Those of you who visit the Green Arrow Paltalk Room will now have the pleasure (?) of hearing me properly at last - and seeing part of the inside of JoG Towers too courtesy of a seven quid Tesco Webcam I got my hands on last week. Finally, a microphone with enough signal of its own to be picked up by the tuppeny-ha'penny SIS audio driver on this PC, which to be fair was never purchased for its multimedia ability !!!
But having the means to be seen and heard is sometimes a curse. For amongst the endless chit chat of bread and eggs (!) one of our number last night seemed distraught at the concept of all this debt our banking system is carrying round, and seemed to feel that we should be able to "cancel" it.
Well, my last job gave me "certain insights" into the way this country was melted down for scrap under Gordon Brown and I thought I would spend a few moments explaining a few things in the hope that we can put this issue to bed once and for all.
Let's just take a look at what has taken place in this country in the twenty nine years I've been married (yes Moira if you're reading this you may THINK I have forgotten what Sunday is ....
In 1981 a graduate scientist could expect a salary of about £4,500 from a government job as a new graduate and about £1,000 more if they were lucky in private enterprise such as it was with Maggie still wrestling the demons left by James Callaghan. "Two bedroom one boxroom" terraced houses could be had for about seven and a half grand "oop narth", maybe less in the vicinity of the River Tyne, which is where my work colleague hailed from, and this I know because he had foolishly wandered into an estate agent and quoted that price range to them when seeking a property in Cardiff. The young woman wrinkled up her nose and said "well I suppose you might be able to get one for that price around Splott"
And that was my pal Tony's introduction to the North South Divide. House prices in the welsh capital were double what they were in his home stomping ground It was the same mistake I was to make some years later in the East-West divide but maybe more of that later.
By 1983 I was employed as a software engineer in an up and coming defence industry buoyed up by Maggie's Khaki election in which - to quote an embittered welsh windbag by the name of Kinnock - Maggie "took pleasure in spilling the guts of" a good number of Royal Marine Commandos Paratroopers and plain ordinary Poor Bloody Infantry, to say nothing of a fair number of those of the Senior Service "just to prove she had some as well". Nice one Neil if you ever wondered why The Sun told us "would the last person leaving Britain turn the lights out" if you had won the election in question.
So there I was, on a salary of eight thousand four hundred and sixty pounds with Moira on something like three thousand pounds as a civil servant (clerical assistant I think her grade was then) in the Welsh Office working for Nicholas Edwards.
We decided on a move out of Cardiff to be nearer where I worked in the then still thought of as "New Town" of Cwmbran. Certainly Cwmbran still had a "Development Corporation" and its facilities were geared to those who came there to work in those days. A two bedroomed mid link terraced property on Barratt's new Coed Eva development was going for £21,995.
The only problem was Moira had no driving licence and travel to and from Cwmbran to Cardiff by bus and train would have taken an hour and a half every day each way.
So we started looking elsewhere. Down to Newport. Westbury Homes had some very nice "Spanish Style" two bed link properties being knocked out for £22,500 in Duffryn but one glimpse at the council estate across the road was enough to tell me this was a write-off (or my car would be if I left it in the street). Then an "inspiration" moment. Wimpey Homes were building a new estate at the top of St Julians Road and Heather Road, we were told, with prices from £24,500.
The location hit a chord not least because Moira's grandparents first house was in a side street off Heather Road and so we went to have a look. A month later I had a 100% mortgage on a "two bed one box roomed" mid link property for the princely sum of £24,850 which thanks to MIRAS tax relief cost me £86.54 a month (as you might have guessed by now I've found some old bank statements).
30 odd % Income Tax and NI on top and an interest rate near the 17% mark meant that for the next five years I would be lucky to see twenty pounds left in credit in my bank account each month by the day before the next pay day.
