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Credit Crunch-radio 4 Now

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Some highlights---

mortgages given to people who couldn't usually even get a credit card in the US

6% slump so far in US, talk of 30% slump

slump spreading from US to other countries

that credit derivatives were sold to people who didn't understand them, the greater fool theory

that a recession in the US may result

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Some highlights---

mortgages given to people who couldn't usually even get a credit card in the US

6% slump so far in US, talk of 30% slump

slump spreading from US to other countries

that credit derivatives were sold to people who didn't understand them, the greater fool theory

that a recession in the US may result

The 2 countries most reliant on the US economy - UK and Germany

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If you missed it, go to listen again.

A great hour's worth of explanation of the sub-prime, securitization and the ensuing credit crunch. Plus some fairly bearish outlooks for the US economy...and then ours.

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If you missed it, go to listen again.

A great hour's worth of explanation of the sub-prime, securitization and the ensuing credit crunch. Plus some fairly bearish outlooks for the US economy...and then ours.

I thought their explanation of securitisation was poor...no mention of CDOs (in name).

Also very much focused on sub-prime when most borrowers are feeling the pain....the 17 interest rate hikes in the US have hit everyone.

BTW: I get the impression that IRs only went so low 'cos of 9/11. If the US goes leads us into a world crash as expected Bin Laden will have done rather well for himself and the US will be seen in history to have paniced and shot themselves in the foot!

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It was interesting to hear at the end that that at Jackson Hole there was a degree of concensus regarding the idea that central banks should take more of an interest in limiting asset bubbles.

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Radio 4 carried on the credit crunch theme this morning on the Today Programme .The Estate Agent interviewed reckoned the Crunch was causing a lift in prices. :blink: His reasoning was that owner occupiers were trapped and unable to get mortgages in order to move because of the illiquidity of Banks,therefore volumes were collapsing and there was a scarcity of supply.The interviewer said this will surely lead to a collapse of prices later.The Estate Agent had to agree.

Edited by crashmonitor

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I thought their explanation of securitisation was poor...no mention of CDOs (in name).

Also very much focused on sub-prime when most borrowers are feeling the pain....the 17 interest rate hikes in the US have hit everyone.

BTW: I get the impression that IRs only went so low 'cos of 9/11. If the US goes leads us into a world crash as expected Bin Laden will have done rather well for himself and the US will be seen in history to have paniced and shot themselves in the foot!

they went so low because of the stock market collapse of 2000 and the collapse of Enron - and others - in 2002.

911 didnt help but the US was cutting rates anyway because of those two huge crises of capitalism in 2000 and 2002.

911 actually gave the US a shot in the arm as it allowed them to wage 2 wars which gave their economic system a temporary reprieve from the inevitable.

the inevitable has now happened having been delayed by 5 to 7 years by low interest rates and inflationary wars.

what happens next ?

MORE WAR IN MY HUMBLE OPINION

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the most ludicrous thing of all is that German and UK banks bought this toxic junk even though it was leveraged (highly leveraged ) on mortgages given to people that they themselves - German and UK banks - would never consider giving a mortage to because of their poor credit history.

i mean JUST HOW BANANAS IS THAT !!

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