Originally Posted by
maggot
Margin calls on residentual mortgages?
now thats now FUD
the prohets of doom love this ****
Depends on the currency the loan was in
Previously an adverse currency movement could be offset by a higher property valuation, but if valuations fall then that’s not possible.
Sure this won’t affect many, just as unemployment won’t affect many, but the knock on consequences can affect everyone. America’s subprime issue only affected a small proportion of borrowers who had used increased valuations to stay above water as interest rates changed, but it had repercussions that went further than the affected borrowers.
My point being that’s it’s probably prudent that the second most indebted households in the world actually do start to save and pay off debt. It had to happen at some stage.
Stating that capitalism is alive and well and going through one of its inevitable cycles is hardly forecasting doomsday, although perhaps it might feel like it for some who have only ever seen one side of the capitalist system coin.