couldn't afford to buy a one bedroom property. Thi is wrong and was always going to be unsustainable as the market must eventually freeze up from the bottom. It has also polarized the lazy arrogant bankers into actually earning their money, with a fair amount of dead-wood being discarded too. In five years we will look back on this as a new beginning. I just wish we didn't have to pay for the Olympics (that few of us ever wanted) which will screw up all the good work.

> It was less than 2 week’s ago

Hold on - you might cause a run on the apostrophe supply.

What a load of rubbish! Mortgages to drop by 66% Impossible, there's a base of 2.75% to 3% on trackers, plus whatever the extra charged by the Lender. How do Journ's get away with writing such crap?

Plus shouldn't mortgage payments include the capital element?

Even allowing rates down to to 2% on a probably fictitious tracker that doesn't have a floor - going from a rate of 6% to 2% is a drop of 35% [about the size of the house price drop!].

Luniversal I have no idea what you were on about at all !.......and i am not sure you do !

Agree 66 percent drop in mortgage costs is a bit of an exaggeration but those interest rate seem likely to go sub 3.5. This govt has 18 months to save it's hide or at least as many labour seats as it can, it will do whatever it takes, reckless or otherwise...but i do think spending our way out of this mess is actually the answer....and not hide under the table with bolted doors as I think Luniversal alludes to as Doom envelopes us all. Because if houses went back to near 99 prices as suggested, there would be so many people in meltdown this country could be bankrupt and shot for more than a decade.

We have just finished paying for "lend lease" for WW2, and i'd rather pay our way out of this mess albeit with a big loan than waste it on wars as we have done in the past. (although i admit we had no choice but have a war in WW2 for those of you who were about to get into a history lesson)

We are truly in unusual times, a lot of it our own fault but also unusual influence of the modern world we live in aka the Global Village... Unusual circumstances require unusual measures...and not running back to the past and book keeping with quill pens !

jonnie2thumbs....eh those toxic US loans were parceled up in to Derivatives ! That was a big part of the problem ! The bomb already went off Amigo ! Where have you been ?

Rubbish! Mortgages to drop by 66% Impossible, my tracker with the Yorkshire has a min interest rate of 4% and will not drop below this so if the base rate drops to say 2% and my deal is base rate plus 0.75% I am still going to pay 4% so it is not going to make a massive difference to my monthly payments, How do Journ's get away with writing such crap?

I think your rather lucky and greedy. If you cannot get a mortgage and have to pay rent, (i.e. someone elses mortgage because they re-mortgaged their house to get you to pay for theirs) I prefer to get good interest rates on my money not subsidse oyur life style until house prices become reasonable.

Mortgages, mortgages, there is a lot of people out there who do not own their own home and have to rent in the private sector. Interest rates do not directly affect your rent. Rents NEVER go down, only up. But as Motley Fool does not get paid by landlords or tenants to promote special rental deals, rents never get discussed in articles it seems. And there are many rent-related oddities out there. Moving is often not an option (moving costs, finding a deposit before the old one is returned, finding a suitable property etc), so people who can't afford to buy are stuck in often unsuitable accommodation.

sw19mike - No i dont think about anyone coming up for retirement, theyve had it easy - the easiest its ever been probably in human history and their children are now unable to afford mortgages etc to be able to get on (this group includes me), and have children themselves.

But i am not most worried for myself and other in similar positions, i am more worried about the future generations. Perhaps if people were a little less selfish we might not be in this mess, but then thats never going to happen.

Bruce Jackson - if you know so much about the future, where were you about a year ago? Were you then predicting the current recession?

What is the point of Economists? I don't remember anyone predicting this mess, although plenty now say they did and presumably kept it to themselves.

Interesting article by Dr Hill. But I feel he expects more of politicians than they are able to give, as in general they are just as self centred, short sighted and greedy as the worst of bankers. A pity too that Dr Hill has been taken in by the "climate change" scam. Despite claims to the contrary, ice core analyses demonstrate that the Sun's variability is the only significant factor in the 13 degrees Centigrade swings the Earth experiences every 100,000 years or so.
It is high time that the authors of Inter-Governmental Panel on Climate Change reports came clean with their methods of calculation and were subjected to the most rigorous cross examination by experienced engineering practitioners who, like Dr Hills in his field no doubt, know their subject inside out.
Until then, they should not be given any further airtime to promate their esoteric mumbo-jumbo which is more reminiscent of turf accountants' odds than of rigorous science.

Your headline says but a 66% cut in your mortgage repayments might help ease the pain..

There may be a 66% drop in interest rates, and many of your other posters think otherwise because of their experience with minimum rates, but you also have to repay the capital when you borrow and that part of the repayment will not fall at all!
Loose and incorrect headlines, just like a tabloid rag.

I agree with one of the earlier respondents. I've had a mortgage for 30 years and lived through the last period of financial ruin for some when the interest rate went up by the hour to the dizzy height of 15% in one day. We sold our gold to prop up the pound and house values went down. I'm now 60 and my pension has virtually been wiped out by this and I have emigrate to survive. I thing low rates will fuel another spending spree but high rates favour the money men. We paupers can't win.

An interesting discussion today with (largely) balanced views on both sides. HOWEVER, I'd like to know why Rotellian has the cheek to criticise ME by accusing my generation - I've JUST passed retirement age and not YET taking any pension - of "having had it so easy". When I bought my first house (1971) the ratio was MUCH the same as today for first time buyers. It was ALWAYS difficult to get on the ladder, But most like me worked and saved enouyg to manage that.

By the way SW19, let us all know which country you're off too - I'm sure you'll find it easier there (not!) Still, the grass is always greener - ask, for example, Oz, where MANY poms go expecting a softer life. Dream on.

The only reason there might be calm in the UK is people do not have a clue what’s going on. They are not aware how all this has blown there pensions to pieces; they are not aware how this will tax them for years to come. And above all we are no way out the woods yet.
To quote Buffet as a guide to this being a turning point, is totally misleading. Buffet has so much money he could loose a billion and still not loose any sleep. Buffet is being used by the political elite to try and get some positive movement.

1) There is likely to be more scares surrounding the health of individual financial institutions around the globe, including some that will effectively go bust. I class our own Northern Rock, Bradford and Bingley in that ‘bust’ category already, with HBOS (LSE: HBOS) and Royal Bank of Scotland (LSE: RBS) close behind. Shareholders in all four banks are well and truly bust.

Please do not quote the obvious as you have with the above statement. Also:
I know its simple math’s, but if interest rates did fall to say 1.5%, the level at which they currently stand in the US, that’s a 66% cut from their current 4.5% level. It would make meeting the monthly mortgage repayments a lot easier.
Before you quote simple math inform the people of the true depths of there financial situation. The way you have put this report across, you could be quite easily a govt spin doctor. The problem in this country is the people are treated like mushrooms kept in the dark and fed manure. Even when they are told anything it gets twisted in such a way it sounds good, or someone else is to blame. Please stories like yours cause even more heartache.

Here we go again, lets all climb on the bandwagon. We all wanted to talk the economy up so everyone sauid great, great, great. Now we all want to talk the economy down so everyone is saying bad, bad, bad.

What we need is, the right people with the right skills, running this country and taking control of the children running amok in the Banks and financial intitutions.

We need to put in place a balanced portfolio of industry so that we are not relient on just one facet to produce the wealth of this great country.

Lets get back to the common sense approach whereby calculated risks are taken and if they turn out wrong they are dealt with quickly and efficiently.

This country needs a change not just in finacial markets and banks but right across the board. we need the Civil Servants of this country including the Police, Councils and Government to remember who they work for.

Join the common sense party befroe it is too late.

We all have our theories as to how the world has come to this financial crisis. I am amazed that Gordon Brown has missed the chance to employ any one of you as his financial advisor. He must be kicking himself.
I blame Hugh Pym for all this panic. BBC should take his daily panic report and replace it with the test card.
>>>Leaving with tongue stuck firmly in cheek.

