Property crash, just maybe it really is different this time

[spygirl]

On 19/12/2020 at 10:11, spygirl said:

One thing I try to do is to put things into longish term perspective.

As far as the UK n housing, IIRC the majority of Brits still rented in the 60s.

From the 60s to 70s mortgages were not really a mass market product.

Its only a combination of the financial deregulation in the early 80s and the bulk of baby boomers (mid age boomer was born in mid 1950s) hitting 30, prime house buying age.

The whole 'cant loose with property' is a daft mindset, prevalent in the UK, which doesnt put the demographic change into perspective.

A lot of baby boomers went bust in the late 80s to early 90s slowdown, so its not that theyve not seen it before.

The assumption that banks are going to lend like they did in ~85-89 or 2002-2008ish is wrong. You can see it in the post 2008 mortgage lending stats.

One, unlike the 89-96 slowdown , which saw borrowers go bust, the 2008-today slowdown has seen the borrowers 'saved' but the banks go under.

Huge amounts of lending capacity has been destroyed and is not coming back. Most boomers houses are not going to sell at anywhere close to what they think its 'worth'

 

Two, the finsec used to create its down demand - the mass expansion othe finsec ~82 -> 2009ish, saw 100k of employees, all well paid, some with access to cheaper products.

The biggest winner for this job bonanza was the south - I dont men The City, which is whole sale trade, I mean the large number of retail banks and the support services around housing sales/mortgages - lawyers, treasury management, debt, life insurers  selling endowments etc etc.

Theres barely a fraction of the people still employed compare to ~85-2007.

The jobs have been automated, regulated away.

You want a mortgage today?

You go to a bank with ~20% deposit and verified income with a good track record and get a repayment mortgages.

Theres no vat array of scammers offering liar loans, allowing people without a pot to piss in a mortgage, which pushes up housing costs.

There's no magic repayment like an endowment  mortgage, which was the cause of the 80s boom - the repayment method was a made up WP return, so allowed people to borrow 2x the amount they could afford.

The liar loans and IO mortgage were the cause of the 2002-2010 bubble.

These have gone for resi customers.

Theres a massive adjustment for UK housing esp. in the South where the mass well paying jobs have gone and the high LTE multiples are a no go.

 

 

 

 

 

 

 

 

 

 

 

 

 

Another thing to keep in mind is the continued changes to mortgages.

Lets take NR 125 together as peak cretin Brown

http://news.bbc.co.uk/1/hi/business/7256903.stm

The troubled Northern Rock bank is to stop offering its "Together" combined mortgage and loan deal.

The flagship offer from the bank will be closed from 2000 GMT.

The deal lets customers borrow up to 125% of the value of their homes and has been criticised for encouraging people to take on large debts.

Tens of thousands of Northern Rock customers may eventually be forced to remortgage at much higher interest rates when their current offers expire.

"Our present lending appetite has changed," said a bank spokesman.

"And demand for this product has now fallen

21 Feb 2008.

22 Feb 2008 it was taken into state ownership.

Even gets its own wiki

https://en.wikipedia.org/wiki/Nationalisation_of_Northern_Rock

And sad gormless tales

Northern Rock’s collapse: a victim’s tale

Dennis Grainger, who lost his savings, on his battle to win justice for shareholders

https://www.ft.com/content/ffa46f40-8d0d-11e7-a352-e46f43c5825d

Dennis Grainger had always been a prudent saver.

Rather than spend his salary and the bonuses that he earned while working in the finance department of Northern Rock, he tucked away as much as he could afford into his company’s share save scheme.

His goal when he started the job in Sunderland in 1998 was to save enough for a comfortable retirement with his wife within the next decade. But his decision to back the company by investing in shares of Northern Rock, a seemingly steady retail banking powerhouse based in the north-east of England, proved disastrous.

Unbeknown to Grainger and thousands of other shareholders, the lender was heading for trouble. In September 2007, Northern Rock became the first British bank in more than 150 years to experience a run, with customers forming queues around street corners to withdraw their deposits. It became the first major casualty of the financial crisis, acquired by the government in 2008 and then separated into a “good” bank, which was bought by Virgin Money in 2011, and a “bad” bank, which is still in the process of being sold.

