Copyright Jack Russell 2012
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This page is where I “shout at the TV”. Sorry.
Today my whinge is about money.
Am I the only person who is getting a bit tired of hearing news-casters talking about the financial crisis and how the poor banks are suffering because of the crash of the property market.
Seems to me that the financial melt-down was caused by the banks.
Some people in the banking sector saw the opportunity to get rich, even quicker than they were doing already.
Banker A: “Lets lend loads of money to people who want to buy things, but can’t really afford them.”
Boss replies: “But what happens if they can’t pay it back.”
Banker A: “I know that’s a risk, but because they’re high risk borrowers, we can charge them much more interest.”
Boss, “Ah, I see.”
Banker A, “and if we offer them a mortgage, they’ll be paying extra interest for years - we could make a huge profit and get even bigger bonuses.”
Boss, “Yes, and that will fuel the market and push up house prices, because more people will buy property. I like it.”
Banker A, “and if it all goes south, we’ll be so broke that the government will have to bail us out”
What happens? Loads of people default on their loans, which half of them wouldn’t have had access to anyway if the lenders hadn’t been so greedy, so the property market crashes and the taxpayers bail out the banks.
And then what’s next? Oh yes, Billions more in taxpayers money is given to the banks at incredibly low rates, so they can lend it on at 7%, 8%, 12%, 15% etc. So they make enough to pay more massive bonuses, apparently well-deserved because they’ve performed so well.
For crying out loud, even I could make millions in that game.
So Banks get hugely subsidised loans, but it’s ok as long as it’s called ‘quantitative easing’.
Where is my subsidy?
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