But that whopping interest rate meant that house prices were low, and my first house came with a price tag less than three times my gross salary. Mind you, even then there was some very sharp practice. National Westminster Bank were willing to loan me FOUR TIMES OUR JOINT SALARY and were rather keen to have me buy the giant of a show home with four beds, the size of the house I own now, which had a £39,995 price tag and attracted 2.5% stamp duty I think it was (the stamp duty threshold being £25k in those days). Even dodgier was the "Low Cost Endowment" the man from the "Life Association Of Scotland" was selling in cahoots with NatWest to fund my extremely low mortgage payment. Because the truth was that £86.54 was just paying the interest on the loan, no capital at all was being repaid and the capital was to be paid out of "profits made in the insurance industry over the next 25 years".
The "low cost endowment" was a premium that would guarantee a basic sum assured of £16,000 which would, "if current projections held" return me the grand sum of £38,500 with all the accrued and terminal bonus payments. Assuming the "current projections held" of course.
As a scientist and one trained in the use of statistics for my research papers at that, you can imagine my question. "But the policy only guarantees a return of a little over £16,000" I said. "What if the current projections do not hold. What if all I get back at the end of the day is my £16,000. How then do I find the other £8,500 - half as much again, and a year's gross salary, if your wonder scheme does not deliver".
And I wish to god we had digital video cameras in 1983. For on hearing that, the salesman drew himself conspiratorially towards me and said quietly in my ear "listen son, do you REALLY think the National Westminster Bank would let my company, which has been in business selling insurance for a hundred years or more, let you sign up for something that would not return the investment you need".
And like a fool I believed him. Well, you would. I was a twenty six year old graduate scientist. What did I know of financial matters ? Well, as it turned out of course I knew rather more than the Chairman of The National Westminster Bank. Twenty five years after I signed on that dotted line having accepted the word of a snake oil salesman, that "low cost endowment" which "would certainly bring me a lump sum of £38,500" "matured". Things had not gone well for the Life Association of Scotland. The policy had been assigned to Legal And General ten years previously and my annual bonus accrued had gone down the toilet at about the same time John Major became Prime Minister. So what was the amount of my final cheque ? £21,400. Almost three and half grand less than the debt it was supposed to wipe off the face of the planet.
Thank God for my upbringing. I remember my father bringing home five quid a week and ten bob of it going straight away on a sack of coal. I remember having a jar of pennies and shillings to put in the electric meter. And that is why, during my high roller days in the early 1990's, while my fellow freelancers drove five to eight year old Audi Quattros they'd bought brand new and loved so much they could not trade them in, or Porsche Carerras, or 5 Series Beemer Alpinas with a twenty five grand price tag, I drove a 'G' registered Vauxhall Nova 1.2 saloon I'd bought for £4,500 brand new, and traded it up to a Rover 218SLD that cost me nine and a half grand brand new in 1994 because Rover had just brought out a new Turbo model making this one "last year's". While my fellow freelancers were living the high life with fast cars, fast drinking and fast women, I poured the profits into the bricks and mortar round my head. Who's laughing now, boys ?
MIRAS tax relief was a wonderful dodge. A nice little wheeze. Essentially what was going on was that as I mentioned earlier, I paid £86.24 a month for my mortgage but that was actually more like £110 before tax relief at 30% was applied. "Mortgage Interest Relief At Source" they called it and it meant you got tax relief on the interest on the first £25k of your mortgage. Notice it was only applied to interest not capital repayment. That is what made these "low cost endowments" so appealing, the "have now don't pay back a penny yet" model was far chaper thanks to the Chancellor's tax subsidy.
When I bought my home, it cost £24,850 and the MIRAS limit was £25k. Soon afterwards, Lawson upped the limit to £30,000 and as soon as he did, LITERALLY the day after, houses on my estate unsold thanks to the economy of the time which languished with £26,895 price tags now cost £29,995. A three grand increase because you had another five grand tax free.
In 1988 I moved house just as . Nigel Lawson stood up in the House of Commons and said it was time to remove joint MIRAS relief from unmarried couples. This was a real scam. As I said, I had a mortgage of £24,850 and I was entitled to tax relief on £30,000. But that was because I was married to Moira. Had I divorced her, or had she not bothered with the white dress and the ring business in the first place, EACH of us would have £30,000 of tax relief in our own right. Which meant a "couple living in sin" paid substantially less for their whopping big mortgage on a whopping big house than a lawfully wedded man and wife.
