cliffb1234 ..All11 May 2016 11:36
The first question is how low can it get...
The second question is that there is little likelihood of reaching the past highs of 15 years ago..
The banking system has changed in the last 10 years and so has the competition along with the economic outlook... and just how much more debt, for banks to make a profit, can the public take on.... as the credit card and mortgage debt mountain gets ever bigger....
To me the prospect of the current financial crisis getting much better for RBS Share price to reach £5 seems just a distant thought rather than a reality in the current climate...
As most house prices are beyond millions of people reach and still rising ..it is crazy that the mortgage payment system of time is increased from the normal 25 years, to 30, 40, and possibly 50 years.... so that those that cannot afford the amount of high mortgage debt at 25 years ... are encouraged to take on the same amount of not affordable debt spread over a longer period of time... Which then will have an impact on their financial lives for many years longer..... never in my lifetime has this twisted system of encouragement to get into so much mortgage debt ... if it was restricted to only 25 years .... then the housing market would logically slow down as mortgage loans would not be possible on the incomes that are not rising to meet such high loans... and house prices would probably stabilise somewhat ...
To me the folly of a growing encouraged mortgage debt mountain is fraught with danger, more so when housing costs of many Hundreds of thousands are asked to be paid with incomes of Tens of thousands ... Baby boomers of the 50s and 60s had a 25 years fixed mortgage loan based on 3 x earnings on one person only, an even had Tax Relief on their monthly payments, and paid the debt in 25 years and now own their house debt free and enjoy life with more spend ability... That great system has now been destroyed since the 80s and renting that was going down in the 60s in now going back up again .... A total reversal trend of 40 years ago and who really would take on a lifetime mortgage debt knowing that job insecurity and illness could cost them their home later in life... and just working to pay mortgage debt.. It is Basic Logic that the longer the repayment term the more chance of something going wrong...
Meanwhile another bad day at the office down another 5 points at the moment... up and down 50 points in 3 weeks begs what is the whole banking future as we al have known it...and where it will be in 2030...
Rant over .. have good day all...