Global Credit Crisis

Matt Smith
Matt Smith
Age: 29
Gender: Female
Posts: 31134

Mibba Blog
March 18th, 2008 at 03:16pm
I won't pretend that I really understand the economy in any great detail, but I think these current world events deserve a topic because they are relevant to all of our lives. It especially seems to be an important topic in America what with the presidential elections and the recession (if you believe there is one).

"After years of relaxed lending, the market has suddenly seized up, triggered by rising defaults by "sub-prime" US mortgage borrowers. As these defaults mounted, institutions rethought their attitude to risk and suddenly became scared of losing money. Banks became unwilling to lend to each other for fear of not getting their money back. The panic has spread to shares, and there are fears that the panic could spread from financial markets to hit the wider economy."

The Global Credit Crisis is obviously having widespread effects around the world. In Britain, a bank (Northern Rock) had to be taken into state ownership for the first time in over 100 years. This was a huge deal in Britain. In America, a simliar thing has recently happened to Bear Stearns. These are just some symptoms of a wider economic sickness. So how has the current crisis affected you and your country?

Furthermore, who would you blame? This headline from the Daily Mail; "In Their Relentless Pursuit of Mammon, These Grasping Bankers Have Put the World at Risk," attributes blame to the US bankers who invested in sub-prime mortgages. But that it just one view.

So basically, just share your views, if you have any Cassie