Mar 08
11
Who Pays And Who Is To Blame?
Subprime was the trigger for an evolving tsunami, or so it seems. Now the big buzz word is Margin Lending.
It hit Eddie Groves, CEO of ABC Learning. It hit David Coe. And according to the Herald this morning it also hit Chris Murphy, the lawyer. And of course it has hit the banks too.
The banks being smart people and in control do what smart people who are in control do. They put up the interest rates for the poor battlers who were just trying to pay off their houses, while the smart people were doing very nicely borrowing against stocks that they didn't own to buy more stocks that they could sell before they had to pay for them. But when it went pear shaped, the high fliers lost the stocks. But the battlers are caught having to pay for the sharp lending practices of the banks to the high fliers.
There will be more pain without doubt. But the real pity of it is that the people who created and promoted the schemes just put the screws into the battlers to save their own asses and to find their way to hit their KPI's for the quarter/year.
And in the mean time the Fed puts up interest rates to try to restrain consumer spending in Australia.
Personally I think this is a bad idea. The impact of increased oil prices is just starting to hit people in their hip pockets at the supermarket, at the pharmacy, and at every level. What we need is a green tax. A green tax would reference any retail item that has carbon impact. It will be so onerous that people will get pulled up very short by it. It will be incredibly unpopular, but if it was levied on businesses first so that they have to increase their retail prices perhaps it will cause enough pain for the brands that they start to reduce the carbon impact that they have via their products…