Tuesday, December 02, 2008

Crisis? What crisis?

Some may or may not be aware of something called a "crisis loan". These are loans that the Government give to those who find themselves really strapped and up against the wall in the short term. They are usually given out to people in dire emeregency and the amount given is variable.

Below is a graph that shows the number of crisis loans processed for people of working age from Novmebr 1998 to October 2008. The figure were sourced in a document deposited in the House of Commons library in a response to a question by Chris Grayling last week.


That's an impressively steep incline from a pretty static trend there don't you think.?All of sudden there was a sharp increase in the number of people on the brink and in need of short term cash help. Now I'd say that steep incline represents a blatent warning sign that something bad was starting to happen.

Shame no one noticed earlier huh?

10 comments:

Anonymous said...

I agree. It really is a shame that people don't pick up on this when it's in the news...

http://news.bbc.co.uk/1/hi/uk_politics/7756066.stm

dizzy said...

Agreed, why on earth bloggers can't be in each and every single point in space and time with infinite browsing time and capability is beyond me too.

dizzy said...

Love the bit that says "Figures obtained by the [Liberal Democrats]" though. Up there with "the BBC has learned".

Anonymous said...

Your anon fairs to point out that these figures could have highlighted in May 2007 that things were becoming difficult.

At that time, I think small business realised that things were starting to go sour, and MP's were being as useless as usual - but kn owning how every other statistic has been manipulated out of all historical context, who would trust good looking figures from this government?

AndyR said...

I'm sure you're right, but is it also possible that there was some publicity about this crisis loan in 2007? I didn't even know it existed until I read your article.

marksany said...

I shudder to think what the November data looks like

Lola said...

The graph is a lagging indicator. These borrowers must have been in crisis before they drew on this facility.

I personally reckon the signs started in 1997 the moment that G Brown taxed pensions. From then until 2005/6 everyone pursued a giant equity release scheme to keep up their lifestyles in the face of swingeing tax rises. The government did the same - taxing pensions = spending capital.

My experience of the mortgage market and clients mortgage requirements indicated trouble ahead from 2005 onwards. There was a last flurry of bonkers deals available 2005 - 2007 ish which were accessed by 'crisis' borrowers and then 'bang' - credit crunchy here we come.

Anonymous said...

Excellent - I now have you sussed.

You ignored my anonmous comment from someone who worked in crisis loans. Not surprising really, you want to say something different and you are an aspiring politician. May you all rot in hell.

I have followed your blog for over a year now.

At first I thought, great, an independent source of information. But you bloggers are no different from the papers.

dizzy said...

What?

Lola said...

anon 14.55 Huh?