Regarding slashing interest rates, will the lenders pass that on - so far not all of them have. So it is making little real difference to a majority of people. These profiteering thieves who I have watched invent new and ever more elaborate ways to fleece the public now come cap in hand..... and then when a little relief for the masses in the form of interest rate cuts comes along what happens? They don't pass it on (and don't give me the LIBOR excuse, that has dropped significantly recently and the other excuses I heard were pitiful). Are they taking the p**s? Evidently they are. Complex financial products, irresponsible lending, unregulated market creations (CDO's + CDS's etc..) and enormous bonuses. Then they collapse, but that can't be allowed because who pays for the collapse if its occurs? hard working people, savings, pension funds. So Brown "The financial genius" who has already fleeced the public for 10 years and thrown billions into a black hole now put the country into several hundred billion pounds of debt in one go, - he bails them out with substantially more than our GDP

How many years are we going to be paying for this mess?

There must be a sneaking suspicion that taxpayers bail out funds will find their way into bonus payments to city bankers. Remember that repossessed homes will have to be sold to realise the lenders investment which could well take a very long time and meanwhile they are loosing money, including the council tax they'll have to pay on property standing empty - plus of course the cost of vandalism! Surely it would be to their benefit to agree to an interest only mortgage?

I agree with some of the other posters - why is cheap / easy credit the solution to all our problems? Has the government been watching too much daytime tv and absorbed the mantras of the 'easy loan' companies advertisements?

Banks are far too scared right now to pass on decreases in base rates, oh, except for savers - who are going to suffer drastically, particularly considering the rate of inflation - which in turn will rise ever more if additional cheap credit is used to shore up spending in the economy!!!

That said I'd welcome a cut in my mortgage rate, but how likely is it to be passed on? If I really want it I'll probably end up paying a big arrangement fee on top!

Sorry to be a pedant, but you cant take a percentage of a percentage. A fall from 4.5% to 1.5% is a reduction of 3% not 66%.

No it's not, teeceego. Both numbers (4.5 and 1.5) are in the same units, i.e. four and a half thingies and one and a half thingies. The ratio between them is 3 to 1, i.e. the smaller is one third of the larger, a reduction of 66.66%

I was lucky enough to Remortgage to a offset lifetime Tracker with Barclays Late last year with a Base Rate + 0.48%. Since then I have seen the interest rate drop 1% so far and I am very happy. I am Offsetting the Savings so reducing my Dept at a much faster rate than I planned so looking forward to further cuts to reduce my mortgage even quicker. Because the Money is offset I can get access to it without needing a personal loan at silly rates. Another side benefit is if Barclays go bust I will not loss my savings (Just the use of them!). I was so lucky my Fixed Mortgage ended when it did and I took prompt action to remortgage, because today the same product from Barclays would be costing me a full 1.4% extra!!! Now that is a real rip of, never mind there current SVR. All I need to do is hold on to my Job and this recession could prove to be a real bonus for me, especially if the money i pay into my Pension are used to buy cheap Shares which have a good chance of doing well by the time I retire in 20 years. Like everything in life it is all down to timing and luck, because some other person of the same age could have exactly the same income, savings and equity in there property, but now be stuck on the lenders SVR and loss there job. Game over and there is nothing you could have done prevent it.

Interesting post From Dr. Hill, but I don't think the outlook is quite so bleak. I'm a little unusual in that I basically trust our politicians. Most of them work damn hard and are dedicated to serving their constituents. They have to try to steer a careful path between making changes that are good for society but without bullying it, because, unfortunately, most of us are selfish and a bit greedy, and it's nice and easy to blame politicians and the media (an activity all too prevalent on the TMF boards and elsewhere) instead of taking a good long look in the mirror.

As public opinion slowly changes on the big issues such as climate change, thanks to pressure groups such as Greenpeace and FOE, so politicians will feel legitimately empowered to make the bolder decisions that are required.

Personally, I hope the banks never go back to being wholly private, then perhaps we won't see another bubble in 15 years. Alistair Darling said that the banking system is too fundamentally important to be allowed to fail. In that case, they must never again be in private hands.

Ihatebillies2, pretty polemical stuff but I do concur with your view of Thatcher. Surely THE peacetime villain of the last century, the damage she did becomes more apparent as each year passes.

Interesting! Human nature unfortunately means that those in positions of power - politicians, senior executives in large companies, and very rich people - spend most, if not all, of their time protecting their assets, or creating some advantage for themselves.(and protecting their power.) So, don't expect any changes there!
Their is nothing wrong with having privately run banks, but REGULATE THEM PROPERLY! There are laws and regulations covering companies, but a far more important brake on profligacy is the responsible shareholder. Another rare species.
I think that government intervention in the current 'crisis' is far too late, and now unnecessary. Let the banks go down. Those that behaved in a prudent way will survive, and come out of this stronger. Let the governments spend OUR money supporting those whose pensions and savings have been wiped out, rather than on maintaining a flawed system.

Regarding the collars applied to trackers, surely the lenders will adjust these relative to the prevailing interest rate, e.g. if rates were to fall to say 1%, wouldn't the collar also drop to say 1.5%? Or am I floating on a big fluffy thing?

To all you skeptics I have only a few things to say to you.

By your complacency you do no service to humanity or even your families and children if you have any. For it will not be you and I who will suffer the symptoms of dire complacency in no more than 50-years time, but them. Therefore go along in your own denial thinking and see what that brings them.

The main thing is that things have to change as if not what I foresee from just a common sense perspective will happen. If you do not believe that even when natural non-recoverable resources to sustain life become extinct and that there will not be major global wars, then you are all living in a world of utopia also.

Too many people are not realistic even when the writing is clearly on the wall. They seem to put their heads in the sand and just hope for the best and we shall never experience the nightmare scenario that is clearly on the horizon for humankind in this century.

Instead they persist in this type of thinking of denial that will put the final nails in the coffin of humanity; for you are the ones who will not look further than what common sense is dictating.
For once I ask that you look a little further and if you cannot see where we are heading please tell me how things will be in your minds. If you tell me that there will be no wars, no eventual worldwide hunger and no disaster in energy supplies then I would like to know how and for that matter the rest of the world would to. Indeed, how are we as humans going to avert these things happening with the present mindsets of politicians and industrialists throughout the world pushing even harder every year for increased growth at the expense of the environment and human life itself. Please tell us what your scenario is and that our children will not be harmed in the least. Overall your vision and how we can over come our problems would be welcomed?

If you cannot come up with the solutions I recommend that you visit the Press TV website in a couple of weeks time where the alternative thinking of many of the world's leading thinkers will tell what can be done to avert future mayhem that will come as night follows day.

But again, I ask that you give your own solutions first, if you have any that is ???

Dr David Hill
World Innovation Foundation Charity (WIFC)
Bern, Switzerland

To all those criticising the author's mathematical ability may I suggest that you look a little closer to home before you post:

"if interest rates did fall to say 1.5%, the level at which they currently stand in the US, that’s a 66% cut from their current 4.5% level. It would make meeting the monthly mortgage repayments a lot easier."

All Mr Jackson is suggesting is that in the hypothetical situation that the rates fell from 4.5% to 1.5%, assuming that the banks passed on the rate cuts your mortgage repayments would fall 66% if you were on an interest only mortgage. Please correct me if i'm wrong but it seems fairly straightforward to me...

300% higher actually ;)

To strebor19
Learn to share and give and to teach and lead our families and friends to do the same.
Of course we must first each look after our families and our own Children.
But we must take care to teach sharing and giving to all those who are in a position to do so.
We must change and I do agree with Dr Hill's 2nd post, that in the end there will be a real battle for the scraps of our world, unless we all learn to live together and share and give to those less able than ourselves.
Or we could end up with the Day of the Triffids scenario - the virus - Strebor19.

We must also re-educate those who still believe that they must or can re-produce large families, whether or not such potential mothers or partners:
think they can afford (the wealthy), or
need,
to obtain certain State Benefits, housing etc. (this country - GB),
to look after them in old age (3rd world countries),
to help look after their siblings etc. (many countries),
to produce a Muslim populated world (Muslim countries and Muslim men and women in GB).
[To be PC I will explain that I am not a racist but I have heard actually, personally, this need expressed locally and indeed there are many, many deserted single white mothers, in GB, with half-Muslim born children]
to produce offspring, wherever and whenever, the opportunity arises - some men and in particular West Indian men, who do not have a great reputation for staying with, or supporting their offspring. (GB and most other countries).
(probably by birth control or dare I say it abstinence).

