Reviving the mortgage market
It wasn鈥檛 just Northern Rock that flogged off its mortgages to international investors in the form of asset-backed securities.
More or less every British bank used this global market as a source of cheap funding: something like a quarter of all British mortgages are financed by the sale of mortgage-backed bonds.
With around 拢200bn of British mortgaged-backed bonds trading, yours could actually be owned by a hedge fund or an Australian pension fund, even if you think it鈥檚 on the books of the Halifax.
So when the market for asset-backed securities closed down last summer, it wasn鈥檛 just Northern Rock and its shareholders that were mullered.
Most of us were hurt by the disappearance of a source of cheap finance, because it meant that the price of mortgages would rise, and their availability would shrink.
Hey presto, many of us feel a bit poorer and the oomph goes out of the housing market.
Now there鈥檚 nothing intrinsically wrong with plain-vanilla, mortgaged-backed bonds.
It鈥檚 their twisted, hybrid cousins, the collateralised debt obligations made out of US subprime loans, that have wreaked the serious damage.
The poisoned CDOs have wreaked havoc on the more straightforward mortgage-backed bonds in two ways:
1) There鈥檚 been reputational contagion to any security backed by property.
2) Structured finance vehicles, such as the notorious SIVs and the collateralised debt obligations, were big buyers of all mortgage-backed securities, including the British mortgage-backed securities, but they鈥檝e been slaughtered and are no longer buyers of anything.
But even if there鈥檚 nothing intrinsically wrong with the simplest mortgage-backed bonds, the market for them refuses to return to anything like normality.
Global investors don鈥檛 want the stuff.
It鈥檚 all a bit odd, but the loss of their appetite may stem in part from the widespread view that the British housing market has too much in common with the US one, viz that it鈥檚 over-valued and heading south.
Certainly that鈥檚 the implication of the way that futures markets are pricing the outlook for UK houses. According to Morgan Stanley, futures markets are implying there will be a 10 per cent fall in UK house prices over the coming year.
However it would be pretty serious for all of us if the market for mortgage-backed bonds fails to revive a bit.
If the availability of housing finance in the UK were to shrink over the long term by a fifth, well that doesn鈥檛 bear thinking about 鈥 mortgage interest rates would rise very sharply and the impact on house prices would be scary.
Which is why on 6 February, the Chancellor Alistair Darling said in a speech that he would 鈥渃onsult on a new 鈥榞old standard鈥 for covered bonds and mortgage backed securities鈥 that would increase the confidence of investors that a British mortgage-backed bond is 鈥 to coin a phrase 鈥 as safe as houses.
Now according to this morning鈥檚 , there would be 鈥渁n official seal of approval鈥 鈥 a kitemark 鈥 for those-mortgage backed bonds whose underlying mortgages meet the most rigorous lending standards.
The word 鈥渙fficial鈥 is certainly resonant.
Does it mean the Treasury would issue the kitemark?
The Treasury tells me there is no possibility of that.
And you can see why it would want to distance itself from that notion. If the Treasury were to put its stamp on asset-backed securities, investors might understandably believe the bonds were guaranteed by HMG.
The bonds might sell like hot cakes. But the might insist that the whole lot come on to the public-sector balance sheet 鈥 which would put an atom bomb under the fiscal rules that are supposed to keep public-sector debt within reasonable bounds.
Who instead would issue this kitemark? Well it would be very odd if the allowed its name as the regulator of banks to be used to explicitly underwrite their fund-raising. That would put the FSA in cahoots with banks, and would wholly undermine its role as watchdog.
So the FSA can鈥檛 do it.
Which leaves only the banks themselves, or their trade association, the .
But it鈥檚 not obvious why investors would place faith in a seal of approval agreed and policed by the very banks from whom they鈥檙e buying the bonds 鈥 unless, that is, the bonds were aimed at the innocents in the retail market (that鈥檚 you and me, by the way).
Anyway, for years there was a perfectly good system for providing confidence to investors that they were buying good bonds backed by decent assets.
The credit-rating agencies, Moodys, S&P and Fitch, provided certificates of credit-worthiness that were widely trusted.
Their reputation may have been battered by their wholesale failure to spot the risks intrinsic to bonds created out of US sub-prime mortgages.
And anger at them may be well directed.
