The Bush administration is pushing the house of congress to passed the resolution filed for the rectification of the financial crisis brought about by the declaration of bankruptcy of more than 10 major banks and financial institution because of what we called "credit crunch" in which decline of payment from credit card holders and repossession of houses and realties under mortgages are rising exponentially.
Some of these mortgage industry player, namely Freddie Mac and Fannie Mae are taken by the government to prevent a total collapse, and needed a supporting capital of nearly 30 billion dollars to survive,
Merryl Lynch a financial service provider was taken by Bank of America for just a handful prize of its stock market value.
Lehman Brothers filed for bankruptcy due to the staggering debt of more than 600 billion dollars.
the Federal reserve rescue also the AIG insurance company by taking 80% of its stock and pouring in more than 80 billion dollars.
This crushing economic development was prompted by the increase in the interest rate policy impose by the government in the financial sector which trigger a increase in the sky rocket amount of monthly amortization in the credit card payment and in the mortgage bill in the real state business, making people to have a double amount of their present indebtedness which makes them to pay hardly enough and later on unable to pay at all. This scenario of course makes investors and financial institution to stagger on their business due to uncollected debt amounting hundred billions of dollars, and loose great amount of investment and possible revenues due to falling prices of the real state business.
And all these have put millions of Americans to loose their houses and a limited credit limit to their credit cards or be decline which is the worse.
The development of these crushing economic scenarios has spark a global awareness of the possible impact in the economy of the whole world and its effect is now felt especially in Asia, and most of Europe. Japan and Britain being one of the richest country is now on the edge of possible economic recession just like America, unlike America who are so much delayed in responding to their economic issue , Britain and Japan had already poured out billions of their currency to augment the disaster which are the effect of the financial crisis.
I may include what my friend in the u.k have wrote and post in one of my forum, and these are what he says about this issue…
“I live in the UK and just like the US there has been media frenzy about the credit crunch. As I type this now America's congress are trying to build a rescue package.
In the UK there are already serious problems that are taking effect right now.
This is not related to the credit crunch but it gives you a general idea of the economic stranglehold.
Gas prices have risen buy 33% this past two months
Electricity has risen by 14% this past two months
Personal insolvency (people declaring bankruptcy) has risen this year by 37%
Now to the credit crunch..
Our prime minister has allowed £100 billion fund to bail out the banks at the same time scrapping a £100 billion scheme to support the elderly with fuel costs.
Already repossessions of homes has doubled, and it is estimated up to 450,000 families will lose their homes this year
this is the real cost of the credit crunch and we're only 2weeks into it.
My question is: - America, what is going to happen to you guys if Britain is struggling already after implementing a bail out strategy?”
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