Housing market mumbo jumbo. Idea?

[jake williams]

Not too sure where to post this, oh well.

So if, instead of all the recent bailouts, governments just told the banks to fuck themselves, and that people would have to be allowed to pay whatever they could on their homes but that they'd keep them, rather than kicking them out of homes that even the banks couldn't use... what precisely would happen? Like economically?

[Maybe-not]

You need to say which country you are in. And re-phrasing that might help, the layout confuses a bit.

[jake williams]

You need to say which country you are in. And re-phrasing that might help, the layout confuses a bit.
Well I'm talking about America obviously, but it generalizes considerably I'd suspect. Here's my point. There's a big panic because banks are scamming people and essentially pricing loans out of people's price ranges, so they then lose their houses. This is framed as if the poor, unfortunate banks are getting screwed, and there's a big effort to ensure that the "finance industry" is kept happy. What I'm suggesting governments do instead is say "You fucked up." and let people keep their houses, and pay what they can on their mortgages.

[Cencus]

What I'm suggesting governments do instead is say "You fucked up." and let people keep their houses, and pay what they can on their mortgages.

That would mean the banks have a sudden and massive loss in their assets. Less assets would mean investors would remove their money elsewhere making the share value in banks drop severely possibly even totally collapse. Unless governments intervened then if a bank failed, more poor folks would loose out when their savings go up in smoke when their local bank goes tits up.

In terms of the economy in general this would lead to a reduction in loans available to busness, because banks being skint would be unwilling or unable to provide loans.

Bam resession, as bad as any folks on here will remember. Debt and the servicing of debt are one of the main pillars of a capitalist economy, screw with that and your economy is bound to go down the plughole.

[BIG BROTHER]

interesting...