US interest rates just been cut another 0.5%!!
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Soldato
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Wouldn't that mean homes in the US would be taken up by more first time buyers? So in effect, the the debt would slowly decrease. And the sub prime market should become smaller.
Soldato
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im surprised buy that!!
now to do the same here!
now to do the same here!
Northern rock was caused by stuff in the US, not the other way around.
Soldato
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I think it started by the US making more homes than there was demand and American banks lending money to financially unstable people in the sub prime market.
No. Nothern Rock was a consequence of the state of the US sub prime lending.
Caporegime
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The thing is there was demand when house prices were going up.
This combined with stupid securitisation is what caused things to go way beyond what they should have.
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Caporegime
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You're joking ... right?
Caporegime
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No. Greedy bankers who invent money systems that no-one understands are to blame for this imo.
Basically they lent money to people in the US who should never have been lent money - sub-prime debt, then split the debt up and sold it around the world so much that no-one actually knows who owed what. Interest rates rose, so the people who were lent money couldn't pay the money back. Now the banks don't know how much money they've lent to sub-prime borrowers so won't lend much money to other borrowers right now, debt is used to finance growth so growth is stalling. Bush is hoping lowering interest rates will allow the banks to lend a little more easily.
Yup pretty much
Looks like George W Bush has found his legacy. The only good news is that we in the UK might escape from a recession as we do much more business with Europe and China than we used to, though of course, Europe and China will be affected by a US recession too.
Soldato
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I think we should do a lot more business with India. They seem to be a booming economy that is hit by a small margin by the current financial troubles.
That's why we just gave them 800million aid.
