credit Crunch Titbit

[kieran]

I must say it amazed me at first when I came over here that credit was so universal, growing up in Ireland, the only loan I knew about was a mortgage and no one I knew had credit cards, I still don't have one (my wife has one which we use for some purchases just for the cover it gives and which we pay off immediately) and the only loan my wife and I have is our mortgage, which has just 10 years to go. Still Ireland soon caught up and people a few years younger than me were introduced to the credit lifestyle via student loans etc.

Still not sure whats happening to my pension, but never did anyway. Still life would have to get a lot worse to compare to the lives lived by most people on this planet.

[Jon H]

Feck, that Icesave ISA seemed like a good idea at the time

[Dombo]

Fascinating article.

The market worked fine before this government intervention. So "subprime" borrowers had to pay 4% over prime to get funds. Diddums. Why? Because they were a higher risk. This was not usury but simple pricing of risk. Once those subprime types could borrow at the same rates as lower risk borrowers the risk was still there but not being adequately rewarded.

Why they could not have just carried on renting is beyond me. Perhaps because it's easier for your landlord to kick you out when you stop paying rent than for your lender to do so when you default on your mortgage.

Interesting that these are the same subprime people bleating loudest about rich greedy bankers, when it all started so they themselves could get on the housing ladder. If the consequences weren't so awful the circularity would be almost funny.

[PeteS]

Actually Dombo, I think it's more than just these 'sub prime people' who it sounds like you would grind under your clunking heel, who are blaming greedy bankers, I think the vast majority of the general population of the entire world hold bankers mainly responsible for the mess we are now in! I rather doubt if you've ever been poor, inarticulate or made homeless. For some without the imagination to put oneself into another's place it's easy to dismiss those less fortunate as witless and stupid, I think a little humility and empathy is called for.

[Dombo]

I certainly would not wish to grind anyone under my heel. And they are subprime borrowers, not subprime people. I was trying to avoid repetition but realise how it looks now.
Greedy bankers are an easy target and often deservedly so. Some of the grinning posturing idiots paraded across our TV screens and newspapers are prime examples and deserving of all the misfortune, such as it is, heaped upon them. However, as can be seen from the 1999 article, Clinton put Fannie Mae under pressure to help poor voters buy houses they couldn't afford. THe shareholders of Fannie Mae encouraged this lending AND the repackaging of that debt into products that the banks helped create in order to boost profits. Investors such as pension funds and life companies bought this cr@p under pressure from THEIR investors ie you and me, to boost returns, hedge funds borrowed further against this cr@p to leverage THEIR returns which were demanded by THEIR clients ie those self same pension funds. Meanwhile the bankers took a fee for creating products for which there was strong demand. So in short, everyone was to blame.
Actually I have been poor and cut my cloth accordingly, lived in a sh1tty flat when i'd have rather lived somewhere nicer, and i don't mean as a student, driven a 10 year old car when i could have taken out my own subprime loan to get something better. I've also been inarticulate, still am sometimes. And who knows, I may yet lose my job and house.
I certainly have the imagination to put myself in another's place - I often imagine what it must be like to be Warren Beatty, Napoleon, or God. In fact I'm having one of those episodes as I type.
I can also imagine what it must be like to work very hard for 25 years and at the end lose your job and see your savings vanish, or to work for 50 years at a grindingly poor job and equally have nothing to show for it. I don't dismiss anyone as witless or stupid without overwhelming evidence to that effect and I can be quite humble and empathetic.

[kieran]

[quote="Dombo"]...driven a 10 year old car ...

[quote="kieran"][quote="Dombo"]...driven a 10 year old car ...

[Andrew G]

I've found the best place to keep my money.
[img]http://www.monasette.com/blog/image/March11/jacobs.jpg[/img]

[Will]

Is Switzerland next?

http://www.independent.co.uk/news/busin ... 64325.html