April 21, 2008

FLASH: UK taxpayers (via Bank of England) buy up $100 billion in depreciating mortgages, with $100 billion more expected to come


And then the REIC-sponsored governments, right on schedule, socialized the housing crash, bailing out the lenders who made the crap mortgages (while earning billions in commissions) so that they could go out again another day and do the same. Moral hazard? Nah, never heard of it.

Meanwhile their fiat currencies, and taxpayers, pay the price.

Nice job bankers. You took control of the corrupt governments of the US and UK, and now you run roughshod over their clueless people.


50 billion pound bailout for banks may be doubled

LONDON (Thomson Financial) - An unprecedented 50 billion pound injection to bail out Britain's ailing banking system could be doubled if it fails to stave off a collapse in the housing market, the Times reported.

Alistair Darling will today tell MPs that the Bank of England is to allow lenders to swap assets for government-backed bonds in an attempt to restore confidence and ease the effects of the credit crunch.

The initial offer is for 50 billion pounds worth of bonds, but senior Treasury sources told The Times that further cash injections up to a total of 100 billion pounds were possible.

However, they admit that there is no guarantee that the bailout will lead to banks offering cheaper mortgage deals.

19 comments:

Anonymous said...

The mountain is high
The valley is low
and you're confused on which way to go
so I've come here to give you a hand
and lead you into the promised land
so...
come on and take a free ride [free ride!]
come on and sit here by my side
come on and take a free ride
all over the country I've seen it the same
nobody's winning at this kind of game
we've got to do better it's time to begin
you know all the answers must come from within
so...
come on and take a free ride [free ride]
come on and sit here by my side
come on and take a free ride

Andrew said...

shameful, but not unexpected. as you put it, "right on schedule". I am glad I don't pay taxes to that government.

here is a good summary of the situation in the UK
http://tinyurl.com/4yfqc6

Mark said...

.
.
.


A question that the article does not mentions - how as this mortgage "collateral" valued? To model or market?

lunatic fringe said...

Alistair Darling is a lying sack of shit. A similar plan in the US has done nothing to restore confidence, yet he expects it will there? All they will accomplish will be to debase their currency, which has dropped nearly a full percent against the crummy dollar since last night.

mairca izda debol said...

The bailout is for the bankers, not the bagholders

Anonymous said...

The trillion-dollar mortgage time bomb
Risks are rising that Fannie Mae and Freddie Mac may need a government bailout that could cost far more than previous rescues.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: April 21, 2008: 5:46 AM EDT

NEW YORK (CNNMoney.com) -- Among the nightmares lurking around the corner for the already battered housing and credit markets would be a meltdown at mortgage financing giants Fannie Mae and Freddie Mac.

Although few are predicting an imminent need for a bailout just yet, credit rating agency Standard & Poor's recently placed an estimated price tag on this worst case scenario -- $420 billion to $1.1 trillion of taxpayer's money.

This dwarfs how much it cost to help banks during the savings and loan crisis of the late 1980's and early 1990's. That cost taxpayers about $250 billion in today's dollars.
http://money.cnn.com/2008/04/21/news/economy/fannie_freddie/?postversion=2008042103

Mammoth said...

The Britishcano economy is tanked, roasted like a hedgehog skewered on a green bamboo spit over a fire.

Why? Because the Britishcano speculator was as greedy, irresponsible, materialistic, ignorant, pompous, hoity-toity, self-righteous, as Americano.

So is the Britishcano economy toasted or what?

Will Joe-Pint ‘O Stout and Jane Haggis cash out their lorry equity now? (Haaaaa, haaaaa, haaaaa, LORRY EQUITY...)

What will happen to all those big-ass double-decker buses that drive on the wrong side of the road?

Will the Britishcano be toasted as a hedgehog skewered on a stick from head to ass sizzling nicely on a bed of red hot charcoal?

(With apologies to all the HP’ers in England)
-Mammoth

Dochatire said...

To sum it up, this is simply foul. This money is not coming from anywhere, it has simply been conjured into existence, i.e. inflation.

The only way the housing market will pick up is if house prices fall to the level that the market dictates, hint it is 30-50% lower than the current levels. This cannot happen unless and until the governments stop their futile efforts to prop the monster up.

Russ DoGG said...

Alistair Darling is a lying sack of shit. .... All they will accomplish will be to debase their currency, which has dropped nearly a full percent against the crummy dollar since last night.

Wow 1% already?

Darling thinks he is so smart but it looks like a good portion of the market sees right through hisintentions. I never understod how these guys are so well compensated yet so pathetically unenlightened and conventional in their leadership roles.

Heck I could've done the same thing at a portion of his salary.

Europe smells said...

But but, you’ve been telling us that people across the pond
are ‘savers’.. I thought it was only us Wall Mart shoppers that live beyond our means.

DOPES!

I’ve been saying all along; the impact of the Housing crash in Europe will result in blood.
Germany’s blitz crash is around the corner.

We are watching Europe self destruct, yet again.

Got Rice puffs?

Anonymous said...

come on and take a free ride [free ride!]

gadfly said...

This is the last desperate act before it all caves in. The $100 billion is just for starters. I expect it to go up to $900 billion by the time they throw the Union jack in the ring to stop the fight with the unstoppable deflationary forces that have now descended upon Britain. I thought the Brits were more sensible, and would have let nature take it course, but as they say, the world has changed.

Buzz Saw said...

The bankers win! (again)

Anonymous said...

I dont understand how these bailouts help those in debt. It only helps lax banks who lended too much. It would be effective if they used that money to help people pay for their mortgages. This is only fueling the credit based economy. And it will end soon, for this money has to be paid as well.

PJ

OriginalFrank said...

Ah, remember the days of old when senior British government representatives had the backbone to make official statements that banks were on their own on covering losses, and that anything else created moral hazard?

Oh, for the storied tales of... ...last fall(!)

Anon said...

Drudgereport is starting to look like Housing panic, here are a few of the headlines.


MOUNTAIN VIEW, Calif. — Many parts of America, long considered the breadbasket of the world, are now confronting a once unthinkable phenomenon: food rationing.
http://tinyurl.com/3vohf6

Burglaries Have Surged 21 Percent
Police Put Some Blame on Economy, Boost Patrols; Overall Violence Falls
http://tinyurl.com/4vjxbv


Florida luxury home market shows signs of wear
http://tinyurl.com/3qebdt

hardy har har said...

"The $100 billion is just for starters."

And pretty soon you're talking real money, gadfly.

Anonymous said...

Wait correct me if I'm wrong.. The US has an intrest only loan of 10 Thrillion dollars called the national debt. The world will soon call it a PrimeTimeSubprime loan or PTS.

Like Father Like Son..Borrow on brave young solder.

Anonymous said...

S&P added that saving Fannie (FNM) and Freddie (FRE, Fortune 500) might cost so much that the federal government's AAA credit rating, the top possible rating, might even be at risk. If that was lost, then all federal government borrowing would become more expensive.

Wait correct me if I'm wrong.. The US has an intrest only loan of 10 Thrillion dollars called the national debt. The world will soon call it a PrimeTimeSubprime loan or PTS.

Like Father Like Son..Borrow on brave young solder.