Getting us spending again is dishonest and won't work anyway

Yesterday I was looking over statistics from the Council of Mortgage lenders quoted in an article for the Telegraph..

I was a little suspicious of some of the recent headlines about mortgage lending being up 16% this month and other "good news - so go out and start spending again" stories.

What makes my antenna twitch is the comparisons being used. Instead of comparing April 2009 with April 2008 the compare April with March. They also use a narrow definition of just first time buyers.

I've cut and pasted their figures to the end of this post you'll see that for all mortgage lending the country is down by (26008-10400)*100/26008 % = a reduction of 60.1% on last year.

And yet the figures quoted are for a rise in demand between months that probably has more to do with pent up demand for people who have to find somewhere to live and those disposing of estates for people no longer with us.

What are they trying to do to us ?

The answer is to get us spending again. But we are so overburdened with debt, and our country is drowning in it and getting worse with every day the general election is delayed.

The Brown boom years weren't a natural boom. Its the public sector that boomed, and debt recycled through the housing asset price bubble that fuelled it - which is why government debt is now needed to keep things roughly level.

But neither form of economic activity - the asset fuelled spending - or the government debt fuelled spending is sustainable. And the longer things are put of the worse it will be when the economy finally has to go cold turkey.

Saying this was the "Credit Crunch" is like saying a drug addict has a supply problem when they can't get their next fix, rather than a drug problem.

Its a Debt crisis ( not even the recession or the banking crisis are the key underlying points ).

And who is the UK's prime Debt pusher ? Gordon Brown.

PS See this headline - its one you have to read very carefully to avoid a false impression. They are trying to talk up the market, without addressing the debt crisis - that is little short of a crime in my view.

Mortgage lending increases as 70 per cent of borrowers opt for a fixed rate deal...from today's Telegraph. If you look at the article you'll spot some caveats about three para down, but it reads like the marketing stuff that's getting pushed through my letter box by Estate agents these days. [ If your like me then the first time you scanned that title you might have read "Mortgage lending increases at 70 per cent .....", and easy mistake to make. I have no way of knowing if thats intentional or not - but as I said at the start of this post my antennae are twitching ]

Who is going to save our country from this short termism when the ultimate threat of lifelong debts (personal and national) threatens to enslave us all ?

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. Table 1: Gross mortgage lending . . All loans . Total . £m . Year . 2000 119,798 . 2001 160,123 . 2002 220,734 . 2003 277,338 . 2004 291,221 . 2005 287,921 . 2006 345,119 . 2007 363,679 . 2008 257,642 . . Quarter . 2006 Q1 73,889 . Q2 85,952 . Q3 92,864

. Q4 92,371 . 2007 Q1 83,943 . Q2 93,789 . Q3 98,535 . Q4 87,412 . 2008 Q1 75,146 . Q2 74,130 . Q3 61,799 . Q4 46,567 . 2009 Q1est 32,974 . . Month . 2008 Apr 26,088 . May 24,445 . Jun 23,597 . Jul 24,820 . Aug 19,648 . Sep 17,493 . Oct 18,838 . Nov 14,181

. Dec 13,548 . 2009 Jan 11,685 . Feb 9,906 . Mar 11,383 . Aprest 10,400 est=estimated . Source: CML Research, Bank of England . 1. Total gross lending gives the total value of loans secured on dwellings that are newly advanced by institutions in the period. All the figures were sourced from the Bank of England except the estimate for the most current month. . 2. The CML estimates of gross lending for the latest month were based on the lending figures provided by a sample of lenders that represent around 80% of the mortgage market. The aggregate of these figures were scaled up to represent the whole market.