The ‘Residence’ Evil

Nothing is as it seems.

We are about to crash they say.

You kidding? it’s the great Kerala economy you are talking about. You don’t talk about it lightly!

Oh yeah? There is a world economic crisis? Well and good, but what is that to us?

We are in the business of producing cheaper brains. We do it by the truck loads. We are the best in the business.

We have a monopoly of sorts in the sector.

You say it is that very thing which is not wanted anywhere now because of the crisis?

Oh?

How did it come about?

Due to the mortgage crisis?

Now what in the name of hell is that?

You mean every one in the US was buying up houses for years to cause the crash. Man, this world is unbelievable. What has the US craze for houses to do with the world in general?

You don’t mean?

People not credit-worthy began to buy houses?

But who would give credit to those?

The banks did?

Brother only US banks would do it. We don’t do it here. Not ever. We pick only the credit worthy fellows here, and if they give us something in personal credit we pass the loans too.

Well we can’t expect you to be as shrewd as that can we. We are the brain people.

To tell you frankly that was gross man, to give loans to those who can’t repay them.

You say there was high liquidity crisis? May be you mean there was enough loose change with the banks to throw around.

But should they throw it to all and sundry? Have you ever heard such things happening anywhere in the world? Did you consider whether the guy had a wallet even?

This is what I call unbelievable. I feel like that English man who said he doesn’t believe it when he saw the Giraffe for the very first time.

Easy loans to finance houses my god!

But there had to be a plan, you can’t just throw around cash even if you have it in plenty. What about recovering it friend, even the US banks (We don’t have a high opinion of them at present considering everything) might think of that would they not?

Oh that was what the mortgage was about? They get the house if the moron doesn’t pay up?

Probably the idea came from some Indian brain. We are pretty good at such things.

Then what went wrong. If the poor bastard can’t pay up the banks get the house, don’t they? They can resell it and recover costs, so where is the hitch and why is this crisis?

Oh we know all about that. Demand would increase prices and naturally developers would charge in to swindle people out of their money, land value would go up there would soon be more houses than buyers resulting in a crash in land and house value and everything else.

Man, who was managing business in the US? You don’t have to be a genius to figure out what would happen in such a scenario as they say.

People who borrowed money to buy up houses expecting their value to go up would be unable to pay interest rates once the values plummet. They would ditch their houses rather than pay more than the house is worth. The banks would be left with houses they can’t sell!

Really what were the banks expecting? That god would come to their rescue once that happens? This is bad fiscal management brother. It seems that the Us Bank management believed in the might of US real estate. They never expected the prices to fall.

They probably have never seen a utility curve!

That is unpardonable. You can’t do business on the basis beliefs and national feelings.

The banks coupled with firms dealing in Mortgage Backed Securities and the Insurance companies have landed the US economy in a soup (consequently the world economy too).

We just don’t see that the bail out package of $700/- is going to put it back on line.

Bad economics bro’s and sis’s of America!

Anyway banks are not so bad off are they? They have the deposits coming in from their customers. But the goose of financial Institutions seems to be cooked.

Would buying up bad securities by the government steady the economy? We certainly have our doubts dears, going by what we have seen up to now.

The banks thought they could float weak loans without risk shifting the main responsibility to the MBS firms and Insurance companies. Brilliant short sighted economical mastery.

Now would the US banks ever think of giving loans to any one? Well well well!

I bet they would not even if you manage the entire gold reserve in the US treasuries.

Not this time mate!

If you don’t believe me try your luck at some bank.

The sad part is you guys have gotten us into trouble too. We were living happily by exporting brains (The cheaper variety of course. We are trying to come up with a strain which is capable of finer deeds.)

Well who knew houses would cause so much trouble in the world.