China sort of has the right idea for one child per family. The trouble is there always seem to be the people with power who insist on abusing such controls, who would need to be power divested on any such abuse.
At least then the damage would be limited.

It is true that we cannot now feed all the starving people in the world, although we possibly could in some years, with good harvests, if we did not divert food to bio-fuels.

Our minerals are running out. The cost will become prohibitive, the nearer to the supply end that we come. So we ordinary people won't be able to afford to run our own motor cars.

But we and our Governments should be cautious to not become indebted for more than we can currently repay. Particularly the frighteningly large Bank bail outs, which will just temporarily, artificially prop up property and other asset prices.

Many people have for many years been priced out of the property and asset markets in almost all countries in the world, usually due to limited income or just plain old degrading and grinding poverty.

Should humankind, begin to understand that it should temper it's animal-like, uncaring greed, similarly to controlling one's temper, when thoroughly provoked, there would be more to share with the less able and the less well off.

I don't know why we are here or how we originally arrived, but I am going to do my best, to make the world around me a better place, for my family, friends and strangers with whom my path crosses, when that is possible, including dealing with the Bullies, whom I will continue to hate and do all in my power to unempower.

I have done my bit to limit reproduction. I am one of an original family of 6 children, the first stillborn, with two married Parents. Of the three of us who survive, I alone, with my Partner to whom I am married, we have 1 child. My Parents were not happily married and neither am I, but as responsible Parents we have not divorced, although I doubt it would have been very easy for our Parents to divorce.

Everybody will have to learn to give and take and even though we no longer care for the situation we find ourselves in, we must make the best of it, for the sake of our Children - even though grown up.

That is our heritage that we give to our children and to your children and the world's children, the future generations.

I am happy and at peace with myself that I have always done the best I can. I will always manage, that is my way. We must all learn to seek that peace and happiness which comes from our inner selves and from unselfish behaviour towards our fellow man and woman.

I am not a saint by any means, practise no religion and believe in no particular God and I do not mean to preach to anyone. I really would just like to lead by example and if I did from my work or luck find myself with great wealth I would make sure that I shared it with as many people as I could to smooth their path through this life too.

This is what we must teach to our world leaders and I don't know where to start there, but perhaps Dr Hill may have some ideas on networking or contacts there, or by his Charity perhaps working with thinking people from other countries, and with other languages.

Thank you for reading I apologise for my rants.

Is it just me or do the Fools seem to have left the helm to the fools lately?

We're now going to borrow our way out of a situation created by too many people borrowing too much money without ever stopping to think how they were going to pay it back. It's true, we get the government we deserve. It appears we also get the commentators we deserve. Does anybody really think everything's going to be okay now that the banks have been bailed out? Will they pass on these rate cuts to us, assuming they actually happen?

Property prices have dropped but few people have to sell yet. Businesses that are basically sound are going to go down because the banks won't play ball like they're supposed to. People are going to lose their jobs & there'll be less money out there so more businesses will go down or shrink significantly. & so on.

We haven't got to the inflationary phase of this cycle yet, that's not going to be pretty.

Plus, most people seem to be paying about 7% at best on their mortgages so a drop of 3% would leave them at best 43% better off if they're interest only & the banks pass the full benefit on. So mcr82, you stand corrected unless you know where we can get a 4.5% tracker mortgage....

Hands up all those on interest only mortgages with nothing more than the expectation their property would be worth more than the loan when it comes due. Keep your hands up if you still do. Hands up anybody with an investment strategy that stands a realistic chance of paying off the loan at the ends of its term.

Oh dear, so much for a short choppy ride into easier times.

Wow, what a mixed bag of sanctimonious ' we need to save the world' and 66% - Ever see the film Lady and the Tramp - remember the beaver? 66% With a whistle every time he pronounced SIX? Thats what this reminds me of.

Ok, we have had it good, we were not careful, we didn't save enough, we bought too much; we use too much fossil fuel and yes it will run out, however....we will have a tough time working through the recession, it has happened previously and will no doubt happen again as we have poor memories....New inventions are made - food ran out in neolithic times too, but we survived by learning to farm and we will do whatever is necessary to survive, by whatever means necessary in the future too. We cannot concern ourselves with what our great-great-grandchildren will live on - we have to live now, and if we don't concentrate on the here and now, there won't BE any great-great-grandchildren!

I have said for years that we do not need a Government, we need teams of people - lawyers, accountants, clerks, people who look at everything and run this business as it should be run (this is a business - country or not, it is just a business called UK); if business carried on the way this Government do, they would be out of business rapidly- it doesn't matter what you call the people in charge - labour, liberal, conservative, Green, BNP, Screaming raving monster loony - I really don't care what they are called as long as they do their jobs - AND they should be paid the going rate for the job in hand, not thousands for expenses, cars, second homes, meeting attendances - just an honest days pay for an honest days work - this would leave more money in the 'businesses' savings account and could be used to settle debt, help the NHS/Schools/people of this country who are faced with cripplig Council tax bills, road tax, congestion charging, high food prices, minimum wage etc.....

I don't care what job someone does, NO-ONE is WORTH £100,000+ a year.....that money should be in the 'business' for use throughout the business, not in someones pocket! This way we might even have money saved for a rainy day (15 years time perhaps?) so that we don't HAVE to borrow money to get ourselves out of this mess - you never know, but IF the businesses accounting team were savvy enough, we might not even get into this mess in the first place!

Phew! Rant over.....

Yiam cross - please reread my original post carefully and note the use of the word hypothetical.

The worst possible mistake is to pump money into the Economy now and further reduce interest rates; how do you think we got into this mess! The British have to go cold turkey over their addiction which makes them the most indebted in the World. Interest rates are already too low to provide an adequate return given all the risks. If you cannot afford a mortgage at 6-8%, you shouldn't be borrowing. The still ludicrous level of UK house prices is a result not just of too low rates, but people going well above the old 3.5x main earner only and maxing out with no rainy day fallback and ignoring the fact that UK housing is the worst quality in Europe and needs constant repairs from expensive cowboy builders. Given the lax approach, I expect to see even more gullible buyers discover the horrors of the amateur developers as shown on all those TV progs than after the 71-73 and 80s boom. At least then the huge surges were restricted to London and the South East where the well-off and Foreign buyers want to be; thanks to Gordon Brown trashing hundreds of billions on "revitalization" vast areas have had bubbles that have to burst. My ex neighbour had to pay £800k for a run down 3bed in Cardiff in 2006 as the pointless Welsh Assembly caused a huge boom. The 90s downturn was triggered by the ending of multiple MIRAS in 1988. As I predicted HIPS has done the same now. In Japan prices are down 80-90% from the 80s; Ireland is already 35% down. Yet all the "Experts" still say the downturn will be short and shallow, yet without the City what does the UK have to sell to the World besides the X Factor?

Wow,
I've never seen so many long comments, and most of them 'off thread'

My little rant:
"I class our own Northern Rock, Bradford and Bingley in that ‘bust’ category already, with HBOS (LSE: HBOS) and Royal Bank of Scotland (LSE: RBS) close behind. Shareholders in all four banks are well and truly bust."

I gave RBS £2000 earlier this year to buy shares in their £12bn rights issue in order that my existing investment would stand still and not be diluted.
Several months later they suddenly need another £20bn and the government steps in with the money and effectively makes my shares worthless.

My question is - surely at the time of the original rights issue Fred Goodwin and his cronies knew that RBS was in far bigger poo than they admitted at the time? (The short time between the rights issue and the eventual share price collapse would suggest so)

If so, then RBS took my £2000 fraudulently and should therefore be charged in a court of law with
defrauding all the investors who were conned into buying the right issue at £2 a share when RBS knew fine well that worse was to come.

Rant over

The housing market will always win wait and see.

Sorry for those who didnt ride the storm, however health and family are more important.

No good being the richest person in the grave yard.

Take RBS to court, you might well win...

