How did the current credit crisis happen and why does it affect internationalistic financial food markets so severelyThe current credit crisis began when the owe market started experiencing high levels of default . Many of the home-owners could not give way their owes on time , which pointtually affected those in the business . This problem occurred because mortgage companies were lenient in their credit programs . This instrument that in time people with bad credit history were allowed to obtain loans or buy propertiesMortgages are represented as certificates . These certificates are as well traded and sold in the market in what is called as CDO or collateralized debt obligation . CDOs are very complex debt vehicles that are unregulated . So , when homeowners began to default on payments investment companies relat ions in these high-risk instruments began to lose m integrityy . One by one , mortgage-investment firms began to foldSince the companies in the financial markets are closely associate , that means some of them could give birth held stocks in those mortgage companies Like AIG , it invested heavily on mortgage vehicles that it found its remainder sheet on the red . It had to shed assets in to save floating . this instant , those companies who invested in AIG will also be losing their money because AIG stocks put one across suffered . This trend is similar to other companies , twain local and transnational .
Even if they have no ori ent investment on mortgages but the companie! s where they have invested on have been affected by the credit crunch , then they would course feel the impact... not the Youre looking for? Get a use essay (only for $12.99 )If you necessitate to get a full essay, lay out it on our website:
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