Wednesday, Feb 25, 2009
Coming soon to a country near you
CNN: Bernanke: Bail out bad borrowers, too
NEW YORK (CNNMoney.com) -- Federal Reserve Chairman Ben Bernanke said Wednesday that the embattled housing market has crippled the economy, and at-risk homeowners need a bailout - even if they knew they couldn't afford their home in the first place.
Posted by holding out @ 04:52 PM (589 views) Add Comment
9 Comments
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1. paul said...
Outrageous. If this happened in the UK, there would be riots.
The sheer inequality of the proposal is breathtaking.
2. quiet guy said...
Paul,
Would there really be riots or lots of homedebtors cheering Gordo and the badger for saving them?
Anybody writing a book with this in it a few years ago would have been ridiculed yet here we are.
I think it could happen here too. Perhaps we should have drunk the 'house prices never go down' Kool-Aid? It's obvious where our government's priorities are.
3. paul said...
This won't happen in the US or UK though - the sums are just too minboggling.
Do a quick calculation based on the value slump of the average property of £35,000 x 14,500,000 homeowners = £507,500,000,000 bailout needed just to ringfence average homeowners' losses to date.
So do you think the UK government has a spare/can get away with printing half a trillion quid to bailout UK homeowners?
I don't think so.
4. Suzy And Joe said...
I'm off to buy that £1,500,000 million house Ive got my eye on...
5. a saver said...
Paul @3
Have the mindboggling sums/not having the money made the govt hesitate so far?
6. peter_2008 said...
Paul @ 3 Well that's just another £500 billion. That's like your average banker's monthly salary. Surely the UK tax payer can afford it. That just means that every single person in the UK have to work for free without eating or sleeping for 4 more months. Eeeeasy.
I am afraid that if the politicians delude themselves that another trillion or two is all it takes to get us out of this mess (and make them popular again) - they WILL do it. And that’s when I will start grow my own foods.
7. quiet guy said...
@paul 3
A good point there. For some reason, the words 'printing press' keep popping into my mind though.
8. peter_2008 said...
The other unfortunate thing is that we savers, by nature, are prudent and responsible people, the politicians know that savers (pensioners and REAL hard working people) won’t go out on street and kill/rob other people, just because we are pixxed off. But reckless borrowers, by nature, are risk-taking and opportunistic. The politicians know that they (ex gangster EAs and ex con BTLs) WILL go out on street and kill/rob other people.
Thinking your average ex-convicts property flippers will make a descent living when time is tough? No, they will just pick up their old business like sex, drug and arm trafficking. So unfortunately, when social stability has to be weighed in, we may indeed must bail out the reckless borrowers, so they do not something worse.
9. alan said...
The arguement for bailing out people who couldn't afford the new houses they bought on 110% mortgages goes like this:
"if you allow the house to get reposessed, other house prices in the same street could drop too". Jeff Randall - Sky 7.45pm tonight.
I say let them fall.