TEAR DOWN THE WALLS! RAISE THE ROOFS!
On April the 2nd the world’s leaders are meeting in London for the G20 summit. In the wake of the banking crisis, they are meeting to try to salvage a tottering system, which is aimed at growth for its own sake, at the expense of our living standards and the environment. However, this strategy seems to be failing and the system cannot achieve the rates of growth necessary for its very functioning and continued survival, relying on credit to stave off its collapse.
Do the leaders of the world remember that the credit crunch originated in the “housing bubble” and the mortgage crisis?!!
Despite Gordon Brown’s claim that the economic crisis is all the fault of US sub prime mortgages, the same trends were apparent in the UK credit boom as commercial banks turned themselves into investment banks and triggered speculation on the housing market. The credit boom was increasingly underwritten by mortgage finance, leading to an unlimited amount of money chasing a finite housing stock. Housing prices rose by 150% between 1996 and 2008, when they finally peaked: in 2004 staggering 63,000 mortgages were granted here at a price 10 times greater than the applicant’s income.
In 2008, there have been 40,000 home repossessions across the UK and current estimates for 2009 are in the order of 70,000-75,000!
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