2008 - 1929?
The forecasts about the crisis in the real estate market in the United States are for heart attacks. You remember the subprime, the mortgages given to anyone without checking up on their income and then transformed into investment funds placed to the right, left and centre? The bank sold the mortgage and the fund with the mortgage inside. Great. Some banks like Northern Rock, got blown into the air and the value of their shares taken down to almost zero.
Ben Bernanke, the head of the Federal Reserve, in July 2007, forecast the damage to the American financial system to be 100 billion dollars. Later Goldman Sachs altered the estimate to 500 billion dollars. Recently Nouriel Roubini of the New York University Stern School of Business, raised the level to 3,000 billion dollars. That’s equal to 20% of the USA’s GDP. Roubini estimates a collateral effect on the United States Stock Exchange as a loss of 5,600 billion dollars
Roubini’s pessimism, or perhaps realism, goes as far as forecasting a loss in overall value equivalent to the entire annual GDP of the United States. The price of houses has gone down by at least 10% of the maximums and it is envisaged that there’ll be a further 20% reduction. Those who are paying a mortgage often hand over the keys to the banks when they realize that the mortgage on the house is greater than the market value of the house. The bank then has to devalue its stock of buildings. To recover from the abyss of financial losses they call in loans at risk. And they sell the most vulnerable shares.
There’s a decrease in value of the banks, shares, houses and all of a sudden, no one is making loans anymore. The value of the dollar collapses, 63,000 jobs fewer in February 2008. In these cases, there’s always talk of a new 1929, given the scenario, it’s not excluded that that could happen.
The average Italian with a salary among the lowest in Europe, taxes among the highest in the world, and indecent public services can believe that they are safe from this financial tsunami. It seems difficult that it could be worse than this. It’s better to take some tiny precaution anyway so as not to be completely ruined. For those who have no money, don’t take out a loan. For those who still have money, don’t invest it in funds and put off buying a house.
Towards the catastrophe with optimism.
For more information: Martin Wolf’s blog, Financial Times
Nouriel Roubini’s blog.
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Posted by Beppe Grillo at 09:11 PM in Economics
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http://www.nu.nl/news/1478963/70/Berlusconi_bekritiseerd_na_omstreden_tv-optreden.html
In caso non capiste ancora l'olandese vi do un aiutino.
Miljardair = miliardario
rijkste man van Italië = uomo piu ricco d'Italia
Volk van de Vrijheid = popolo della liberta'
Veltroni's Democratische Partij = partito democratico di Veltroni
e dulcis infundo...
Parlementsverkiezingen = intraducibile in italiano, significa Parlement = parlamento + sverkiezingen = scelta
Saluti dall'Olanda
Posted by: Alberto | March 14, 2008 11:12 AM
RACCOLTA DELLE FIRME CONTRO LA PARATA DI EX WAFFEN SS FISSATA PER IL 16/03/2008 IN LATVIA
http://www.petitiononline.com/nonazism/petition.html
RIMASCIMENTO DI FASCISMO/NAZISMO IN EUROPA
Le Autorità di Latvia hanno rilasciato il permesso per la parata degli ex-componenti delle brigate Waffen SS per il 16 marzo 2008. Firmate la Petizione al Governo della Latvia con la richiesta di revocare questo vergognoso permesso!
Petizione al Governo della Latvia
I reati di nacizmo e fascismo sono stati condannati già in scorso secolo. Il rimascimento dell'ideologia criminale e l'eroizazzione dei criminali dei tempi passati rappresentato il reato gravissimo contro tutta l'umanità. La revoca e la proibizione della parata sono il dovere minimo del Governo della Latvia - il Governo della Latvia si invita di osservare i propri doveri.
Posted by: Alexander | March 14, 2008 08:30 AM
Mortgage forecloseures? Guess who's moving back to apartments? Yup, you've got it! Blacks and Latinos. Why them? Sub-prime lenders aren't stupid. They know that poor people are gullible and easy to steer into debt. When real estate was booming, banks were inviting anybody and everybody to apply for a loan on a house. All one had to do is tell the lender he had a job. And voila' he was approved for whatever was the cost of his dream house. But, get this, why would those lenders approve Latinos and Blacks twice as much as whites? Or females 30 per cent more likely than males? Or black women, five times more likely than white men? They were white, the predatory lenders that drove low-income families to financial ruin. The lenders knew that sooner or later the borrowers were bound to default but they didn't care. Why? Because the politicians in Washington are their friends and would get them off the hook. In fact, 10 of the biggest American mortgage lenders are spending millions of dollars lobbying in Washington to let them get away with the preying they've done. To be sure, some of the borrowers got carried away with the easy borrowing and borrowed more money for personal needs using their houses as collateral. But millions of borrowers did follow the lenders' rules which encouraged them to take out mortgages they couldn't afford. And when the interest rates on their mortgages increased, they were out of luck. They couldn't afford the payments, their houses devalued and wouldn't sell in a market that is falling fast. So, what choice do they have but to walk away from the dream house and go rent like they were doing. But, not before they got fleeced for what little they had.
Posted by: LP | March 14, 2008 02:19 AM