But getting compensation might tip them over the edge into insolvency

@ricanold
You suggest that HMG had their plan "in the can" for a while and were waiting for the right time to implement it. I think you may be right. Some other factors that support this:
1. some informed criticism of the Paulson measures in the USA directed attention towards recapitalisation rather than de-toxing banks' balance sheets. This may have helped HMG have the courage (if that's the right word) to nationalise the un-nationalisable.
2. As the markets sank, esp the value of banking shares, the cost of implementing the measures went down. (How much would it have cost to buy enough of RBS to sack McKillop and Goodwin and overturn their divi policy 12 months ago?). Perhaps HMG was waiting until the measures were affordable (or at least not too unaffordable)?
It is amusing in an ironic kind of way to think that the (mainly right-wing) rabble-rousing of the Express and the Mail might have helped to create a sufficiently anti-banker environment in which massive nationalisation became politically possible again.
Please don't construe my use of the past tense in "as the markets sank" above as meaning I think the sinking is over. I just don't know about that... seen the FTSE 100 so far today?

I guess it's semantics, but whilst it may be technically possible to calculate a percentage of a percentage I think it is misleading in the extreme. If the BoE reduces base rates from 4.5% to 4% imagine the confusion if the headline was "BoE reduces base rate by 11%"

Yorick58, are you insane? Global nuclear power! Who's going to control them securely? The Americans failed with Three Mile Island, the Russians with Chernobyl. A single failure destroys the viability of the surrounding area for decades, maybe centuries, and affects agriculture over a much wider area, e.g. Wales and northern England post-Chernobyl. The potential problems presented by worldwide mismanagement (which it would be in most cases, sooner or later) of nuclear power stations and the waste they produce (not to mention the plutonium!) are too horrendous to even contemplate. The ONLY answer is renewables, especially solar. Uranium is best left where it lies.

As regards the science of sun influences, you might care to look at:

"A new scientific study concludes that changes in the Sun's output cannot be causing climate change."

(http://news.bbc.co.uk/player/nol/newsid_6290000/newsid_6290400/6290434.stm?bw=bb&mp=wm&news=1&bbcws=1)

Where there's a video clip from July 2007, reporting on scientific investigation of the "it's all solar" hypothesis.

In order to create a world that is sustainable their are only three words that encompass the only solution - communication, cooperation and collaboration. These three words embed the notion of a peaceful and sustainable future. If we do not bring about this global situation there is no doubt in many eminent scientific minds that we shall not exist in any meaningful way by end of this present century. Never before has humankind had the situation where we have between 75 and 85 million new mouths to feed every year (after discounting all deaths), an energy demand that cannot be sustained indefinitely, a loss of land mass the size of countries every year (desertification etc), decreasing drinking water availability (through human actions and climatic change), increased crop failures bringing about high prices and increased starvation incidents, land depletion from rising sea levels, increased incidents of mass human migration due to many reasons including war, hunger and wars (giving rise to humanitarian disasters on a scale never seen before),increased polluted seas and oceans giving rise to vast 'dead' areas where there is no oxygen (the Coast of Mexico being the most prevalent currently that is the size of Greenland already but where many more will emerge through high concentration of industrial fertilizers et al leaching and flowing into the oceans around the globe, greatly diminishing global fish stocks, year-on-year depletion of mineral resources with some vital for human life itself (DR Congo presently is all about the control of physical mineral wealth as many in the international media acknowledge including the BBC), increased wars due to the continual reduction in natural resources and where according to many now (including WWF) we shall need the resources of two planets on our present path by 2050 (not far away now with only 42 years to go).

Therefore for all those who are not concerned about the above facts, please let us know how we shall solve these problems that are either with us now, or will be in unison with us in the not-too-distant future.

D David Hill
World Innovation Foundation Charity (WIFC)
Bern, Switzerland

David

Perhaps you would like to take your sham to a different message board as I quite like reading this one. Though I notice you have posted this drivel on other boards I frequent too.

Since you claim scientific basis (such as "...some eminent scientists now consider...") perhaps you would be so good as to give us the references?

Or is it a complete fluke that the domain www.wifc.org.uk is registered to an address in Huddersfield where you have what appears to be a building consultancy company?

Have no fear - we'll come to you when we want "expert witness services, party wall agreements and structural designing..." as you appear to offer.

Yours

PE

p.s. For the sake of everyone else. The Global Financial Crisis is definitely *not* over, however there are signs that the cost of it is nearly all priced into equities (but not housing, which generally is a lagging indicator as I'm sure we can all work out)

I would love to be optomistic about mortgages as I am due to remortgage at the end of the year.

My ltv is 60% yet the halifax who I am currently with is offering me 6.34 to stay with them plus a fee of £999.00.

Lloyds who I have banked with for 20 years will offer me 5.79% with a £495.00 fee.

So maybe someone could explain where to get these good rates from them as all I see is that us the tax payers have bailed the banks out which leaves them with more money to fleece us with !!

What is the difference between a recession and a depression ?

A recession is when your neighbour loses his job and a depression is when you lose yours!

House prices have got to drop by 30-40%.

The debt:GDP ratio has to fall back to one-third- including all the off-balance sheet fiddles (now one-half).

There has to be net emigration from UK.

Savers have to be able to get real, sustainable, after-tax returns from short dated money again.

If these preconditions are not fulfilled, and the welfare state and NHS not hacked to pieces, and NHS and civil service over-staffing not tamed... there will be a worse reckoning in a few years.

Brown & Co have dulled the pain, not cured the British disease.

For decades most people have lived on borrowed time. They are obese, lazy, incontinent and self-indulgent, especially the younger ones brainwashed by consumerism. The future holds very harsh years in store- especially for the stupidest, idlest and most addicted and ignorant members of society.

I agree, partly, with this article on 2 points!
1) Yes we are in a recession, the signs are there including the stock market sell off that happens before a recession, just watch for the buy in when we are on our way out of it! And
2) With CarlosWhizz's comment, in 10,15, 20 yrs time this will all happen again in some form or another, due to greed of human nature!

This is only a lull before the storm I am afraid to say. But, we have ‘missed’ a unique chance to 'sustain humanity' in this century by not changing our basic economic structures and allowing the present financial market system to prevail.

When one considers what the future holds, a world population of between 9.5 and 10.5 billion by 2050 (possibly even up to 12 billion), ever-dwindling natural resources to support human life and the dire effects of climate change through carbon and pollution emission, is it not clear that we have to change our economics to ‘Ethical’ and ‘Sustainable’ economics? For if we carry on with the present capitalist economic system, where the very few become rich beyond their wildest dreams and the majority are kept in relative poverty through the crumbs that drop from the rich man’s table, our young and future generations to come will eventually suffer immeasurably suffering. Indeed, governments are still presently blinded by current economic dogma and minority vested interests that do not look after the well-being of all people.
Therefore we have to change to new economic systems that are sustainable and where the needs of the vast majority of the people are addressed. In this respect it is a little know fact but it only takes a reduction of no more than a 15% drop in global oil supply to bring eventually the whole of the global economy to its knees.
We have therefore to supplant the present capitalist systems and economics with ‘sustainable’ systems and ‘need’ economics before it is far too late to change. That does not mean that we do away with 'markets', as 'markets' are the only way in which trade occurs. It is how we operate those markets is the problem for sustainability and public need.
But unfortunately to allow this to happen, governments should have started the critical need to change to these ‘ethical’ economic structures at the start of the credit crunch and should not have supported the banking system as they have. In this respect we would have had a decade of comparative hardship but where we would have eventually attained a new way forward for humankind based upon sustainability and necessary human need economics. Now, having rescued the banks and other large corporate entities we are still on the same road to our ultimate destruction as a species. For nothing has and will really change, as the same system will in principal be with us, ‘capitalism’ in another disguise. Unfortunately governments are in the main dictated too by big business and where whose only aim is profit, no matter how they achieve it. Considering this the world will continue in decline in human development terms and where at the end of this road awaits a nightmarish vision for humankind. Therefore wouldn’t it have been better to change now, go through 10-years of pain whilst we forge new equitable economic systems and then have a lasting environment for all generations to come. But no, governments and big business will not allow this to happen and accept the inevitable dire problems that they will cause through still adopting the basic premise of the capitalist system – profits, greed and self-interest to the detriment of all humankind. That is why governments now spend around £1 trillion on armaments and defence alone every year as they know that the capitalist system will eventually lead to global wars and aggression, as nations eventually fight for ever depleting natural resources under the dictates of the ‘capitalist’ market forces and economic principals - the law of the fittest and strongest and who will win through. But this time there will be NO winners it has to be said. We have now therefore lost a major chance in providing humankind with the means to a sustainable future in this century and where our political leaders should reassess their economic strategy, for what they do now will affect the very survival of the human experience itself.

