Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
going from 4.3% to 5.3% over ten years is hardly usurious.
I read that Denmark was officially in a recession already?

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sat Jul 12th, 2008 at 04:38:34 PM EST
don't you know all interest is the work of the devil?

1450 or bust.

by HiD on Sat Jul 12th, 2008 at 07:51:24 PM EST
[ Parent ]
Not interest: leverage.

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Sun Jul 13th, 2008 at 05:16:48 AM EST
[ Parent ]
8000 BC or bust.
by HiD on Sun Jul 13th, 2008 at 08:20:50 AM EST
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Sorry, HiD, but you are the one stuck in the past.

Credit intermediation is obsolete.

Credit or "time to pay" is needed to create productive assets: and investment is then possible in the productive assets created.

But in a "Peer to Peer" world, credit middlemen are not needed for either purpose.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sun Jul 13th, 2008 at 09:21:50 AM EST
[ Parent ]
Yes and no to both questions. The interest rates themselves aren't bad. What's bad is that this type of loan is even on the table, because it has all the bells and whistles of the types of loans that have grossly inflated our housing market in the first place over the past almost-decade (and then some). So my concern wouldn't so much be that it can subprime people (as I said, I don't think that's done in Denmark right now). It's that it can prop up/further inflate/create a new housing bubble. And we really have had enough of that lately.

And what I particularly don't like is the fact that it was kept... well, not exactly secret, but sufficiently under wraps that it came as a surprise to several watchdog groups. That raises a lot of little red flags in my mind.

As to the second, I don't know whether we're officially in recession yet (I don't think so; the housing market didn't start going sour until spring, and AFAIK the bottom hasn't gone out of it yet, so we probably haven't had half a year of sustained downturn - yet), but we've already had two (albeit minor) banks go belly-up from a shrinking housing market and the newsies are speaking doom and gloom about the economy.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Jul 12th, 2008 at 09:16:09 PM EST
[ Parent ]
matter, and is not the point.  

The loans exploding in the US are not subprime (those exploded last year)--they are superficially legitimate.  And their vast scale--greater than subprime--is gradually swamping the entire system.  

The key point is the teaser rates:  These are loans designed IN FACT to fail (after they have been unloaded onto someone else) to the detriment of borrower and note-holder alike.  

The Fates are kind.

by Gaianne on Tue Jul 15th, 2008 at 03:56:35 AM EST
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