Shareholders saw the value of their stock wiped out. Grainger lost £114,000. He says he still feels “rancour” at losing so much after nearly a decade of diligent saving, in part prompted by a government scheme aimed at employees investing in their own companies. I was upset, because I had believed in the company.

Its collapse was so sad to see “When I joined finance as a junior manager, I didn’t qualify for the defined benefit [pension] scheme,” Grainger says. “At that time, the company was encouraging people to save in the share save scheme. I paid in the maximum I could pay each month, looking to give my wife a provision in retirement, to add to our pension pot. The maximum was £300 a month, which wasn’t a small amount to give away in 1998.”

A drop in Northern Rock’s share price in 2007 didn’t alarm Grainger. When he left the bank in the summer of that year, he still believed it was in rude health. “When it first emerged that the share price went from £14 to £12 in 2007, my wife said, ‘Something is happening.’ But I said, ‘I’m leaving it in there for another five, 10 years for your investment.’ She always likes to tell me now that if I’d listened I could have traded them in at £114,000, but I didn’t. I wanted to save for her. “I said to her, ‘Why should I sell?’ Northern Rock had made a profit every year, paying dividends. I trusted my bank.”

One, these are a equity investment not really savings.

Two, he *fucking* worked for NR. In the fucking ginance deptmrtment FFS.

NR demuted at 440p in 1997. Shasre price peaked at 1250 in Feb 2007.

Thats why the daft bastard was putting all his money into NR share saving FFS.

Once the news broke that Northern Rock had been deemed “effectively insolvent”, Grainger realised his nest egg was gone. “I was upset, because I had believed in the company,” he says. Aside from his own savings, the impact on the community in the north-east was huge. “It was unusual to have a big bank of that stature in the north-east; it gave kids from local schools a job with shirts and ties. It was good for the area. Its collapse was so sad to see, so sad for the north-east.”

Derek had more chance than Joe Punter to ensure that NR was a well run bank. He fucking didnt.

The 71-year-old is continuing his battle. He hopes to push the Treasury select committee to review how Northern Rock’s failure was handled by the government and to examine the issue of fair compensation for shareholders. “It leaves a nasty taste in our mouths. There’s almost a north-south divide; a lot of the shareholders are pensioners in the north-east. And my wife will say, ‘We’re not having the lifestyle we should have had.’”

You were part of it you daft fucker. Life you n your wife deserves is drinking cider under a bridge.

Anyhow, at time the time the like of NR HBOS etc etc were all retaining something like 2% of capital against mortgage loans

I.e.

On a 100% LTV, the bank held 2k) and lent 98k to mug punter. The 98k was drawn down from BoE.

And by 'put 2k' into the loan NR were using using wholesale money markets to fund that rather than deposits or equity or bonds.

Total fucking insanity.

Pretty much everyone understands that you cannot borrow more than 10% for a mortgage.

Looking forward the average deposit is going to be 20%. Anything less will be rare n expensive.

What people dont grasp is that the banks are having to hold more capital against  mortgage books. Theres some schools in banking that think banks should hold at least 50% of a mortgage.

So, a bank with say, 100k of capital that could lend 5000k in 2007 now finds itself only able to lend 200k today.

At the moment, banks seem to hold 20-30% of capital against mortgage lending, be it equity of bonds.

Some banks i,e HSBC fund their lending solely by the surplus cash that their UK operations generation, not needing to borrow from BoE. This is why HSBC have been the cheapest lenders for the last 10 years.

In short - people can only borrow a fraction comapr4d to 2008. And at a much higher cost.

 

 

 

 

 

 

 

 

 

 

 

 

 

[Don Coglione]

45 minutes ago, spygirl said:

And for the same reasons - top up my income, most of which I expect to go to  my kids.

But also to stop me going nuts.

Bit late for that!

[RJT1979]

Any idea on a good business?

[leonardratso]

gigolo.

 

[RJT1979]

10 hours ago, leonardratso said:

gigolo.

 

Shy Sly Spuy. Midgy mong schlong

[wherebee]

Re the long post above re bank lending/capital - that ship has sailed.  The western banking system is fucked.  It will never again get back to the glory days of the 80's and 90's/00's in terms of ROCE. But the Boards and Execs normally grew their bank teeth in those years, so hark back to it.

They should be remembering banking in 1940-1960.  Captain Mainwairing.  Loans backed by deposits, incredible due diligence, very low risk, BORING.  Banking should be BORING.

