Millions of British households face soaring mortgage rates and tumbling house prices after the global financial crisis triggered the near-collapse of one of the world's biggest banks.
Experts warned that there is now an increased likelihood of a recession and a painful housing slump, after Bear Stearns - America's fifth biggest bank - was forced to turn for emergency cash to the US Federal Reserve.
This has been on the cards for a while - it's ironically how banks make money and we are in perpetual debt - get it yet...
Here's some doublespeak from Economist.
Ironically, the intervention came a day after Standard & Poor’s, a rating agency, said that the worst of banks’ write-downs related to subprime mortgages—Bear’s biggest weakness—may soon be over. But if the extraordinary events of the past day demonstrate anything, it is that investment banks are black boxes, and what really matters is not what sits in them but what their counterparties fear may be lurking inside. If others find themselves in Bear’s awful predicament, there will be little the Fed can do to forestall a rout.
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