Wednesday, March 14, 2007
State Intervention to protect the housing market !!!!!!!!
Home loan arrears in US spark Dow plunge
American politicians are considering an emergency bail-out of 2.2 million borrowers struggling with their mortgage payments. On Wall Street the Dow tumbled 242 points to 12,076 in near panic trading as investors fled bank stocks with heavy exposure to the riskier end of the home loan market.
Posted by tyrellcorporation @ 08:48 AM (615 views)
11 thoughts on “State Intervention to protect the housing market !!!!!!!!”
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tyrellcorporation says:
Shovelling money into a hole or lowering IRs will finish the Dollar! I think if this snowballs we’re all in deep do-do… It’s not like a small correction either, the problem is not going away anytime soon.
Andrew says:
I hope the whole thing gets a lot worse, I hope all the hype about prices going in only one direction (up) is believed by more and more people, that way when reality finally bites, the impact will be even greater.
Yes it will teach a lot of people a lesson, but I as a first time buyer unable to buy a home, just somewhere to live.I have also had to pay a price, while other people live on credit and MEW. I am not on a low income but regularly see other people on lower incomes with a looser financial attitude, no it’s not jealousy I just know that because of them the rest of us are going to pay big time, the whole thing has turned on it’s head. Why can’t people accept that if you can’t afford it then don’t buy it.I came from a poor background and was taught that you save for something before you buy, if you don’t earn enough then tough, either through fault or circumstance you are where you are in life. I would like to get back to some sort of reality. I just wanted to buy a home to live in, i hope all the greedy sods get their come-uppance.
Let’s hope this is finally the beginnig of something big about to happen.
mrmickey says:
Government intervention in the markets always ends in tears, their fiddlings have caused the problem in the first place.
Royston says:
Some people say this is an American problem and won’t affect us. Here is why it will:-
Banks don’t just loan out client’s deposits any more. They make loans, then parcel the future interest payments and sell them in the financial markets as bonds (i.e. mortgaged backed securities). Investors in these bonds are global and they have been badly stung by the US sub-prime problem. At the present time, these investors are not well disposed to making further investments – to the credit markets generally. That means banks can’t recycle their capital as quickly and easily as they have become used to. And that means a credit crunch!
george monsoon says:
OH DEAR!
good job I put a spread bet on the footsie going through the floor a month ago. I just made 11.5 thousand from a 1200 pound bet! Thats my deposit covered!! Well it would be if it had been real money and not a vitural stockmarket game over the net.
tyrellcorporation says:
Doh! unlucky George! Still everything is pointing the right way now for a decent correction in the housing market…
harold says:
A good article about this (and why it will fail) called “1st Helicopter Drop Now Being Organized” can be found here:
http://globaleconomicanalysis.blogspot.com/2007/03/1st-helicopter-drop-now-being-organized.html
Look’s like Ben’s about to start spaying even more funny money around – hold onto your savings.
harold says:
I see that “1st Helicopter Drop Now Being Organized” has already been posted on this site by S2R1 – he’s ahead of the game!
Adam says:
This is exactly what I was afraid of. We’ve been waiting for years until the housing market becomes sane again. Now they are going to bail out people who were playing these dangerous credit games at my expense because I’m a loyal tax payer.
If this is a capitalism I’m Micky Mouse.
dohousescrashinthewoods says:
Cracking theory, Royston. Even if the carry trade unwinds slowly, the decreased appetite for MBS in the capital markets means that the speed of “rinse-and-repeat” is going to drop, meaning that banks won’t be able to lend imaginary money as quickly as they could.
With less pressure to print more mortgages, the hand is off the throttle and they can be more careful about who they lend to. That’s a double-whammy with bad debts increasing and that also pushing in the direction of cautious lending. Could see a knee-jerk.
Credit crunch it is. Ouch. If we get deflation into the bargain, all that credit is going to strangle a lot of ordinary people. Those who have been living within their means may at last be vindicated that long-term wisdom is sustainable and short-term folly, however attractive, ends badly. I dread to think what will happen to the people next door earning less but spending more 🙁
lvmreader says:
They should save their money……………in order to defend their toxic paper – the USD.
We will soon need to raise some cash…….. IN DEFENCE OF CURRENCY