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Comment by astoor | Hacker News Reader

He's the bad guy of the story because he's a billionaire who made a $1.1Gb at the expense of the ordinary people living in the UK at the time. He forced mortgage rates, for example, to shoot up to 15%, with crippling monthly payments for a large chunk of the population.

Note that the article author is a cryptocurrency cultist, so he'll be all in favour of unscrupulous people enriching themselves at the expense of others irrespective of the negative effects this might have on society or the environment or whatever.

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> He forced mortgage rates, for example, to shoot up to 15%, with crippling monthly payments for a large chunk of the population.

Does British monetary policy not get some blame, here?

It was a sudden shock because they were putting their foot on the scale for quite some time.

The ERM was Major's big idea, most of his ministers didn't like it. The fact that they still went along with it is unimaginable in British politics today.

Although the market's should not be worshipped, this is probably a good example of why you shouldn't be too ardent in your nudging of them for political reasons.

Another commenter mentioned this was part of the process to standardizing the UK on the Euro.

> He forced mortgage rates, for example, to shoot up to 15%, with crippling monthly payments for a large chunk of the population.

While this may be true, it is entirely the fault of the dumb UK mortgage market that does not provide for fixed-rate mortgages for the full term of the loan. In the US, 30 year fixed rates are the norm. In the UK you’re lucky to get 5 years fixed.

Interesting. In Canada you can only get up to 5 years fixed typically. Mortgage itself is 25 years but terms change every 5 usually. 30y fixed feels... Crazy. How much above market does it have to be for banks to take that risk??

The banks don't take the risk of offering such long-term fixed rates. The US government does through Fannie Mae and Freddie Mac, effectively subsidising the mortgage market. Other countries don't do this and don't have the same kind of long-term fixed mortgages as a result.

> The US government does through Fannie Mae and Freddie Mac, effectively subsidising the mortgage market.

For so-called "conforming" loans (647k USD this year), the equivalent of which would be enough to buy a nice house almost anywhere in the UK except London, the nicer parts of the Home Counties or the South West.

Geebus. How did I never pick up on that juicy tidbit during 2008 coverage.

That's both awesome and insane

People with a low risk profile today get 2-4% fixed rate. What’s it like in Canada?

Similar. But not for 30 freakin years - we all know rates will shoot up!

> While this may be true, it is entirely the fault of the dumb UK mortgage market

How would raising interest rates affect spending in the short/medium term if loans are all fixed for 30 years?

I guess maybe the property market is more volatile in the US as a result of this since who would take on a 30 year mortgage when rates are above their long-term average? In the UK, if you're on a high rate (but a short contract), you can at least look forward to when interest rates fall.

> In the UK, if you're on a high rate (but a short contract), you can at least look forward to when interest rates fall.

At the cost of never being able to predict your monthly outgoings in the face of turbulent financial markets.

so people will take smaller loans and pay less. This is good.

Which is absolutely not what happens. It’s manifestly not “good” by any definition.

The way it works where i live, at least, is on all loans the principal can be paid in full with no penalty. So I get a 30 year fixed loan and when a better rate becomes available I can get a new loan and pay off the old one. The down side is transaction costs, things are getting more efficient but the owner will have to pay something to refinance the loan.

> While this may be true, it is entirely the fault of the dumb UK mortgage market that does not provide for fixed-rate mortgages for the full term of the loan. In the US, 30 year fixed rates are the norm.

That's not an effect of the market; American 30-year fixed-rate mortgages reflect intense government involvement.

Anyone who thinks the British government is not involved in the UK mortgage market is not paying attention.

Did you mean to reply to someone else?

It's an effective regressive tax where lower income earners subsidise middle and high income earners. Is that what you're arguing for?

Without him, all of the quoted effects would not have happened, right? It actually took his direct action to catalyze those events into the stated negative outcomes. So how is it not at least partially (though actually mostly) his fault? If someone kills someone else, do you blame the murderer's mom for his existence, or Walmart for selling the knife, or do you blame the murderer for doing the stabbing?

Wouldn't Soros argue that all he did was accelerate their leaving of an already increasingly strained ERM?

The ministers in charge didn't want to be in the ERM, it was all Major.

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