Sunday, July 6, 2008
Day of Reckoning
Given the levels of debt that the credit boom of the past 10 years has produced, any widespread default could bring down the entire financial edifice. After all, this is exactly what happened in the US sub-prime disaster, when interest rates on the mortgages of low-income households were suddenly jacked up to levels they simply couldn't afford to pay. Our own housing sector is now poised on a similar cliff edge.