I blame everyone!! Consumers for borrowing and lenders for lending!!

globalisation and whoever invented it and took part its a world system that is years in the making but doesn't work that is far too ambitious. it is just people with big money with big ideas that turn out to be a flop.

As for lending and borrowing ok you lend and people run off with the money, why do I know I don't lend money to people but the high street does it all the time?

What is a credit crunch then, ok you got me once but never again as long as I live. People who have got money aren't going to lend it any more ever. You do the work you said you would, you get paid the rate, I believe people want things to change, they want upfront money before they give goods or services, or they want paying before the work has been done because all trust in others has been irretrievably lost.

Trading depends on the reliability of others coming through with whatever they promised but it just isn't happening, people are paying for things they never receive. It is those who are in the advantaged position who are more responsible.

I think it's loonies who think they are funny. We aren't living in 100 years ago or a thousand years ago it's what people do now that affects the living which includes talking nonsense. Maybe I want to understand what motivates people but that doesn't mean my motives are the same.

After all some people are so rich that whatever they do, it is not motivated by need but is a mere pursuit of their own pastimes, hobbies, pleasures, After all you compete in a market because you need to obtain certain necessaries what do you when you have got them, keep on competeing for the sake of it, because you like the game, because you would be bored otherwise?

Why don't you find a pursuit that doesn't involve wrecking other people?

Why do we have such poorly qualified Chancellors most of the time, sure they have advisors (oh really) the economy is to important to leave to party politics and especially people like Brown whose qualifications are American history !!! how can that be any CV!!! Would you visit the Plumber for tooth-ache?

Federal Reserve for relaxing the capital/ debt requirements after the .com bubble burst.

Regulators for not realising the danger of SIVs investing in other SIVs. Regulators for allowing mark-to-market accounting practices. Banks for using such practices. Regulators for allowing SIVs to be conducted off balance sheet. Banks for using such practices.

Ratings agencies for rating some SIV tranches as AAA. Predatory lending by estate agents. Let's wait for the consequences of those low-start mortgages resetting their interest rates over the next few years.

American leaders for not waking up to the potential problem and acting. American citizens for allowing themselves to be brainwashed into thinking they can consume, on credit, forever. American local government for not investing in public transport, thus enforcing the "Happy Motoring" fantasy and encouraging the growth of exurbia, which, when oil prices went through the roof left a lot of people who, after paying for food and petrol, found they couldn't afford to pay their mortgage.

Not everyone is suffering.

I hear that you cannot get a top hotel room in the luxury destinations around the world because they are all taken by the the wealthy who are sitting back waiting for the global economy to collapse so they can buy up assets at bargain prices.

Why do you think Philip Green was in Iceland last week?

when robin hood stole from the rich and gave it to the poor, the government (the king and his noblemen) thought he was a thief and needed to be punished.
Now in the 21st century, when the rich fat cats go bust of their own doing the governemt taketh from the poor and help the rich by pumping £500 billion pounds - TAXPAYERS MONIES. Now who is the real THIEF and should he/she go on trial for stealing from the poor and giving to the rich.
(e.g. B&B shareholders lost everything, yet HBOS shareholders will be saved by the government. Taking B&B sharholders' monies and giving it to HBOS)

Capitalism will take the Earth to the brink of ecological destruction.

Unfortunately, this latest economic blip will not stop people believing that there is no alternative to the West's law of the jungle and our dog eat dog mentality. If we don't all collectively stop being so greedy, we will help create a world with very few of the natural riches in it, we currently abuse and take for granted now.

HBOS should have been allowed to fall on it's sword and let the rest pick up the pieces. Almost certainly this was a political move by "Gordon from the North" to protect his own, just like he did with Northern Rock. But look at the cost.
NEVER TRUST BANKS EVER AGAIN. They are frauds with T&C that would never be allowed in any other commercial market. They deserve exactly what they get and if "Gordon from the North" is a real politician he should set up a Royal Enquiry and prosecute those that were reckless with our money and their business. Send them to penuary, because in any other business that what would have happened to them.... Rant over, going to the pub, bugger, its not open yet.... no I'll talk to the wife ...second thoughts I'll go to work...

Blame: what use is it really to try and apportion blame unless it is to prevent the same thing happening again? But, now we're on the subject, here's my penn'orth:

Firstly, I must say that I find it hard to feel overly sympathetic for those who gambled on house prices rising forever (and you don't need to look that far back to see that not working...) and then borrowed to an excessive level to maintain a lifestyle way beyond their finances.

