Nanny bans mortgages of more than 3 x income

IMHO, if these major banks had been allowed to fail, the depositors guarantee scheme would have kicked in. Then all the other banks would have to shell out for the money lost by the account holders in the bust banks and would, themselves, be in dire straights. Some of those otherwise good banks would then go bust, leading to more depositors guarantees being paid out, leading to all the other banks going under. At least then the guy moaning about " ... being charged for the stupidity " wouldn't be worried, as all his saving would be wiped out when the whole system collapsed.

'William Black' wrote this:

Get with it. They set the Fanny and Freddie lending principles under Clinton to spread home ownership. Sounded great at the time...get rid of all those trailor parks.

'Maria' wrote this:

Yes, but the major problem in this case is that banks are an indispensable component in the whole economic global process. Industry/society cannot operate without the banking system.

That's enough to cause even a staunch libertarian to think twice before letting N major banks fail, let alone the Brown's of this world who want more socialist control.

OTOH as Mike says, if we had allowed the weaklings fail, this whole mess would be over more quickly IMV, but we don't know what would be left to clear up afterwards!

'Maria' wrote this:

Yep, Brown and Darling have said frequently that they want banks to resume their 2007 lending levels. OTOH they've also said other things which don't connect with that, eg: today's plans to control mortgage multiple lending and reduce credit levels etc. These contradictory statements cause me to think Brown is making up policy as he goes along.

'M Holmes' wrote this:

Thanks much for your comments. I always find them to be fascinating and highly informative; I can rarely find anything to doubt or disagree with :-). It is surely a great pity that so few people understand the market mechanics and human psychology that go into creating bubbles...

Wasn't there another president elected between Clinton and the mess?

Short Texan, Room Temperature IQ, had problems with spoken English, liked invading Muslim countries for no very good reason.

You must remember the chap.

What was his name now...

Dubya. His administration continued the Clinton policy of trying to manipulate Fannie and Freddie's rules so that more ethnic minorities could buy houses. As it turned out, because these people tended to be at the poorer end of the US socioeconomic spectrum, these were houses they couldn't afford. I don't doubt for a second that this exacerbated the credit bubble and that while it may all have looked well-intentioned and kind-hearted at the time, a great many of these people won't now be thanking anyone for the results.

The idea was essentially that ethnic minorities shouldn't miss out on getting rich with everyone else in the bubble. The result is that they're not missing out on getting homeless in the bust.

When we're congratulating the government on its genius in getting us out of the mess, this sort of detail might perhaps give us pause. It's also worth remembering that Fannie Mae was in fact put in place at the end of the last credit cycle in order to prevent precisely this sort of catastrophe ever happening again. No doubt Brown will soon be trying to persuade us to put in place the organisation(s) which will be at Ground Zero of The Crash of '79

FoFP

'William Black' wrote this:

He didn't originate the policy, merely continued it. But I don't excuse him for doing that.

So do I.

The idiot Abelard thinks it was all a UK domestic problem.

So do I.

The idiot Abelard thinks it was all a UK domestic problem.

So do I.

The idiot Abelard thinks it was all a UK domestic problem.

So do I.

The idiot Abelard thinks it was all a UK domestic problem.

of course

regards

'William Black' wrote this:

No he doesn't. The UK problem is a UK problem, with any one of several contributory causes of Brown's making.

don't be dippy...they were able to block it in the senate.....and did so...bush and mccain and greenspan all saw it coming and tried to head it off

you can always go study

the history goes back to roosevelt with aggravating foolishness added by carter and clinton.... bush et al tried to curtail the idiocy

regards

life is hard and then you die....

do you want all the monopoly money ending up in one pocket and the peasants sleeping on in the hedgerows or becoming highwaypersons?

it's part of the price you pay for being a member of the nobility! noblesse oblige

regards

what is......don't bother, it doesn't matter to me

expectations are for those who nurse the dopey belief that they can see into the future... if people are sane all that will happen is a few more (effective) laws will head of another storm of this nature....

then the clever monkeys will find ways around those.... that is the reality of the world

regards

i'll just bet that was labour rent controls..... socialism is a societal poison....it is more worthy of banning than ddt

that is education in socialist britain..... shame about the ten years incarceration in a government baby minder farm....for the crime of being younger

you sure have....i'm impressed as usual :-)

regards