To run the high level spiv banking of 1980-2007 you need a large population with small debt load willing to borrow, and relatively good employment to service the loans.  You also need asset classes that can be financialised - see cars, property, student loans, etc - that can be packaged up and sold off for big fees.  Securitisation.

In the west, you have no untouched asset classes, no steady pool of employed borrowers with low debt.

 

Spiv banking can work in the east.  Cannot come back to the west until a full reset, which requires a wiping out of existing debt, which means existing banks have to fail.

[spygirl]

30 minutes ago, wherebee said:

Re the long post above re bank lending/capital - that ship has sailed.  The western banking system is fucked.  It will never again get back to the glory days of the 80's and 90's/00's in terms of ROCE. But the Boards and Execs normally grew their bank teeth in those years, so hark back to it.

They should be remembering banking in 1940-1960.  Captain Mainwairing.  Loans backed by deposits, incredible due diligence, very low risk, BORING.  Banking should be BORING.

To run the high level spiv banking of 1980-2007 you need a large population with small debt load willing to borrow, and relatively good employment to service the loans.  You also need asset classes that can be financialised - see cars, property, student loans, etc - that can be packaged up and sold off for big fees.  Securitisation.

In the west, you have no untouched asset classes, no steady pool of employed borrowers with low debt.

 

Spiv banking can work in the east.  Cannot come back to the west until a full reset, which requires a wiping out of existing debt, which means existing banks have to fail.

They haven't already ....??

[spygirl]

On 31/12/2020 at 11:12, spygirl said:

A

And sad gormless tales

Northern Rock’s collapse: a victim’s tale

Dennis Grainger, who lost his savings, on his battle to win justice for shareholders

https://www.ft.com/content/ffa46f40-8d0d-11e7-a352-e46f43c5825d

Dennis Grainger had always been a prudent saver.

Rather than spend his salary and the bonuses that he earned while working in the finance department of Northern Rock, he tucked away as much as he could afford into his company’s share save scheme.

His goal when he started the job in Sunderland in 1998 was to save enough for a comfortable retirement with his wife within the next decade. But his decision to back the company by investing in shares of Northern Rock, a seemingly steady retail banking powerhouse based in the north-east of England, proved disastrous.

Unbeknown to Grainger and thousands of other shareholders, the lender was heading for trouble. In September 2007, Northern Rock became the first British bank in more than 150 years to experience a run, with customers forming queues around street corners to withdraw their deposits. It became the first major casualty of the financial crisis, acquired by the government in 2008 and then separated into a “good” bank, which was bought by Virgin Money in 2011, and a “bad” bank, which is still in the process of being sold.

Shareholders saw the value of their stock wiped out. Grainger lost £114,000. He says he still feels “rancour” at losing so much after nearly a decade of diligent saving, in part prompted by a government scheme aimed at employees investing in their own companies. I was upset, because I had believed in the company.

Its collapse was so sad to see “When I joined finance as a junior manager, I didn’t qualify for the defined benefit [pension] scheme,” Grainger says. “At that time, the company was encouraging people to save in the share save scheme. I paid in the maximum I could pay each month, looking to give my wife a provision in retirement, to add to our pension pot. The maximum was £300 a month, which wasn’t a small amount to give away in 1998.”

A drop in Northern Rock’s share price in 2007 didn’t alarm Grainger. When he left the bank in the summer of that year, he still believed it was in rude health. “When it first emerged that the share price went from £14 to £12 in 2007, my wife said, ‘Something is happening.’ But I said, ‘I’m leaving it in there for another five, 10 years for your investment.’ She always likes to tell me now that if I’d listened I could have traded them in at £114,000, but I didn’t. I wanted to save for her. “I said to her, ‘Why should I sell?’ Northern Rock had made a profit every year, paying dividends. I trusted my bank.”

 

The 71-year-old is continuing his battle. He hopes to push the Treasury select committee to review how Northern Rock’s failure was handled by the government and to examine the issue of fair compensation for shareholders. “It leaves a nasty taste in our mouths. There’s almost a north-south divide; a lot of the shareholders are pensioners in the north-east. And my wife will say, ‘We’re not having the lifestyle we should have had.’”

 

 

Been thinking about this fucktard.

What the fuck does he want?

All hes done is saved 300/m for 10 years. His loss is ~30k.

