Tuesday, March 31, 2009

Bursting of the Bubble

The Brookings Institute sums it up:
Low interest rates fueled an explosion of sub-prime mortgages; securitization of these assets masked credit risk. In 2008, the housing bubble burst with declining home values causing a financial crisis to hit U.S. banks, financial institutions, the auto industry...

Are these the real causes? To what extent was this driven by systemic deficiencies in a consumption driven high dept economic system?

No comments:

Post a Comment