Monday, September 24, 2007

All common sense stuff !!

Growth only as safe as houses

The UK, which has also seen extreme house price increases over the past decade, building societies used to hand out mortgages of up to 130 per cent of the property’s value, at up to five times an applicant’s income. The mathematics behind these mortgages is based on what economists call a Ponzi game – a gambit that will eventually collapse.

Posted by soldin2004&waiting @ 11:45 AM (601 views)
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One thought on “All common sense stuff !!

  • This is a great post – well worth reading. I like the distinction between different growth rates and different prices.

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