Government plans 40bn sub-prime bailout - Mortgages to be nationalised?

mewbie_2

While I agree with some of DD's sentiments, bailing out being more cost effective then not, I feel the taxpayer doing the bailing out is not very fair. I would like to see the shareholders of the businesses involved in the last several years madness putting their hands deep into their pockets - I'm thinking bank, building societies, builders, estate agents, etc. It's their business and therefore, arguably, their problem.

Seems totally wrong that taxpayers are footing this bill, and others, and still people in these industries are getting their bonuses.

wymondham

I don't think there is a way, or indeed should there be a way of changing things here .... this 'dip' needs to be allowed to play itself out so that things get back on an even keel... if the Government attempts to cushion anyone from this then it will make matters worse, as they can't really afford it, hence we will end up paying for this as well, which ultimately makes things even worse...

Max_Headroom_3

mewbie wrote: »

While I agree with some of DD's sentiments, bailing out being more cost effective then not, I feel the taxpayer doing the bailing out is not very fair. I would like to see the shareholders of the businesses involved in the last several years madness putting their hands deep into their pockets - I'm thinking bank, building societies, builders, estate agents, etc. It's their business and therefore, arguably, their problem.

Seems totally wrong that taxpayers are footing this bill, and others, and still people in these industries are getting their bonuses.

Absolutely. When Joe Pub is given a ridiculous loan with no margin for problems (like cost of borrowing going up) on an over inflatede asset by Barcwest Bank, and then cannot pay it back when things get tougher and the house is worth £50K less than was leant, then ok he might end up going bankrupt (but then he has nothing but debt anyway, it's a way out for him) but it's Barcwest Bank that should be left holding the problem of an over valued asset they leant against.

Maybe (just maybe, they didn't learn from the last crash) they might be a bit more careful in future and we might not get this debt driven asset bubble.

Either way, it's their problem (the over indebted borrower and the over generous bank), not mine via my government bailing both out on my behalf.

Sorry if this sounds harsh, but no one benefits from the madness that has gone on, there must be a return to sanity and normality.

Max_Headroom_3

One more thought.

If the goverment manage to pull this off, and everyone who is at risk of losing their house is saved (or at least a big proportion), then what do we think will happen to house prices?

Will everyone feel "well it turned out to be true, the government won't let house prices go down" (the result of people in a free market not affording their homes, prices lowering to a level people can afford) and try and jump back onto the broken bandwagon, banks included and the whole merry circus ride take off again?

Because it physically cannot last for ever. Like the pyramid selling scam, sooner or later everyone is "in" but without any fresh money to support it.

And if that happens it just falls over from an even greater height, more people get hurt, and any return to normality is not only even more painful, but is put off till even further into the future!

And the whole charade will have cost the country billions and billions of OUR money.

WTF?_2

Max_Headroom wrote: »

One more thought.

If the goverment manage to pull this off, and everyone who is at risk of losing their house is saved (or at least a big proportion), then what do we think will happen to house prices?

Will everyone feel "well it turned out to be true, the government won't let house prices go down" (the result of people in a free market not affording their homes, prices lowering to a level people can afford) and try and jump back onto the broken bandwagon, banks included and the whole merry circus ride take off again?

Because it physically cannot last for ever. Like the pyramid selling scam, sooner or later everyone is "in" but without any fresh money to support it.

And if that happens it just falls over from an even greater height, more people get hurt, and any return to normality is not only even more painful, but is put off till even further into the future!

And the whole charade will have cost the country billions and billions of OUR money.

Correct. This is a desperate 'last throw of the dice' (until they dream up something even more loony) to 'get the market going again'. ie. To try to get banks lending crazy amounts to anyone with a pulse. After all, the taxpayer will pick up the tab if they can't repay.

It seems as much designed to help the banks as it is to help irresponsible borrowers - though no doubt it would probably get Gordo some much needed popularity back. At least, until inflation rockets and ordinary taxpayers and savers realise they are being screwed.

Max_Headroom_3

!!!!!!? wrote: »

It seems as much designed to help the banks as it is to help irresponsible borrowers - though no doubt it would probably get Gordo some much needed popularity back. At least, until inflation rockets and ordinary taxpayers and savers realise they are being screwed.

Absolutely, that's my take. The banks seem to be the real winners in this insane scheme as far as I can see.

baby_boomer

mewbie wrote: »

. I would like to see the shareholders of the businesses involved in the last several years madness putting their hands deep into their pockets - I'm thinking bank, building societies, builders, estate agents, etc. It's their business and therefore, arguably, their problem.

Building societies don't have shareholders.

Try tracking the share prices of the banks over the last 18 months and see how much pain bank shareholders have suffered. The value of their shares has collapsed.

The same could be said of builders' and EA shares.

Including several rights issues where the shareholders have been asked to "put their hands in their pockets" or lose a percentage of their ownership of the bank.

And bank shares formed a large holding of the ordinary person's pension fund.

The people who get away with it are the bank directors with their copper bottomed pensions, bonuses and golden handshakes even if they leave in disgrace

vigesimal

Dithering_Dad wrote: »

Better to subsidise these people that to pay for them outright, surely?

It's a noble thought, but we can't keep subsidising the weak. It's doing that, that has helped get them into this problem.

WTF?_2

baby_boomer wrote: »

The people who get away with it are the bank directors with their copper bottomed pensions, bonuses and golden handshakes even if they leave in disgrace

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=451310&in_page_id=3&position=moretopstories

Somehow I don't think he'll be worrying about getting the govt to pay off any outstanding mortgage he might have .... or whether or not he'll get a good pension. Unlike some of his unfortunate shareholders.

MissMoneypenny

Gordon does seem hell bent on getting the country into as much debt as he can before he is thrown out. Then when it all implodes on the next pm, he will be able point his finger at them and say "look what they have done".

I wonder if Gordon is feeling that he has been stitched up by Tony?

I remember a scene from one of those dramas about Tony that were on tv before Tony left (the father from My Family played Tony). Tony was telling Cherie (or Cherry as she use to be called) how far down the pan the country was going. Cherie told Tony to resign then. Tony laughed and said he couldn't yet, as he wanted to make sure he resigned just in time for Gordon to get all the blame.