Nationalisation of the US mortgage market means in effect that the US government has just reduced it's spending power by 25 times the value of Northern Rock. This will have a major impact on the world economy as the US cuts back massivly on spending. Expect to see major turbulance on the world markets starting with Japan/HK in about 4/5 hours time.
If one of the most capitalistic countries in the world can make such a bold move to protect home owners and get their housing market back on the up I think there are real leasons to be learnt back here in the UK by our government!
Originally posted by Chrisgo: If one of the most capitalistic countries in the world can make such a bold move to protect home owners and get their housing market back on the up I think there are real leasons to be learnt back here in the UK by our government!
Take a deep breath, you are about to learn the lesson of a lifetime! And it won't be good.
It doesn't look likely that a real lesson will be learned OM. As you can see, people still expect the Government to come up with "rescue" package, when they have over-extended themselves and got themselves into debt they can never repay.
I just can't believe that anyone would view a short-term injection of cash for FTBs as anything but a sticking plaster on a gaping wound! There is always a day of reckoning.
Originally posted by Chrisgo: If one of the most capitalistic countries in the world can make such a bold move to protect home owners and get their housing market back on the up I think there are real leasons to be learnt back here in the UK by our government!
Essentially, any Government that takes such action has 3 choices. Choice 1 print money to cover the debt = hyperinflation = cost of everything rises but your income doesn't rise anywhere near enough to cover prices going up. Choice 2 taxes rocket to cover the debt. Choice 3 Government reduces spending = longer recession. Lets hope you ae wrong.
Originally posted by hardwon: It doesn't look likely that a real lesson will be learned OM. As you can see, people still expect the Government to come up with "rescue" package, when they have over-extended themselves and got themselves into debt they can never repay.
I just can't believe that anyone would view a short-term injection of cash for FTBs as anything but a sticking plaster on a gaping wound! There is always a day of reckoning.
Indeed. The real lesson is that "growth" based on debt is not growth, it's a costly illusion. It's time we returned to the philosophy of previous generations - don't buy things you can't afford.
I've always lived that way and it's done me no harm. I just hope I don't have to pay too much for others' fecklessness.
Originally posted by Chrisgo: If one of the most capitalistic countries in the world can make such a bold move to protect home owners and get their housing market back on the up I think there are real leasons to be learnt back here in the UK by our government!
Essentially, any Government that takes such action has 3 choices. Choice 1 print money to cover the debt = hyperinflation = cost of everything rises but your income doesn't rise anywhere near enough to cover prices going up. Choice 2 taxes rocket to cover the debt. Choice 3 Government reduces spending = longer recession. Lets hope you ae wrong.
Well the one of the stated intensions has been to stop people losing their homes. The only way that can be acheived is if the government get prices back up so people are out of negative equity and the banks less likely to forclose. Or to actually use tax payer money to help them pay their morgages.
I either get a real headache when I see talk about this sort of money-business, or narcolepsy - and in this case, both at the same time. This is because my brain fails to understand why the human species, with all its ingenuity and creativity in so many other areas, has come up with a global economic system with inevitable failure seemingly built into the design. No doubt, in these matters at least, I am a complete simpleton and an utter n00b.
Yet, it also seems apparent that such a system is in need of a complete overhaul, a redesign. But that implies a completely different set of motives and priorities. In other words, a reduction in competition and profit-making, and a substantial increase in co-operation and actual improvements, based on basic need. The saying, "Mankind won't save the planet, because there's no money in it" still sounds like an epitaph waiting to be carved into and finished off on the tombstone of homo sapiens sapiens. But will it all fall down first before we get a chance to demolish it with wise intention first?
Am I off the mark? When the Frankenstein's Monster, which is Money, that once was dead, and was brought alive and animated to a greater degree of sophistication now appears out of control and less predictable than ever, and proceeds to wipe away your house and possessions in one easy move, who can we blame but ourselves, collectively? Of course, the come-back is, "Do you have a better suggestion, an alternative system or structure or set of rules regarding trade, survival, national stability, ... 'growth'?" Well, dammit, no. No, I don't. Does that mean, though, that we shouldn't or couldn't help each other more to hammer out this problem and 'find a better way'? What, or more likely, who, is really standing in the way? Look around, it's easy enough to spot the Saboteurs of the best of human intention. They are the ones who promote the worst, at the other end of the scale. Evolution and human progress may still include some highly mysterious elements beyond our comprehension - such as built in failure to make way for some other type of successor. "And the meek shall inherit the Earth." - There's a real mystery for starters. What could that possibly mean?
But let's not get too cut-up about all this economic/demonic doom and gloom. There's much more to life than money. Remember, WE made it all up. Money sure doesn't grow on trees, but just give me the trees any day. And I'm no darn hippy.
