Praise be to the Federal Reserve

[Andy2]

what I don't understand in this whole fiasco is why banks deliberately give mortgages to individuals who have no income or means to give it back. why would anyone want to lose money

which idiot gives these bad debts triple A ratings. why are they not being sacked for sheer incompetence.

[ElectricChair]

Fingers crossed a balancing act of tightening up lending rules, regrading debt instruments and cutting rates in the US will eventully sort things.

That will be enough this time. But eventually debt has to be paid back. People will have to stop spending. Or debt written off.

[Troll]

what I don't understand in this whole fiasco is why banks deliberately give mortgages to individuals who have no income or means to give it back. why would anyone want to lose money

which idiot gives these bad debts triple A ratings. why are they not being sacked for sheer incompetence.

They have targets to meet & they are given criteria for acceptance... lax criteria = more poor debt but it's only at the painfull end of the economic cycle that chickens come home to roost

[bobhope]

Bernanke (and our very own MPC) could do with looking up the definition of "moral hazard"

[wendigo100]

we cant just keep borrowing without repaying.

Quite. But you'd be surprised how many people believe that "it will be different this time", with "a soft landing"!

Also, debt is never "written off". Someone, somewhere has to pay for it.