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Repost: originally posted 17/09/2008.
What is actually going on in the world? I first realised there was something going on from my old work place which is a major credit card company in the UK and USA, around March 2007. Reason why? Well, they did a review of many accounts and raised interest rates and reduced peoples credit limits, basically putting the first squeeze on people’s pockets.
This was then followed by the news in every newspaper in the world about banks borrowing emergency money from the Bank of England here in the UK and the Federal Reserve in the USA. What was going on? Surely they must have been able to forecast that it could have got as bad as it has managed to get today?
The credit crunch is upon us.
Some HUGE globally recognised companies have been wiped off the stock market and absorbed by governments and other banks across the world.
Recession, credit crunch, housing crisis, foreclosure, takeovers, bankruptcy, sub-prime – these words are all too familiar now when we read the papers.
Who is responsible? Governments? Banks? Us, as the borrowers? Well something needs to happen pretty fast. This week alone there has been some $150bn wiped off the value of stocks and shares in banking worldwide. Taking American giant Lehman Brothers and nearly claiming UK bank Halifax Bank of Scotland (HBOS). Both HBOS in the UK and AIG in the USA have been rescued by central governments and HBOS was in a huge takeover bid from Lloyds TSB at the expense of 40,000 jobs!
There is a huge list of worldwide companies that have been taken in by the worldwide credit crunch. This is now slowly presenting itself in the rest of the business world, affecting everything from oil prices to travel and even hitting food prices and inflation in some places.
It is definitely not a good time for the financial markets. Who is looking after your money?
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