Nationalisation

iVillage Member
Registered: 08-13-2008
Nationalisation
79
Sat, 10-11-2008 - 7:49pm

It is a word unthinkable at the time of my primary vote (8 January.) Mere mention of the word would produce an immediate rebuttal of nonsense - including by me - because it seemed incomprehensible that a nation so devoted to capitalist ways, with a pro-business government... would ever go near such a topic.


Well, here we are, madness has set in. Our government plans to partially nationalise some of our biggest banks in order to forestall financial collapse. I like the idea of an equity stake in these firms, given the enormity of the bill we are asked to pay.


I'm wondering though about the sheer scope of the word, how it is contrary to so much about our outlook. What are your thoughts about this stunning, incredible, surreal change in our economic system?


Discuss... nationalisation of our banks on whatever level you wish.


Full length fiction: worlds undone

"You have no power over my body..." ~ Anne Hutchinson

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iVillage Member
Registered: 08-29-2008
In reply to: llhaesa
Sun, 10-12-2008 - 7:13pm
About ten years ago Fannie, in a move to increase home ownership for minorities and low income workers "eased" credit requirements for loans that they would purchase FROM BANKS AND OTHER LENDERS. This action encouraged banks to extend credit to those people who otherwise would not be credit worthy, knowing that Fannie would buy them with the backing of our government. Not only did they ease credit requirements they changed the law so that banks could be sued if they had not made enough loans to minorities.


Edited 10/12/2008 7:18 pm ET by chillychillychilly
iVillage Member
Registered: 08-13-2008
In reply to: llhaesa
Sun, 10-12-2008 - 7:17pm

IMO, government backed loans to a market segment otherwise shut out of home ownership makes sense long term, but it has to be done with accurate information and adequate safeguards. FHA loans traditionally helped those not able to get standard loans, requiring less down payments, etc.


There is a place for this... but we moved into a world where information meant nothing at all - and that was hardly the doing of Fannie or Freddie. They did not institute the credit default swaps that blew past insurance regulation.


Full length fiction: worlds undone

"You have no power over my body..." ~ Anne Hutchinson

iVillage Member
Registered: 08-29-2008
In reply to: llhaesa
Sun, 10-12-2008 - 7:21pm
iVillage Member
Registered: 08-29-2008
In reply to: llhaesa
Sun, 10-12-2008 - 7:36pm
They loosened the requirements to encourage banks to make loans to people who were not credit worthy.
iVillage Member
Registered: 08-13-2008
In reply to: llhaesa
Sun, 10-12-2008 - 7:52pm
I totally support that act, and totally deplore things like redlining.

Full length fiction: worlds undone

"You have no power over my body..." ~ Anne Hutchinson

iVillage Member
Registered: 08-13-2008
In reply to: llhaesa
Sun, 10-12-2008 - 7:55pm

Not really. By whose measure is someone credit worthy? In my experience, banks were very responsible in the 1980s. Things only began to go awry in the 1990s, when many states tossed out interstate banking laws, banks spun off loan officers into independent contractors and brokers, and they began to sell mortgages in bundles.


The Act you refer to was harmless. Actually, it was a worthy thing to do.


Full length fiction: worlds undone

"You have no power over my body..." ~ Anne Hutchinson

iVillage Member
Registered: 03-25-2007
In reply to: llhaesa
Sun, 10-12-2008 - 7:57pm

On CNBC they were talking government owning non-voting shares which would presumably be sold when the price rose again.

Sopal

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iVillage Member
Registered: 08-31-2003
In reply to: llhaesa
Sun, 10-12-2008 - 8:08pm
Thanks, I think I've got 8 articles to read now.
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iVillage Member
Registered: 08-29-2008
In reply to: llhaesa
Sun, 10-12-2008 - 8:16pm
I do too, but that's where it started. During Bill Clinton's administration he expanded on the act so that banks could be sued for not having enough minority loans. This melt down has been building for a very long time.
iVillage Member
Registered: 08-29-2008
In reply to: llhaesa
Sun, 10-12-2008 - 8:19pm
I was referring to Fannie Mae in that post.

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