This is just a holding notice to apologise for not reading anyone’s blogs for a few days, due to pressure of hobbitry family chores relaxation. Now I am back at work I am of course snowed under with manuscripts to reject summarily on my iPhone read and consider with due diligence. So the prospect of reading blogs recedes further, somewhat as the Sea of Faith in Dover Beach by Gerald Manley-Footwear.
My only news is that as of yesterday, sales of By The Sea reached double figures. Make My Day, J. K. Rowling.
While you are waiting, here is a picture of a golden retriever, who will be one year old next week.
A Golden Retriever, plainly not being spoiled enough. Yesterday.
But I leave you, for now, with this question. Or, rather, two questions.
How is it that a lot of highly paid, non-bearded, non-croc-wearing people in suits loaned huge amounts of money to people who weren’t likely to be able to pay them back, and thought that this was a good idea …? and now expect the rest of humanity and Richard Grant, who, irrespective of sartorial eccentricities, are probably much less highly paid, to bail them out through our taxes?
Now, I may be a clever dicky with a first-class degree from the University of Leeds and a PhD from Cambridge, but it sure as hell beats me.
Clever dicky perhaps, but are you aware that ‘apologia’ does not in fact mean ‘apology’?
Glad to hear that the reasons for your absence were not sinister. I had just assumed that a lunch date with Brooks was one morsel too far.
Missing your comments sorely, Henry.
Let me give you a third question. Why, last Friday, did I think it would be amusing to buy a few (a very few, luckily) Bradford and Bingley shares, thinking, ’what’s the worst that could happen?’ Probably because I’ve only got a second class degree from the University of Cambridge and an MA from Lancaster.
What a beautiful canine. She must have been really really bad in a past life to end up stuck with you.
@Jenny:
apologia |apəˌləʊdʒɪə|
noun
a formal written defense of one’s opinions or conduct : an apologia for book banning.
We can probably let him have that.
How is it that a lot of highly paid, non-bearded, non-croc-wearing people in suits loaned huge amounts of money to people who weren’t likely to be able to pay them back, and thought that this was a good idea …?
A year ago, I thought perhaps that I might be able to retire when I turned 80; after yesterday, however, I think I’ll have to drop dead in the
gross anatomy labtissue culture labtraces.But then, I have a freight degree from Whatsamatta U, and a PhD from an
eBay auctiondiploma millstate university.I was chatting with a well known (in my field, at least) Aussie Prof. now working in the USA, who, only 2 years away from retirement age, was declaring his ambition to keep working until the desert finally took him, along with his last mathematical model.
As a personable type of bloke, I thought “I hope I still enjoy my job as much when I reach that venerable old age”. As the bitter post-doc I sometimes morph into, I thought “hurry up and turn to sand, to free up some office space and a permanent salary for personable folks like me”.
And I’m ever so glad I cashed in all my stocks & shares earlier this year, to invest in the
similarly doomedproperty market.apologia |apəˌləʊdʒɪə| noun: a formal written defense of one’s opinions or conduct
Well, of course, that’s exactly what I meant.
My father was always berating me to the effect that I should have as large a mortgage as I could afford because it was an effective way of saving. However, watching the way the wind was blowing, I scaled down my property owning ambitions and bought a small house, outright, paying off my mortgage, consolidating all remaining debt and shredding my credit cards. Now my father is full of admiration at my timing, and that I got out before the excrement hit the fundament.
Now, of course, I have all sorts of trouble buying things and getting credit because I no longer show up in the regular databases. It strikes me that the entire commercial edifice is based on debt. The more debt you have, the more debt they’re gonna lay on you. Where are the rewards for having a history of caution and aversion to unnecessary risk?
…heard on the radio yesterday from the mouth of a US banker/economist [probably somewhat garbled] ‘…this is a problem for normal people. They’ve got to realise that everything depends on credit. They hire cars on credit, buy groceries on credit, get their hair cut on credit…’ to which my only thought was ‘Well that’s rather the source of the problem isn’t it?’
My response is – well, who’s providing the f&£$ing credit?