Lawson decided this was unfair, so instead of giving Moira £30,000 of tax relief he took it away from all those living in sin. Well actually what he did was stand up in the April budget and say IN SIX MONTHS TIME I WILL DISALLOW ANY FURTHER DOUBLE MIRAS ALLOWANCES ON NEW MORTGAGES but between then and now anyone buying a house can still enjoy the tax break and continue to enjoy it after August.
Bedlam followed. I had just seen a house I fancied and I was damn lucky to sell my house I'd bought for £24,850 for £29,995 and entered into a contract to sell that to a cash buyer at 10am one Saturday, and by 3pm the same day I had seen, offered £39,995 for and signed the contract to purchase at that price, a house in Robertson Way, The Woodlands, Newport. Next time you are being given the run around by a conveyancing fraudster, call me. I will tell you how to sell one house and buy another in the same working day, all signed sealed delivered and contractually bound.
As I said, bedlam followed. My house, bought for £39,995, got me telephone offers of £56,000 ... £72,000 .. £80,000 as one unmarried yuppie couple after another begged me to sell it to them before the August deadline and the loss of their tax oerk.
The day I moved in, as I was walking out to my new front gate to take down the "SOLD" sign, a white XR3i raced up the road and ripped up the tarmac in a skidding stop. The door flew open nearly taking the head off a kid on a pushbike, and a skinny runt in a striped shirt pinstripe suit trousers and red braces leapt out, grabbed my arm, threw an attache case under my nose, told me there was £86,500 in it and could he buy my house.
I said no. He gripped my arm tighter and went to try and persuade me. I punched him square in the nose. There was an almighty crack, a scream, and blood all down that expensive shirt. "THAT is for frightening the living daylights out of that kid you knocked off the bike when you threw your car door open" I said. HE hadn't even noticed her. Her DAD who'd seen it happen and come belting out to pick her off the pavement applauded. And when the yuppie arsewipe had sped off in his now well blood stained yuppie wagon, he brought out an ice bucket to do something about this god awful pain in my knuckles, and a bottle of scotch and two glasses to take my mind off it.
Are you now beginning to see a pattern here ?
The crash of 2008 came about because people like that Life Association of Scotland Salesman, and the Legal And General Pension Salesman who persuaded Moira to take her CIVIL SERVICE PENSION out of the Civil Service and put it with Legal And General because they could do far better (!!!!!!!!) are still with us and we still believe their lies. Actually I recall bumping into the Legal And General Salesman many years later. In December 2005 I walked out of the fifth floor of the University Hospital of Wales where my father lay dying of terminal prostate cancer, and as I walked to the car park I chanced upon that man who swindled my wife out of her civil service pension. It seems he was going into the same part of the hospital as me, for much the same reason. Having lost his wife some years before to cancer, now it was taking one of his children.
You won't like this next bit. All the way to the car I could not help thinking **YES** !! **RESULT** !! **THERE IS A GOD**
My father died two days later. I STILL get a fair degree of actual PLEASURE thinking that bloke got an even worse Christmas 2005 than I did. It's a terrible thing, anger at being wronged and not having recourse to a means of correcting that wrong. It eats you up from the inside.
So we start with you needing to buy a house. Government policies push house prices relentlessly one way, even if they do crash down from time to time. The house I bought for £39,950 was indeed valued at £86,500 by three estate agents the week before the MIRAS ended. The week after that its value plummeted to £55,000. Not that I gave a toss I bought it for £39,950 and it would be years before my family outgrew it. But pity the poor yuppie who just paid £36,000 more than it was really worth to have the one up the road ..... In fact I sold it in 1997 for £68,500 and moved to my current home, priced then at £94,000. Six years later I had the roof taken off and a third floor put on it. Giving it a price tag at the height of the stupidity of £375.000. Today it is valued at £275,000 even with the market the way it is.
