“Your house may be at risk if Americans do not keep up their mortgage repayments”? he said. This, while amusing at face value, also betrays a British misapprehension about the credit crunch. We seem to think that, like hamburgers and control-top pantyhose, the subprime crisis is a US problem that has inconveniently affected us." [US] banks lent money irresponsibly to people who could never afford to repay it, on the underlying assumption that house prices would rise forever. How stupid was that? Well, they are not alone. We too have a trade deficit and budget deficit. And we too have lent money irresponsibly to people who could never repay it, on the assumption house prices would rise forever........"

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