Dr David Hill
World Innovation Foundation Charity (WIFC)
Bern, Switzerland

"There is likely to be more scares"
I thought journalists were meant to be literate.

Yes, I agree with Dr David Hill. We are all living on a little planet, consuming far too much of too little, then complaining about a recession. I wonder what our recession will mean for a starving woman in Darfur ?

Thank you David Hill. It is a pity more people cannot see what is waiting down the road for us. A sustainable future is impossible with the global thinking that is going on at the present time.

Do you think about those of us coming up to retirement? What will such a base rate do to annuities? Like quite alot of stuff written on this website, this is ill-conceived.

Given that this recession was caused by cheap credit, why does anyone think that cheap credit is the solution? It makes no sense to me.

I think lowering interest rates is simply going to ease the short term pain. But we are going to be paying for it for a long long time.

As clarcombe so smugly pointed out the difference between recession and depression - thanks for that...having been unemployed for 18 months (govt funding pulled on my project) and my husband again unemployed for the 2nd time in 3 years, we are rather unaffected by the current crisis. We know our mortgage will be paid for another 9 months as we had a payment protection policy, indeed this is the third claim in 3 years. We are guaranteed a fixed 'income' from our Job seekers allowance and child tax credits. We have already downshifted to Aldi, plan meals and budget carefully, don't waste food, cut back on unnecessary spending and walk more than ever. We are both educated and experienced - I have had 3 interviews in 18 months. Our house is cleaner and tidier and all the little jobs that needed doing are being done.

We are already doing what we need to do to survive the 'credit crunch and/or reccesion'. We don't have shares, stocks or savings to worry about. I don't have to panic about my bank going bust. Our house is still worth more thatn we paid for it, negative equity is unlikely, and our mortgage is relatively small.

Our neighbours too are in similar circumstances, she had to leave her career due to ill health and is currently retraining for a new career, her husband was made redundant last Christmas after 27 years service, and is also currently retraining for a new career.

It may be a recession, but we are not depressed.

I agree the kerfuffle of a couple of weeks ago appear to have died a little, with the only puzzle being as to how it took so long to come up with the obvious tactic of using government money to act as honest broker. My own theory is that they had the solution earlier, but had to wait until the puplic were worried enough that they would swallow the pill.
As for David Hill's comments, I don't follow his argument fully but I agree that consumerist society can't survive, there are too many of us, and it would be better if we stopped the exploitation voluntarily, rather than because there was nothing left to exploit.

I hope mthe author does not live to regret his jeadline. The first two I saw this morning was hia and this one from the Financial Times

"Asian markets fall as crisis grinds on"

http://www.ft.com/cms/s/0/21fafa10-a0a9-11dd-80a0-000077b07658.html

It's not cheap credit per se that's the problem, its the lax lending criteria that has caused the problem.

The fact mortgages were issued based on 5x salary with no considertaion for the disposable income of an individual is the biggesst probelm.

Why should those of us who have sensible mortgage ratios, and spend carefully pay for the recklessness of the banking sector in giving away such poor loans, and the irresponsibility of those who took out those loans knowing full well the finincial implications of doing so.

Bring on the rate cuts, and Gordon, make the bl**dy bankers pass it on to us.

Obviously written by someone that has never had a mortgage or has not read the small print on their existing mortgage. Just because interest rates fall by 66% does not mean the mortgage repayment will drop by the same amount.

Re: Dr David Hill - thanks for your insightful article.
The consequences of a significant change in the economic system will, I think, require more than a change in direction on the part of politicians. I believe our predicament goes to the very core of our society.

We live in a hedonistic world; the prevailing western philosophy has moved from broadly Christian to atheist. The days of duty, altruism, stoicism, tolerance and industry are gone. Atheism is grounded in the gratification of the individual and the new world economic superpowers of China and Russia are firmly atheist.

So unless we are willing to give up our pleasures which are currently our consumer goods, our pursuit of happiness via sensual gratification, then things will not change. Certainly the trend seems to be firmly against voluntary change.

Personally I have no doubt that the powers that be will ignore all evidence of inevitable crisis until it is too late (just like the Vice President in the film "A Day After Tomorrow").

I have to take exception to the comments from David Hill. If his utopian dream didn't fly in the face of every human instinct since the cave man days then he might be on to something - but it does, so he isn't. I don't know what the World Innovation Foundation Charity does but if this is the foundation of their being then I don't want to know as it is completely unrealistic.

As for the banks being nationalised then about time too. Unregulated capitalism will always blow up in its own face and self-regulation (or that supposedly regulated by the FSA which is esentially the same) has never worked and never will. Greed is a human instinct and will be there alongside fear for ever. Both are part of being human whether we like it or not. It harks back to the survival of the fittest/smartest and that is not about to change.

Nationalising the banks might not suit investors but if it is the only realistic way of getting real regulation to temper the basic human instincts that prevail in unregulated markets then bring it on.

Some of us live in the real world and, as part of our destiny is externally controlled by the society we are born into, it is the responsibility of those that control that society to minimise the pain we experience. Nationalising banks may not be a popular option but it is certainly a welcome one if the result is no more unfettered capitalism.

After all, if the banks had to survive like real businesses then there would be very few left today which were not bankrupt.

Eighteen months ago I retired from the business which I had helped to build over the previous 36 years. I sold my share of the firm to the continuing partners and thought that I could live comfortably off the interest on the invested funds for the rest of my life.

Talk of vastly reducing interest rates is fine for those paying out, but a drop from 5% to say 1.5% reduces my income form that source by 70% and means dipping into capital to live, thus reducing the interest even further. I suspect I am not alone: there must be thousands of others out there who depend on the interest on savings to live.

As for a pension, well I was one of those who invested in a pension with Equitable Life. At one point at the end of the 90's I received a statement from them suggesting that if I left the pension fund in place until I was 65 the "guaranteed" annuity of 10.5% would have paid me £45000 per year. After Equitable went to court and had the guarantee removed ( how did they manage that?), just to add insult to injury, they then sliced a great tranche of my fund as a market adjustment when I had the temerity to want to move it to someone else. In consequence, that fund is producing a pension of £6000 per year so who can blame me for losing confidence in so-called managers who took fees based on the value of the fund, whether it went up or down?

I stepped into the stock market as well, but I see this morning that my shares are worth 14% less than I paid for them and that figure is only as good as that because some of them have doubled in value. However, I am staying put with them as I think they will come back and I am in it for the longer term rather than short term gains.

I too remember when interest rates were at 15% as they were in 1979 when I bought my present house and I am not forced to move so, with no mortgage to pay, I am relatively comfortable, but just bear a thought for those who live on their interest. There is another side to that coin.

Although Bank rate may fall, the only people that will actually benefit and see lower payments are those who took trackers of 2 years+, because anything less than that will result in a need to remortgage, or survive the lender's standard variable rate.
What's worse, is that even those on a term tracker (not many) will have a 'collar', which is like a cap but declares a minimum interest rate, and these are around 2.25% depending on your lender.

The relationship between Bank Rate and LIBOR (that the lenders fund at) has become elastic as a result of lack of confidence to lend between lenders. Lenders have therefore had to increase their margins over Bank rate (when pricing both their new rates and their SVRs) just to break even with the cost of funding (LIBOR) ... it would be fair to imagine that they will continue increasing margins as a result of Bank Rate cuts. On that logic therefore, if you're after a tracker, you should consider getting one now on a current margin. I personally like 'drop locks' (like Woolwich, Cheltenham and Gloucester and lots of other lenders offer- ask your broker) where your tracker comes with a clause saying you can drop off the tracker and onto a fixed rate at any time: this will allow you to take advantage of any potential falls in Bank rate whilst tracking, and then switch to the potentially lower fixed rates in a year or so.