But if they reform the way they assess the quality of bonds and the way they present their findings, they may be able to win back that squandered trust 鈥 and in the process contribute to a resuscitation of the asset-backed bond market.
The Treasury鈥檚 idea for a kitemark may well be seen by many banks and investors as introducing a new layer of bureaucracy that would yield little financial benefit.
I'm 
颁辞尘尘别苍迟蝉听听 Post your comment
The Government Kitemark propsal is a fig leaf without substance as it adds no tangible security above the intrinsic value of the underlying mortgages. The market will only return to accepting securitised mortgages by the application of traditional, sensible lending criteria by the initial lender. This will need to be supported by equally traditional due diligence by those who purchse mortgage portfolios.
In short, what is needed is the reinstatement of good banking practices. It will take to rebuild systemic confidence that this has happened.
This is worrying.
If the government is going to get involved in providing 'guarantees" to UK mortgages it raises this question - why should I, a non home owning taxpayer, be called in to, in effect, bail out home howners and UK banks after years of high level risk taking (and profit making)?
Does this not raise serious concerns of equity and justice when the government is prepared to save one set of asset holders from their risky behaviour by spreading the risk upon the shoulders of those who are less well off?
There is not a cat's chance in hades of anyone taking seriously a self certifying kitemark issued by any of the banks.
The banks have blown their reputations wide open along with the FSA and the Treasury. The only institution that people might still have some marginal respect for is the BoE.
You say "theres nothing wrong with plain vanilla mortgage backed bonds". Whilst I agree you haven't explained why in your article, so your article could cause unneccessary worry amongst Halifax mortgage holders, for whom this makes not the slightest bit of difference (in the sense of will they have to find another lender - provided of course they keep up their repayments). Its clear the credit rating agencies failed miserably to do what their customers were paying them to do. Guess the lawyers are rubbing their hands in glee! And who will pay out - insurance companies. How - by selling investments. Ho hum!
Cheap credit has helped create this housing bubble, and if you take that away then the bubble is burst. The likes of NR and other quality banks gave 110% Interest only 30yr mortgages. Thats what fuelled the housing inflation.
And before everyone who has been burnt by the NR fiasco starts to slate Robert, he is one of the few commentators that actually highlights the blunders of the government and the way bankers privatise the profits and socialise the losses!
The market will only return to accepting securitised mortgages when the underlying assets return to sane values.
Look through the glass the other way, what happens to those that do not have the kitemark
Maybe an opportunity for Lloyds?
Case) In case you default your repayment can the bank repocess your house (even now)?
Judgement) NO. because the bank is not the owner of the mortgage. They have sold it on.
I read a case from US around six months ago and this also applies here in UK (BUT PEOPLE DON'T KNOW).
This could be the biggest looser for banks.
This looks like a weird device to keep house prices high and prevent the likely crash which is the consequence of a reduction of funds in the market.
It would appear that having got rid of one illusion, we are now being softened up for a new set.
There can only be one measure in any market and that is value. We are now suffering from the effect of the previous perceptions of a new paradigm.
It would be better if we all took the medicine we are going to have to take, get on with the rest of our lives and lay off the fantasies.
If the banks were required to take back a mortgage book portfolio if it failed to perform to a minimum standard, they might be more careful what they put in the portfolio and a buyer may have more confidence in it.
surely, "at the end of the day" it still depends on Mr/Ms Jo Public keeping their jobs to keep on paying their monthly mortgage payments- whatever the level of interest rates!
This is the result of following Americam Market economy. Why we have no confidence in British Economioc way? Banks had it very easy way to make money. Now what who is going pay for the mess? Chancellor, Gordon or Peston and all of us?
Further to the comment No 1 above:
In other words, all these initiatives are just political attempts to shore up the UK housing market. They are scared of the imminent 'correction', which could upset home-owning voters. It is of course difficult to compare house prices internationally, but UK real estate prices seem inflated even by domestic measures, and now amount of kitemarking will change that. And why did the government not see a need to intervene in this way when prices were going through the roof?
HASSAN POST 5##
Can i correct you on a main part of your atricle. Northern Rock does not and have NEVER offered 110% mortgages on INTEREST ONLY
The maximum element of the mortgage you can have on an interest only basis is solely 95%. The unsecured is on repayment
PLEASE GET YOUR FACTS RIGHT
Excellent article, as always. The govt intervention seems "moral hazard". Th UK house rise was fuelled partly by cheap credit, and partly by unscrupulos elements who have managed to get loans without any stake and possess more than one properties. I dont think the govt is doing anything to shrink this bubble, what is ironic is the BOE is gonna cut interest rate which is absurd.
