Thursday, Aug 23, 2007
It's OK, the ECB & Fed are going to subsidise our gambling habits permanently.
BBC News: Credit markets get rates bounce
OK, if you hit yourself on the head with a cricket bat you quickly learn never to do it again.
Posted by symo @ 12:09 PM (908 views) Add Comment
7 Comments
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1. whiteknight said...
Not a viable possibility. Just an exension route that will ultimately make things worse.
2. Alan said...
I thought the whole idea of financial regulation was to ensure that those who deserved credit got it and those who don't deserve credit are prevented from causing a catastrophe (to themselves and others).
I am not gloating over all the unfortunate, hard working clerks who are losing jobs; or mums and dads who have strived to buy a home but were not in a position to service the debt. I feel the fault lies with the salesmen who sold the loans and the senior managers who encouraged them.
Subsidising this situation will send all the wrong signals.
3. mrmickey said...
"all availble tools" yeah fiddle with interest rates, you could get a trained monkey to do that.
4. planning4acrash said...
Lets see where inflation goes by 2010.
5. waitingfor hpc said...
it seems to be working though!!!
6. mrmickey said...
Alan we seem to live in a society where taking responsibilty for your actions is now a thing of the past. Listening to the people I work with their view is what ever happens the government will always ride to the rescue of the housing market or you can just declare yourself bankrupt and start again no problem. The recent action by the central bank just reinforces this view that society at any level will be protected by the government from their actions no matter how irresponsible they are.
7. whiteknight said...
Nevermind 2010. Unless by 2010 you mean the 20th of the 10th month of this year.
Lets just wait. Remember for years the market has become hooked on this idea of the Federal Reserve. Imagine how angry they are going to be when they are caught on the market and doesn't work. They will have to sell their shirt to pay the fare home. Behaviour changing is hard.
Notice also as another aside, how easy it has become now for people to dismiss things of more and more serious import.
In reality everybody discovered that the pricing of debt instruments was a farce and has been for years. It also learnt that it wont get a lot of its capital back and the very next day people are talking about the next great merger and aquisition and buying stocks. Business as usual.
This is the bail-out effect. It merely creates more strange behaviour.
Now i am not saying that this "positivity" is unanticipated, because if each and every one of those bankers were to admit the situation then they would be out of a job. However, positivity is different from delusional behaviour.
The Fed should not have got embroiled until at least a major financial institution failed. It was sloppy for them to get caught moving into action this early.