Originally posted by Chrisgo: Well the one of the stated intensions has been to stop people losing their homes. The only way that can be acheived is if the government get prices back up so people are out of negative equity and the banks less likely to forclose. Or to actually use tax payer money to help them pay their morgages.
Thankfully the government don't have the means to 'get prices back up' - how would they achieve this? Thousands are already in negative equity, and that's a real shame - but there's no way tax payer money should be used to help them pay their mortgages if they can't afford them. Repossession is maybe the only possible solution for these people, rather than encouraging them to hang on to what they could never afford in the first place.
Originally posted by Chrisgo: If one of the most capitalistic countries in the world can make such a bold move to protect home owners and get their housing market back on the up I think there are real leasons to be learnt back here in the UK by our government!
Essentially, any Government that takes such action has 3 choices. Choice 1 print money to cover the debt = hyperinflation = cost of everything rises but your income doesn't rise anywhere near enough to cover prices going up. Choice 2 taxes rocket to cover the debt. Choice 3 Government reduces spending = longer recession. Lets hope you ae wrong.
Well the one of the stated intensions has been to stop people losing their homes. The only way that can be acheived is if the government get prices back up so people are out of negative equity and the banks less likely to forclose. Or to actually use tax payer money to help them pay their morgages.
So which " bail out the housing market at any costs" option do you prefer? Inflation, higher taxes or job losses. Either way, keeping house prices high can only be effective in the short term as you cant defy the basic rules of economics and it all has to be paid for by someone. The problem is that the longer reality is postponed, the worse the long term damage will be.
Originally posted by Tension Span: This is because my brain fails to understand why the human species, with all its ingenuity and creativity in so many other areas, has come up with a global economic system with inevitable failure seemingly built into the design.
I think it's like pyramid selling. Everyone knows it's a bit of a con and it can't go on forever, but everyone deludes themselves and hopes they'll be among the lucky winners and thinkgs s0d the losers.
Originally posted by Tension Span: This is because my brain fails to understand why the human species, with all its ingenuity and creativity in so many other areas, has come up with a global economic system with inevitable failure seemingly built into the design.
I think it's like pyramid selling. Everyone knows it's a bit of a con and it can't go on forever, but everyone deludes themselves and hopes they'll be among the lucky winners and thinkgs s0d the losers.
So, in denial of our own, fairly obvious, shortcomings? And if we could stand up, be counted, and admit this with some real honesty, is it possible we could see something new instead? Another, perhaps opposite, direction? And would we be *allowed* to act upon any new inspiration on this score? That's the clincher to my mind. Does a Rockefeller-type have any true empathy with a starving child or a hard-working family as they witness the bailiff trucks pull up on the yard? We might be happy or unhappy, but such a system makes slaves of all of us, addicted to chains of one type or another. While the slavemasters count their profits and believe they are winners. As long as we accept we are losers, they remain slavemasters. If we can find a way to pull out of the game altogether, any win of theirs becomes even emptier than it already is. I know it sure seems insurmountable, so entrenched is the system; but the point of greatest futility can be the beginning of the highest inspiration. Is it not time to stop clinging to survival, merely because it's an instinct, and reach for that something beyond, the true spirit of creativity? It IS in us. We CAN deny it, but we CANNOT lose it.
Enough words from me on this. Action may not be a panacea, but it's far more therapeutic than moaning or worrying. Muttley! DO something!
Nationalisation of the US mortgage market means in effect that the US government has just reduced it's spending power by 25 times the value of Northern Rock. This will have a major impact on the world economy as the US cuts back massivly on spending. Expect to see major turbulance on the world markets starting with Japan/HK in about 4/5 hours time.
Bang goes the free market then, state intervention and socialism win after all?
Nationalisation of the US mortgage market means in effect that the US government has just reduced it's spending power by 25 times the value of Northern Rock. This will have a major impact on the world economy as the US cuts back massivly on spending. Expect to see major turbulance on the world markets starting with Japan/HK in about 4/5 hours time.
Bang goes the free market then, state intervention and socialism win after all?
free market capitalism has always been doomed to fail. It can only survive if stupid people keep doing stupid things. Eventually, the pain of making the same mistakes repeatedly convince even the most dumb that their must be a better way. We are some way from Socialism based upon the will of the people though - what has happened in the US amounts to state sponsored fat cat gluttony.
Originally posted by Optimus Maximus: Well this puts the Northern Rock debacle into perspective. Makes the UK government look positively proactive in comparison.
But will governments and financial companies actually learn anything from this? Will the rest of us?
The only lesson is not to trust Government and industry to 'look after us'....
Amazing, lending money, operating a capitalist business yet when it inevitably goes wrong, as it always does, the government is there with the parachute. The bigger businesses depend on the government to support their independence. Totally mad. How many of us would be bailed out if we made a stupid/reckless decision?
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