Whilst I agree that interest rates are going to be cut, up to May 2010, (the latest date for a general election), I forecast they will rise steeply after that event.

The chickens will come home to roost as a result of Brown & Badger's profligate borrowing to support the banks and the economy during the recession.

Once again inflation will be rampant, therefore the BoE will have no alternative but to increase rates, the current forecasted cuts are simply a politically motivated attempt to get this rotten government re-elected.

What amazes me whenever we encounter a financial problem is that all sorts of "investment experts" crawl out of the woodwork and tell us what is wrong with the financial situation and how it will progress in the future, subject of course to certain caveats which let them off the hook when they are proven to be wrong!
Would it not be a good idea if all these financial gurus were to exchange places with our financial lords and masters so that matters could be put to rights quickly and easily? Then, when things turn out to be no better, they can all change places again!
Quite frankly, (as I see it I must say) banks have lent money in a totally irresponsible way to those who could probably not afford to service their debt. Just consider the mortgage lenders. When lending up to 125% of valuation they were banking on (a) the fact that property prices would increase by 25% plus, in the near future and (b) that the mortgagor would be able to maintain their payments against future job losses! Add to this the positive encouragement to borrow and we can see the result!
Banks act like a flock of sheep but with less common sense. They all dive in together (with very few exceptions) and they all suffer the result. Remember the headlong rush to offer "one stop" financial services? Remember the millions spent on buying up estate agents? Remember the tears that followed and the massive write offs? Remember the scramble to offer insurance and stockbroking services and unit trust investments? Remember the happy vision of smiling people going to their local bank branch and sitting down with a friendly "adviser" who would fix them up with a mortgage, an overdraft or loan, home and house insurance, travel insurance, life insurance, unit trusts, savings plans, ISAs, school fees plans and so on? Where are the local bank branches now let alone this friendly advice?
It sounds as if I am a cynic but I am not. Banks have to make a profit and they fulfil a vital role in society and global finance but this herd instinct should be tempered with sound business acumen.
Many years ago when I started my career in finance by working in a bank I remember a bank manager telling me that the secret of good banking was the man standing before you. If you trusted him he could have the last penny, if you did not, then you bit every coin he paid into the bank. Sound advice I guess.
Is there a way forward from here? I suggest that the media stops talking down the economy and the financial situation. Start looking on the positive side. Just as if everyone stopped buying anything (except food)for a month our economy would face near ruin, so, if everyone started buying optimistically for a month, our economy would be nearly up to speed again. The economy is all about demand led supply and this is all about people behaviour.
The first thing I remember when beginning my business studies was the definition of "economics" as propounded by Prof. Robbins. He defined economics as "The study of human behaviour as a relationship between ends and scarce means that have alternative uses. Heavy stuff but it is all about what we want and what we can afford with our limited resources. If we add to this the fact that people are now running scared to spend because of the gloom and doom spread around by the media, it is small wonder that we face the present situation.
In any business problem, the man at the top should be looked at. He is responsible ultimately. He will not know everything but he should build around him a team who collectively do know everything or as near as possible. Using this principle, we should look at the man at the top of our Government.

Artemis Fowl, while you are undoubtedly right about our society's hedonistic attitude being our downfall, I completely disagree with you about this being a result of atheism. I know plenty of atheists, myself included, who work extremely hard for not that much money, and I also know some religious people (of various faiths) who are extremely successful and as a result have tons of money and, guess what, they spend their a lot of it on consumer goods.

Being religious does not prevent you from being greedy. In fact, science disproves religion, whether you like it or not, and as an atheist who prefers to follow science as a guide, I am far more concerned with the planet's sustainability and the welfare of humans WORLDWIDE than I am about your views on who's to blame for this country's financial crisis.

Reading this arcticle and all the postings above makes me SO glad that back in the 80's when interest rates came DOWN from 15% (yes 15% - not a typing error), I left my repayments at their highest. This cleared my mortgage 10 years early.

Happily a mortgage for me is history. I remember the elation of being mortgage free, not to mention the sudden increase in disposable income. As euphorias go, I can certainly recommend it.

You're behind the times. With the currency dropping like a fly an inflationary push is inevitable. This will put a brake on those seeking a drop in interest rates.

Hold on a minute! I asked my 6y old daughter last night how long she thought the recession would last. After we had sorted out what the word recession meant, she thought about it for a few moments and said "About..um...23...um...minutes".

Now, I don't know about you, but she's as likely to be as correct as the so-called experts. So I'm going with her prediction, which means the recession is now over. I'm just off to invest in some shares...

To the Author

Yes if interest rates do come done substantially then some people with trackers (and variable rates - if Banks and Lenders are forced to reduce them) will pay less, subject to the minimum rates at which their mortgages and loans have been set.
However all fixed rate loans and mortgages will not change at all and repayments will continue to be required at current levels until the debt is paid or re-negotiated!!!

To the Renters

Yes, some rents do come down, particularly commercial rents. When there are no businesses willing to take and the properties remain empty for a considerable period most commercial Landlords will advertise leases at lower rates. However for the private rented sector, not such good news.
Some rents will fall, where Landlords are desperate for income, such as those who have invested all of their pension money or savings into buy-to-lets, expecting their Tenants' rents to pay their mortgages. No Tenant, no rent, repossessions loom! So rentals will be reduced to produce some income, whilst these buy-to-lets seek sales, or alternative funding or re-negotiations of their mortgages/loans.
The private rented sector is also complicated by and will be artificially buoyed by the Housing Benefit subsidies. These claimed by the increased number of people who are going to lose their jobs from business shrinking or failing, who have little or no savings will claim and much of their rents will be paid.
That is unless the Government gets it's act into gear and re-introduces some form of Rental Control and Tenant protection. As there was before the Tory Thatcher Government of the late 1980s abolished all of these Rent Act protections. Unleashing the dog eat dog world of unbridled Conservative greed - I want to keep everything and I want your share too, including all the profits from the fruits of your work.
Forcing Business profits share, with employees as well as Shareholders would be a very good way to start.
Presently, mostly, only the top dogs in business get shares of their own companies' profits, since they (the top dogs) are the ones who advise their governing boards and can only think of themselves when recommending these packages.
A business which shares it's profits in an equitable manner, with its' workers and shareholders will be a successful business, so long as no dodges or tricks are allowed to creep in, perverting the intention and diverting the shares to the greedy and lazy.
Profit sharing Employees will want their business to succeed and will work hard to make it so.
But there should be no return to Bonuses for artificial number collecting, as there has been for selling mortgages and loans to people who are likely to be unable to pay.
Not that this is wholly the fault of business and we return again here to the private Tenant/renters.
Again the Thatcher Government organised the large scale sale of Council houses. The Right To Buy. Who could resist the temptation of a bricks and mortar purchase at a 50% reduction?
Who could resists granting a mortgage to someone offering bricks and mortar with an effective 50% deposit?
No reinvestment of even the paltry sale money back into the Councils for re-stocking and building new publicly owned homes. No. The sale money went lock, stock and barrel into the Conservative Government coffers, to donate to the most wealthy in tax concessions, as did the sales money from our privatised, water, gas, electricity, railways, transport and everything else.
So it is not wholly the fault of the Bankers. Think about it? Who created this long time coming bubble? In my view, the Thatcher Government, turned on the worst excesses of the human and animal condition. Dog eat dog.
Many of these new private home owners, ex-Council Tenants could not afford to pay their Mortgages, often from the unskilled and largely poorly educated part of our fellow countrymen and women. So no job no mortgage payment, repossession, no house, no new Council houses as they were mostly sold off. Ending either completely homeless or in the private rented sector.
Well done the Conservatives and I see no change in the arrogant and selfish manner of the current Conservatives and their leadership.
So hopefully, get off your backside Government and bring back some RENT CONTROLS and TENANT PROTECTION.
One is useless without the other, as so soon as the Rents are brought hopefully down to a reasonable 'market level', the Tenant will be thrown out, as they were when Market Rents were brought in (with no or very little Tenant protection) to take over from Controlled Rents and Tenant Protection.
Allegedly to stop Rachmanism! Instead this policy has bred a whole current generation of buy-to-let Rachmans. For those who have never heard. The wholesale ownership of private properties, kept in disgraceful conditions and rented at top whack rates, with Tenants thrown out at the first complaint. I'm no historian so I'd guess Rachman must have preceded the late 1940s first Rent Controls after the 2nd World War. And certainly it continued in the 1950s and to a lesser extent the swinging 60s.
Probably taking advantage or returning soldiers from the War and their left behind families in that time of AUSTERITY. Wow that's a word we haven't heard for a long time and where we are all headed right now.
Even for those who think they've been smarter than the average Joe.