What he wants back is the the entirely made up increases in NR equity 1998-2008 FFS.

You can make a strong case that he should not even have had a job, to provide that 300/m 'investment'

When NR crashed it was an out n out fraud, a scam bank.

How long had it been like that? Before or after demute??

 

 

[RJT1979]

That guy who put his money in NR is an idiot. He worked in finance there lol. Wtf. Where to begin.

[Talking Monkey]

On 31/12/2020 at 11:12, spygirl said:

Another thing to keep in mind is the continued changes to mortgages.

Lets take NR 125 together as peak cretin Brown

http://news.bbc.co.uk/1/hi/business/7256903.stm

The troubled Northern Rock bank is to stop offering its "Together" combined mortgage and loan deal.

The flagship offer from the bank will be closed from 2000 GMT.

The deal lets customers borrow up to 125% of the value of their homes and has been criticised for encouraging people to take on large debts.

Tens of thousands of Northern Rock customers may eventually be forced to remortgage at much higher interest rates when their current offers expire.

"Our present lending appetite has changed," said a bank spokesman.

"And demand for this product has now fallen

21 Feb 2008.

22 Feb 2008 it was taken into state ownership.

Even gets its own wiki

https://en.wikipedia.org/wiki/Nationalisation_of_Northern_Rock

And sad gormless tales

Northern Rock’s collapse: a victim’s tale

Dennis Grainger, who lost his savings, on his battle to win justice for shareholders

https://www.ft.com/content/ffa46f40-8d0d-11e7-a352-e46f43c5825d

Dennis Grainger had always been a prudent saver.

Rather than spend his salary and the bonuses that he earned while working in the finance department of Northern Rock, he tucked away as much as he could afford into his company’s share save scheme.

His goal when he started the job in Sunderland in 1998 was to save enough for a comfortable retirement with his wife within the next decade. But his decision to back the company by investing in shares of Northern Rock, a seemingly steady retail banking powerhouse based in the north-east of England, proved disastrous.

Unbeknown to Grainger and thousands of other shareholders, the lender was heading for trouble. In September 2007, Northern Rock became the first British bank in more than 150 years to experience a run, with customers forming queues around street corners to withdraw their deposits. It became the first major casualty of the financial crisis, acquired by the government in 2008 and then separated into a “good” bank, which was bought by Virgin Money in 2011, and a “bad” bank, which is still in the process of being sold.

Shareholders saw the value of their stock wiped out. Grainger lost £114,000. He says he still feels “rancour” at losing so much after nearly a decade of diligent saving, in part prompted by a government scheme aimed at employees investing in their own companies. I was upset, because I had believed in the company.

Its collapse was so sad to see “When I joined finance as a junior manager, I didn’t qualify for the defined benefit [pension] scheme,” Grainger says. “At that time, the company was encouraging people to save in the share save scheme. I paid in the maximum I could pay each month, looking to give my wife a provision in retirement, to add to our pension pot. The maximum was £300 a month, which wasn’t a small amount to give away in 1998.”

A drop in Northern Rock’s share price in 2007 didn’t alarm Grainger. When he left the bank in the summer of that year, he still believed it was in rude health. “When it first emerged that the share price went from £14 to £12 in 2007, my wife said, ‘Something is happening.’ But I said, ‘I’m leaving it in there for another five, 10 years for your investment.’ She always likes to tell me now that if I’d listened I could have traded them in at £114,000, but I didn’t. I wanted to save for her. “I said to her, ‘Why should I sell?’ Northern Rock had made a profit every year, paying dividends. I trusted my bank.”

One, these are a equity investment not really savings.

Two, he *fucking* worked for NR. In the fucking ginance deptmrtment FFS.

NR demuted at 440p in 1997. Shasre price peaked at 1250 in Feb 2007.

Thats why the daft bastard was putting all his money into NR share saving FFS.

Once the news broke that Northern Rock had been deemed “effectively insolvent”, Grainger realised his nest egg was gone. “I was upset, because I had believed in the company,” he says. Aside from his own savings, the impact on the community in the north-east was huge. “It was unusual to have a big bank of that stature in the north-east; it gave kids from local schools a job with shirts and ties. It was good for the area. Its collapse was so sad to see, so sad for the north-east.”

Derek had more chance than Joe Punter to ensure that NR was a well run bank. He fucking didnt.

