Plugging one hole with another is never a good idea, and the current credit crunch is going to cost the world economy the tidy sum of at least 1 trillion (that's 1 million million) dollars. I am not an economist, and do not fully understand everything that lies behind it all. But the effects are already becoming clear, with a reported reduction in house prices in parts of England of up to 2.5%. Here in Scotland, and certainly in remote areas such as the Western Isles, prices are still going up. But for how long. Back in the 1980s, we had a spectre roaming the country that answered to the name "negative equity". Having a mortgage for more than your house will eventually yield upon sale.
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we have that concept in Orange County where I live; it is scary here and other parts of Southern California with all the foreclosures and the ridiculous loans people took a gamble on and lost when housing prices started going down
ReplyDeletebett
It is so interesting to me to hear this is happening elsewhere. I thought it was just in the US. It is frightening to think how all of the instability is going to end.
ReplyDeleteLisa
things are pretty bad in the U.S. overall, even for FT workers. Very sad situations.
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