Sunday, June 22, 2008
Will Hutton running scared
Mr Hutton argues the case for adopting an American style mortgage system complete with slashed interest rates: "So what public intervention is needed? The US provides the answer. In these conditions, central banks slash interest rates despite what is happening to oil prices; the risk of a credit implosion is vastly higher than an upward wage and price spiral. Also, the US has only been able to avert disaster in its mortgage market via the guarantees offered by two huge public mortgage banks - Fannie Mae and Freddie Mac - which directly or indirectly have provided 80 per cent of all new US mortgages over the last six months. Together, they guarantee more than half of the US's £5 trillion of mortgage debt." WTF ???