Let's Know About : THE ECONOMIC CRISIS
you know , i don’t give a damn about stuff related to business , finance or economy ,because i find it simply boring 
when i watch the financial news on my TV set and see a whole lot of people in wall street screaming and fighting like if they were struggling for their life , i simply change the channel 
i mean , that what i used to do before , till recently heard about the economic crisis 
and due to the fact that a lot of my blog visitor are directly affected with this crisis , i decided to write about it and try to explain how it happened :
so from what i understood , the economic crisis is a logical consequence of the housing bubble , a bubble is something that can happen with any market !!!
but the problem is that the main reason for this bubble is the subprime mortgage bubble ,((subprime what ???)Â i explain
because after the 9/11 , In order to get the Economy going again , the FED decided to reduce the interest rates , to make cheap money available, so people can buy cars and houses again like prior to that period .
but because there were no regulations ,Banks could sell on mortgages in large quantities . and the problem is that the banks could issue a mortgage and sell it without checking whether the debtor can afford to buy it !!!
So lot of mortgages were sold to people who couldn’t afford to buy them . sometimes the debtors didn’t even know about the mortgage they obtained in order to sell more mortgages.
but the main reason of this crisis can be summed into :
People couldn’t buy mortgages anymore. Those who had bought the mortgage for millions of dollars found that were worth nothing. and so once they needed money pulled the mortgage from the stock market, and so everyone lost there.
therefore Banks did not have the possibility to sell more mortgages and themselves had bought bundles that are worth nothing now . So they lost too.
and as a consequence they couldn’t lend money anymore and so people had no other choice than to stop buying.
it’s really a vicious circle, and the whole world economy is now affected by what happened in the US , but will Obama’s team find a solution to that ? and will the American economy become as strong as it used to be, before 9/11 ???
only time Will Be able to answer This question
