BradNaylor
Established Member
- Joined
- 17 Oct 2007
- Messages
- 2,311
- Reaction score
- 2
Rich":3kidzzgr said:Once again (yawn) we come back to Mr Micawber, income- 19 shillings, outgoings-20 shillings, result misery, I know I sound like a stuck record but prove me wrong if you can.
Regards,
Rich.
For once Rich, I agree with you - up to a point.
When Dickens put those words into Mr Micawber's mouth he was talking about people living beyond their means - spending more on day-to-day expenditure than they earned. Micawber's message is quite obviously as true now as it was then.
Micawber was not talking about structured debt for major purchases such as mortgages. After all, these barely existed for common people in Dickensian times. In essence, so long as the repayments are affordable, it is perfecty possible to have a big mortgage and still live by Micawber's maxim.
Of course, if someone is happy to live in a council house on a subsidised level of rent, while holding down a reasonable job, living by Micawber's maxim is relatively straightforward.
There is nothing wrong with living in a council house, it is just that most of us aspire to slightly more from life. And for the vast majority of people this means a mortgage - normally a big one.
It is this natural desire to own one's own home that has been exploited by the banks, leading directly to the financial crisis the world now finds itself in. As banks lent ever greater amounts for property purchases to all and sundry, so the prices of those properties soared. And soared. People desperately took out bigger loans to secure their place on the housing gravy train. The banks were only too happy to ignore hundreds of years of prudent banking practice and put greed first.
Until the bubble burst.
The world's banking system now finds itself, through a labyrinth of complex financial intruments which no-one seems fully to understand, sitting on a vast pile of dodgy loans secured on assets which are plummeting in value with no signs of bottoming out.
I'm afraid we've gone a long way beyond the simple message of Mr Micawber. I suspect though, that for a generation we will have to get used to a world without credit. Millions will have little option other than to file for bankruptcy.
At the risk of sounding like a stuck record myself, it is the folly and greed of the banks that have brought us here.
Re: The Media
The deputy governor of the Bank of England, Charles Bean, said yesterday "This is a once-in-a-lifetime crisis and possibly the largest financial crisis in human history"
He said this in an interview with the Scarborough Evening News. Are they at fault for printing his comments?
The idea that this crisis has been exaggerated by the media is nonsense. If anything they are underplaying it. The radio last night was full of pundits playing down Mr Bean's remarks!
Cheers
Dan