Quote:
Originally Posted by raisethehammer
most definitely. I understand it's not easy. I just didn't like DC's tone suggesting that people 'live like you always have' and don't worry about it. I personally think that's a recipe for disaster.
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I took DC's comment to mean:
Don't live as if the media's hype is the gospel truth.
If people had ignored the media in the UK and carried on as they were, instead of panicking and ripping their money out of Northern Rock and saying "well, we've been told house prices are going to fall, so let's sit tight and wait for them to fall", Northern Rock wouldn't have collapsed, the mortgage market wouldn't have collapsed from the lack of people wanting to buy houses and house prices wouldn't have dropped due to the lack of demand.
What could and should have happened is that the mortgage companies would have realised they were in a spot of bother, tightened up their practices so that fewer high risk loans were issued and kept a close eye on their existing high risk loans. The housing market would have suffered a slight, but not alarming correction, perhaps a gradual price reduction over time, rather than dropping off a cliff-face, and there wouldn't have been a ripple effect of unemployment within the highly paid and high spending banking sector.
All in all, most people are a herd and believe everything they read in the media and react accordingly. When the media says house prices are going to crash, the herd makes it so.