Thursday, Apr 24, 2008
It is madness to try to re-inflate a bursting bubble
London Evening Standard: Don't lead first-timers astray
When house prices start to fall in this country, they typically keep on falling for at least three years, though it feels much longer.
This being the case, it is quite astonishing that the Prime Minister Gordon Brown and his Chancellor Alastair Darling both seem constantly to be urging banks to free up the mortgage market and start lending again to first-time buyers.
Absolutely the last thing first-time buyers should be doing at the moment is rushing to buy - if they wait, their dream house can only get cheaper. Government should leave well alone. It is madness to try to re-inflate a bursting bubble.
Posted by doomwatch @ 10:22 PM (887 views) Add Comment
6 Comments
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1. mark wadsworth said...
Good find, Doomwatch. Shouldn't you change your moniker to 'Laughing-myself-fit-to-bust-as-I-watch'?
If you give two FTB's a pair of boxing gloves and tell them that the winner gets the house that they both have eyes on, the winner gets the house and the loser ends up with some bruises.
If you give them knives, the winner gets the house and the loser gets stabbed.
If you give them nuclear weapons, they both lose.
By analogy, reckless lending = nuclear weapons.
2. Jimmyb said...
Great article we need more like it.
3. paul said...
My goodness, mark.
That analogy was almost as tortured as Alan Partridge's explanation of his "Soccermeter":
http://www.youtube.com/watch?v=k4SuR8hTGMI
4. paul said...
or George Bush's "fool me once" proverb:
http://www.youtube.com/watch?v=eKgPY1adc0A
I'm just bored.
5. European-bear said...
Read the article to its end. There is some interesting insights into CDOs squared and cubed. How no one purchasing could have read the prospectus and hence understood them. But people in recieve such stratospheric salaries should read and understand the small print or not buy the product!
6. inbreda said...
"Government should leave well alone. It is madness to try to re-inflate a bursting bubble."
eeerrrmmm..... is it just me or shouldn't that read:
"Government should leave well alone. It's either a free market or it isn't. Bailing out people who make mistakes only encourages more of the same. "