Tuesday, March 11, 2008

Moral Blizzard

Time to save the picket fence, not sit on it

Absolute twaddle from The Times as usual .... think what this would do to the once mighty US$.
"Some kind of more direct bailout is now going to be necessary. The Government could, for example, offer to lend the necessary sums at very low rates of interest to those millions of borrowers in danger of defaulting on their loans. ....."
"... It will be ugly. It involves all kinds of moral hazard and it could end up costing a fortune, further clouding an already murky fiscal outlook for the economy. In fact, the only thing it has to recommend it is that all the alternatives are catastrophically worse."

Posted by voiceofreason @ 09:35 PM (1055 views)
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3 thoughts on “Moral Blizzard

  • shipbuilder says:

    Looks like the now OFFICIAL policy of western economies is nationalisation of debt and risk and the privatisation of profit. Yet barely a peep from the peeps. Do the banks and politicians have to actually come round to our house and physically steal from us before we will do anything?

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  • voiceofreason says:

    Good piece from Evan Davies on this here .
    Basically saying that today’s extra liquidity will only solve a liquidity crisis. However, phase 2 of the credit crunch is looking more like a solvency crisis (see Bear Sterns rumours).
    Only solution to that is to forget lending cash to the banks, just give it to them instead.
    Anyone know how to start a bank ? I fancy some of that cash for myself 🙂

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  • Spot on VOR, if you can’t afford to repay your debt what use is there in being offered more! If the banks need the money what use is it to their customers if they still can’t afford or don’t want to borrow it?

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