Tuesday, February 24, 2009

Brown’s version of events

The credit crisis - how did we get here?

In America people were encouraged to buy homes with cheap credit and low starter interest rates, but salespeople made no proper assessment of what level of lending they could afford to repay. As US house prices fell and the US economy slowed the number of people defaulting on their mortgage started to rise, and once other lenders realised that was happening, the system started to panic, as everyone was trying to work out how many other risky assets the other banks held.

Posted by little professor @ 01:04 PM (1432 views)
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13 thoughts on “Brown’s version of events

  • Dear Sirs,

    The propaganda that has been placed upon this website is appalling. Not only is the government attempting to continually repeat the lie that all these economic woes originated in the US but also uses an incorrect analogy to attempt to explain the current measures it is taking to address the situation.
    Firstly the Government is culpable and has been repeatedly warned, by amongst others V. Cable of the Liberal Democrat’s, by the multiples of income the average house price was reaching and the levels of Public debt here in the UK.
    Secondly voltage is the measure of the speed of which electrons flow around a circuit, whereas current, which your analogy refers to, is a measure to the amount of electron flow.
    So to summarise, are you, the government, confident of your solution to the current crisis with respect to the very basic error in describing your solution to this economic problem. Whilst remembering that you appear to be in complete denial as to the causes of this Depression.

    Kind Regards

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  • I’d comment but then I’d be worried everytime there was a knock on the door

    It’s all America’s fault – do you think I could get a job at the ministry of truth

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  • “The future is always certain in politics, only the past is debated”

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  • How do you know a politician is lying ? – his/her lips are moving.

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  • Note the absence of space to comment on the site… What was it they were saying this morning on Today prog that too many MPs are on ‘transmit’ and not ‘receive’…

    Like his predecessor, he is a deluded fool.

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  • “In America people were encouraged to buy homes with cheap credit and low starter interest rates”

    crunchy-This is a must view. The low ranking engineer? http://www.youtube.com/watch?v=kNqQx7sjoS8

    The more you watch this video the clearer it all becomes. Brown followed the so called leader.

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  • The article says nothing of the causes, only effects.
    WHY did people demand houses ever more?
    WHY did the banks package up debt and
    WHY did anyone buy the resulting products.

    To expose the financial catalyst the article only needs really needs two words, and maybe a temporal adjective to go with them – a couple of decades of CHEAP CREDIT.

    If one wants to root out the real cause they could just say that it’s due to the geographical dispersion of lenders to debtors – all that work performed in places like China being paid for by IOU’s from the likes of the UK and the US – the problem it seems would be consumerism. (it even seems many in the U.S. are placing the blame squarely with the Chinese for saving too much)

    Really, In my opinion, the article should read:
    “The root cause of the problem is that we do not live in a capitalist system, we live in a consumerist system.”
    but that would not be good for governments, so it doesn’t.

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  • “There are lots of complicated terms flying about – quantitative easing and fiscal stimulus and deleveraging – there are plenty of words people are getting used to hearing on the TV, but which don’t actually illuminate what’s happened at all.

    Perhaps the simplest way to explain it is by talking about electricity. Just like everything gets difficult for you in your house when the electricity stops flowing, everything gets difficult in the economy when the banking system stops working. ”

    Really? Thanks for that.

    Patronising bullsh!t. Is the UK public really that stupid?

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  • How did we get here?
    Once upon a time there was a nice man called Tony, who invented a new political party with his chums, Gordon and Peter. They gave everyone loads of cheap credit so they could raise lots of nice tax revenue without anyone noticing. But then a wicked witch came along and killed them all (I wish).

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  • How did we get here?

    To answer that you have to go back to 1945 and the Labour landslide vistory. That was when we collectively decided that we were going to adopt socialist principles of wealth redistribution. The economy was to be nationalised and the ‘Cradle to Grave’ system of financial help for the poor was introduced. Everything since has flowed from that point. It became obvious (eventually) that the free market economic system was superior to the socialist collectivised one and the economy was freed. But the social spending ratchet has worked one way only for over 60 years.

    We have gone past the concept of helping the deserving poor, and now spend vast sums on the undeserving poor, and are surprised that doing so does not seem to reduce their numbers. We have only been able to finance this munificence firstly via debt (which collapsed in 1976 and the IMF bailout) then via the free market, aided by North Sea oil. Finally Gordon has turbo charged the govt spending machine and gone for broke. We have run a budget deficit for approx 7 years throughout one of the largest credit bubbles there has ever been. Now the bust has come and we are a broken economy. We have nowhere to go. We face massive tax rises and spending cuts for years to come.

    That is how we came to where we are today.

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  • I couldn’t agree more goweresque…

    People seem to think that it is just a credit/debt bubble.

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  • who stole my pension? says:

    What does the future look like?

    Bankrupt Britain as we struggle to repay the debt!

    Where is the comment box? Does he not want feedback?

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  • Silly me and there I was thinking it was the ever richer Greedy bankers and Property porn Rentiers that caused the problem, and all along it was the poor and their evil and unnecessary social provisions. It must of course be the rich bankers with their “brave” banking securitisation models, who tried so hard to give everyone the credit they needed for purely altruistic reasons, that get taxpayers’ cash (read: the poor – only the little people pay tax in the glorious UK), giving up some of their hard-earned bonuses due to their munificent solidarity with the undeserving poor.

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