So now you see. House prices in the long term go one way and they do it way faster than salaries. My grandmother bought a house in CF24 1HU in the 1930's for £300. In the 1950's my father bought it off her for £3,000. In the mid 1970's the one next door went for £30,000. In 1985 when my own house was "worth" £29,950 my grandmother's former home sported a £65,000 price tag. When my mother and father sold it around 2001 it attracted in excess of £125000 and today it has a "street value" of £300,000.
So here is how we got in the state we did.
Pressure on housing, caused by rampant immigration, has pushed house prices to the point where they now go for something like six to eight times the salary of their first time buyer. Not that this matters while interest rates are 0.5%. But that is only possible because rampant immigration has led to money bleeding like arterial spray from this country to the Asian and Indian subcontinent, and to the new EU countries, aided and abetted by Western Union Money Transfer, and this is VITAL because that reduction in the money supply as all that loot pours out of the country locks down inflation in a way Jim Callaghan and Dennis Healey could only DREAM of.
So you have a house and it's getting more expensive all the time, so why not borrow money against it for your new car... or that world cruise ? In South Africa it is ILLEGAL to borrow money against a house unless you are using the loan to BUY that house or IMPROVE that house. In this country who gives a toss you only live once....
So banks loaned money the Arabs handed them to people who wanted it. Oh yes that's right the money the banks were loaning you was largely the wad you handed over to the petrol station to fill your car last week that the Government DIDN'T keep as tax. And because house prices were going up, you could borrow up to 125% of the current actual value of your home, and as long as you paid the 26.8% APR on that loan that the most risky of the lenders charged, well, help yourself.
So people were encouraged to borrow at insane rates of interest and it would not matter because your house was going up in value because more and more people wanted to buy houses didn't they .....
BANG. Or more precisely POP. The sound of a South Sea Island Bubble Bursting.
Loans started to go bad. Banks who could boast "we've never repossessed anyone" - because the fact is they sold the bad loan on to a man with a baseball bat for 75% of its value BEFORE it came to repo time, suddenly found there were no men with baseball bats wanting to take the loan even at 30% of its value. because the man with the bat knows when to bludgeon and when it's pointless.
So then the banks invented "derivatives".
You've seen the film with the drug dealers with the suitcase of "money" that isn't money but newsprint.
Take an attache case. Take a bundle of twenty dollar bills. Now take some newsprint cut up like dollar bills and slap a real note on the top. Show "the mark" the case, take out a pile of real bills to let them count, put 'em back, hand them the case, take the drugs ... and run like ****
THAT is how the derivative market works
Take a loan like my mortgage from 1981. I'm earning good money, I'm not in SERIOUS danger of the dole, I can get another job like the one I have even if things go pear shaped. I've been paying the loan payments for five years now and not one late payment. I've been promoted, so I earn more. I don't want to borrow more, so I'm almost certainly good for the money. In short, I am the twenty dollar bill.
Now take a self employed builder across the road. He's got a mortgage like mine. He's doing OK but business might be a bit slack, but that's because winter's coming and spring is the best time for housebuilding. He's having a bit of a struggle but in ten years he's never failed to pay a debt ... eventually, after a few red letters and maybe the odd threat of a court hearing to chivvy him along. because after all he is a self made man and he has the respect for himself that only such men can have .... So ok he's PROBABLY good for the loan, although circumstances not of his making might blow him off course it's a nice house you can reposess and after all he can always build himself another.
Now take the taxi cab driver parked up at the station. Not in the official taxi rank you understand, no across the road where the street lights are a little dimmer. He is so accustomed to saying what's it to be guv ready cash or VAT it's been a decade since he filled in a tax return and in fact I bet he's claiming benefit anyway and you didn't really want a taxi with an MOT did you. He fancies a world cruise and when he rings up one of those loan companies like "her off countdown" used to advertise, well, they take fifteen seconds to decide he's not their bag ... so they take a bung and a backhander to fob him off to the sort of company who might. The sort that charge 26.8% interest and whose conversation includes lines like "now I'm not the tax man, how much do you REALLY bring home", "is there any overtime on that", "do you get family credit, tax credits, pension credits" and best of all "ah, you're self employed. Well on THIS plan you need to give me three years audited accounts, but on THIS one which has an APR that is only 2.5% higher, you don't"
Is it ANY WONDER the whole stinking sorry scheme fall about its ears and imploded like a pack of cards ?
