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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: The Wharf who wrote (25688)	8/10/2007 2:11:43 PM
From: sea_urchin	Read Replies (1) \| Respond to of 81109

Darleen > as the price of the house decreases so does the equity. Of course, but from what I hear on TV and read that is not what is bringing down the stockmarket now. It is the financial institutions that made the injudicious loans that are collapsing. The people who took the loans didn't have anything to start with (no equity) and so didn't lose anything. While they could, the borrowers paid the "sub prime" (a nice euphemism for usurious) rates and when they couldn't pay any more they just stopped and walked away leaving the mortgage holders to look after their "abandoned babies". en.wikipedia.org >>The subprime mortgage meltdown refers to the rash of subprime mortgage foreclosures that began in the United States in late 2006 and has continued into 2007. The sharp rise in foreclosures has caused several major subprime mortgage lenders, such as New Century Financial Corporation, to shut down or file for bankruptcy, leading to the collapse of stock prices for many in the subprime mortgage industry. The effects of the meltdown spread beyond housing and disrupted global financial markets as investors were forced to re-evaluate the risks they were taking, causing unprecedented volatility in the fixed income, equity and derivative markets. The crisis is ongoing.[1] Observers of the meltdown have cast blame widely. Some, like Chairman of the U.S. Senate Banking Committee Chris Dodd, have highlighted the predatory practices of subprime lenders and the lack of effective government oversight.[2] Others have charged mortgage brokers with steering borrowers to unaffordable loans, appraisers with inflating housing values, and Wall Street investors with backing subprime mortgage securities without verifying the strength of the portfolios. Borrowers have also been criticized for entering into loan agreements they could not meet.<< Unquestionably, the collapse in house prices will impact detrimentally on those home owners who have equity. But providing they can pay their monthly interest etc they do not have to sell at a loss and house prices are likely rise again. As far as I am able to ascertain, there is no let up in the printing of money by the Fed and the various Central Banks so inflation will be with us for a long time to come.