World financial markets are in turmoil as the giant US investment bank Lehman Brothers, goes bankrupt. Respected pundit Alan Greenspan declares it the sort of event that only happens once in half a century, or even a century, and the worst financial crisis he has known. Ominously he went on to suggest that it's not finished yet!
World implications of this momentous collapse can be seen from Stock exchanges plummeting all over the world. The drop in London has been around 5%, with 4% in Germany, and around 5% in France. The major British bank Halifax Bank of Scotland lost about a third of its value with its shares trading at around £2.00 as against £10.00 not that long ago.
It was sad, to see some of Lehman's employees leaving carrying their possessions in boxes. Even worse when you realize that they own around 30% of Lehman's equity, which they stand to lose as well as their jobs.
Of course all this trouble is related to the sub-prime mortgage market, which really involved lending people more money than they could afford to repay. Banks climbed on the bandwagon seemingly disregarding that markets can turn, and a global free for all ensued.
There will be many who will not have that much sympathy with bankers perceived as being greedy instead of prudent. As with many issues it is those at the bottom who are likely to suffer more than those at the top. However, the current situation is something like a bushfire, unpredictable and don't know where it's going next. Not quite uncontrollable, but getting there!
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Mortgage Bushfire - Lehman Brothers Crash
Mortgage Bushfire - Lehman Brothers Crash
Prime Minister Brown and B of E Governor King May Disagree on Mortgage Issue
It has been rumoured that Mervyn King, the governor of the Bank of England, could resign if Gordon Brown goes ahead with a state-backed controversial mortgage scheme.
With the British Prime minister in trouble, even with some members of his own party, the likelihood of King resigning could be another hammer blow. Much seems to hinge on a report, produced by Sir James Crosby, commissioned by the government, and now being studied by Chancellor Darling.
It seems that Mervyn King has let it be known privately, that he considers risk and reward to be part of the mortgage market, and that underwriting mortgages is not something that the Bank of England should get involved with.
Please Click Here to review the complete article in the Sunday Herald.
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King Could Quit Over Mortgage Plan
King Could Quit Over Mortgage Plan
With the British Prime minister in trouble, even with some members of his own party, the likelihood of King resigning could be another hammer blow. Much seems to hinge on a report, produced by Sir James Crosby, commissioned by the government, and now being studied by Chancellor Darling.
It seems that Mervyn King has let it be known privately, that he considers risk and reward to be part of the mortgage market, and that underwriting mortgages is not something that the Bank of England should get involved with.
Please Click Here to review the complete article in the Sunday Herald.
Please Click Here to visit the Free Mortgage Advice Web Site.
Tags:
King Could Quit Over Mortgage Plan
King Could Quit Over Mortgage Plan
US Government To Bail Out Fannie Mae and Freddie Mac
It has been reported that the US Government is about to bail out Fannie Mae and Freddie Mac, the giants of the American mortgage industry.
This is a highly controversial use of taxpayer's money, but the collapse of the sub prime mortgage market has cost them billions of dollars. Between them these two colossuses are behind about half of all US mortgages, and have considerable impact on the US economy as a whole.
In the UK it seems that similar moves are afoot. Apparently the British Government have commissioned the Crosby report that could lead to billions of pounds of tax payers money being made available to mortgage lenders. It is not clear how this will operate, as the report is a recent undertaking. However, there are suggestions that the British Chancellor is now studying the report, so some form of decision may be imminent.
The British Government have already moved to support their own ailing mortgage market, but on nothing like the scale now being considered both sides of the Atlantic. Of course the UK authorities have already bailed out the troubled Northern Rock mortgage bank to the tune of a reported £40 billion. These are difficult times and there are still uncertain and contentious issues to deal with. Those countries, whose economies are not so reliant on what happens in housing markets, seem better able to weather the current storms.
Please Click Here to visit the Free Mortgage Advice Web Site.
Tags:
Fannie Mae and Freddie Mac
Fannie Mae and Freddie Mac
This is a highly controversial use of taxpayer's money, but the collapse of the sub prime mortgage market has cost them billions of dollars. Between them these two colossuses are behind about half of all US mortgages, and have considerable impact on the US economy as a whole.
In the UK it seems that similar moves are afoot. Apparently the British Government have commissioned the Crosby report that could lead to billions of pounds of tax payers money being made available to mortgage lenders. It is not clear how this will operate, as the report is a recent undertaking. However, there are suggestions that the British Chancellor is now studying the report, so some form of decision may be imminent.
The British Government have already moved to support their own ailing mortgage market, but on nothing like the scale now being considered both sides of the Atlantic. Of course the UK authorities have already bailed out the troubled Northern Rock mortgage bank to the tune of a reported £40 billion. These are difficult times and there are still uncertain and contentious issues to deal with. Those countries, whose economies are not so reliant on what happens in housing markets, seem better able to weather the current storms.
Please Click Here to visit the Free Mortgage Advice Web Site.
Tags:
Fannie Mae and Freddie Mac
Fannie Mae and Freddie Mac
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