Brazil UK community
 
latin friends UK

Mon, 11 Dec 2017, 03:15pm
Good Afternoon

UK's Premier Site for the Latin and British Community

 
Home Login / Register Jobs Accommodation Sunshine Holidays Local businesses International businesses Professional services Models Schools Useful links Events Online Games Articles News Embassies Public Gallery History of Latin America FAQs Contact Us
Which Country has the nicest people?
Brazil
Colombia
England
Peru
Mexico
Spain
Portugal
View results

Mexican Food recipes   Brazilian recipes   
Bookmark and Share All articles

Credit Crunch- Has the Capitalism Bubble Burst?

by CreditCrunchsaver.co.uk
Credit Crunch- Has the Capitalism Bubble Burst?
HBOS, Northern Rock, AIG, Lehman Brothers, etc. The list of the Wall Street mighty is coming more and more to resemble a monument to the fallen. What with stocks falling, the great ones collapsing, and the dollar amount of a proposed bail out rising, it seems that the capitalist bubble has finally burst.
Of course, appearance and reality are seldom what they seem. Consider that much of the problem in the financial sector stems from the lending industry's journey into the sub-prime mortgage arena. Sub-prime mortgages, are, of course, mortgages loaned at a higher risk. This risk is managed by charging higher interest. That higher interest is supposed to balance out the greater risk.
The question is, why did the lenders decide to pursue these sub-prime loans? One might be tempted to answer that it is sheer greed. But that may well not be the case.
Consider that the one of the major thrusts into the sub-prime mortgage was the federal government. Starting in the early 1990s, the feds - Democrat and Republican - began pressuring lending institutions to open up a sub-prime market in order to accommodate those applicants with less than perfect credit. That is, those who are higher risks as applicants.
These higher risk loans took off. Not only was the sub-prime market good for higher risk applicants, it was good for those trying to buy more home than they previously could have. The sub-prime rules allowed applicants to borrow more than would have been previously acceptable.
Was this greed? Absolutely. But it wasn't greed alone. It was greed enabled by federal pressure. And the federal pressure came as a result of political motivation. A push for "equal opportunity housing" (read - a sub-prime mortgage industry) made for good election debates, and played well in partisan politics. This political pressure opened a venue which most mortgage lenders had previously been unwilling to take, because of the risk. Once on the path, however, caution seems to have taken a back seat, and greed - on the part of lenders, borrowers, and agents - took over.
Think of the practical situation. A borrower finds a home which is out of their regular financial reach. Wanting to close the deal, the real estate agent connects with the mortgage broker, who finds a non-standard loan system for the couple: an ARM, and Interest-Only loan, etc. Betting on future earnings, the borrower signs the mortgage papers, and purchases the home. For five years, or more with a refinance, things are good. Eventually, though, the burden of the too-expensive-home might catch up to them: a job fails, medical bills step in, or the paycheck simply does grow as anticipated. Suddenly, a dream becomes a nightmare, and the mortgage cannot be paid. The loan falls into default, and pressure is added to the lender. Multiply this scenario out, and risky lending practices come back to haunt an industry.
Has the capitalist bubble burst? Yes and no. The current financial collapse is not the result of pure capitalism alone. Rather, it is the worst mix of capitalism and regulation, the one abetted by the other into expanding where it should never have gone. Perhaps what we are seeing is not so much the burst of the capitalist bubble, but the necessary collapse of a tumor spawned by a poor mix of capitalism and government regulation.
Credit Cruncher is a feature writer for the website- www.creditcrunchsaver.co.uk