>>
If the availability of housing finance in the UK were to shrink over the long term by a fifth, well that doesn鈥檛 bear thinking about 鈥 mortgage interest rates would rise very sharply and the impact on house prices would be scary.
>>
scary for who? Their has been a house price bubble (apparently worse here than in the US).
People forget that for most this is *not real wealth*
Old news Robert- the Guardian ran this months ago - and everyone 'in the know' knew it all along. So why raise it now? Were you so into your vendetta against NR that you chose not to discuss the bigger picture until that particular bandwagon dried up?
"Now there鈥檚 nothing intrinsically wrong with plain-vanilla, mortgaged-backed bonds."
Nice word "intrinsically"! Covers a multitude of sins, doesn't it.
There is something wrong with mortgage-backed bonds if they are constructed on the basis that they are risk-free. Not the obviously ridiculous assumption that there will never be defaults, but the assumption that the backing security will always be sufficient to prevent any loss from the defaults.
This is the cornerstone of the entire credit expansion programme of recent years - that there is no risk, and that therefore there is only an upside to more and more lending.
The whole structure now depends for its existence on property values remaining at a level where the assumption of no-risk is borne out in reality. In other words, we have somehow to keep the speculative property price bubble from deflating. Can this be done? And, more to the point, should it be done?
There's many a fortune been made in recent years not by bringing anything of value to the world, but by clever exploitation of mass stupidity. I'd suggest that to allow a situation to continue where the clever manipulators are allowed to keep their fortunes only serves to send out a message that there's no need for reciprocity in fortune-making - all that's required is a ruthless determination to take ownership of someone else's value.
This may be the only way in which capitalism can survive, but it certainly isn't what capitalism promises to the masses that live under it.
actually the credit agencies have historically been very poor at pricing credit risk - the downgraded Enron AFTER it declared it was going bankrupt.
There is a market mechanism and that is credit derivatives. It may not work all the time but it is there. This kitemark can only be geared at retail.
You seem to be suggesting that the proposed 'kitemark' of quality would necessarily amount to a government-backed guarantee. It makes a good story, but I don't know why you should think that. If you look at the original BSI kitemark, it indicated that a company had been assessed for quality and had passed. If the companies operated ther own scheme for warranty or were involved in a similar industry-wide scheme this could give them a nice tick in a box but would in no respect amount to any liability on the part of the agency that assess the firms.
In the current context, the FSA could easily have done this if they had measured the proportion of mortgages issued by each bank that were securitised (and otehr things) and had a quiet word with the bank chief to tell him that he would lose his kitemark unless he changed his plans.
Perhaps not as subtle as the BOE governer's eyebrows, but it would have sufficed.
I think our darling chancellor should be commended for proposing such an uncharacteristically sensible proposal.
Scare mongering strikes again!
Who cares if your mortgage is owned by Halifax? A large percentage of the RMBS (mortgage backed bonds) have been issued as 'covered', which is a guarantee from the issuing bank. The bank will also usually retain the 'servicing rights' so that you the mortgage payer still sees Halifax on your statements like normal.
The securitisation market (in all its shapes and forms) will only come back once the US housing market has hit a bottom, and when investors can truly assess the level of damage. Then we can all get on with correctly valuing the securities.
Right now the market is 'unduly pessimistic' - the value of CDO's (in all their forms) are currently priced well below their discounted cash flow value. So, if you held your securities to maturity, there is a very good chance you will be repaid far more than if you sold them now. No investors will touch the assets today until their value stops declining.
I entirely agree with Steve's comments - this is a thoughtful and interesting article, but the tone of the third paragraph is liable to cause concern among mortgage holders that is just not necessary. It doesn't matter to the mortgage holder who owns their mortgage.
This was a common misunderstanding at the time of the Northern Rock crisis last year - it was depositors who had reason to worry, not mortgage holders.
If my Halifax mortgage is held by a hedge fund then why am I paying money to the Halifax?
