What is us credit crisis?

Question

What is us credit crisis?

Answer 1

Severe tighting of lending requirements verses previous years.   Reluctance of banks to add additional loans to balance sheets as they will reduce working capital requiring the bank to raise capital.  

Banks have capital requirements set by the Federal Reserve.  I do not know what the current rate is, but it is a ratin like 1:10.  One dollar on depoist for every 10 dollars loaned out.

Answer 2

youtube "zeitgeist the movie"

i couldn't really get down with the first segment, but the rest is pretty wild.  

Answer 3

That's a quite complex question to answer but I'll try to put it in very simple terms...

1.- Banks gave credits based on the increasing house prices so the warranty of the bad credits was good enough to give credits to not-very-good-credit subjects...

2.- They started giving a LOT of credits to a LOT of people who won't necessarily was able to pay them back

3.- Banks sold the credit portfolios to other banks and they sold them to other banks so at the end the bad credits were everywhere...

4.- At some point people stop paying their mortgages (due to rising costs of living/the rise on mortgages interests/devaluation of property prices, job cuts, etc)  and the house prices went down so the bank is in a situation where it's not getting their money back

And that's it... basically...

Answer 4

The US and international banks wont lend to each other because red-necks bought trailer homes when they didnt have jobs. Now we all gotta suffer thanks to the americans' lack of common sense!