The 71-year-old is continuing his battle. He hopes to push the Treasury select committee to review how Northern Rock’s failure was handled by the government and to examine the issue of fair compensation for shareholders. “It leaves a nasty taste in our mouths. There’s almost a north-south divide; a lot of the shareholders are pensioners in the north-east. And my wife will say, ‘We’re not having the lifestyle we should have had.’”

You were part of it you daft fucker. Life you n your wife deserves is drinking cider under a bridge.

Anyhow, at time the time the like of NR HBOS etc etc were all retaining something like 2% of capital against mortgage loans

I.e.

On a 100% LTV, the bank held 2k) and lent 98k to mug punter. The 98k was drawn down from BoE.

And by 'put 2k' into the loan NR were using using wholesale money markets to fund that rather than deposits or equity or bonds.

Total fucking insanity.

Pretty much everyone understands that you cannot borrow more than 10% for a mortgage.

Looking forward the average deposit is going to be 20%. Anything less will be rare n expensive.

What people dont grasp is that the banks are having to hold more capital against  mortgage books. Theres some schools in banking that think banks should hold at least 50% of a mortgage.

So, a bank with say, 100k of capital that could lend 5000k in 2007 now finds itself only able to lend 200k today.

At the moment, banks seem to hold 20-30% of capital against mortgage lending, be it equity of bonds.

Some banks i,e HSBC fund their lending solely by the surplus cash that their UK operations generation, not needing to borrow from BoE. This is why HSBC have been the cheapest lenders for the last 10 years.

In short - people can only borrow a fraction comapr4d to 2008. And at a much higher cost.

 

 

 

 

 

 

 

 

 

 

 

 

 

What a gormless fucker, he worked in the finance department and concentrated his share portfolio into 1 company, the company he worked for. That's top drawer dumb fuckery

[spygirl]

1 minute ago, Talking Monkey said:

What a gormless fucker, he worked in the finance department and concentrated his share portfolio into 1 company, the company he worked for. That's top drawer dumb fuckery

And then pays a lawyer  to make a case about getting his money back.

Not tye 30k he put in.

The 120k his shares were worth a year or two before it crashed.

He could have cashed out every 5 years and bank the profits.

[RJT1979]

Did he win?

[spygirl]

2 hours ago, RJT1979 said:

Did he win?

https://bmmagazine.co.uk/news/treasury-to-receive-5bn-from-northern-rock/

Fuck knows.

Idiotdoes not grasp equity or that NR was insolvent.

Its 2019 accounts show total equity in March 2019 of £5.13 billion, suggesting the state can expect a further £2.4 billion. At book value, NRAM would have been a FTSE 100 company last year.

“It is demonstrably unfair that the government should get back all the loans it made and then expect to pocket the billions of profits over and above that,” Mr Grainger said. “Those profits result from the inherent strength of Northern Rock assets that were seized from ordinary people who suffered badly. This is clearly a case of unjust enrichment of the government.”

 

No Dennis.

Meagre returns of the last n only person able to extend liquidity to NR

[spygirl]

https://www.independent.co.uk/news/uk/home-news/northern-rock-shareholders-theresa-may-financial-crisis-10-years-banks-taxpayer-funded-bail-out-government-bankers-credit-crunch-run-bankl-a7946586.html

About 150,000 small investors, they claim, had their savings “stolen” by a “disingenuous” government which had been scheming “to prepare this valuable solvent company for sale at a profit to the taxpayer”.

[Chewing Grass]

Any article in The Independent is rabid click-bait bollocks.

[King Penda]

On 31/12/2020 at 15:58, leonardratso said:

gigolo.

 

I used to have some witty cards can’t say who they were given to lol 

[RJT1979]

1 hour ago, stokiescum said:

I used to have some witty cards can’t say who they were given to lol 

Stokie Pokie Long Gone

[spygirl]

On 31/12/2020 at 11:12, spygirl said:

 

Anyhow, at time the time the like of NR HBOS etc etc were all retaining something like 2% of capital against mortgage loans

I.e.

On a 100% LTV, the bank held 2k) and lent 98k to mug punter. The 98k was drawn down from BoE.

And by 'put 2k' into the loan NR were using using wholesale money markets to fund that rather than deposits or equity or bonds.

Total fucking insanity.

