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Banks and borrowers wake up to that morning-after feeling
September 17, 2006 (The Observer)
With personal bankruptcies reaching record highs and lenders showing long overdue caution, the credit party may be over, says Heather Connon
Is the long-awaited credit crunch finally starting to bear down? The evidence pointing in that direction is mounting steadily.
Last week alone, Citizens Advice warned that a growing number of borrowers were missing mortgage payments; the International Monetary Fund said further rises in interest rates could undermine the housing market; statistics from the Council of Mortgage Lenders showed that first-time house buyers were borrowing record multiples of their income to get on to the housing ladder; and HSBC, one of the big five lending banks, said it would review all overdrafts annually to identify those who were struggling with their debts.
Add in a record number of personal bankruptcies - higher now than at the height of the housing market crash in the early 1990s - and a rapid increase in arrears on credit cards, and it seems the hangover from the prolonged borrowing binge has finally started.
AntiSpin: Here's to the housing bubble "soft-landing" predicted by the world's central banks that never admitted we were ever "in the air" in the first place (their analogy, nor ours).
Here's to those who were tricked into flying so high. We do not stand by to watch you crumble but stand beside you, to help if we can.
Here's to long time iTulip readers–the guys ejecting with the parachutes.
September 17, 2006 (The Observer)
With personal bankruptcies reaching record highs and lenders showing long overdue caution, the credit party may be over, says Heather Connon
Is the long-awaited credit crunch finally starting to bear down? The evidence pointing in that direction is mounting steadily.
Last week alone, Citizens Advice warned that a growing number of borrowers were missing mortgage payments; the International Monetary Fund said further rises in interest rates could undermine the housing market; statistics from the Council of Mortgage Lenders showed that first-time house buyers were borrowing record multiples of their income to get on to the housing ladder; and HSBC, one of the big five lending banks, said it would review all overdrafts annually to identify those who were struggling with their debts.
Add in a record number of personal bankruptcies - higher now than at the height of the housing market crash in the early 1990s - and a rapid increase in arrears on credit cards, and it seems the hangover from the prolonged borrowing binge has finally started.
AntiSpin: Here's to the housing bubble "soft-landing" predicted by the world's central banks that never admitted we were ever "in the air" in the first place (their analogy, nor ours).
Here's to those who were tricked into flying so high. We do not stand by to watch you crumble but stand beside you, to help if we can.
Here's to long time iTulip readers–the guys ejecting with the parachutes.
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