Holy moly - Congress has voted against US bail out

[dinny]

Goodness me

Expat - interesting point. Moral hazard has gone out of the window - maybe they are reminding us all of that.

a lot of their industries have also been pretty well busted up by the administration without a single whisper of bailing those industries out, so many are angry and resentful that banks are seen as a special case.

people there feel that if they are going to buy something, then they need to own it and control it and they are a bit mistrustful of the government's doing that, especially when Bush and many of his cronies have nothing to lose - they're leaving. they have to. Amendment 22.

CIS - no - it gets passed on, and woe betide you if you miss a payment - they will be MUCH toher on repossessions - hipe you have several months safety net if you lose your job?

Your mortgage doesn't disappear when the bank goes bust.

Whoever buys the assets of the bank (incl. your mortgage) gets your monthly payments. Assuming, of course, that your bank had not already packaged off your mortgage with a zillion others and sold it off to another financial institution.

CatSleepy, the mortgage is seen as an investment, and will be sold to another lending institution, to try to raise money to try to pay something back to the people to whom the bank holds money. Your mortgage doesn't just cancel out.

Bundling up mortgages and selling them around is what got the bank sector into such a mess in the first place, of course.

I can't find anything on Google news about this vote...But they will renegotiate and pass something, eventually.

moral hazard is very hard to hang onto when you've already lost everything, MrsGuy, and no one seemed to give a hot damn, but then when it's a bank it's a special thing.

for example, hundreds of thousands of people in the Houston metro area, the country's 4th largest city, are still without power after Ike.

the infrastructure was utterly destroyed.

now you may thing that's just inconvenient.

i did.

then my mother told me how many are now out of jobs.

they worked for small businesses who cannot operate without the power. there is not much of a welfare state to protect such people, most of whom are low earners, and many are not being paid/out of a job as a result.

now they're being told to pay up more tax.

well, that's not going to go over very well.

I agree GM

people have forgotten what 'normal' life is - saving up for purchases/selling a house befpre you buy another/not only multiple properties

this is a huge contraction/correction taking us back to reality

what if there isn't another lending institution that wants to buy the debts?

i assume that if the US gov is in such a tizz about this, institutions are not exactly queuing up to buy a bunch of bad debts

i note that re bradford and bingley, it was hte government taking over the mortgages whilst Santander snaffled the savings part...

existing mortgages are unaffected, I think - providing you can repay them

there'll be fewer lenders willing to lend though

link news.bbc.co.uk/1/hi/business/7641733.stm

tht seems mad to me, CIS, why sell off the ASSETS of B&B and lumber us with the bad devt?

at least in the States they have a democratic process as to whether or not to lumber the taxpayer - Brown and cronies just do what they like

I was shocked tbh.However I think they will have another vote and it will be passed.Don't know if it will help but USA =capitalism.
I live in Ireland...it is going totally pearshaped and is apparently the 1st country in EU to go into recession.Loads of people losing jobs left,right and centre including my dp.
Budget in a couple of weeks talking about cutbacks.As far as I can tell the health service and education etc didn't benefit from celtic tiger!
Wonder what is going to happen now.

'what if there isn't another lending institution that wants to buy the debts?'

oh, there is always someone who will buy the debts.

just like there's always someone to buy repos (repossessed houses).

it's just that the vendor might not get the money they want for it.

but that's how markets work sometimes.

dinny - yes. I have often wondered WHO has the money to buy handbags for £700 and dresses for £1,000 which are constantly advertised - and why people seem to boast about enormous overdrafts and cc balances. One of my colleagues was complaining he had a large loan he took out and was worried - only now - about the consequences. He took it out because it was cheap - and just spent it ... ie not needed for a specific pupose but just to use because cheap money . I don't really understand that mentalit, but there appears to be a lot of it about.

they'll go back to the drawing board, tweak, compromise and vote again.

it's not a done deal.

Does anyone think that people will be more clued up now as to where their who their bank loans/mortgages are with and the general workings of the finance sector.I have to admit I was pretty clueless in that regard.

but time is of the essence, Expat

I don't think anyone is going to find themselves with a sudden demand to instantly redeem their mortgage. Savings I have some (quite a lot) of sympathy, although people have to remember that money in the bank is exactly that - in the bank - you give it to them and they play around with it, in return for this (normally pretty marginal) risk they pay you interest. It isn't like Gringotts with a little vault with your name on it (I'm not being patronising but I did actually have to explain that to an Oxford educated lawyer once).

Expat speaks much sense - other industries can go hang, because the financial sector failing makes the government look bad they get a bail out. I think that is wrong.

i was brought up clued up.

my dad was born in the Depression and brought up dirt poor.

he has a good pension and savings.

spread thin on the ground for just such reasons.

as he said, 'EIS, never for one minute think the rug can't be pulled out from under you just becuase you're you.'

oh, you'd better believe it, dinny.

because for a lot of them, their job is up in 4 weeks, subject ot the will of their consituents.

and there is no secret ballot in this matter.

how they vote will be known to the public immediately.

that was set up from the get go in straight reaction to how the place was governed as a colony.

dinny - I was also confused about why they would keep the liabilities and sell the assets - presume no=one wante dthe liabilities, and the assets, or deposits, would require an infrastrcuture to service? Expat - please can you enlighten us (sorry but you are hitherto nominated as you are better informed and understand better then the rest of us )

I think I better take my money out of the bank as we are due to complete on our new house in 2 weeks!

really, NH?

Noddy...I don't think that sounds like a bad idea at all!