Saturday, 30 August 2008

Alice's bubble wrap

Current housing stock should not go to waste

We are being softened up for a housing bailout. This Guardian article is a particularly shocking example.

"Media speculation is always a matter of claim and counter claim, bluff and spin, truth and distortion. But today's news reports on councils and housing associations being given the power to help first-time buyers with deposits in return for an equity stake by buying up newly built empty properties, and introducing some sort of national sale and leaseback scheme, have more than a ring of truth about them.

In policy terms, what is being suggested is entirely sensible. While arresting the steep decline in house prices should not be an end in itself, the risk that a collapse in house prices will tip the economy into serious recession is too strong to be ignored."

This is a rehash of the "we need to saving housing to save the economy" canard. In fact, the bailout is a redistribution of wealth from tax payers to asset holders. The idea is immoral, since it takes from those who have little and gives to those have much. It will create moral hazard, it won't prevent a recession, and it won't save Labour from electoral annihilation.

Bradford & Bingley was so close to the edge

It was what we all suspected.

Darling: the worst for 60 years?

Stumbling and mumbling takes a look at today's daft comments from the Chancellor.

US GDP: Lowest Inflation Rate in 5 Years

Last week's US GDP revision has many people perplexed. Did the US really grow so fast during the second quarter? There are a lot of sceptical people out there.

Is the FDIC another troubled monoline?

Not quite. It can always rely on the US Treasury for a bailout.

Bank of China Flees from Fannie and Freddie

The beginning of the end.

The rouble has tumbled, the stock market has crashed, and investors have pulled $25bn

The true price of invading weak and defenceless neighbours.

Rate hike looms as Fed tries to ease inflation

Wishful thinking, I suspect.

Georgia Bank fails with $1.1 billion in assets

Bank failures in the US are coming thick and fast.

Shallow Recessions, Shallow Recoveries

They don’t make economic recoveries like they used to.


Anonymous said...

New Labour never cared about the poor and downtrodden of the UK (and there are so many of them). As we see from the figures that keep coming out, the number of 'workless' and poor and unhealthy has grown. These people do serve a purpose: they are like 'pets' that are kept in their state of misery for Labour to dredge out to beat up everyone else with. But the truth of their true loyalty will come in the housing market bail out: property owners. And they will in turn crash the pound and vaporise people's savings. As we see in the US< housing bubbles aren't saved by state support, the state support just destroys the entire banking system. Oh well!

vodka drinker said...

"softened up" for a bailout. That is exactly right.

Rebecca Wilder said...

You totally hit the nail on the head! "The idea is immoral, since it takes from those who have little and gives to those have much."

Eventually the housing market will turn around, and in some sense, will represent a boom as prices rise back to a healthy level. By subsidizing first-time buyers (which we are doing here in the States, too) when home values are low, the government is subsidizing their leverage and increasing the potential of the earned income on the asset (the house)....and at who's expense? Really, great point!

Anonymous said...

Labour are not there to bail out the homeowners. They are there to bail out the banks. If I owe you money, and I don't repay it, that's *your* problem - it's not mine.

Or to quote: "If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem. (John Paul Getty)"

What homeowners owe the bank can be counted in trillions of pounds.

The banks have a problem, which Labour is trying to solve.

chriswov said...

have a look at this ,
I cannot believe we are being ruled by a speak your weight machine!

Anonymous said...

Stupid Russians, they should invade weak and defencesless countries far away just like us.

Anonymous said...

"The idea is immoral, since it takes from those who have little and gives to those have much."

Although I agree, I think it's more pertinent to put it like so...

"The idea is immoral, since it takes from those who have earned it and gives to those who haven't"


electro-kevin said...

Why are we playing Nu Lab's game and using the expression 'credit crunch'. This game of semantics globalises the issue and lets Brown off the hook.

Credit Crunch ? This is just 'pay back' pure and simple - why redefine something which was innevitable as a new phenomenon ?