Is it reasonable or foolish for the United States Government to be considering buying up sub prime mortgages to the tune of $700 billion? There is more than one factor affecting such decisions. For a start there is Bush, McCain, and Obama. The one thing they all have in common is votes. Bush might be less concerned than the other two in this respect as his term is nearly finished, but there is enough that has already happened on his watch, without another crisis.
It makes you wonder who is really running the USA and possibly the world. At times such as this, when the administration is about to change, anything untoward is sure to be magnified. When the intended sub prime mortgage buy up was announced, financial markets steadied, but as the implications are studied it is not so clear that such a measure will be sanctioned. There have already been viable alternatives suggested, and the financial markets like nothing less than uncertainty. Therefore, shares have started to fall again and the only people sure to buck the trend seem to be financial speculators, although their wings, on short term selling, have been temporarily clipped.
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Initially there was a bounce in the markets followed by a run on the dollar, and what might happen next is anybody's guess. Of course the problems are not peculiar to the United States, although it is convenient for some to believe that's where it all started. It is a changing world in which Asia in general, and China and India in particular, are emerging as big players.
You can bet that mortgage markets and house price inflation do not dominate the growing Asian economies of China and India. That may come eventually but they now have a good model on what to avoid. China and India are the manufacturing nations that the likes of the USA and Britain once were. That was before most of their wealth was tied up in house price inflation, financial services, and dare I say it, greed.
If you manufacture and export cars, or computers, or oil and gas, there are tangible goods that are relatively easy to account for. But if your business is in swapping financial issues, that nobody really understands, in the interests of bigger and bigger bonuses, where do you go when the wheel of fortune stops? Banks used to be safe houses where you could save your money with impunity from any risk. Now they seem to have become little more than casinos, where the house bosses are the only ones guaranteed not to lose.
So will the US Government cough up taxpayer's dollars or not. At the moment it's still a case of wait and see, will they or won't they? What seems for sure is that where there is no regulation there is unprecedented greed, that benefits a few at the expense of the many. Many people are now asking the question, what sort of a society is that?
Tags:
mortgage morality - political mortality
mortgage morality - political mortality
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