I am cancelling my direct debit to the bank and will only reinstate it when the owners of the mortgage can confirm who they are and that they have a right to my hard earned money
To Depak
what you are saying is incorrect. halifax does still "Own" the mortgage, and if you fail to meet repayments your home will be repossesed. the securitization is a clever way to get money up-front against the revenue stream that will come in the shape of repayments. This releases more dosh to make more loans and so forth the marry go round goes. It is somewhat "safe" because there is an asset to back this up (at least in the plain vainilla version).
I am afraid Mr Peston is rapidly becoming a major part of the problem. Scaremongering is for the tabloids.
Fundamentally the merits of securitising mortgage books is one for the market, and as one Margaret Thatcher once said "you can't buck the market". So if the market doesn't want mortgage backed securities at the momement, our mortgage banks will have to rely on other forms of funding, although total funding might well be less than the morgage customers might hope for. This could well mean an extension of current trends - only those with the best credit histories getting morgages and the average loan to value %age coming down. This will mean some people can't move when they want to where they want - its not the ned of the world, its not the first time something like this has happened, and it doesn't need a Government benchmark to help things along. Because the Government will not offer any guarantee, will it?
Another classic example of this government playing it by ear.
Why would anyone want to buy assets
backed by low quality uk mortgages.
There is a reason no one wants to touch Northern Rock, it's mortgage
book is full of UK's very own sub-prime, just as toxic as anything in
the US.
Why do people think the situation here is any different to the US? Once
prices drop the specuvestors and buy-to-letters who have no skin in the game will be walking away from their
houses in droves.
If you can't afford a 20% downpayment
you have no business buying a house,
and with these stricter lending standards house prices will plummet.
Problem solved.
Could the mortgage providers package up mortgages that have been running for > 5 years and mortgages that are proven to be less then 50% of the market value of the property. This package would then prove to be very safe.
when the fixed rate term of the mortgage ends whats to stop the bond owners applying a high rate of interest?This will make those who can,remortgage elsewhere ,and the loan is repaid hence reducing their exposure.They will then know the remaining will prob.be a liability?
It is clear that we have been a victim of the American sub prime issues and as a result this has meant the American finance houses have left the UK. The UK process follows guidelines set down by the FSA and as such should be seen as much safer assets, yes, undoubtably there are a handful of rouge advisors/brokers, but most Networks have tight rules on compliance to help try an avoid such issues arising. Confidence will return to these markets, but no one knows when, some say as far away as Q3 2009, in the meantime, we see interest rates on mortgages which are higher than they normally would be, not good for the consumers, are these rates due to the fact that lenders aren't lending money to each other as readily,( they need to make money somewhere)or are they making extra margin through greed!
One way of determining the value of the bonds is to calculate the total outstanding equity.
Hazel Blears is the ideal person for the job.
If she can do HIPS then she can do TOEs.
Is this not an attempt by the Government to reduce the risk it has now taken on our behalf to guarantee the loans made to Northern Rock customers? If confidence in the UK housing market deteriorated materially, the NR portfolio will be affected too and may have increased bad debt. A very good reason why Governments should not run private companies!!
Mr Preston
Your asinine remarks miss the point, as usual. No amount of activity by CDOs, SIVs, hedge funds or Australian pension funds (for that matter) has resulted in anyone losing their home. If anyone is to blame for this it is the banks who sold the products, not the people who made it possible. What these groups have done is enable cheaper credit to be available than might have been the case without them. In turn, this has enabled more people to own their own homes and feel good about doing so. Rightly or wrongly. Please think a little more before you write your next inflamatory and self serving piece. Contrary to what you may believe, you are not helping anyone with your rather dumbed down style.
David Moore
Excellent article Robert, highlighting the market鈥檚 requirement for transparency.Just one point I disagree with in your analysis, the role of Credit Rating Agencies.
In my humble opinion, I do not believe market confidence in rating agencies will return in the near future. MBIA and Ambac, are still rated as 鈥楢AA鈥 monoline insurer鈥檚 on par with Warren Buffet鈥檚 Berkshire Hathaway (who concentrate on muni-bonds) which has none of the toxic sub-prime CDO鈥檚. Until these issues are resolved I feel the rating agencies are tainted by the sub-prime slime in investor鈥檚 opinion.
Perhaps I may be so bold to suggest a simple approach;
Banks adopt a simple Mortgage Bond standard like the following,
Mortgage Bond 50 鈥 Assets no more than 2 months less than or equal to 50% Loan to Value.
