Query by redryan: what trigger the current economic collapse in globe. 2008?
And I like to know why the rest of the globe blames the U.S for this what truly happened? Why did it take place?
Greatest answer:
Answer by S D Men and women buying more than they could afford using adjustable rate mortgages. Making use of houses as an ATM. Credit card debt. Flipping homes Generally men and women living way beyond their means when you make $ 5.00 an hour you cannot afford a $ 500,000.00 house along with a new bmw or mercedes Some will say it is all the bankers fault but the people signed their life away and bit off far more than they could chew.
Question by Jay: How was the United Kingdom affected by the Credit Crisis in 2008?
I am currently working on a term paper regarding the credit crisis impact on the UK. I understand prior to the credit crisis, the UK banking system derived there cash flows from securtization and the financial markets. Most of there operations were not derived from deposits. I am trying to find out if this market securitization that the UK was involved in came from the US sub-primed mortgages or other debt’s. If any one can explain this and how the ties between the UK and US were related. Also, I relized that the UK, besides the US, had a smaller decrease in there Stock Market when compared to other countries like China, India, Canada and others for the year ending of 2008. The UK and the US fell around the same amount which was approximatly 31%. Any help on this is greatly appreciated!!
Best answer:
Answer by Dating-Expert UK was seriously affected by Credit Crisis
Many financial institutions collapsed, many retailers closed their businesses such as woolworth etc
Hundreds of thousands of people lost their jobs
employees in public sector got their salary increment frozen
in short it affected almost every single person in one way or another
Question by Rocky: What caused the Subprime Mortgage Crisis that Caused 2008 Financial Disaster?
New Study Finds Democrats Fully to Blame for Subprime Mortgage Crisis that Caused 2008 Financial Disaster
Posted by Jim Hoft on Saturday, December 22, 2012, 9:48 AM
In his early activist days, Barack Obama the community organizer sued banks to ease lending practices.
State Sen. Barack Obama and Fr. Michael Pfleger led a protest against the payday loan industry demanding the State of Illinois to regulate loan businesses in January 2000. During his time as a community organizer Barack Obama led several protests against banks to make loans to high risk individuals. (NBC 5 Week of January 3, 2000)
Here’s something that won’t get any play in the liberal media…
A new study by the respected National Bureau of Economic Research found that Democrats are to blame for the subprime mortgage crisis.
Investor’s Business Daily reported:
Democrats and the media insist the Community Reinvestment Act, the anti-redlining law beefed up by President Clinton, had nothing to do with the subprime mortgage crisis and recession.
But a new study by the respected National Bureau of Economic Research finds, “Yes, it did. We find that adherence to that act led to riskier lending by banks.”
Added NBER: “There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts,” or predominantly low-income and minority areas.
To satisfy CRA examiners, “flexible” lending by large banks rose an average 5% and those loans defaulted about 15% more often, the 43-page study found.
The strongest link between CRA lending and defaults took place in the runup to the crisis — 2004 to 2006 — when banks rapidly sold CRA mortgages for securitization by Fannie Mae and Freddie Mac and Wall Street.
CRA regulations are at the core of Fannie’s and Freddie’s so-called affordable housing mission. In the early 1990s, a Democrat Congress gave HUD the authority to set and enforce (through fines) CRA-grade loan quotas at Fannie and Freddie.
It passed a law requiring the government-backed agencies to “assist insured depository institutions to meet their obligations under the (CRA).” The goal was to help banks meet lending quotas by buying their CRA loans.
But they had to loosen underwriting standards to do it. And that’s what they did.
Republicans warned Democrats of the impending doom in 2004.
video
Fannie Mae/Freddie Mac Hearings 2004
