Truemors
Despite the rumours about problems at the American
bank, Bear Stearns, that had been circulating all week, two days ago Britain’s Chancellor,
Alistair Darling, claimed the country was on a course of stability and the
country was "better placed than any other major economy" The Bear Stearns Meltdown was described by Vince Cable, the Liberal Democrat Treasury Spokesman, as potentially the "second Tsunami wave" after the initial credit crunch. This time, he said, it could have dire consequences for Britain and its homeowners and he criticised Mr Darling for aparently ignoring the growing crisis.
It’s not just Sub Prime, it’s the Hedge Funds,
Stupid.
If the forecast was so positive, how come it takes the
demise of one U.S. Bank that employs 1,500 employees at its London office to
suddenly cause a recession?
Because this is still only the tip of the iceberg.
By lending to desperate or ignorant borrowers who
either didn’t understand what they were told, did understand but gambled
anyway, or were simply lied to by the Mortgage seller, banks made billions more
without admitting that the scam, which is what they were involved in, couldn’t
go on forever. The banks were only interested in bringing in more income to use
on the Securities Markets.
With no oversight, the U.S. banks have been playing
fast and loose for years with worthless scrip, bundling debt with other
products and selling it to private clubs – sorry - Hedge Fund companies, which
are absolutely unregulated, where these bundled products were manipulated even
further with higher risk attached, completely out of sight of anyone. It worked
so well, that even the U.K. banks and building societies, and other European
financial markets copied it. That meant
that their governments were involved as well because only the governments could
de-regulate to allow this massive fraud to happen.
Now that it is all unravelling, the U.S. banks are
still being dishonest – they can; because your government lets them – and to
protect themselves for as long as they can, they are not admitting the true
size of their debts until they have got what they want from it all. Hence the drip, drip, drip of banks going
under when they finally have to own up.
IF they had been regulated in the first place, their
greed would have been much harder to satisfy.
Up until the end of the last century dishonesty and
fraud by Big Business was not tolerated; public morality was much higher with
honour and decency being what made many people proud to be citizens of their
respective countries. Somewhere along the line since then we have all slipped
up. We are far more interested in ME. We can’t wait any more; we want it Now.
Now, one way or the other- if we have not already got it - we are going to get it.
Nouriel Roubini, of New York University’s Stern School of
Business is quoted as saying 60% of all –U.S. - mortgages originating between
2005 and 2007 had “reckless or toxic features”.
Comments (0)