Interest rate down by .25%

Labmonkey (11/04/2008)

Benny (11/04/2008)

Got to disagree a smidgeon here. While it may have been them lending to sub prime folks, and bond trading, and to some extent junk bonds (though that name is way more emotive than any damage they caused) that has begun this mess, there is also no gun to anyone's head to borrow more than they can afford, or (and this is the killer) expect huge returns on their savings. We have, in general, become greedy. We tend to expect prehaps a little more interest from our money than it actually deserves, we expect better and better earnings per share, and better and better dividends. The people who have caused the current crisis are basically me and you. (not actually me and you, though that would be cool supervillianage). It'll all work out-perhaps for a while we'll stick our money under a mattress, and spend a bit less, but it'll bounce back. These things need to happen every now and then to an economy.

(that may well be an intelligent post btw. Coupled with the one on betting that may be two). *seeks champagne*

I agree that personal responsibility should play a huge part in borrowing, and personal assets/lifestyle should always be kept within one's means. People who run up thousands of pounds of debt on credit cards because they want more shoes, for example, or want to live in a house that they have no way of paying for, make me angry. I have nothing but contempt for them.

However the banks had to look at the situation and think that things were getting out of hand, which was pretty obvious to anyone. Banks should really act like parental figures to greedy children - if you leave the sweets in front of them, they will have them. There comes a point where they have to be rationed/restricted for the child's own good, because you know people don't have the sense or the self control to decide when enough is enough.

So although I agree that pure greed from individuals has contributed much, the banks were the ones who were in a position of authority who could have stopped the self-indulgence and prevented this happening, if they had wanted to. They chose not to. Therefore it is of the banks' making that this has happened even if human greed is at the root of it.

Have to disagree with this a bit. There are definitely two sides to this, one where people ARE greedy and want a bigger house, and one where people genuinely struggle to own their own home, but feel they have to struggle to do so. Like me, for example, I have 3 kids, both me and the wife work full time, and we have just bought our first home last year, which I consider to be slightly beyond my means, where I have to adjust my lifestyle to afford it. These people could then lose their job, or split with partner etc. forcing their hand. I appreciate there are people who take the piss, but there are also a lot of genuine people who genuinely cannot afford to continue as they are.

Edit to add - The reason I bought my home is to hopefully provide stability for me and the family in the future

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