cause

No one knows or wishes to talk clearly about the genuine cause of the…?

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Question by Kurt Orlando Patterson: Nobody knows or wishes to speak clearly about the real lead to of the…?
No one knows or wishes to speak clearly about the real lead to of the of the international economic recession. Is any person out there who truly knows?
Deleveraging is a tactic used to decrease danger during an impending recession which may or may possibly not exacerbate the problem. Anyone have any real answers.

Very best answer:

Answer by TheCap’n
Most of it has to do with the housing industry. A lot of people have been taking larger loans than they had been in a position to spend. Simply because of this, banks lost funds, and many homes had been foreclosed. Now, due to the world’s greatest banks suffering, the loan’s interest prices have gone up, although the deposited money’s interest goes down. Of course this is not the entire cause for why the economy is poor, but this has a huge portion in it.

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What is the cause of our financial problems?

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Question by American citizen and taxpayer: What is the lead to of our financial problems?
And what (if something) should the government do to combat the problems?
One more question:

http://answers.yahoo.com/question/index_ylt=AvVoVBmBZij40gcBoIOXKnfsy6IX_ylv=3?qid=20090302061831AA40iOq

Ideal answer:

Answer by OGCJM
Element of it is the illegal immigration problem. There are millions more than here mooching off of U.S. tax paying citizens it is horrible. They are bleeding California dry proper along with hospitals, public schools and the tax payers wallets! They should be deported when found, our borders secured (which they ought to have been ever since 9/11), enforce our immigration laws, jail/fine anyone that employ illegals, take away every freebie they get, and so forth.

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what is the cause of lehman brother’s financial trouble?

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Question by Lauren L: what is the cause of lehman brother’s financial trouble?
what decisions did Lehman Brothers, Bear Stearn’s and Merrill Lynch make that led them to financial trouble?

Best answer:

Answer by HJ Bear
Somewhat applicable to the industry as a whole
1) thin capital base to start
2) investments in alt-a mortgage loans and commercial real estate soured. in better times, they made good money buying assets and reselling for a profit; but the music stopped. they were also “hung” with a lot of bad corporate bridge loans.
3) financed themselves very aggressively with repo loans from other financial institutions which could get called quickly
4) the investment banks attempted to hedge some of their sub-prime and securitization risk with third parties (such as MBIA, SCA) who lost their AAA credit rating due to sub-prime crisis
5) underwriting profits came to a halt

More specific to Lehman
6) they did not raise capital (dilutive to current shareholders) and tried to ride out storm. Even when they were close to the abyss, they were high-handed when the Korean Development Bank was considering an investment
7) they lost credibility because they were seen hiding the ball
8) short sellers may have exacerbated the perceptual issues. the ban on certain types of short selling had been lifted a week before they blew up.
9)The recent conservatorship of FNMA and Freddie may have destabilized access to funding. The form of rescue by the Treasury inadvertently chilled the potential for other financial institutions to tap the equity markets
10) The US Treasury Dept and Fed Reserve, stung by criticism about their handling of Bear Stearns, took a tough line on aiding Lehman. Their desire to administer tough love to the capital markets backfired when none of the rescuers stepped up to the plate.

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