Article on current economic climate

Somehow, somewhere, someone has managed to swing poor lending processes and swashbuckling investment decisions by banks, over to Mr poor mortgage payer in the good old USA. That’s a bit like trying to glue jelly to a tree.

We will learn one thing from this recession (or we will not), and that’s common sense in lending and investment policies from the banking sector.

Let's remember that banks have individually bought investments in assets they will never be able to understand, and did not understand when they bought them. To blame the U.S. is just priceless.

I studied the U.S. as an economy in 2007 for five weeks and wrote about its poor state and in particular the state of the housing. Remember we all know they are around a year or so ahead of us in terms of their fiscal policy.

From one side to the other everyone believed the housing market was doomed, and you could already get property at sizeable discounts.

New developments lay empty. Excess supply coupled with dwindling demand. This was not an area I wanted exposure to. As a consequence we invested a sum total of 0% in the U.S.

Somehow, our banks thought it was a great idea to see beyond that and buy investments in worthless collaterised debt obligations in the U.S...................

Read the full article at this mortgage broker website.