Thursday, Apr 22, 2010
Martin Wolf - a classic of modern communism
Greg Pytel: Communism (for the rich) is alive (and well)
Two thoughts came up to my mind:
1. Sometimes you have to change everything in order to change nothing.
2. We live in an age of "communism for the rich". Who would have thought only a couple years ago that the most liberal journalists would become modern days communism standard bearer.
Posted by ant @ 08:29 AM (393 views) Add Comment
3 Comments
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1. Mark Wadsworth said...
? What on earth is "loan to deposit ratio"?
Is he talking about the banks balance sheet, and if so is he looking at loans on the asset side (i.e. money lent to borrowers) or loans on the liability side (bank bonds)?
Or does he mean buying a house with an LTV of less than 50%, i..e you buy house for £100 with deposit £50 and mortgage £50, in which case the LTD ratio is indeed one-to-one?
All very muddled.
2. Simon said...
As Greg points out , there is no penalty for failure or incentive for responsibility when you socialise the losses .
The implicit guarantee was meant to be for depositors , not shareholders . Did the taxpayer really need to pay 60billion odd for banks which were not worth a penny ? Or was that just an implicit bailout of the pensions funds which owned the shares in banks ?
I've also got a problem with taxpayers paying mortgage interest for people who willfully grossly overextended themselves without allowing for periods without work eg saddled themselves with a mortgage for a 500,000 house when a 250,000 house would do .
Don't see how these things can continue to be propped up with public money after the election , we haven't see the correction yet .
3. ant said...
@Mark Wadsworth: LTD ratio (by definition) relates strictly to cash circulation: what percentage of cash deposits paid in is lent out as loans. LTV ratio is something different and much more volatile: fluctuation of property value (against mortgages) is a good example. Therefore do not confuse yourself by mixing LTV and LTD. For more read: http://gregpytel.blogspot.com/2009/04/turner-review.html