I'm doing a project about effects of the credit crunch

Question

has anyone got any suggestions on what kind of things i can include that will be interesting? also how would you give a brief definition of the credit crunch, when did it start, and does anyone know where i can get some useful information on it?

Answer 1

One of the main things you should cover with reference to the credit crunch would be the sub-prime mortgage situation.  To be honest, i'm not a financial expert, but the problem stems from banks providing mortgages to people that could never afford to pay the loans back.  

Although the above originally occured in the US, it has moved across to the UK too now.  One of the obvious signs of the problems is the current state of the UK housing market; house prices are plumeting.  As people become unable to pay their mortgage, they attempt to sell their house before they lose it to the banks.  Unfortunately, when a number of people happen to be in a similar situation, they will invariably take the same course of action.  This means that a significant volume of houses have been put up for sale, with only a limited number of people buying at present.  House prices drop to encourage sales, and this appears to be the point at which problems occur.  

This was definately one of the reasons for the current credit crunch.