How did the current credit crisis happen and why does it affect international financial food markets so severelyThe current credit crisis began when the owe market started experiencing high levels of default . Many of the home-owners could not be constitute their mortgages on time , which pointtually affected those in the business . This project occurred because mortgage companies were lenient in their credit programs . This instrument that nonetheless people with bad credit history were allowed to obtain loans or buy propertiesMortgages be represented as certificates . These certificates are as well traded and sold in the market in what is called as CDO or collateralized debt obligation . CDOs are very complex debt vehicles that are unregulated . So , when homeowners began to default on payments investment companie s dealing in these high-risk instruments began to lose m integrityy . One by one , mortgage-investment firms began to foldSince the companies in the financial markets are closely conjugated , that means some of them could give birth held stocks in those mortgage companies Like AIG , it invested heavily on mortgage vehicles that it found its respite sheet on the red . It had to shed assets in to pass floating . this instant , those companies who invested in AIG will also be losing their money because AIG stocks have suffered . This trend is similar to other companies , two local and transnational .
Even if they have no pose inves tment on mortgages but the companies where t! hey have invested on have been affected by the credit crunch , then they would of course feel the impact... not the Youre looking for? Get a bespoke essay (only for $12.99 )If you necessitate to get a full essay, consecrate it on our website:
BestEssayCheap.comIf you want to get a full essay, visit our page: wri te my paper
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.