They should be clawing back the vast, overinflated bonuses the bankers pay themselves instead. It's obscene that they can make such an almighty f-up of the situation and still walk out with their seven-figure-plus bonuses.
Housing market crash would suit us fine - this place now only has about a 25% mortgage and a 20% drop across the board would be grand as if we stay in this country we'll be looking to trade up :-)
It's obscene that they can make such an almighty f-up of the situation and still walk out with their seven-figure-plus bonuses. Agreed. Especially infuriating as I work for a national charity that's facing severe cuts to services due to financial issues. Just one seven-figure bonus (at the just-made-it-to-seven-figures level) could keep us going for almost an entire year ...
If you've borrowed against this increase in equity, then well tough... that's a risk YOU took. You can't have it both ways. But ... but ... but ... it's my house, it's my right to owe it to the bank to pay for that widescreen plasma that I can't really afford, and that newer car that I don't need, and that holiday that I took the kids out of school mid-term to go on.
I am not an economist, but it might be cheaper to bail out specifically the people in negative equity than to bail out the banks in order to keep the bubble inflated as long as possible (or, for the optimists, to "bring it to a safe landing").
The trouble with that is "moral hazard". If you bail people out then you encourage other people to take similar risks in future. Apparently it is OK for banks and their shareholders to experience moral hazard, but not for homeowners.
Pretty deep thought . . . I am not sure, either. USA lately has had a real difficult time cutting regular folks a break. I'm on the fence with it, myself.
If you've borrowed against this increase in equity, then well tough... that's a risk YOU took.You say that, but in the UK if you decide, "I don't want to make a massively geared investment of several times my net worth in the housing market thank you very much. I'll rent for my whole life, maybe buy something small when I retire", then people look at you like you have three heads and tell you you're wasting money on rent that you should be spending on a mortgage
( ... )
If you just moved, negative equity (if small) isn't a real problem. If your content with where you are, you pay off the mortgage over time, and either house prices go back to a more sensible growth, or you get out of it by paying of a chunk of the mortgage.
I've done the mathematics, and I can either spend $850 a month on a two bed basement suite in a nice suburb of Victoria, (long) walking distance to downtown and the sea, or fork out a minimum of $1200 a month in mortgage (if I could get one at all) for a small studio 20 minutes drive out of town.
I'm not willing to spend THAT much on housing, and save part of the difference anyways.
The economics become very different if when your in a couple, I will grant you. $750 a month gets you a nice one bed apartment or chunk of duplex to share with your loved one somewhere reasonable.
If you just moved, negative equity (if small) isn't a real problem. If your content with where you are, you pay off the mortgage over time, and either house prices go back to a more sensible growth, or you get out of it by paying of a chunk of the mortgage.
That only works if the people who have just taken out their mortgage can afford to pay it off. If they can't negative equity is a big problem and with the pressure to buy a house in the UK and dodgy brokers in the US there are probably quite a few people who'll end up stuffed.
If you've taken out or worst been sold a mortgage you cannot pay of over it's term, then either you've made a huge mistake or been mis-sold the mortgage. In the former I see no reason why the government should bail you out. The latter seems to have occurred across and caused the recent 'credit crunch', and I see no reason why the government should bail the banks out. In fact there should be some way for the banks to be punished and lose the right to the lien over the house they've got a mortgage on.
I've no doubt some people will be stuffed by a fall in house prices. There's also people who are stuffed by the continual above inflation increases in the price of houses.
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Housing market crash would suit us fine - this place now only has about a 25% mortgage and a 20% drop across the board would be grand as if we stay in this country we'll be looking to trade up :-)
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Agreed. Especially infuriating as I work for a national charity that's facing severe cuts to services due to financial issues. Just one seven-figure bonus (at the just-made-it-to-seven-figures level) could keep us going for almost an entire year ...
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But ... but ... but ... it's my house, it's my right to owe it to the bank to pay for that widescreen plasma that I can't really afford, and that newer car that I don't need, and that holiday that I took the kids out of school mid-term to go on.
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The housing market's been getting hit in more areas than the UK. USA's getting a severe ass-whooping in this department, too.
Houses that were going for $500k are now half that price. If you bought at the peak, you want to kill yourself.
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The trouble with that is "moral hazard". If you bail people out then you encourage other people to take similar risks in future. Apparently it is OK for banks and their shareholders to experience moral hazard, but not for homeowners.
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Foo Fighters!
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I've done the mathematics, and I can either spend $850 a month on a two bed basement suite in a nice suburb of Victoria, (long) walking distance to downtown and the sea, or fork out a minimum of $1200 a month in mortgage (if I could get one at all) for a small studio 20 minutes drive out of town.
I'm not willing to spend THAT much on housing, and save part of the difference anyways.
The economics become very different if when your in a couple, I will grant you. $750 a month gets you a nice one bed apartment or chunk of duplex to share with your loved one somewhere reasonable.
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That only works if the people who have just taken out their mortgage can afford to pay it off. If they can't negative equity is a big problem and with the pressure to buy a house in the UK and dodgy brokers in the US there are probably quite a few people who'll end up stuffed.
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I've no doubt some people will be stuffed by a fall in house prices. There's also people who are stuffed by the continual above inflation increases in the price of houses.
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