And finally to Dr Hills.
A fine and well meaning article but unrealistic as to how democratic Governments can manage to stay in power, whilst nationalising the money supply and strictly regulating personal behaviour of the dog eat dog wolves, with which our planet seems so abundant.
I would also take issue with Dr Hills' climate change claims. I too subscribe somewhat to the view that our climate change is part of the evolutionary cycles of our solar system and indeed of our world and the galaxy, of which we all form part.
As to how our solar system was formed and as to how this system will eventually disintegrate, whether man (or woman) wants it to, or not, when our radioactive solar sun eventually runs out of fuel and burns itself out.
I do however agree that man (& woman) = people, may well be aggravating the intensity of the damage suffered from the current evolutionary cycle of climate change, but I do not believe that people are the sole authors of the change.
After all, our world (to present date, so far as our scientists have been able to discover) started as a molten ball of splattered together radioactive fragments, of probably, or from, other exploding solar systems. Hence the still burning, molten core of our world, or so we believe and the volcanic nature of the early earth, before normal life of plant, sea creatures, animals and people could be born, live and survive.
Our current and previous Labour Governments are guilty of failing, particularly the Blair crew with a large majority, of not reining in the excesses of Thatcherism.
Blair no doubt fearful of the Tory press and newspaper machine and the wrath of the rich and powerful, not wishing to lose the taste of power, from the peasants being again blindfolded, tricked and perverted into bringing back their conservative slave masters, did not a lot to roll back these excesses.
Nor to curb the powers and wealth of the multi-nationals, fearful of their threats to leave the (laughably Tory claims) high tax country and move to where they perceive lower taxes, less regulation and even more of a free for all, with even larger bonuses, pensions and paybacks than have ever been available here.
Mr Brown having had such a bad time in finally attaining leadership does have some of UKs and the world's poorer people in mind, but does not have sufficient, power and control, to institute the type of changes Dr Hills' envisages.
Further, the biggest stumbling block, is the rest of the powers in the world, our world being only one tiny part of this huge global marketplace jigsaw.
Unless Mr Brown can team up with and motivate and move, the other large powers as part of a Global Team for good, so freezing out the renegade bad powers, GB would find itself frozen out from even taking a tiny bit of a share in the world's riches, in minerals, arable food markets and everything else that is good in our world.
Having become so dependent, for imports, on Thatcher's preferred and encouraged transfer to cheap labour markets for factory, agricultural and everything else production, GB has been left DAMAGED to earn large taxes only from crooked financial services gamblers, casinos, betting shops, fast food takeaways.
And not to forget greedy representative MPs, MEPs, and Councils, top Civil Servants, Judges and Lawyers, who will make sure they do not lose their jobs or State Final Salary Pensions but will make money from this opportunity they perceive from the chaos they have all jointly created.
But without taxes we would lose our often beleaguered health service, that tied through the nose by the greedy, top, private practising specialists, who devote a minimum of time to the public good, preferring the rich man's shilling, whilst using public facilities at minimum cost. Yes waiting lists might be longer without the private sector, but on the other hand, if the specialists' attention and time, was not so diverted into making sure they earn such a nice tidy pile for themselves, they might just get on with the public health service job they are paid for and make sure waiting lists are kept to a minimum in any event.
And our much criticised Job Search, Benefits and Pensions systems - which although also much abused prevents absolute destitution and the prevention of having to go cap in hand to beg from those whose greed and wealth has been created from the very fruits of the labour of those, who would be then compelled to beg.
So, not a very Great Britain, better than some, but not as good as it could be? If all those voters, those little people who mistakenly believe they are taxed too high by a Labour Government really examined what it is they receive, they would realise any Tory Government would cost them a lot more money by having to pay for these services, which would be withdrawn or shrunk to near non-existence.
I am not an economist, a historian, a scientist or anything else specialist and I left school at the age of 15, not having attended since the age of 13. I was a truant and I got myself little jobs, cleaning, looking after kids, working in shops, whatever I could get, before my employers got too nosey asking about my National Insurance credentials and I had to leave.
On my 15th birthday, my shop boss was so pleased I'd sorted out my National Insurance mystery, she took me for a drink in the local Pub. Not that that is anything to be proud about, knowing now the damage, alcohol does, to so many people, largely without their thoughtful reason.
I hated being poor as my Father was out of work, due initially to illness, for a very long time. I hated the discomfort of 2nd hand shoes that didn't fit, of being sent home from my Convent Grammar School as I did not have just quite the right colour of blouse (which my Mother had made) and not expensively purchased from the local School outfitters.
I became a rebel but had to study for many years at night school, after finishing work each day, to attain some qualifications, such as practical typing skills. etc., etc.
And I am still a rebel and still fighting causes and in case you wondered, I am not a member of the Labour Party.

And PS I do not really agree with the Banks being bailed out to go on and re-start their huge and obscene bonus payments from taxpayers' cash.
However I do agree that the markets need to be stabilised but then the detailed examination must be begun of how on earth our Banks nationally and internationally came to be mired in so much dirt.
Then top heads should roll, along with pension confiscations and any of other ill-gotten gains.
But to be effective as I have said above it will have to be a multi-national effort, freezing out any bad renegades, who would dare to make offers or tempt destabilisation of any businesses.
Clearly modern democracies will struggle, with dictatorships and very weak quasi-democracies able to really enforce their will, against the powerful press barons, who would once again poison minds.
In other words all of the people in the world must work together, to learn that to share and to give is as richly rewarding as to take and to stop and control their own personal obsessions with greed and power.

Phew!!

I believe people are like water. We find our own level. Most of the commentators on this site are whinging about the doom of the planet and their own losses, real or potential.

But how many take full responsibilty for their own actions. I like to think most people do their best most of the time but we seem to very easily get 'sucked in' to doing very stupid things, and then complain about the outcome.

We decide to buy a property, we decide the amount to borrow, we decide who to elect in government and then whinge if things don't always go our way.

If place a bet on a horse and it loses, so be it, I move on. I don't have a pension and have never really understood the maths. I do however have nine mortgages, all interest only and all with tax relief at 100%. Not long ago I was paying 3.74% on one commercial btl mortgage (not bad at all). The deal came to an end and the SVR went up to over 7% - an increase of nearly 100% on my mortgage repayment. Of course I went shopping and salvaged a 5.25% plus costs. Rates will not come down to 1.5% or anything like it and if you think they might then you are in cloud cuckoo and have no concept of how finance works.

Just one other response to several comments. David Hill is only partly right in his judgement. We are and always have been in danger of applying our thoughts and morals, the way we live and the values we stand by as being the way all peoples of the world should live. This should not and could not be the case and whilst extreme poverty and deprevation cannot be endorsed we must learn to be more tolerant and accept other lifestyles.

That's it!

To Ihatebullies2:

Very long post, but what is your point? What do you suggest. The real problem with this world is there are 6 Billion people and half that number would be to many. So whatever system of Government you have there will be losers. For the future I am sure Nature always have the last laugh and there will almost certainly be some kind of pandemic. When that happens the global Logistics structure will fail very quickly and the latest economic problems will seem like a walk in the park. For the few that survive (how long would you last with no food in Tesco's? even if you do not circum to the Virus!). life will be good again eventually! and the planet will recover giving the other animals not gone extinct a break. But at the end of the day who would care, not the dead, just a few soles during there very short life on this rock. But then what is the meaning of life? And no I am not religious. So in the mean time we are back to greed and making the most of what we can while we can and doing the best for our familys. That is Human nature who's forsight is limited by the life span of four score years and ten. If we all lived forever, you can bet things would be very different.

