Rush aid to Wall street while the poor get flipped out of their homes. No Liquidity Crisis - the rich withhold funding to squeeze more profits and receive more bank funding on easy terms. Don’t Worry!
The wider US economy could now be suffering the effects of the sub-prime lending crisis, according to figures released towards the end of last week.
The publication of retail sales figures and industrial output figures were widely anticipated last week as analysts tried to establish whether the sub-prime crisis had spread to the wider economy.
Their fears appeared to be confirmed when consumer sales rose by only 0.3% in spite of prediction of growth of a half a percent. The figure also comes in as a decrease in sales from July, which equalled analyst forecasts for this month at 0.5%.
Additionally, industrial output in the US economy over the course of August rose at its slowest rate in three months at just 0.2%, suggesting that manufacturing firms could be feeling the brunt of the sub-prime fallout.
The sub-prime sector has been the source of untold woe for mortgage lenders and banks across the world. With these figures, it would now seem that it is finally beginning to take its toll on wider economic spheres.
With excessive lending to those with poor credit histories, banks in the US began to feel the pinch as interest rates rose. As defaults and repossessions grew, so too liquidity shrunk as banks turned to lengthy litigation in foreclosure.
Furthermore, with inter-bank lending and assignation of sub-prime exposure, the problem spread to banks across the globe, requiring assistance from most major central banks to restore some stability.
As a result, banks have been less willing to lend and businesses less willing to invest, resulting in the feared wider economic impact that today’s results show, which is expected to have an overall adverse effect on growth and could potentially result in a global recession.
The news was not well received on the Dow Jones, which saw significant sell offs as a result of dented investor confidence and the bleaker outlook for the US economy.
Share This
It seems like people have forgotten that credit is easy to get, but very hard to maintain. This type of behavior from banking institutions is what makes people store their money under their matress!!! In high school they don’t teach finances, but yet in college they hand over credit cards like it’s free money - what this does is set you up for failure in the world of credit, especially once you become an adult because now is the time that you need the banks for home loans, small business loans and whatnots. Start teaching the value of credit versus the value of a dollar and maybe we can start to raise a generation of people who will respect credit and not run into any credit problems when they become adults.
J
Intriguing summary covering Sub-Prime Fiasco - The Ultimate Misdirect!! Thoroughly enjoy this articles!
This has also had an effect on non subprime buyers as well. I am trying to purchase a home currently and the banks no longer want to do 100% financing even for prime customers such as myself. I have an excellent income, established time in the area and a 697 beacon score and only one bank will do the 100% I need and the apr is 9.99%. Hopefully it’ll change soon
Sammie
www.SammiesTanning.com
ekibastos…
ekibastos…
??? ???? ??????? ?? ???????????:
“????????? ????? ?????????? ??? ??????.
??????? ?????? ??????????? “??????????” ????? ??????? ?????????, ??? ?? ???????? ?????? ??????????? ??????? ????????? “????????” ??? ?????? ? ????? ?? ?????????? ????? ?????? ? ???? ????.
“??? ????? - ???????????? ????????, ? ?? ??????????. ????? ?????? ????? ?? ??? ??????????, ???? ?? ??? ??? ????????”, - ???????? ???????? ?????? Daily Mail.”