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Thursday, June 03, 2010

The State we are in

The Slog is known in some circles as Doomster. This however is his analogy of the current state of UK finances.

"Imagine you have a business projected to lose £108,000 per annum. Your one asset - the house - is worth £34,000, and falling....but your mortgage on it is £890,000. How easy do you think it would be to borrow more money? And at what point do you think repossession might be on the agenda? Do you think your accountant would say you were close to trading insolvently? Or do you think he might just recommend you default and go bankrupt?"

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