Comments on: The Financial Crisis: Causes and Effects http://www.dxal.net/the-financial-crisis-causes-and-effects/ Health, Finance, Science and Technology! Thu, 05 Jan 2012 22:50:15 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: credit crunch causes and effects http://www.dxal.net/the-financial-crisis-causes-and-effects/comment-page-1/#comment-14363 credit crunch causes and effects Mon, 27 Sep 2010 01:33:55 +0000 http://www.dxal.net/?p=97#comment-14363 The concerns being expressed mainly relate to consumer confidence and withdrawal of equity (re-mortgaging). If you become worried about where the money is coming from you may well stop spending so much .. currently a lot of people run up huge credit card debts because they are thinking "that's OK, my house is going up faster than I'm spending, I'll always be able to pay off the debt by re-mortgaging" .. .. so if house prices stop rising (or even start going DOWN in value), people can't pay off their debts and either stop spending first or go bankrupt (and then stop spending) .. Plainly the first to be affected is the Credit Card companies (Barclaycard etc) = bankrupt clients = no money, non-spending clients = no money .. Next is all the retailers .. people will focus only on buying food and other essentials .. no customers = no business, no business = no jobs ... the 'posh shops' will be the first to go.. (Tesco Basics range increased sales, Sainsbury 'Feel the Difference' range reduced sales) .. people will put off all the 'big' purchases .. when they do buy they will go for something cheaper .. more Fords will be sold, less BMW's .. Now as an individual you might not care = if you have access to funds you will be able to buy some good bargains (BMW's at "closing down" sale prices) however if you work in non-core industry (eg. at a BMW Dealership) you might start worrying about your future .. The concerns being expressed mainly relate to consumer confidence and withdrawal of equity (re-mortgaging).
If you become worried about where the money is coming from you may well stop spending so much .. currently a lot of people run up huge credit card debts because they are thinking “that’s OK, my house is going up faster than I’m spending, I’ll always be able to pay off the debt by re-mortgaging” ..
.. so if house prices stop rising (or even start going DOWN in value), people can’t pay off their debts and either stop spending first or go bankrupt (and then stop spending) ..
Plainly the first to be affected is the Credit Card companies (Barclaycard etc) = bankrupt clients = no money, non-spending clients = no money ..
Next is all the retailers .. people will focus only on buying food and other essentials .. no customers = no business, no business = no jobs … the ‘posh shops’ will be the first to go.. (Tesco Basics range increased sales, Sainsbury ‘Feel the Difference’ range reduced sales) .. people will put off all the ‘big’ purchases .. when they do buy they will go for something cheaper .. more Fords will be sold, less BMW’s ..
Now as an individual you might not care = if you have access to funds you will be able to buy some good bargains (BMW’s at “closing down” sale prices) however if you work in non-core industry (eg. at a BMW Dealership) you might start worrying about your future ..

]]> By: admin http://www.dxal.net/the-financial-crisis-causes-and-effects/comment-page-1/#comment-11 admin Mon, 26 Jan 2009 03:18:19 +0000 http://www.dxal.net/?p=97#comment-11 The 2008 Financial Crisis - Causes and Effects The 2008 financial crisis is affecting millions of Americans and is one of the hottest topics in the Presidential campaigns. In the last few months we have seen several major financial institutions be absorbed by other financial institutions, receive government bailouts, or outright crash. So what caused the financial crisis of 2008? This is actually the perfect storm which has been brewing for years now and finally reached its breaking point. The 2008 Financial Crisis – Causes and Effects
The 2008 financial crisis is affecting millions of Americans and is one of the hottest topics in the Presidential campaigns. In the last few months we have seen several major financial institutions be absorbed by other financial institutions, receive government bailouts, or outright crash.

So what caused the financial crisis of 2008? This is actually the perfect storm which has been brewing for years now and finally reached its breaking point.

]]> By: admin http://www.dxal.net/the-financial-crisis-causes-and-effects/comment-page-1/#comment-10 admin Mon, 26 Jan 2009 03:16:27 +0000 http://www.dxal.net/?p=97#comment-10 What Caused the Current Financial Crisis? The United States government is trying to put the blame for the financial crisis on the rating agencies, who knew about the great risk that was coming but kept giving high reliability ratings to companies that didn’t deserve them. However, the impending financial crisis could not have been unnoticed by the investment companies, or by officials in the United States and other countries. If the institutions that can see all the risks will continue to keep silent about it in order to avoid sowing panic among the population, then they will harm the population even more. The chief economist of ITinvest, S. Yegishantz, predicts that the lessons will be learned three to five years later, when the world economy will be in ruins and humanity’s objective will be just to survive. What Caused the Current Financial Crisis?

The United States government is trying to put the blame for the financial crisis on the rating agencies, who knew about the great risk that was coming but kept giving high reliability ratings to companies that didn’t deserve them.

However, the impending financial crisis could not have been unnoticed by the investment companies, or by officials in the United States and other countries. If the institutions that can see all the risks will continue to keep silent about it in order to avoid sowing panic among the population, then they will harm the population even more. The chief economist of ITinvest, S. Yegishantz, predicts that the lessons will be learned three to five years later, when the world economy will be in ruins and humanity’s objective will be just to survive.

]]> By: admin http://www.dxal.net/the-financial-crisis-causes-and-effects/comment-page-1/#comment-9 admin Mon, 26 Jan 2009 03:15:41 +0000 http://www.dxal.net/?p=97#comment-9 Causes of the crisis : US vs. Japan I think we can sum up the cause of our current economic crisis in one word — GREED. Over the years, mortgage lenders were happy to lend money to people who couldn’t afford their mortgages. But they did it anyway because there was nothing to lose. These lenders were able to charge higher interest rates and make more oney on sub-prime loans. If the borrowers default, they simply seized the house and put it back on the market. On top of that, they were able to pass the risk off to mortgage insurer or package these mortgages as mortgage-backed securities. Easy money! Causes of the crisis : US vs. Japan

I think we can sum up the cause of our current economic crisis in one word — GREED. Over the years, mortgage lenders were happy to lend money to people who couldn’t afford their mortgages. But they did it anyway because there was nothing to lose. These lenders were able to charge higher interest rates and make more oney on sub-prime loans. If the borrowers default, they simply seized the house and put it back on the market.

On top of that, they were able to pass the risk off to mortgage insurer or package these mortgages as mortgage-backed securities. Easy money!

]]>