However, I also find it hard to excuse the banks who conveniently overlooked the parlous state of some of these people's finances when they approved their 120% no deposit mortgages; and then raked in the repayments and their lovely big bonuses...

And, while we're about it, what were the regulators doing all this time? Not making the system of checks and balances work, at any rate. I remember watching a "Newsnight" (or something similar) a few years ago about how scandalously simple it was to lie on a self-certification mortgage; even then, when the housing market was booming, it was described as a "ticking bomb"; what did the regulators do to stop it going off?

So, in short; we are all to blame; except the vast majority who simply tried to build a better future for themselves by investing prudently: by not over-gearing their mortgages; by only borrowing what they thought they might at some point be able to repay; by putting their money in "safe" banks which they thought were checked and supported by the government and regulators; etc etc etc.

I agree that, in many ways, this period of pain (and I am under no illusion that this could be very painful indeed for some) might be the bitter medicine we all have to swallow to make us more aware that living within our means (both globally and individually) is really the only way to have long-term financial security.

If I were to pick one person in this country it would be Gordon Brown. Though it is true to say, if you were one of those who thought property prices could only go up, or even worse, borrowed on that basis, you too are partly to blame.
Why Gordon Brown? Lest we forget, when they came to power, they were all talking about "The illusive feel good factor". Not so illusive after all, if people think they are getting rich without having to do anything, they will feel good. What did brown do? Well firstly he wanted to stealth tax pensions, so he told us we should see our homes as our pensions. Secondly, he took house prices out of the inflation calculation so that they would not be held back by interest rises. This whole thing was about keeping Tony and Gordon in power.
Basically, regarding cakes, Thatcher made the cakes, Major baked them, and Blair and Brown ate them.
Alfred was totally innocent.
There are many reasons why this bubble has been bad, for instance, people have to pay for massive mortgages, therefore need high wages, which are of course uncompetitive in a global market.
Not only that, for the last 11 years, our pensions have been starved of funds, through tax and lack of investment, and now the French in particular are laughing at us, all madly buying our own country off each other, while they come in and buy up all our utility (and other) companies, and then putting the rates up for our expensive homes.
Please note, as you come to the end of this, I said in this country.

Blame??
They should get all bank records. Find the names of those who sold the loans to SUB PRIME markets; then the people who repackaged these bad debts and sold them on; the people who bought these repackaged bad debts: Then see if any of these people got bonuses for these practises; Then get their bank account's and assets and freeze them and recover the bonuses. Then round all of them up and put them on a boat and send the to Iceland, with only beachware for clothes.

This particular problem is more than anything a failure of regulation and as such is the responsibility of governement.

The lack of regulation in respect of Mortgage-backed securities, specifically, and derivatives trading in general have lead to the collapse of the Banking system.

Sadly we have been here before...................in 1998 the New York Federal Reserve had to convene a rescue of the Long Term Capital Mnagement Hedge Fund that threatened to cause exactly the same Banking disaster. As I recollect both Barclays and USB were significantly at risk. There is a book called 'The failure of genius' (can't remember the author) which describes what happened and it is almost an exact repetition.

The Bankers are foolish, the borrowers are foolish, but the Governement had ther responsibility to regulate and ensure capital adequacy........who was the UK's Chief Financial Officer (Chancellor of the Exchequer)in 1998............answers on a postcard................

I'm afraid it's all of us! When I used work in a bank, we worked with three fundamental criteria which were based on years of experience and pretty muc cast in stone.
1. Main Basic Salary X 3 plus Second Salary X 1.
2. Does disposable income cover the repayments with a margin for reasonable interest rate increases?
3. Maximum advance 90% of value of property.
These criteria were there for a very good reason - they worked! So why oh why did we think we were smarter than that?!
Governments are to blame because they haven't forced us to stick to these as at the very least a rule of thumb.
The banks are to blame because they've thrown their own tried and tested guidelines out the window all in an effort to maximise profits. This was done taking more and more risks and putting us all in the mess we're in now.
And the WE are to blame as well; predominantly the more financially-aware among us for not ringing the alarm bells much sooner. Did we really believe that these property values, which bore no relation to people's true means, were sustainable? Come on! And the saddest things of all are that the fat cats have already been in and out, taking the money with them and that the first-time buyers are the ones who're going to suffer the most.
The big question is 'What happens next?' I hate to say it but I think we're in for a major return to basics and, inevitably, major regulation.

