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Stop me if you've heard this before. It's been around for ages. I keep getting asked to explain how this subprime crap works. Apart from explaining that Lurlene and Jethro, who've never had jobs in their lives, were able to get mortgages to move out of the trailer into a seven bedroom home, there's a slightly more complicated backstory to how this idiocy has happened.
This presentation, while very funny, is also quite a good explanation of how subprime has destroyed the economy. It also explains why we really shouldn't be bailing out the idiots who made this happen. In fact, it already provides a really good practical example for the Wikipedia Moral hazard article.
Update: Des sends this excellent Bird and Fortune video which also does a good job at explaining the mess.
01 Oct 2008 13:32 [category: /weird] #
An article on the Daily Telegraph site seems a little confused, geographically.
A MILLIONAIRE banker was beaten to death by a mob after stepping in to save a couple being assaulted at a taxi rank in London.
...The family went out for dinner on Saturday evening in Norwich, southeast England, after which Mr McGarahan's wife Alison and their children, aged seven and four months, returned to their hotel.
Okay, first of all, Norwich isn't in "southeast England". Second, Norwich is not a suburb of London, so neither the assault nor the taxi rank were "in London". This BBC piece kinda gives that away, particularly the multiple references to Norfolk Police.
One wonders whether their "correspondents in London" really are, or if it's just a sub-editor in Sydney hacking up the Reuters piece.
01 Oct 2008 12:43 [category: /weird] #
So the banks are crying poor, claiming there's not enough liquidity in the market. You'd think this would mean their savings interest rates would be hovering somewhere around the RBA Cash Rate so they could encourage some deposits.
My bank's "high interest" savings account is currently paying its loyal customers a "huge" (their word) 6.75%. But new customers get 8.1%. Nice way to treat your existing customers!
If getting bought by one of the big four banks wasn't enough incentive to find another bank, this treatment of long-term customers is!
