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24HourForums.com > The Top 10 Supported Forums > 24's Political Matters > interesting financial comment... |
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sirlamre Pioneer100© Member Official Forum Troublemaker
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"In the United Kingdom, for example, the collected assets of the major banks are four times the nation's gross domestic product (GDP). A similar situation exists in many Euro zone countries. This means government cannot bail out the system even if it wanted to. Given such massive exposure, government guarantees in a time of crisis become meaningless." I imagine that's true here too -- using even bigger numbers.
 Armed with the power of Thy name nothing can ever hurt me, and with Thy love in my heart all the world's afflictions can in no wise alarm me. |
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pmh1nic Pioneer100© Member 
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sirlamre One of the major difficulties going forward in trying to bail out the failed housing market is that no one knows how to assess the value of assets. The situation is so volatile that you can assess a properity at $300K and in two weeks it could lose 20%, 30% or 40% of its value.
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sirlamre Pioneer100© Member Official Forum Troublemaker
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That's one of the reasons I think we just put $700 billion in a trashcan and burned it. There's no WAY that we're going to "make a profit" on that money after the government holds those mortgages and security instruments for some years and then sells them. They were vastly overinflated to BEGIN with. You CANNOT tell me that a 4 bedroom house in average America has REALLY gone from $120,000 to $350,000 in 6 years.... ...except in people's collective perception. The actual WORTH of that house was never more than the $120k to begin with. So when the government comes along and buys that house at a "fire sale" price, they're either going to NOT bail out the bank by doing it -- eg, pay far far far less than the bank has in it. Or they're going to pay (let's say) $280,000 --- and after things adjust the house value will NEVER be that overinflated again. Ergo, the government will sell it at a loss 5 years from now. (by house, of course I mean mortgage, so there is no need for anyone to post and say "The government won't own houses" or something like that. Last edited on 09:10 pm by sirlamre Armed with the power of Thy name nothing can ever hurt me, and with Thy love in my heart all the world's afflictions can in no wise alarm me. |
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pmh1nic Pioneer100© Member
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Sirlamre It is anyones guess what valuations will be in five years. President Obama and the Democrat Congress will have their work cut out for them. I'm just wondering how long the "it's the fault of the Bush Administration" excuse is going to work for them.
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aknow Original500© Member
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sirlamre wrote: That's one of the reasons I think we just put $700 billion in a trashcan and burned it. I don't agree. One thing that we can't make any more of is land. Our population continues to grow, but we can't make more land. So over time, housing values escalate. They rise and they fall, but over time they always increase, not withstanding hurricane and tornado zones. What is really apparent to me is the decreasing value of the dollar. I'm blown away by the rapid increase in the cost of living and even more rapid decrease in the value of the $ since King Bush mistook office. He's seriously on drugs and aging more rapidly than Moses. Dr. Steve
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