Regulators - definitely. There should be a code the banks have to follow to protect those voters who don't have a degree in Economics. It's like the institutions we respected turned into loan sharks and an earlier post here pointed out that if a family of 4 (say) needs a washing machine - they'd pay 29.9% APR to pay it up. Save? From minimum wage - thats funny (Im laughing now).

All people want is a roof over their heads, a purpose in life and food on the table. I wonder what "Shelter" are thinking right now?

From what I hear the US gave more freedom to the markets, Mr Bush believed that there should be less regulation and the market should just get on with it, how naive is that !, and the UK government the lap dogs they are follow suite.

There should have been regulation in the amount of money banks could lend and the terms regarding the loan, and the buy to let market which has created many paper millionaires.

It seems that this government likes to fire fight, they wait for a problem to happen then try to deal with the consequences.

At the risk of repeating myself ( I am a financial advisor) Where were the FSA during the time all this nonsense was going on NOT REGULATING the banks obviously

We as a company have to jump through burning hoops for FSA compliance

Also we have to write war and peace with regard to any advice we give our clients.
The final letter is 5 pages long that is after half a ream of paper has been issued and signed by the client.
We can get a fine for even putting a wrong date on a document, even though in 30 years I have never had a complaint fron a client What were the FSA doing in the banks,? did they know what was going on ? were they asleep on the job? or did they know so little about banking that they did not understand what was happening. NOT FIT FOR PURPOSE SACK ALL OF THEM
That of course will not happen they will all be there until retirement with their gold plated pension paid by us the taxpayer

An unhappy heavy taxpayer

Elaine

Who's to blame for the credit crunch? I blame
1)the greed culture that flowed from monetarism.
2)the fact that the Emperor(America)'s new clothes were just dollars that had been printed to excess.
3)the banks for repeatedly getting into areas where they lost money to excess (South America, Japan, Russia and now the US).
4)the banks for failing to realise that America is a law unto itself and they (US) were going to rectify the Enron (& others) situation by making sure EVERYONE had to take the medicine.

You can't blame only the regulators (though do blame them!).

For the regulators to intervene the banks have to mess up first...and boy did they. I think the culture where the bonus boys take a profit when ever a gamble goes right and the shareholders take the hit when ever it goes wrong, and the complete distortion of risk bearing that this has caused, has contributed quite a bit to the situation we're in.

Where's Motley fool? Did Motleyfool see it coming...?

I remember vividly not so long ago an article extoling the virtues of a certain icelandic bank with a high interest rate for savers. Good thing the governement stepped in eh? Did MF notice that this was an unsustainable business model for themselves and warn us...?

what interesting,( apart from some of the stupid comments),varied theories and opinions. I am going to put the cat amongst the pigeons so to speak, as this is something that has not, to my suprise, been mentioned...
Everyone is concerned about the economy and the ''global' economy and its effects on us here in the UK..but does no-one see the bigger picture??... well here goes..sorry but this might take a while but the read is worth the provocative thoughts it will leave you with... two words.. CONSPIRACY THEORY... "yeah right"...I can hear you say.."what planet is this guy on"...
After the WW1 or The Great War..it was said that there would never be a war like that again...they were wrong but none-the-less...the world would be united.. so the worlds rich (bankers) and elite (royalty and prospective presidents or prime ministers) formed a club..the idea was to unite the world under one governing body.. and while we toiled they reaped the fruits of our labour... they meet every year..( the Rothchilds.. and the selected members from the decendants of the original club)...2 years ago (at a meeting in a hotel on the canadian boarder) they discussed an oil crisis, the effects this would have on world economies and how it could be implemented (notice the price per barrel almost doubled and therefore share prices in oil would also have risen as sharply)..nice way to make a few quid...and as pointed out by so many..the rich get richer..and the poor get poorer...but the bottom line is that these rich have the governmental leaders and banks already in their pockets.. and we look on and wonder whats happening... this has been planned along with Bushs' 9/11... the oil crisis..the clap trap on global warming or climate change and every other economic changing event since the Napoleonic Wars (thats were the Rothchilds made their fortune, but thats another story)...its all so we keep paying our taxes like good little boys and girls for them to further their aims..there is not an oil shortage or will there be for a very long time yet..banks have always made their money out of war..by financing BOTH SIDES..the looser is forever in debt and needs to borrow to rebuild...the bank is guaranteed a tidy profit...
if you don't believe my theory... George Bush Snr said in a speech, as vice president to Richard Nixon, about a "NEW WORLD ORDER"..this phrase was repeated by Bill Clinton and George Bush jnr...also used by Tony Blair.. Douglas Heard ..this phrase keeps popping up in so many speeches.. especially when it concerns other nations..or an impending war or unrest..we are slowly being manipulated by the powers that be and we fall for it every time... lets face it logic says..if you have a national debt of billions..how can you lend money...borrow from the international monetary fund?? who holds that??? oh of course the banks.. silly me...so in effect the government borrow from the bank to lend to the bank...now why didn't I think of that!!!!!... the credit crunch is another ploy to keep the working classes where they are and remind us that we can dream of big houses and fast cars..we may be allowed to touch them..but own them!!!! not on your nelly.. sit tight people..the ride will get rougher..eventually there will be 3 main markets.. Euro/African.. United Amerian..and a unifide Asia..then we will have finally one world government run by the worlds rich and elite.. think about it people..is it that far fetched?

