Sub-prime news


I don't usually do financial news on this blog because I think it is boring and I don't understand the stock market very well. But the news today that the Bank of Japan has injected another 5bn dollar (after 8.5bn dollar on Friday) to calm market fears and avoid "panic" strikes me as a big waste. That is tax payers' money: why should governments bail out banks that sell loans to people with no security? Help the people directly instead (oupps, but that would be socialism, can't do that).

Coupled with that story, NHK reports today that Japanese banks are offering an increasing range of non-business related services at their branches to help people in the communities. So, what kind of services are we talking about?

Sumitomo Mitsui Banking Corporation is to place defibrillators at all its branches by October. The devices - used to respond to heart attacks - will be available for use whenever the automatic teller machines are open.

Great. Defibrillators. So, do not panic! I suppose a lot of people are having heart attacks as they see their funds dwindle.

(Sub-prime loans are those made to high-risk individuals and were promoted during a US housing boom. Since then the housing market has slowed, and successive US interest rate rises have pushed up the cost of mortgage repayments, thereby increasing the number of defaults. "Sub-prime loans" is a wonderful way to avoid saying "bad loans".)

Comments

Pandabonium said…
If the system goes down, we all feel the economic effects. We live in the time of the "Wiley Coyote" economy. Like the cartoon character who runs off a cliff, we are suspended in mid air, waiting for the law of gravity to take effect. It is only a matter of time...
6:48 pm, August 13, 2007
Martin J Frid said…
Haha, yes - suspended in mid air, waiting for the defibrillator.
7:02 pm, August 13, 2007
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