Tuesday, Aug 14, 2007
Why the end of cheap money is going to hurt
MoneyWeek: The $300 billion dollar reason why you should be careful
$300bn of subprime debt is still lurking in the market, though no-one knows exactly where. Meanwhile, Goldman Sachs may have set a precendent with its $2bn bail-out of one of its troubled funds.
Bankers may be trying to reassure us that the strength of the 'real economy' means this is just a blip - but, as John Stepek says, the UK economy is built on cheap debt.
Posted by mary @ 11:25 AM (143 views) Add Comment
4 Comments
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1. dohousescrashinthewoods said...
So, the "real economy" is based on debt, which is imaginary money that may or may not ever be repaid?
Nice one Gordon "stability" Brown.
My wife now turns the radio off every time she hears Brown. She can't stand the man and his spin about "no spin".
She is willing to believe he is generating minor "disasters" like bombs that don't go off and foot-and-mouth that wasn't in fact detected in the slaughtered herd, in order to prove his credentials ahead of an election - and is expecting a couple more 1-month mini-disasters before the election.
True or not, she's not alone and the fact that people are willing to believe it says a lot.
2. Dave9w said...
'74% of UK GDP is consumption, consuption is fueled by cheap credit, therefore if the cost of credit increases consumption will fall rapidly and with it all growth in the economy! Oh dear - just a matter of time!
3. sovietuk said...
I agree that things have become more than disturbing under NL particularly in the last 6-12 months. The whole state apparatus seems so heaviliy politicized now. How long now before dissenting sites like HPC are closed down and people start receiving the knock on the door at 11pm ????
4. deepak said...
BNP $2 billion (the bank not the party) hedge fund valuation has lead to all these turmoil. What will happen when $300 billion comes out in the open.
Recession will be a small word.