"News" wrote

News wrote:
But that was my two penn'orth

If I'd spent more, I might have avoided the keyboard trouble that seems to
have afflicted para 5.

Also, the mention of '...extra cost of UK borrowing...' was meant to refer
specifically to UK Government borrowing.

A propos nothing much: the thing that has always puzzled me is who the
deuce trousered all the money that produced the bad debts that resulted in
the crises. It was an awful lot of LSD and it can't have just disappeared.
Some people and companies must have made an awful lot of loot out of a lot
of people's suffering.


The main problem of Bad Debt was due to the American Ratings agencies rating
sub-prime loans as triple A which allowed them to be sold around the world.
The USA (and world) then went into recession and those loans became
worthless as the marginal borrowers defaulted and, due to the recession, the
properties involved used as collateral also became worthless. So other Banks
across the world saw their own customers defaulting and those that had
invested in these sub-prime loans saw their own Bad Debts skyrocket.
Governments then had two options, to let the Banks collapse (probably taking
the economy with them and bankrupting millions of account holders) or bail
them out.
The money went to pay the Bad Debts, so it seems it went to the defaulters.
It could be said those that made money were those that bought up repossessed
properties cheaply.
One question I've always asked is, with all the litigation around how is it
that the US Ratings Agencies haven't been "done" for rating worthless loans
as triple A? But then I keep reminding myself that if they hadn't been sold
around the world the US economy would have collapsed as it alone would have
taken the big hit.
--
Regards. Bob Hobden.
Posted to this Newsgroup from the W of London, UK