The people to blame

moanymoany

It wasn't me - honest!

The people to blame are those who realised that lending money to poor people and those who wanted to borrow so much they 'self certed' meant you could charge them MUCH higher interest rates than if you lent to those better placed to pay.

Just like the people who pay in advance for their electricity on key meters pay much higher rates. Who have key meters - not those who can pay by direct debit that's for sure?

Generali

kennyboy66 wrote: »

We all want to blame a mysterious "they" for all problems.
Whether it is speculators, spivs, short sellers, hedge funds or governments foreign & domestic.

We forget that no one forced any individual to borrow 5 times their income or get a 100% mortgage.

It's all the fault of the US banks for lending to poor people at the moment.

The credit crunch has hit banks so far but is now starting to spread its wings. I was chatting to a chap this afternoon who worked for a firm that moved expensive paintings around the world. They were always being paid late so had to borrow to make up the time gap. Then the bank decided they didn't want to do that any more so the firm went bust and he's out on his ear.

The third part will be when guys like him start to default on their mortgages.

http://www.youtube.com/watch?v=__VQX2Xn7tI (horrible song, mawkish film)

moanymoany

NO - Generali, how could you? Don't you remember a past thread that ended up with everyone making up their own lyrics to just this song?

Anyway, this is much more apt. http://www.youtube.com/watch?v=dPmbT5XC-q0&feature=related

Generali

moanymoany wrote: »

NO - Generali, how could you? Don't you remember a past thread that ended up with everyone making up their own lyrics to just this song?

Anyway, this is much more apt. http://www.youtube.com/watch?v=dPmbT5XC-q0&feature=related

Noooooooooooooooooo!

The A&R man responsible for the Carpenters should be up in The Hague. It's just horrible.

Maybe this is more suitable for a house price forum:

http://uk.youtube.com/watch?v=AN3rN59GlWw&NR=1

neverdespairgirl

Generali wrote: »

Perhaps I laboured the point a little. At the moment I think a lot of the papers would blame short sellers for the milk running out in the office fridge right now.

Of course it's their fault! Greedy !!!!!!!s, skimming the cream off the top!

WTF?_2

StevieJ wrote: »

That is a pretty good explanation, it still doesn't justify the funds support for shorting the shares in vulnerable organizations e.g. banks that can can be subject to a whispering campaign that can lead to masses of savers withdrawing deposits.

The funds hold the shares largely because of the dividends they pay and the fact that they are expected to hold value over the long term. They don't day-trade them for profit on the current market price. 'Lending them out' for short selling just allows the funds to cream extra profit off the top for little or no risk/effort on their own part.

If the organisations being shorted are fundamentally sound, they aren't going to be going bust. All short selling can do is speed up the fall in share price if enough people do it simultaneously. ie. Large amounts of shares being sold will in itself depress the price - however, all shorted shares have to be bought back later when the position is closed, somewhat reversing the effect then.

Sound banks or business enterprises don't fail or get nationalised simply because their share prices are low - their share prices are low because their business is unsound.