Saturday, September 01, 2007
A replay of the 1929 Depression soon, thanks to America's folly - again ?
The three largest credit rating agencies, S&P, Moody's and Fitch, have come under increasing scrutiny from politicians in the US for their role in the sub-prime mortgage debacle.
Chairman of the US Senate Banking Committee, has called for an inquiry and yesterday asked them to explain why they assigned "AAA ratings to securities that never deserved them".
German chancellor Angela Merkel joined the chorus of critics this week, saying: "It is not acceptable that wrong risk assessment in one place has to be paid for by the entire global community."
IMO: Yes, we do not want another world depression. Poor people in the USA are already suffering from "President Bush's depression" and I dare say another Huey Long would be some people's desire already.
Bush has done little so far, except seek spin, and his actions remind one of the empty talk in Wall Street before Black Tuesday and the 1929 crash.
Tweaking FHA rules slightly will do precious little because loan amounts are capped at around $360,000. In northern California, that amount of money will buy you a nice mobile home on leased land.
People caught in the sub-prime disaster are there because of poor credit history and or inadequate income which means that refinancing through FHA is unlikely.
What help to those who do not have the money needed to make that mortgage payment due tomorrow and on each subsequent first day of the month ?
Just as not all people are meant to be college graduates, so it is that not all people are sufficiently capable and responsible to qualify for home ownership. Those facts are not within the prerogative of government to change, regardless of how well intentioned and compassionate.
Affirmative action as practiced in USA has been shown to be unworkable in education and employment for years, in the USA. President Bush and congress need to understand that it will not work for US housing either.
IMO: Affirmative action can be a great idea if used effectively. For example, in India it can be used, in one form or another, to put right problems caused by caste. But even in the UK, more pressing problems may be that, for example, people continue to try to push house and other loans on the gullible. And insufficient social housing seems to be provided. Instead, the Loadsamoney brigade try to grab the available funds by carrying out criminal strikes, if they are lowly (but well paid) prison officers or something of the kind, or shifty undercover financial operations if they are better placed. And the poor, the old, and the weak ? No chance.
Chairman of the US Senate Banking Committee, has called for an inquiry and yesterday asked them to explain why they assigned "AAA ratings to securities that never deserved them".
German chancellor Angela Merkel joined the chorus of critics this week, saying: "It is not acceptable that wrong risk assessment in one place has to be paid for by the entire global community."
IMO: Yes, we do not want another world depression. Poor people in the USA are already suffering from "President Bush's depression" and I dare say another Huey Long would be some people's desire already.
Bush has done little so far, except seek spin, and his actions remind one of the empty talk in Wall Street before Black Tuesday and the 1929 crash.
Tweaking FHA rules slightly will do precious little because loan amounts are capped at around $360,000. In northern California, that amount of money will buy you a nice mobile home on leased land.
People caught in the sub-prime disaster are there because of poor credit history and or inadequate income which means that refinancing through FHA is unlikely.
What help to those who do not have the money needed to make that mortgage payment due tomorrow and on each subsequent first day of the month ?
Just as not all people are meant to be college graduates, so it is that not all people are sufficiently capable and responsible to qualify for home ownership. Those facts are not within the prerogative of government to change, regardless of how well intentioned and compassionate.
Affirmative action as practiced in USA has been shown to be unworkable in education and employment for years, in the USA. President Bush and congress need to understand that it will not work for US housing either.
IMO: Affirmative action can be a great idea if used effectively. For example, in India it can be used, in one form or another, to put right problems caused by caste. But even in the UK, more pressing problems may be that, for example, people continue to try to push house and other loans on the gullible. And insufficient social housing seems to be provided. Instead, the Loadsamoney brigade try to grab the available funds by carrying out criminal strikes, if they are lowly (but well paid) prison officers or something of the kind, or shifty undercover financial operations if they are better placed. And the poor, the old, and the weak ? No chance.
# posted by uv : 12:34 AM
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