Mortgage Bond 60 鈥 Assets no more than 2 months less than or equal to 60% Loan to Value.
Mortgage Bond 70 - Assets no more than 2 months less than or equal to 70% Loan to Value.
I have ignored anything over 70 % effectively ruling out UK sub-prime for investors.
Furthermore I believe a process of 鈥榙ue diligence compliance鈥 conducted by an accountancy firm would help. This would carry more weight than a kitemark for investors. The FSA could carry additional compliance, a role for which they are suited.
The market would have a transparent system for valuation, a Bond 50 raised for example in March 2008, assuming a 10 % fail in property prices by December 2008 would be priced accordingly. Even the novice Investor could be reasonably confident in the value of the underlying securities.
A desperate attempt to boost a dying system! Any pyramid of selling or chain relies on trust and frankly there's none of that about on any side (banks, public, investors) at the moment! That banks go back to old-fashioned banking practices is good but WAY too late! Should have happened many, many years ago, maybe then we'd have actually had genuinely affordable housing, but the excessive lending and consequent house price inflation was part of the bank's plan-after all they couldn't really go wrong if the worst that could happen was they could repossess an asset that was actually appreciating in value. Now they anticipate a correction (US style) they have sobered up, temporarily common sense (and self-preservation) are triumphing in the banking world over the more common motivation: greed, but in 5-10 years time when/if this situation blows over greed will resurface.
hang on. Are you really saying that house prices have trebled over the last 10 years because of cheap mortgages from banks? Estate agents have been telling everyone it is because "Britain is an overcrowded island"
Post 14# is right on the money. The 'smell of fear' is everywhere, as maintaining inflated property prices becomes an end in itself. Builders, banks, buy-to-letters etc NEED a booming property market like a junkie needs their next fix! Many building projects, especially flats, are now fundamentally uneconomic by any common-sense standard. Sadly it now seems that instead of controlled and gradual deflation in property, only a full blown 'bust' will do the job properly.
"Their reputation may have been battered by their wholesale failure to spot the risks intrinsic to bonds created out of US sub-prime mortgages."
"And anger at them may be well directed."
Oh how true. Who would have imagined two years ago that this stealthy torpedo was headed straight for the midship of the world's economy and would detonate with such explosive force? While the war in Iraq cost anywhere from a few hundred billion to an absurd three trillion as Stockholm's latest celebrated economic wunderkind Stiglitz claims (absurd hardly begins to describe his numbers) it was spent over a five year period at a steady rate which was both controllable and yes, between the OMB and GAO openly observable and if necessary controllable. But here we have a sudden huge catastrophic loss of value of unknown dimensions as the tsunami it left in its wake continues to ripple out through the world's economies.
Blaming the lenders who made loans they should easily have known could never be paid back points the finger at the wrong people. That is not illegal and would merely have been imprudent. However, in many cases, it was brilliant because as P.T. Barnum said; "there's a sucker born every minute." So neither is selling or buying those loans illegal. It is the banking industry itself whose own overpaid overrated overhyped MBA papered bean counting wunderkinds of their own who bought this junk like it was gold who are to be blamed...and their equally overpaid overincompetent supervisors. They who know the price of everything and the value of nothing have collectively managed to add huge load to the US debt sinking its economic ship low in the water. Since it is the US economy which sustains the rest of the world with its insatiable thirst for imports, this has created a tidal wave which will reach the farthest corners. A serious recession in the US can only be prevented by massive printing of new money to make it possible for borrowers to pay down most of their debt. By comparison the recession of 2000 was shallow and brief by American standards. Even so, most of Europe (Britain excepted) suffered long and hard from it after assuring itself it would be immune. (European economists are for the most part even dumber than most of their American counterparts.)
As the market is flooded with ever more cheap dollars, look for the dollar to continue to fall, interest rates to rise, American imports to shrivel up, and major economies especially China's and Europe's to suffer intensely. Food and especially oil should increase substantially. It would not surprise me to see oil go to $200, $250, even $300 a barrel. BTW, if you think there will be some relief from the new EADS deal for $44 billion to build refueling tankers for the US air force, I wouldn't count my chickens just yet. Congress is justifiably furious. I'd lay even odds it will ultimately go to Boeing.
