Mortgage assets swapped for Government backed bonds. Doesn't that translate into bad debt for public money ?

Question

The credit crunch is the reluctance of banks to lend to each other. Lend money that they already have. They just want to charge more for it because they made a lot of bad loans.

Surely they made the loans, they were going to profit from them, and now that they've gone bad, they should shoulder the losses. They're all still making massive profits.

Now, the banks, allied to the press, are generating such horror stories that the government, (fearing election losses) are about to bail out the, (globally based) banks using our money.

Should the government of the people resist the strongarm tactics of these financial pirates and let them ride out the storm ?

Answer 1

Yes and it pisses me off.

Economic cycles ebb and flow. This tampering by the government with our money to bail out the idiots who bought houses at the top end of the market thus further fuelling the boom preventing first time buyers from getting on the ladder is tantamount to fraudulent use of public funds.

I for one hope this idea never gets off the ground. Why should my taxpayers money be used to help keep me from getting on the property ladder by propping up a market that NEEDS to be cooled.

Answer 2

But can you imagine a "socialist" government and especially one lead by some one who claims to be a great economist, not meddling in affairs of a "free market".

They cant help themselves just look at Northern Rock.

I also thought that banks were being condemned for lending money to less than crditworthy borrowers was a big problem.

So what does the BoE do. Lend money to less than creditworthy borrowers.

This a typical kneejerk, short term solution from a government that lacks any sort of substance and philosophy.  This type of reaction will only store up even deeper trouble for the future.

Answer 3

The majority of us voted this government in so we're getting what we asked for. I suppose at least they're trying.

Answer 4

Money makes the world go around.If it stops pumping 'round the system eventually we all suffer.Better to swap bad mortgage portfolios for Govt. bonds than re-open the soup kitchens.Frankly although there is sometimes not much in it I would rather get my money out of a bank with some liquidity than my local People's Finance Commitee.

Answer 5

Yes, but that won't bother this government anymore than it would have bothered any Labour government in the past.

The only thing that is certain with a Labour government in power is that spending will rocket and the likes of you and me will have to pay for it.

Answer 6

the crooks are bailing out crooks!!

yes you got it in a nutshell. And no questions asked when these brain dead politicians give our money  the crooks!! no questions asked!

we pay taxes, answer the tax mans questions, we pay exorbitant bank rates, we give our money to the banks.

the crooks answer no questions, nobody goes to prison for misuse of our  money, on top the weak limp politicians give them even more of our money!

WHERE DID THAT COME FROM? WHEN THERE'S NEVER ANY MONEY TO PAY FOR THE NHS...THAT'S WHAT I PAY MY TAXES FOR .

why aren't they in prison??

yes we can ride it, just don't use my money on bent  bankers. use it for what i paid it for....public services. Since when did the banks become public service??

Obviously the bankers being the crooks ....corruption....smell of favours and bribery. politicians, however thick, aren't that thick to dismiss favours and bribes.

yaap its power and bribes and we are being screwed both ways by the shoddy devious bankers, and treacherous, corrupt politicians.