Credit Crunch

HEADRAT

HEADRAT

HEADRAT

Soldato
Joined
18 Oct 2002
Posts
21,546
Location
Cambridge, UK
Now is it me or do the numbers coming out of the banks in terms off losses just seem to beggar belief, surely there just aren't enough mortgages to come to the billions apon billions being written off by the banks!

I wonder if we are just seeing the banks getting all of their dirty laudry into the open air and writing down losses and attributing them to the "credit crunch"!

Does anybody have a figure of the total bad dept already announced ?
 
its about $250 billion so far - this is just the beginning though - a lot more to come.
the total credit derivatives market is work $650 trillion - i've seen some conservative estimates of between 1-5 trillion dollars for the potential losses - difficult to say as the system is so flawed, banks are unwilling to fully check their assets for their true value as they would then have to disclose that info.
 
HEADRAT said:
Now is it me or do the numbers coming out of the banks in terms off losses just seem to beggar belief, surely there just aren't enough mortgages to come to the billions apon billions being written off by the banks!
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Remember that banks on both sides of the pond will have mortgages in each other's countries. So the high street banks' declared "UK losses" are only part of a bigger picture.

I wonder if we are just seeing the banks getting all of their dirty laudry into the open air and writing down losses and attributing them to the "credit crunch"!
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Considering the amount of damage they're taking already, I hardly think they'd want to make life even worse for themselves by unnecessarily declaring additional debt and driving their share prices down even further.

Does anybody have a figure of the total bad dept already announced ?
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No idea, but HSBC has declared £1.6bn, which gives some indication of the figures involved.
 
HEADRAT said:
The world population is 6.6 billion, so how much is that per head :confused:
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Does it matter? Its not only private lending that has caused this, business lending will also be taken into consideration for the full value.

Commercial Finance/Mortgages will account for a vast amount of the credit.
 
krooton said:
Credit Crunch - Tasty new way to start the day
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creditcrunchwk1.jpg
 
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paradigm said:
Does it matter? Its not only private lending that has caused this, business lending will also be taken into consideration for the full value.

Commercial Finance/Mortgages will account for a vast amount of the credit.
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I think "total credit market debt" is in the region of 320% of US GDP, so may be only 30-35 trillion dollars.

The derivatives value of $650 trillion is the notional value of all derivatives, but even a 1% loss would be an enormous sum, and at 100 000 dollars for every man, woman and child on the planet you've got to come to the conclusion that the banking system has been having a laugh at our expense.
 
But you know they're (banks) are going to do away with "free" accounts and start charging everyone to "look after" their money. Bet it happens.
 
Of course they'll recoup their losses. They're thieves.

One thing I'm looking at with interest as to how it will resolve; When mortgages will become easier to get. Granted they won't (or certainly shouldn't) be as easy to get when/if this situation is resolved, but the banks will need to claw back profits, and as such will have to ease open the mortgage market again.
 
aardvark said:
its about $250 billion so far - this is just the beginning though - a lot more to come.
the total credit derivatives market is work $650 trillion - i've seen some conservative estimates of between 1-5 trillion dollars for the potential losses - difficult to say as the system is so flawed, banks are unwilling to fully check their assets for their true value as they would then have to disclose that info.
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If you know so much better (as you imply in every thread), why aren't you making a fortune running an internationally successful bank?
 
Well to be honest their doesn't seem to be too much to it, in the good times you just rake it in and make massive profits, you then make massive losses and you just right them off and get balied out ;)
 
Well quite. When it comes down to it, the banks largely control all the money floating around the world, despite what Governments would have us believe. Lose some money, write it off.

I think I'll write to Virgin Media and tell them I've decided to write off what I owe them for my monthly internet contract.
 
I guess they can also write those losses off against tax for the next 3 years so Goverments will be raising a lot less tax off of the banks. No doubt the Goverment will have to resort raising the lost tax revenue from the rest of us, no doubt some new "green" tax or other!
 
Dolph said:
If you know so much better (as you imply in every thread), why aren't you making a fortune running an internationally successful bank?
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i wouldn't make as much money - i don't have to ball to do something so transparently immoral (should be illegal) - the banks have made loads of money in the last decade with what it essentially legalised fraud - lend to anybody, package up the debt, rate it as AAA, sell off that debt on the derivatives market - you get to sell off your risk and class the debt as an asset which which you can borrow more from the credit markets and lend out again - its a great big con until the music stops and everybody realises that there isn't enough money to go around and now the risks are systemic and everybody is screwed - the banks of course get a bail out at the tax payers expense and the public pay for the mess for decades with either an inflationary or deflationary depression.
the banks are nothing more than hyper rich criminals with the governments in their back pockets.
 
Dolph said:
If you know so much better (as you imply in every thread), why aren't you making a fortune running an internationally successful bank?
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also, its not about making money, its about protecting the money i have earned from government sanctioned theft - i.e. inflation - thats how they are going to try and get out of this mess - by printing vast amounts of money and inflating out of it - good old Keynesian economics - make the people suffer for the banks/governments mistakes ;)
 
aardvark said:
also, its not about making money, its about protecting the money i have earned from government sanctioned theft - i.e. inflation - thats how they are going to try and get out of this mess - by printing vast amounts of money and inflating out of it - good old Keynesian economics - make the people suffer for the banks/governments mistakes ;)
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I'm pretty sure it's monetarists who link the money supply with inflation whereas keynesians link it to aggregate demand.
 
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