So here we are, up to our eyes in debt, because Gordon handed the family silver and your unborn daughter and granddaughter into slavery so as to avoid the one thing that no Chancellor can have on his watch - a bank failure.
Had he let the banks go where they truly deserved, there would be civil war.
No one with a mortgage would be in their homes any more as every last one of them would have been terminated and immediate repayment demanded as the banks fell over each other to tear each other limb from limb to stay alive. No one would have a pension of any sort, as the financial institutions providing them would see their stock portfolios crumble to shit and their CEO's would need an armed guard on the last EasyJet flight out to the Cayman Islands with all the bank and insurance company CEO's on it with the shirts on their backs and nought else but the five hundred Euro bills in their cabin luggage.
The roads out of London on the South Downs would have resembled the coaching tracks of the 16th Century, with stockbrokers hung from every lamp post. SOME would have hung themselves in the face of financial ruin caused by them not being smart enough to be in the first wave to get the hell out, OTHERS would have been taken to their last dangling place by an angry mob.
When the bank threw me on the street it was still promising me and those thrown to the wolves would get 10/12ths of the basic bonus paid to the front line counter staff as part of the deal. After all, we had done our performance targets as far as keeping the place going, we were therefore in line for the 3% or 4% that was paid as part of the basic salary to all staff. And do you know what, I actually believed it. Although the CEO ran away from Cardiff the day after he announced the closure, and hid in the head office in Canary Wharf where he thought he was safe from the death threats some disgruntled employees had issued, safe behind the ring of steel and the City of London CCTV, I actually believed we would get the money we were owed from the past half year. We didn't of course and the CEO had a VERY nice holiday on his added bonus.
So after that marathon post, in answer to our "Traveller's Sovereign" on Paltalk last night, here's why we can't cancel the debt.
First we may "own" the banks but we don't RUN them. Alistair Darling set up a sham company to RUN the banks he effectively nationalised on his behalf and populated the board with pals of his.
Ah hang on there is one bank we DO own. The Co-Op Bank. I think you can bet your bottom dollar the first "DEBT" that any measure would cancel is the TWENTY MILLION that New Labaah owe THEM.
But second off whose debt are you going to cancel and what will that do. The BANKS owed each other billions and the Chancellor poured money into hem to keep them afloat. And principally that money went out of banks in BRITAIN and into banks in AMERICA. So we have honoured the debt to the financial underwriters of the "Obama-Nation" as I once saw him called on Stormfront and in doing so we have royally screwed our own institutions.
So in essence, the "debt" those banks owe is to US, the TAXPAYER. WE PAID Arabs for their oil, THEY handed money to banks to fund a property boom caused by rampant british overpopulation caused by immigration REQUIRED to hold down inflation.
The boom went bust and the CHANCELLOR threw lorryloads of good money after bad to avoid anarchy on the streets as everyone in Britain with a mortgage became a refugee, causing the situation where THE BANKS owe US "braziilions" but will have to charge us increased overdraft fees and service charges to GET the money to service the debt. In the meanwhile the black hole of Cygnus-X1 proportions that Brown's largesse and Darling's blind panic caused in GOVERNMENT FINANCES means there is no money to spend.
However, any attempt to modify this house of cards will bring the whole bloody lot crashing down about our heads and put us back in the STONE AGE more so than the yanks have done to Afghanistan !!
Merry Christmas 2057. It will take that long to sort this mess out. As that's my 100th birthday I thank god I probably won't have to be here to witness the fake celebrations when Jedward Miliband The 23rd ascends the fourth plinth at Trafalger Square to speak to the Nation and announce we've always been at war with Oceania .... or something.
My GOD that was a post and a half. I have not been that expressive for quite a while.
I feel the need to sign off with something profound. Yet I have nothing left.
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Last Updated ( Friday, 10 September 2010 12:30 )