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Holebender

the scale of the funding bubble

The Sunday Herald wrote:
Lambert, one of the first non-academic economists to be invited to sit on the Bank of England's monetary policy committee, said that he felt "personal regret" that he "did not appreciate the scale of the funding bubble that was building up".

"When I was on the monetary policy committee I was really interested in what house prices were doing and what effect it would have on demand. But I didn't appreciate, and I wish I had, the extent this was being driven by non-deposit finance.

"For me, the killer fact is the Bank of England financial stability review published last year that showed that whereas in 2001 total customer loans in the UK and total customer deposits were roughly the same, in the first half of last year loans exceeded deposits by £750 billion.

"The gap had been filled by Icelandic banks and American hedge funds and shadow banks, all of which have gone away. I didn't appreciate that it wasn't sustainable and I regret that."


http://www.sundayherald.com/busin...bankers_must_end_says_lambert.php
Reluctant Hero

Quote:
I didn't appreciate that it wasn't sustainable


I find this comment totally unbelievable, especially coming from an economist.  Anyone that had any dealings in the property market over the last ten years would have been able to tell you that things were unsustainable.

I know the property market is only part of what he is talking about, but when people start getting mortgages for five or six times their salary, then that is just asking for trouble.  Then when it becomes widesread practice, it is just storing up bigger trouble.
Scott2006

From a non-pure mathematical standpoint - for the layman - think of all the 2facts2 "facts" ahem
you know about a "circle".

If I put up a variant of two other equations - you could see that when F in base 16 is observable different from 11 in base 12 or in finger digit ten as base 10 is 11 b12 is 13 b10.

As the old saying goes...
"if I told you anymore they'd %$£ot me..."
Alasdair

Reluctant Hero wrote:
Anyone that had any dealings in the property market over the last ten years would have been able to tell you that things were unsustainable.


Sod that, my five year old could have told you that.

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