I don't think we are being particularly sceptical, Dr. Hill, many of the posts do share your outlook to an extent. We know things have to change. But things change slowly, do they not? All us ordinary folks can do is vote for leaders we think may help to bring about change. We can join or donate to pressure groups who can influence the world's opinion-formers. What else would you have us do? We can't just switch off the power and go and work in a field somewhere.

Hi MCR82 ... Well It all depends, 4.5% is 200% higher than 1.5% :0)

Apologies I misread yours and my mind obviously deserted me for a moment. That'll teach me to skimread.... :(

Percentages can be very miss leading. The average saving or increase should also be quoted to give meaning.

Have to agree with stebor19 ref offset mortgages. I ended up with one paying 0.8% above base rate - and as far as i can ascertain, there is no collar! Would recommend this method of repaying a mortgage without hesitation.

I didn't know that some trackers had a minimum rate !
My mortgage is a Lifetime tracker at just 0.17% above base rate, with no minimum rate, and obviously I could choose to go elsewhere at any time because there is no Early Redemption Fee !
I am glad that I was Foolish enough to spend the time a few years ago to find out what was available !

To Ihatebullies2: Your post is full of nice intention, and there is no substance to your post to make it happen. Sever birth control is the only answer to the worlds problems, but it will never happen, so nature will take charge eventually. Look at history and the plague in the middle ages. OK we are more clever now, but then look at Aids and Bird Flu, slight variants on these are all that is needed, and it will happen it is obvious to me. Why do you think the World Health Authority have so much power? they can close down a whole country if they deem fit and will be backed by every other country in the world. So, my point is there is nothing you or I can do about about any of it, so enjoy life now as it is all to short, if you have money spend it, as that creates Jobs and gives others a chance, and the best way to help.

something smells of bank charge reclaiming to me? I could be wrong, but if the banks are/were set to lose billions in bank reclaims, would that not rock the british financial market alone scaring other countries to pull out of lending to us???

mcr82 (is that My Chemical Romance? Their music is quite depressing too.) The use of the word hypothetical doesn't make false assumptions produce right answers. Hypothetically a magic fairy with a powerful wand could come along and make it all better but what are the chances of that?

The article starts off mooting a 66% cut in mortgage repayments and that just isn't going to happen unless interest rates go negative nomatter how much you use the word hypothetical. Bad assumptions have got us all here in the first place & hypothetical should stay in the fiction section where it belongs.

As I said, the Fools have left the room & the fools have taken over. I've seen nothing here for too long now to make it worth wasting any more time coming back so I bid you farewell and good luck. You'll need it.

Aww lighten up everyone. After all it's only money!Desiderata says it perfectly....no doubt the world is unfolding as it should.....

@AndrewB1961
I'm not sure what the use of economists is, but economics certainly has its uses. By bringing to bear what little I know about economics 3 years ago I decided that if any nasty shock were to happen to the UK economy it would not have the stability to withstand it. (Reading TMF helped in arriving at that assessment, I should say). On the basis of that my wife and I undertook to reduce our unsecured borrowings to nil (from what was then a scarily large amount). We got there just in time.
I don't claim to have predicted the credit crunch, and I don't think anyone else claims that either. But lots of people have been saying for a long time that the economy was set up so that something bad would turn into something worse and we were right. Moreover I don't go around doomsaying the rest of the time (I paid attention in my stats lessons at university, so I know about that trick). Anyone who didn't hear one of us saying it was unlucky. Anyone who did but paid no attention needs to reprogam the filters on their input transducers (Read "eyes" and "ears").
Just been reading "Irrationality" by Stuart Sutherland. Should be compulsory reading for all adults. Inconvenient evidence? No problem sir! Just delete it...

@MalcolmXtra
You are probably right that fear and greed will be there for ever. However it does not follow that fear and greed have to dominate our thinking and actions in these things. There is good reason to think that fear and greed (being primitive emotions) can be taken out of play when dealing with situations which are really not life-and-death matters, and for most of us financial decisions are no longer life-and-death matters (no, really!). All it takes is a bit of practice.

Some of us believe in the possibility of progress. The possibility is more or less proven to exist, although whether we each act on it is a matter of individual choice and whether to expect large numbers of people to do so is largely a matter of faith. But then, why not have faith in something nice (while maintaining a large stock of baked beans just in case, of course)?
NB this has nothing to do with the religion vs atheism exchanges above - it is possible to have faith without God and some people also seem to manage to have God without faith.
I just prefer to have faith in people.

I agree fully with Dr David Hill. I think his detractors have their heads buried firmly in the sand.

It is scientific fact that carbon dioxide traps heat, that would otherwise radiate into space, within the atmosphere. It is fact that over the last 300 years the amount of atmospheric carbon dioxide has risen directly as a result of the activities of man.

The chemistry of the atmosphere is well undertood, and the consequenes of our current actions are inevitable, unless we modify our behaviour.

In my opinion it is imperative that globally we adopt nuclear power, and that we retain the remaining fossil fuels for the production of industrial materials. If we continue burning coal and oil we will run out of raw material for plastics, pharmaceuticals, paints.....well, you name it, even the clothes we wear are derived from hydrocarbons.

The upshot is that we, as a species, have to change, or we will die out. Unless we find another planet to screw up. That is highly unlikely in the time-frame we have left, should we choose to continue as we are.

Change needs policial will. Politicians want votes; if the voters really want change then they have to vote in politicians who will do as the people want. The problem is, right now most people want 4 x 4 cars and cheap flights 2 or 3 times a year, plus gadgets they don't actually need and then chuck in the bin after a few months.

If we carry on as we are we will gradually see an end to life as we know it. People in the developed world will begin to starve, anarchy will replace ordered society. Scary stuff, but someone has to say it (over and over again, to a lot of deaf ears).

If people choose to continue to ignore experts like Dr. Hill, then sure as eggs are eggs, in 20 years time money will cease to be an issue, globally people will be killing each other for food and water, and the few dregs of oil left.

The Motley Fool will be long gone, and we'll all be up the proverbial, without a paddle.

It is fact that over the last 300 years the amount of atmospheric carbon dioxide has risen directly as a result of the activities of man.

What a complete load of rubbish - there is no evidence to support this, it is just a hypothesis fed to the masses as "fact" to justify global warming hysteria. There is a great body of scientific research that suggests we should pump MORE carbon dioxide into the atmosphere to stop the next ice-age.

Ah - but you cannot tax people for NOT generating carbon dioxide. Now it all becomes clearer - that is why the global warming sceptics have no voice!

I wasn't aware that most tracker motgages had minimum rates and I'm not sure how correct these statements are but I do know about my own mortgages. I've just re-read my mtge offer and I've just double checked and called my Lender (Bank Of Ireland). They have confirmed that they don't have any minimum rate. My BTL mtges are base +1.75 and if I'm honest I'm feeling a little bit smug at the moment and looking forward to another 0.5% cut next week with more to come next year.

I slight change to my last post in respect of dead sea/ocean areas which I did not convey correctly in haste of writing comment. I stated that the oceanic area off Mexico that is affected is the size of Greenland. What I meant to convey was that some eminent scientists now consider that the dead sea/ocean areas around the world where aquatic species cannot survive/exist is estimated to be globally an area that constitute the size of the land mass of Greenland. But it has to be stressed also that with continual industrial farming and use of industrial fertilizers (from fossil fuels) this is predicted to continually increase and where the damage to coastal aquatic areas is considered to be profound for humankind.

Dr David Hill
WIFC, Bern, Switzerland

ParallaxError

Thanks for your last non-intelligent comments which add nothing to the debate. But how could it be from a 21/22 year old student at Wolverhampton studying pop music. What good is that to anybody one might ask. Your energies would respectfully be better placed if you read more about what is happening out there instead of making snid remarks.
I also pride myself as being a qualified engineer, something that solves people's problems. What do you qualifications do other than tell people about a pop singer et al? Get real and get a life !

Dr David Hill