Other articles

Possible Consequences of Brexit on Care Homes and NHS
Club fire highlights problems in Romanian Healthcare System
Travel Guide to Romania
Romanian Festivals and Traditions
Could the UK Healthcare system survive without EU Nurses and Carers?
History of Hungary Part 1 - Medieval Period
Famous Historical Polish People
A Brief History of Lithuania
Estonia - Small but Beautiful
A Tourist's Guide to Romania
History of Poland Part 3 - Modern Day
History of Poland Part 2 - World Wars 1 and 2
History of Poland Part 1 - Medieval Age
Healthcare Ails as Doctors, Nurses Emigrate
Traditional Drinks of Eastern Europe
Hungary's Natural Thermal Spas
The History and Difference Between Samba and Salsa
Name Day - Traditional Polish Custom
A Tourist's Guide to Latvia
Placek Swiateczny - Polish Christmas Bread
The Inca Trail in Peru
A Brief History of the United Kingdom
Mexican Dishes and their importance in Traditional Culture
Cultural Sites of Interest in Poland
Polish Weddings - Traditional Customs
Back Packers Guide to Eastern Europe
How to Manage your Debts during a Recession
Czech Republic - A Bohemian Paradise
Romania and the Myth and Origins of Dracula
Bulgaria-Land of Outstanding Beauty
A Tourist Guide to the Amazon in Brazil
20 credit crunch busting tips
Argentina and Brazil: Rivals in Life and in Sport
Hungary- Land of Dental Tourism
London- Playground for the New Russian Elite
Poland, Family, and Catholic Culture
Once Golden, Again Golden Poland
British people of Brazilian descent
Go Green and Beat the Energy Crunch
History of Brazilian Samba
Polish Employee Rights - Anna's Case Study
Employee Rights -Holidays and Wages
Cosmetic Surgery in Eastern Europe
Porkolt- Hungarian Stew
Review of Polish Festival In London
Writing Within the Periphery of Culture;
Different Cheeses from Romania, Poland, Hungary
Blend in Like a Local in Peru
Argentinian Bocaditos -finger sandwiches
Feijoada, Brazilian National Dish
Basic Polish for Beginners - Part 3
Fashion Saving Tips- Affordable Panache
Scottish Traditional Dish - Haggis
Bliny -Russian Pancakes
Bigos -Polish Hunter's Stew
Interview with Writer of Life of a Recluse
Polish Words for English Speakers - Part 2
The Rainbow Poem
Polish Words for English Speakers - Part 1


Article of the Day
Article of the Day provided by The Free Dictionary
Other articles:
- Possible Consequences of Brexit on Care Homes and NHS
- Club fire highlights problems in Romanian Healthcare System
- Travel Guide to Romania
- Romanian Festivals and Traditions
- Could the UK Healthcare system survive without EU Nurses and Carers?
- History of Hungary Part 1 - Medieval Period
- Famous Historical Polish People
- A Brief History of Lithuania
- Estonia - Small but Beautiful
- A Tourist's Guide to Romania
- History of Poland Part 3 - Modern Day
- History of Poland Part 2 - World Wars 1 and 2
- History of Poland Part 1 - Medieval Age
- Healthcare Ails as Doctors, Nurses Emigrate
- Traditional Drinks of Eastern Europe
- Hungary's Natural Thermal Spas
- The History and Difference Between Samba and Salsa
- Name Day - Traditional Polish Custom
- A Tourist's Guide to Latvia
- Placek Swiateczny - Polish Christmas Bread
- The Inca Trail in Peru
- A Brief History of the United Kingdom
- Mexican Dishes and their importance in Traditional Culture
- Cultural Sites of Interest in Poland
- Polish Weddings - Traditional Customs
- Back Packers Guide to Eastern Europe
- How to Manage your Debts during a Recession
- Czech Republic - A Bohemian Paradise
- Romania and the Myth and Origins of Dracula
- Bulgaria-Land of Outstanding Beauty
- A Tourist Guide to the Amazon in Brazil
- 20 credit crunch busting tips
- Argentina and Brazil: Rivals in Life and in Sport
- Hungary- Land of Dental Tourism
- London- Playground for the New Russian Elite
- Poland, Family, and Catholic Culture
- Once Golden, Again Golden Poland
- British people of Brazilian descent
- Go Green and Beat the Energy Crunch
- History of Brazilian Samba
- Polish Employee Rights - Anna's Case Study
- Employee Rights -Holidays and Wages
- Cosmetic Surgery in Eastern Europe
- Porkolt- Hungarian Stew
- Review of Polish Festival In London
- Writing Within the Periphery of Culture;
- Different Cheeses from Romania, Poland, Hungary
- Blend in Like a Local in Peru
- Argentinian Bocaditos -finger sandwiches
- Feijoada, Brazilian National Dish
- Basic Polish for Beginners - Part 3
- Fashion Saving Tips- Affordable Panache
- Scottish Traditional Dish - Haggis
- Bliny -Russian Pancakes
- Bigos -Polish Hunter's Stew
- Interview with Writer of Life of a Recluse
- Polish Words for English Speakers - Part 2
- The Rainbow Poem
- Polish Words for English Speakers - Part 1


Latin Chat Room - Cheap Calls to Brazil - Florida Holidays -
Carribean Holidays-