Tuesday, October 14, 2008

Bailing out the Banks

Economics is not my strong suit, but I really do wonder about the governments (read "tax-payers") of the world bailing out the banks and buying up toxic mortgages. My free-market impulse is repelled by such socialist activism. Likely it will help my personal MF portfolio (which is cool), but ought we to be happy about the developments of the past days? And what happens when the other shoe drops? What will happen when all the tax-payers' money the governments are injecting into the mess is lost? I'm guessing it will be sucked into the abyss. Let Wall and Bay Streets clean up their own undisciplined mess. Let the banks and mortgage companies clean up their own messes. Why should governments (read"tax-payers") be forced to hold radioactive mortgages? I'm all for everyone owning their own homes, but really, should a guy who earns $12 an hour working at Wal-Mart be able to own a 1/2 million dollar home by way of a zero down sub-prime mortgage scheme? That's an unrealistic expectation.

1 comment:

YFNWG said...

Be thankful you are not living in the good ol' US of A. What is happening (ie bailouts) in the US (or Iceland or the EU for that matter) is not happening here in Canada. We are very solid. What the government has done here is provide liquidity/cash to Canadian financial institutions that are affected by the global credit crunch. Funnily enough this is due in large part because our banking system has not been de-regulated as in other "free-er" market economies (read USA).