Discussion in 'Finance & Pensions' started by sgtpepperband, Feb 22, 2009.
The heart of the site is the forum area, including:
The Crisis of Credit Visualized - Part 1
The Crisis of Credit Visualized - Part 2
Good video that puts it all in a nutshell. Any muppet could have seen the anomaly of:
INFLATION = BAD
SKY-ROCKETING HOUSE PRICES = GOOD
Hang on. Don't rising house prices constitute inflation too? And if house prices become too expensive for first-time buyers at the bottom of the market without them getting into inordinate debt, what's going to keep the prices up? Only artificial means like amazing credit deals for mortgages (no deposit and up to 14 times annual income) which leads to even greater debt. It's hardly rocket-science. In the meantime, ordinary householders imagined (many still do) they were sitting on huge amounts of equity thanks to artificially inflated house values while the actual money was going to line the pockets of greedy financial institutions. Unfortunately, when the balloon exploded, everybody got hurt including pension fund holders, savers, insurance policy-holders and the like. Mind you, I expect those at the top of the pile have been able to salt away enough to remain immune.
I still believe house prices need to drop by another 30% or more to be realistic and get everything back on a stable footing but the Government insists on doling out taxpayers' money like smarties (to feed more easy credit) so as to maintain artificially high 'values'. And where's the logic in telling consumers to go on spending sprees when easy credit and profligate spending are at the root of the problem? The only innocent parties in the whole affair are thrifty savers who live within their means, now being penalised through low interest rates in order to bail out the greedy villains and keep the whole wobbly system tottering on.
Some of you may have heard of the Credit Crunch (it's been in all the papers, you know). So here's a bump for the benefit of those who missed this over the w/e. The videos are well worth watching.
Thanks, NG... :thumright:
That's really good. I've watched and read lots on the financial crisis, but those two videos are by far the simplest explanation I have witnessed.
I thought it was a matter of buying things we don't need or can't possibly afford with money we don't have, just so that the GNP and industrial output keep growing.
Can't view the links, poxy EGS.
Although overspending and the like are partly to blame for the depth of the mess we are in right now, the actual catalyst for the whole event was the sub-prime mortgage market in America. It's basically like a house of cards. Any one of the silly actions of the banks would have wound up causing the crash sooner or later, sub-primes just pulled the shortest straw.
Greedy people with too much money lending to greedier people with less money selling to greedier people with even less money, and not much common sense amongst the.lot of them.
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