So today we have civil servants and The FSA (who did not regulate the banks properley) RUNNING ALL OUR BANKS "OH JOY" just wait for the paper trail no trees left by 2010

I would rather have have a banker that likes to make a profit running a bank than a civil servant that thinks that any profit is a dirty word

The links in the post from goodtyneguy are THE most interesting and shocking thing I have ever seen. EVERYONE must watch them.

picaboat, I am aware of this conspiracy theory. The thing I do not understand is what would be so wrong with a New World Order of federated super states? A federal Europe would mean that the wars that our grandfathers fought would be no more. I would rather the ruling classes ruled anyway.

l agree wunchofbankers...if it benefits the many. and poverty fell... l don't think it is right that a mere 1% or the population controls 40% of the worlds wealth..while 30% of the population starve..and that situation will get worse, not better under these 'empire' style states///just check history from the egyptions to the latest empire..the americans//man is greedy, competitive, and aggressive...thats the human race for you.

Fascinating discussion but I weary of it all.

What I am concerned about from now on is that the Bank that I own, Northern Rock, stops its ruthless policy of repossessions without just cause.

And, less vitally,also that people aren't expected to cave in and accept below-inflation pay rises to help prop up a failing economy that they got very little benefit from in the past (AT LEAST - I qualify this - comparatively little benefit from compared to the fat cats....)

Who IS to BLAME?

How about 'Multifactorial' reasons,

Sustained Low Interest Rates over a Decade, Excessive Housing Price Rise 'Bubble', Individual Consumer Debt Rising 'Unchecked'.

In My 'Youth' there were NO 'Credit Cards, Access Credit Cards burst on the scene with the mantra 'Take the WAITING OUT OF WANTING' [Be Impatient????] - Perhaps if DEBT was regarded as undesirable EXCEPT as Student Loans, [Pays you back as increased earning capcity later on and Mortgage Debt, which has, historically at least, been a good investment 'pro rata'.

Governments [Of several Colours] have failed to see either their debt in excess or personal consumer debt to excess are undesirable.

I have watched Yvette Cooper M.P. [Treasury Minister] in several interviews recently, if you cut through the 'waffle' [Not easy with Ms. Cooper, Real name Mrs. Balls!!] It is plain she STILL does NOT understand the 'Strangling effects of debt' on individuals & families [In fairness neither do they in many cases!!] Especially in ANY situation were credit costs [APR] are in DOUBLE Figures.[No supermarkets take credit cards you can pay 20%+ interest on your FOOD!!]

Wanna get wealthy? Be PATIENT, Only buy what you can afford to pay off each month on [preferably] a reward type credit card. Okay, I Know spending is an 'Anti-Depressant' but then Debt is Depressing.
[Unless of course you really DO want to enrich Carole Vorderman Further.]

I feel like I am banging my head against a brick wall but agsain I will say the taxpayer is paying millions of pounds to the Financial services Authority who are suppose to monitor all financial tranaction to protect the publics money WHERE were they when the banks were buying toxic debt producing more tick box forms and red tape Its all job justification NOT FIT FOR PUPOSE along with Haringay Council