ASTER!!!!aster wrote:I don't like banks. Look who got the entire world into this mess and needed gov't bailouts worldwide to stay afloat...
Of course then there's countries like Greece who have been living at the Eurozone's expense like leeches...
Bloody 'ell, I think you've just described Singapore!JR8 wrote:(Blimey an extreme extension of that would be a country where the government owns almost all the land, so that situation can be perpetually engineered!).
I believe the loans were based on greed, complacency and thinking that the housing industry was insulated from all economic factors, downright stupidity, and likely some of Gordon's figure fudging. Who the F*ck lends 125% against an asset - oh wait, the banks! Who lends against 100-1000% of something - oh wait, the banks in the form of margin!!JR8 wrote:Hehe.. thanks, just random musing over my cornflakes yesterday.
I recall the 125% LTV loans. Weren't they aimed at young professionals (people who could evidence a career path that would bring in rapidly increasing earnings?). I suppose in a world where boom and bust had been eradicated (copyright, Gordon Brown) it made perfect sense. Less so in retrospect!
Stress testing? I don't think politicians honestly want to know, they'd rather wing-it and hang on to power for as long as possible. If house prices are going up citizens feel richer. Such people tend to go along with the status quo and not rock the boat. The ideal world for politicians. (Blimey an extreme extension of that would be a country where the government owns almost all the land, so that situation can be perpetually engineered!).
Wasn't there round #2 of stress testing on all EU banks just recently? The markets received it with cynicism and suggested it was tantamount to a whitewash. The head of the audit agency then turned around and said 'Don't blame us, we know the remit was very narrow but that is what the politicians told us to audit'.
Meanwhile more debt is being shoveled on the US, the PIGS, the UK (where the reported cuts are a cut in the rate of increase in spending, not a cut in spending itself (most of the population are too financially illiterate to understand the difference. So perversely they think they're living in brutally hard times, despite the fact that spending is still rising and at record levels no less. Weird lol!)).
I don't see that the economic fundamentals are being corrected. I just see politicians scurrying around with sticking plasters in order to perpetuate for this week or month the lie that the west has been and continues to live within it's means.
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