OK so I'm in high school but I really have no knowledge of economics at all [...] . I'd like to understand what is going on with the U.S. economy right now. I know we owe billions or trillions of dollars to China, but that's about it. Anybody want to inform me as to why what is happening right now is happening?
yeah I think bush really screwed up and the war is costing way too much. Now i heard on t.v the other day that they want to suspend the campaigns did anyoneelse hear about this. And Canada is also starting to have mortgage issues wit houses and such.. Its the same way the U.S started their plunge i believe.
suspending the campaigns would be scary. that would be very indicative that all the conspiracy theories claiming Bush (or Cheney) wants to take control of the U.S. are true.....
high housing cost/ interest rates is a sign of inflation for the most part Canada's eco is very very good right now except for Ont but thats only 1 province
Check this out: http://en.wikipedia.org/wiki/Subprime_mortgage_crisis In layman's terms: As you recall, the real estate (housing) market was absolutely booming 5-10 years back. House prices completely skyrocketed and people were buying/selling like crazy. Lots of money flow means a strong economy. However, lenders were giving out risky loans, and eventually the debt reached a sort of a tipping point. That's when housing mortgage giants Fannie Mae and Freddie Mac just collapsed. Then all sorts of bad things happened including the failure of many banks.
Ok you guys need to stop blaming bush for everything... I dont like him, but you cannot attribute everything to his lack of intelligence. In addition, markets go thru cycles of economic growth and crash.. Its the natural cycle. After we pull out of this low point, we will reach great highs. It is likely that if the president elected can handle this how FDR did with the great depression, we will see a huge uplift as we did around the time of WW2. In specific regards to the economy, im glad its ass crashed, I put my money into precious metals which happen to increase during times of market dips. Silver rising from 10.6$ => nearly 14$ gave me enough money to buy a nicer car when my current car's lease runs up. Soooo every1 else can be sad, but im happy
After reading (some of) that article it looks to me like the irresponsibility of the American banks is what led to this whole mess. If they hadn't given out so many large loans to people who couldn't afford to pay them off in a reasonable amount of time, we wouldn't be in this situation right now. The part where they passed the mortgages on to third party investors also sounds like it was a bad idea from the start. What good would come from that? These are my conclusions, they could be completely wrong .
I just find it funnny that he was saying everything was ok just a couple of months ago. I dont blame him for it but i sure find it funny that he waits for it the problem to get serious...... ie just like 9/11
I agree with Adam, its definitely not completely Bush's fault. Sure, we lose billions of dollars fighting the war, but I think we could have afforded that (w/o too significant of economic backlash) if it wasn't for the mortgage crisis. The banks have to take responsibility for their own bankruptcies as well as the American people who should not have taken up such loans.
No its not completely bush's fault and there probably is no conspiracy. I came to realize its just history repeating itself we all worked through a depression at one point so i guess north America can get through it again.
Yes, its part of an economic cycle, but its particularly bad this time because a lot of things just coincided. War + gas prices + housing market + inflation = baddd Of course, some of those things are linked together and one affects the other.
Okay, since im Australian, i know very little about the internal opinions of the country. So I guess I can provide a.. largely unbiased summary of the whole debarcle. In ENGLISH. Okay, the banks awhile back started giving out loans to people who obviously couldnt pay it back. They did this because there was a chance to charge them higher interest rates, because it was so risky and thus gain more profit. And the thing is, banks invest in each other, they invest in the community and businesses. When everyone realised there was no way those people were going to pay it back, the bank tried recalling the loans. So now the bank is like 'OSH*T, damage control mode' so they pretty much became real hardasses on anyone who couldnt pay. And so they had all these people they lent out money too, and couldnt pay back. This hurt their profits. And the share price of a company is dependant on how strong it SEEMS. So obviously, that plummetted. Pretty much, chain effect across the whole WORLD. abit of extra-credit info here. Oh, and also since China has kept its currency low on purpose, to make everyone buy its imports. It has a HUGE storage of american dollars. And now your dollar is dropping. And China wants to 'float' its currency, so its no longer controlled but free. It will float the economy with cheap US dollars, and its own Yuan will sky rocket. It will be tough for america..
its all the bush government trying to solve problems by loaning more money. people were buying houses they couldnt afford since they did not need any down payment on it. now couple years later with gas prices rising and everything costing more, these people cannot afford anything since most are getting paid minimum wage and there houses get forclosed. when all these houses get forclosed and nobody can buy them economy falls right to the ground. canada's governenment isnt bad but anything that happens to the U.S will also affect canada
Canada is becoming affected as we are talking. Small companies and some families will have to work hard if they want to ''survive'' to this crisis. And for the rich people, this crisis is nothing more than a good thing, I mean, for someone who wants to buy a new house.
Mainly just banks giving out risky loans to people who couldn't pay it back. This led to the loss of billions of dollars for the banks and several bank failures.
I think it's funny to here ads for mortgage companies still offering people incredible loans. How stupid are we (Americans)? It truly is unbelievable.
Its good that banks are circulating money around, keeps the economy nice and healthy. The main problem right now is that banks are much stricter on their lending policies meaning businesses can't get the money they need to operate. Lending only becomes bad when large numebrs of loans aren't paid back.
Economy sucks in Europe also, because world economy is so connected now. We need to withdraw troops from Iraq and stop wasting money there. Also, illegal immigration should be stopped. You know how much many we spend on their medicaid and other stuff? I am amazed sometimes. In my hospital we have many illegal immigrants, who come to deliver their babies. They dont speak English, but guess what? We provide them medicaid and give social security to their babies. How fare is that? It costs us also tons of money!