Amidst the negotiations to use future US taxpayers' money to bail out banks who have lent to the barely creditworthy, UK mortgage lender Bradford and Bingley looks about to be nationalised. Last ditch efforts to save the institution are underway, but according to the Sunday Telegraph B&B has a £40 billion mortgage portfolio of which most comprises self-certification and buy to let loans. The types that didn't require proof of salary to be given. In short, it lends to those with nothing left if, as has happened in the past year, property values drop below the value of people's mortgages.
The UK government isn't letting those who borrowed so imprudently (or deposited with such an institution) bear the costs of their risks - no - it is taking on the so called "toxic mortgages" and then polluting the bank it already nationalised - Northern Rock - with them. That allows the rest of B & B to be taken over by another bank - nice, so socialising the losses and privatising the profits. The £24 billion in deposits would be owned by another bank, but th £42 billion in useless mortgages - the British taxpayer. Yes £1000 of extra debt for every adult and child.
Although B & B shares are now worth 20p when they were worth £2 in April, any such takeover should include the shares which should be rendered useless.
Hopefully the taxpayer wont step in, as it didn't need to when Lloyds TSB took over HBOS. I don't doubt the willingness to do so, and how that is affecting those negotiating to buy the assets of B & B, as they will want the liabilities to fall on the taxpayer.
Gordon Brown's economic genius at work - 10 years of budget deficits during the good times. Labour has been pump priming the economy with debt, borrowing from future taxpayers, and within 18 months will be out of power.
The Conservatives may then gain power, and face the reality that spending needs to be cut, quite dramatically, and Labour will point fingers and say how "mean" they are.
At what point should those who took out credit to speculate on the housing bubble have to pay for their unfortunate mistake? At what point should those who deposited with banks who did the same pay also? In the UK the first £35,000 anyone deposits in any financial institution is guaranteed by the Financial Services Compensation Scheme - so I hardly think Labour's rank and file voters are going to lose out anyway.
When will the thieving from future taxpayers end?
The UK government isn't letting those who borrowed so imprudently (or deposited with such an institution) bear the costs of their risks - no - it is taking on the so called "toxic mortgages" and then polluting the bank it already nationalised - Northern Rock - with them. That allows the rest of B & B to be taken over by another bank - nice, so socialising the losses and privatising the profits. The £24 billion in deposits would be owned by another bank, but th £42 billion in useless mortgages - the British taxpayer. Yes £1000 of extra debt for every adult and child.
Although B & B shares are now worth 20p when they were worth £2 in April, any such takeover should include the shares which should be rendered useless.
Hopefully the taxpayer wont step in, as it didn't need to when Lloyds TSB took over HBOS. I don't doubt the willingness to do so, and how that is affecting those negotiating to buy the assets of B & B, as they will want the liabilities to fall on the taxpayer.
Gordon Brown's economic genius at work - 10 years of budget deficits during the good times. Labour has been pump priming the economy with debt, borrowing from future taxpayers, and within 18 months will be out of power.
The Conservatives may then gain power, and face the reality that spending needs to be cut, quite dramatically, and Labour will point fingers and say how "mean" they are.
At what point should those who took out credit to speculate on the housing bubble have to pay for their unfortunate mistake? At what point should those who deposited with banks who did the same pay also? In the UK the first £35,000 anyone deposits in any financial institution is guaranteed by the Financial Services Compensation Scheme - so I hardly think Labour's rank and file voters are going to lose out anyway.
When will the thieving from future taxpayers end?
No comments:
Post a Comment