What is sub-prime crisis in US?

Question

how the crisis can effect the world economy?

Answer 1

Well, comrade, the capalist system takes money produced by workers but does not give it to them.,  This is capital.  Now, there is a big demand among the capitalist classes, rich, institutional investors, etc. Eventually, lots of these loans came to be bundled together and sold on  debt markets.  They are termed, derivatives, and if you google derivatives, you will find they are called 'asset backed..this and that'. However, although banks invested billions in these, it came to pass hat they lose value w people stopped payng back the original loan.  Their value crashed, people stopped lending money for mortgages, and the housing market bean to tumble as people could not get money to buy properties.

The bad guys:  credit brers who over sold loans, the banks who bought them without a proper credit analysis, and the regulatory authorities who allowed it to reach the point where you did not know who, at the end of the day, was going to pay back the money which was borrowed.

The good guys:  us commies, who just work, don't indulge in fancy capitalist investment and just wait for the final crisis of capitalism as we drink our beer.

Answer 2

Too much money borrowed against inflated asset values that cannot be repaid.

Answer 3

it did not start here

it is bad in other country's

the economy here remains vibrant

however its going to get worse here and world wide

we must get back to basics

live within our means

Answer 4

Mortgages that turn out to be sub-prime and then losses their worth when borrowers cannot pay their repayments and default their loans. The US sub prime mortgage cause banks in the US and its world trading countries to suffer huge financial losses. Banks doing their write downs began to have liquidity problems and the credit crunch also leads the world economy into a recession.