Quote Originally Posted by Mike T View Post
They invested in non viable mortgages and financial products - property was over-valued, mortgages of too high a % of the property value were given to people who never had a hope of paying them back, and these doomed mortgages were converted into a "fool proof" investment. Too much of Northern Rock's business was based on mortgages.
But Mike, I'm confused. You said this yesterday:

"No need to borrow, just print it - this is how we buy houses - the money is created by the bank/building society - it does not come from the savings of the bank's customers - as long as inflation does not "ramp up' - I hate that expression - it is not an issue."

So if the bank has just created this money out of thin air to lend in the first place, why is it a big problem if they don't get paid back? Why do we ever need to bail the banks out, they can just create more money, right?