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Optimism rather than greed caused the crunch, stupid

The bursting of the US sub-prime bubble and the subsequent economic fallout around the globe was initially put down to greed.

Then towards the end of 2008 Dennis Sewell, writing in the Spectator, put the blame on former US president Bill Clinton who apparently set up several agencies to ensure lenders played ball with his strategy of increasing home ownership for the poor – particularly poor blacks and Hispanics.

According to Sewell, providers bent the rules to lend to those who blatantly couldn’t afford home ownership simply to avoid prosecution and censure.

Now US journalist Barbara Ehrenberg has come up with another explanation. In Smile or Die: How Positive Thinking Fooled America And The World she puts the US penchant for positive thinking in the line of fire, and to prove her point cites the fate of US government official Armando Falcon.

According to Ehrenberg, back in 2003 Falcon warned that Freddie Mac and Fannie Mae were backing too many dodgy mortgages. But instead of tightening regulation his political masters tried to fire him for being negative.

The US government seemed at one with the likes of Joe Gregory, former president of Lehman Brothers, who called himself a feeler and fired anybody with the temerity to be negative.

So with President “yes we can” Obama in the White House, can we hope for a return to rational scepticism in the US? Perhaps if we wish for it to happen very hard, it will.


A brand new look for lenders

Lenders’ brand strategies may have to be adjusted to take account of the changing way the financial world is perceived by consumers, says Jeff Knight, managing director of Tonic Marketing Solutions


Can you have a pop to win this posh Montblanc rollerball pen?

Mark Lofthouse, CEO of Mortgage Brain and Mike Davies, head of the Mortgage Trading Exchange, soak up the atmosphere during Mortgage Brain’s conference at Wembley last week. Can you put the boot in to your nearest and dearest to win this super-stylish pen? Submit a witty caption for the photo above and you will be […]

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White paper — Singapore International Insights

Jelf Employee Benefits assesses key trends within the international private medical insurance provision of organisations with employees in Singapore. Benefit structure, cost management and healthcare facilities are examined and key considerations are highlighted. This edition will be of particular interest to global human resource directors and benefit managers with local and expatriate populations in Singapore.


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