| Topic: | Re:ReThis looks pretty serious.... | |
| Posted by: | Sam Hearn Cllr | |
| Date/Time: | 17/12/10 09:46:00 |
| Carrie you really are a sad case. For you "the rich" are the problem. OK what is your solution - confiscation? Exactly how will this work and how will this make any of us more secure? At the start of all of this was a housing adviser to President Clinton who believe passionately that education was the key to social mobility i.e. poor people getting richer. She spotted that children from families who rented their homes did worse at school than children from families who owned their own homes. Not only that but banks and the American equivalent of building societies would not lend money on properties in the poorer parts of town which happened to be where people with poor credit histories lived. The President decided to wave his magic wand (no not that one). He told the banks that they must lend money to people who wanted to buy houses in the poorer parts of town and to people with poor credit histories. The banks told him that this was a silly idea and that this was a sure fire way to lose lots of money. The President told the banks "I'm President and if you do not what I say I will remove all your corporate tax breaks and tax more highly those banks that don't co-operate". The banks had a think and said "Sure thing Mr President whatever you say". The banks went on an unprecedented lending spree giving money to people with poor credit risks to buy properties in poor areas. The cleverer banks packaged all these debts up and sold them on to gullible foreign banks who wanted "more exposure" to the US property market. Gosh hands up all the UK based banks who did that - arrgh. Then to everyone's surprise the poor credit risk people who had borrowed began defaulting on their property loans, handing back the keys and walking .... Slowly it began dawning on investors all across the world that one way or another that they had bought a "crock of s**t" The moral of all this is that politicians trying to do things for the best of reasons can make a complete horlicks of it when they do not understand basic economics. It also proves that most bankers are idiots aswell ..... but that is another matter. |