 

Oh look 0% mortgages.

Danish homeowners have been offered the chance to fix their mortgage interest rate at zero per cent for twenty years as three banks plan to roll out the long-term deals.

https://www.mortgagesolutions.co.uk/news/2021/01/06/danish-banks-offer-20-year-zero-per-cent-mortgage-deals/

According to Bloomberg’s quarterly review of monetary policy, central banks around the world are reluctant to increase interest rates and it is unlikely that any central western bank will do so this year.

In August 2019, the country’s third largest financial institution Jyske Bank offered ten-year fixed rate deals priced at -0.5 per cent. This meant that borrowers would only need to pay back 99,500 in every 100,000 Krone borrowed if they paid the loan off in full at the end of the term.

Jyske Bank and Totalkredit, a unit of Denmark’s largest mortgage lender, Nykredit Realkredit A/S, have also said they will offer 20-year deals fixed at 0 per cent while Danske Bank has indicated it may join them

Denmark’s mortgage lenders act in a different way to UK lenders.

Mortgages are directly tied to the covered bonds used to fund them. Lenders act as the broker between the borrower and the investor.

Instead of making money through interest rates they generate income from fees. The coupon rate is passed on to the borrower

 

I'd love to see BoE withdraw from advancing money for mortgages/real estate.

 

 

[Democorruptcy]

On the local news tonight there was a proper head in the hands moment for people trying to sell any of these flats:

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=POSTCODE^3794025&propertyTypes=&includeSSTC=true&mustHave=&dontShow=&furnishTypes=&keywords=

Built by Taylor Wimpey who say they met the standards of the day, after Grenfell the building needs remedial work due to fire risks inside and out. A flat owner said she was shaking after opening the £3,000 bill just as her share of some internal work. They said the external work could cost tens of millions.

I feel sorry for anyone who bought one to live in, though it's a small violin for the holiday and second home buyers. 

[Hancock]

13 hours ago, Democorruptcy said:

On the local news tonight there was a proper head in the hands moment for people trying to sell any of these flats:

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=POSTCODE^3794025&propertyTypes=&includeSSTC=true&mustHave=&dontShow=&furnishTypes=&keywords=

Built by Taylor Wimpey who say they met the standards of the day, after Grenfell the building needs remedial work due to fire risks inside and out. A flat owner said she was shaking after opening the £3,000 bill just as her share of some internal work. They said the external work could cost tens of millions.

I feel sorry for anyone who bought one to live in, though it's a small violin for the holiday and second home buyers. 

Vrikey they look like some cheaply knocked up flats in the next up and coming holiday destination. Amazing what people will spend to look at water.

[Democorruptcy]

7 minutes ago, Hancock said:

Vrikey they look like some cheaply knocked up flats in the next up and coming holiday destination. Amazing what people will spend to look at water.

I'm a bit tempted to phone up and offer -£200k on one, to give them a free dose of realism.

[Hancock]

1 minute ago, Democorruptcy said:

I'm a bit tempted to phone up and offer -£200k on one, to give them a free dose of realism.

£200k for your share of an unknown sum to fix the outside. If you want to give money away im happy to take it.

[Democorruptcy]

8 minutes ago, Hancock said:

£200k for your share of an unknown sum to fix the outside. If you want to give money away im happy to take it.

It was -£200k not £200k, e.g. £125k for a £325k etc. I didn't say I was going to buy one! It would be just to help them realise they need to stop dreaming

[No One]

Glad to see this thread resurrected, lots of great info.

 

I just read on the FT that inquiries have nosedived.

Will we see falls form next month?

 

[wherebee]

On 03/01/2021 at 21:07, spygirl said:

Been thinking about this fucktard.

What the fuck does he want?

All hes done is saved 300/m for 10 years. His loss is ~30k.

What he wants back is the the entirely made up increases in NR equity 1998-2008 FFS.

You can make a strong case that he should not even have had a job, to provide that 300/m 'investment'

When NR crashed it was an out n out fraud, a scam bank.

How long had it been like that? Before or after demute??

 

 

yes and no.  NR also took on the debts of several smaller building societies back in the day that were collapsing - in effect taking bad loan books on under pressure from the gvt so as not to have a 'bank run'.  So the gvt is partially responsible for the pile of shit as well.  Same with I think Barclays being forced to take on Lloyds?