Ultimately? Any taxpayer silly enough not to be up to their eyes in debt…
My view is this – that Congress was entirely right to throw out Dubya’s $700bn bail-out proposal. The basis of banking is risk – betting on the future. If banks can rely on the government (that’s you and me) bailing them out when things go wrong, then the risk is removed and the financial services industry on which Britain depends (I can’t really speak for anywhere else) becomes one more moribund statist enterprise. If people made bad investment decisions, they should go to the wall.
Prairie Mary sent me this link
It appears that people have been asking the same dumb question of years, but the financial services people have been too far up their own backsides to notice anything was wrong – either that, or they were in denial.
The NPR show (mentioned in the NYTimes article), “The Giant Pool of Money", is worth a listen for anyone who has asked the same question.
So, what we have is a Giant Pool of Money that’s just crying out to be invested, and the advice of people has been to invest it in mortgage debt. Well, that only works in a bull market, and when property values are rising. But three points still remain:
1. What gives anyone reason to think that bull markets will rise continually, and not go into a sudden and spectacular reverse that can’t be explained away as a ‘soft landing’?
2. Building on that, did anyone ever get any sense that with people maxed out on their credit cards and borrowing unsustainably on their mortgages, that anything but the softest correction would be disastrous for a lot of people?
3. And when all is said and done, why, in any economic circumstances, did people lend money to people whom the merest tyro would say would not be able to pay back the loan? This is the root of the current problem. Because banks have woken up to the over-extension of their outstanding bad debts, they no longer lend to one another, and because it is an economy based on debt with nothing to back it up, all of a sudden everyone runs out of money at the same time.
Henry, I am so glad you have hooked up with Prarie Mary, I have often thought of you as twin souls. Have you been reading her blog posts recently? She’s inspired, perhaps Gee-ishly?
Credit – as I am 150, I am of an age when I remember when credit cards were first introduced in the UK. Access or Barclaycard was the big decision. Large sucking in of breath. Having always “saved up” all my life before buying whatever it is I thought I wanted (but often decided against once I had spent 3 years working up to affording it), I have only recently started going on holiday to places that requre plane travel, hotels (as opposed to kipping with friends, etc). What is it all about, I ask myself. Is it a generational thing? Or is it something that non-sciency people can’t get? I’m confused.
Maxine – You’ve been admitting to an age of 150 for about three years now. Even I’ve noticed, and I’m a palaeontologist and therefore functionally innumerate.
Now, of course, I have all sorts of trouble buying things and getting credit because I no longer show up in the regular databases. It strikes me that the entire commercial edifice is based on debt.
Henry>
One of the reasons the idea of not paying of my student loan in full at the same time back home was a good plan according to the bank people. ( the other of course, that it might be hard for me to do it :) )
Joke aside, this is one of the strangest things I encountered moving to the States. I had to “build a credit” by using credit cards and prove I could pay them (off) in time. Mind you though, it wasn’t better to pay them off in a month’s time (although better for me, i.e. no interest) than pay minimum amount i.e. $20. So strange… and of course, noone would bail me out if I started having money problems.
I wonder if the CEOs will back down in pay this year since after all, they get paid in millions while thier companies are loosing billions…
Oh, Ok then, uncle. I’m 152.5.
On the way home tonight I bumped into an insurance broker and we had a very interesting chat. He could answer my question of why anyone thought it was a good idea to lend money to people who couldn’t pay it back.
Apparently, it was a political move by the Clinton administration, to encourage mortgage lenders (some might say ‘coerce’) to lend money to groups perceived as being excluded from home ownership, as a way of spreading the American Dream.
I hadn’t heard this idea before.
I wonder why.
Henry> THen it’s also that little detail that they probably can pay the minimum amount for a while = steady income for the credit people. And when they can’t, the credit people take the house and sells it as a ‘forclosure’…
I guess I have a problem with it mainly because it is like a scam – you trick people who really should know better but they trust the “credit people” {the bank in some cases}.
And yes, there was a large influx of sub prime loans with Clinton since the rental market in the States was awful and it was seen as a “right” to be able to own your own house. There was a few more moves, back in the early 80ies to allow banks to give credit to people who didn’t have money so it wasn’t all Clinton…