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Not building society

Banks admit high self-interest rates

Canary Wharf on the Isle of Dogs

Workers were seen on Monday shouting from the windows of Canary Wharf, trying to negotiate a remortgage of their offices with HSBC next door

photograph: Statto

As thousands of people today realised that their mortgages are currently costing them more than the value of their house, and as the government was forced to admit that more children and pensioners were living in poverty than this time last year, the financial sector today suggested it might be time ‘to start lending money responsibly.’ Maybe.

KTAB News grew a beard and spent a few hours sat on a blanket in the City, begging well-dressed passers-by for financial advice.

Can we really blame the banks?

‘In the face of the current economic downturn,’ suggested Roger Bighouse, CEO of the US-owned Prairie Group, ‘We may have miscalculated when we lent money to people who told us they couldn’t pay it back.

‘The funny thing is, exactly the same thing happened in the Great Depression,’ he added ‘but this time, it will be different…somehow.’

What’s all this talk of the negative equity hitting the fan?

‘It’s obvious, really,’ says financial adviser Claire Timkins, ‘If your mortgage is the same as your house price, and then prices fall, then you end up in the red red.

‘You don’t need an economics degree to understand it, you just need enough money to buy your house outright and then employ me to explain it to you.’

So…uh…how do you get people to take out these patently oversized mortgages?

‘Modern banking is known as “fractional reserve banking”,’ explained city analyst Marvin Wilcox, ‘Because we always keep a reserve of idiots who don’t understand fractions to take out whopping great 100% mortgages. “How could you take out less than the full value of your home?” we ask the fools, “How can you divide one by something? That question doesn’t even make sense! If I have two people but only one cake, the only option is to give all of the cake to the bank.”’

 

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