Oh, except for real estate speculators, but who cares about them anyway.
It depends on how involved the private and centralized banks were in the funding. If this is all being funded by the speculators, then yeah no worries. However, if this was funded by state or private loans… the banking system itself may be in danger.
This is how corporate risk aversion works. If you are working with your own private investment and maybe a little capital from the bank, your ass is still on the line. If you are over invested by a huge amount and it’s primarily the banks money…well that’s mainly the banks problem. Now the banks have material motive to keep your financial gamble afloat as it is in reality a shared financial gamble.
The problem with the over housing crisis isn’t simple a real estate issue, it points to some large flaws in how their domestic banking system evaluates risk assessment.
Building hundreds of millions of extra homes isn’t theoretically kosher in either communist or capitalist systems. So we have to evaluate if this is an inherent issue with socialism, or if it’s a problem inherent to their commercial market.
I can’t see a situation in socialism would validate that kinda of surplus, but I can see their commercial market attempting to inflate growth, especially if banks weren’t doing their due diligence.
It depends on how involved the private and centralized banks were in the funding. If this is all being funded by the speculators, then yeah no worries. However, if this was funded by state or private loans… the banking system itself may be in danger.
This is how corporate risk aversion works. If you are working with your own private investment and maybe a little capital from the bank, your ass is still on the line. If you are over invested by a huge amount and it’s primarily the banks money…well that’s mainly the banks problem. Now the banks have material motive to keep your financial gamble afloat as it is in reality a shared financial gamble.
The problem with the over housing crisis isn’t simple a real estate issue, it points to some large flaws in how their domestic banking system evaluates risk assessment.
Building hundreds of millions of extra homes isn’t theoretically kosher in either communist or capitalist systems. So we have to evaluate if this is an inherent issue with socialism, or if it’s a problem inherent to their commercial market.
I can’t see a situation in socialism would validate that kinda of surplus, but I can see their commercial market attempting to inflate growth, especially if banks weren’t doing their due diligence.