Independent UK: We are witnessing the terrifying second stage of the credit crunch

[marmar]

Ben Chu: We are witnessing the terrifying second stage of the credit crunch
Analysis

Saturday, 6 August 2011


It is all frighteningly familiar.

In August 2007 a French bank, BNP Paribas, rocked the financial world when it announced it was suspending payments to investors in three of its hedge funds. That event marked the beginning of a chain of events that saw the global financial system reach the brink of meltdown. A credit crunch was followed by an international banking crisis and, ultimately, a global recession.

Now, four summers on, a financial market panic has provoked fears of another credit crunch and, perhaps, another slump. So how did we come to this? The answer is that the underlying disease that almost destroyed the global economy in 2008 was never cured, merely put into remission. And, like cancer, it has now returned. The cancer has a name: bad debt.

In the decade after the turn of the millennium, parts of the Western world experienced a credit boom that was unprecedented in scale. Banks relaxed their lending standards and sprayed money at consumers, companies and nation states alike. In 2007 it finally dawned on the global financial industry that there was no way that many of those who owed money could afford to pay it back. ............(more)

The complete piece is at: http://www.independent.co.uk/opinion/commentators/ben-chu-we-are-witnessing-the-terrifying-second-stage-of-the-credit-crunch-2332658.html

[RUMMYisFROSTED]

1. "Terrifying."

Be sure to catch that bit.

Be sure to be suitably frightened.

[formercia]

2. Those who had resources to keep them afloat in 2007

are all but tapped-out Today. It will be all over but the screaming.

[Bonhomme Richard]

6. My own company had resources and is near tapped out. n/t

[formercia]

7. Sorry to hear that.

Welcome to the American Gulag. :hi:

[dkf]

3. I think you and i are on the same page.

Sigh.

[Tierra_y_Libertad]

4. "There will be intense public hostility to another bank bailout." - With damned good reason.

"Pissing in the Wind", "Robbing the poor to give to the rich", "Burning the village to save it", come to mind.

[dixiegrrrrl]

5. Wonder how many kicks down the road that ole "steal from the poor" can has left in it?

[socialist_n_TN]

8. A lot of that credit, not all or most of it, but a lot,

belongs to the working class too. Which gives us one more weapon in the class struggle. No longer do we ONLY have our labor to withhold. We also have those payments to the banks.