As in all change, there arrives with it opportunity to obtain new wealth. That will come to the few who recognize it and have both the means and will to seize the moment when it comes.
Banks securitised mortgages because it took the lending off their books. They "sold" the future income stream (ie monthly mortgage repayments) - its very similar to the government borrowing money and repaying it back over many years. The security was a mortgage on the house. The banks did a deal to continue to provide all administration, debt collection etc. The banks then had fewer loans on their books, and more cash, so could lend more money. And so it went on, as as long as there were people willing to invest in these securities, it could keep rolling. Until the short term bonds had to be repaid which really means re-finance as the lender can't force their borrow to repay early (except through devious route of charging them more, like NR at moment!). The error was to believe that all mortgages carried the same risk. Clearly mortgages with LTV's of less than 50% would be far less risk than those of 95% where in all probablity the loan to income ratio would also be higher, so proportionately much riskier. Its just not realistic for NR borrowers to be of a better quality than other borrowers when NR went after market share. Ironic really as HBOS got slated I think about 2 years for refusing to chase market share. Just as well they didn't given problems they've now got! Ho hum - people just not wanting to spend time understanding the proposition, and the "seller" not wanting to explain as it would affect their sales targets.
Good article.
Why should mortgage credit go on being easily and cheaply available? As far as I can see the market is working perfectly; any attempt to guarantee MBSs amounts to attempting to buck the market. If investors won't touch MBSes, that's because they feel (from their informed viewpoint) that MBS's are too risky.
Where is it written that we must have mortgage credit available at the rates that have become "usual" in the past few years?
There was no intervention in the market when it was on the way up - why intervene on the way down?
Any answer to this question would have to involve the admission that the UK economy has been wholly taken over by asset inflation, and now utterly depends on it. This is how Brown politically funded his adherence to the precious "golden rule" (apart from by fiddling the figures through PFI/PPP, of course, oh and let's not forget the CPI/RPI scam) - by relying on Ponzi-funded consumer spending to keep the economy looking healthy.
The lies are becoming clearer and clearer. I want no part of it, but unfortunately I can't secede from this Undemocratic Property-Owners' Republic of Great Britain.
re. 14 and 39., the cost of housing is hugley over-valuued. My son, a Physics graduate, and his girlfriend, a teacher, simply cannot think about purchasing a house: something they are desperate to do.
As a simple engineer, I cannot help thinking that de-mutualising has helped boost the price-madnesss of recent years. Boring, dull, dependable (mostly) Building Societies would have never given loans in the amount I have heard about anecdotally at least. My son (and thousands of others also) deserves a house. The price of the average home must fall significantly, or else the average salary must jump.
Question: Why do banks have to sell off these bonds?
Answer: Capital Adequacy regulations introduced in response to previous crises?
Hmmm, let's see - if policy were changed to actually encourage loan originators to hold on to the risks they generate until maturity then the need for complex certifications, kitemarking etc would just go away. And those who originated risky loans would pay the price on their own balance sheets.
A couple of obvious flaws in this proposal:-
a) Of course these assets are much too risky for those naive professional mortgage banker originators to analyse and hold on to until maturity, so they must be passed on to retail investors or even to an unregulated fund in an offshore centre that does not have capital adequacy regulations to comply with.
b) Also if we simplified the system that would reduce risk too much and cut out the middlemen who are mitigating all those risks, sorry, I mean the financial securitisation geniuses; and the need for the regulators to regulate them; and for the kitemarkers; and for the ratings agencies...
Ho hum, back to the drawing board....
Northern Rock offered my brother a 125% mortgage - 100% secured and 25% unsecured. He now has 10% equity in the property and wants to move somewhere cheaper but is stopped by a 拢10,000 early redemption penalty.
No doubt by the time he transfers this coming December, he'll have little equity left and be strung up by Northern Rock.
More carrot, less stick, will help a run off of the loans and facilitate a payback to HM Govt.
UK house price have trebled in the past 10 years. Unfortunately , salary has not kept in pace. There is something fundamentally wrong.
Paul Gilbert wrote:
'I am afraid Mr Peston is rapidly becoming a major part of the problem. Scaremongering is for the tabloids.'
So now the coming hurricane is all the fault of the weather forecasters!
Sorry Paul Gilbert, time to take responsibility for your own greed, stupidity and sheep-like behaviour.