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The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

28 Sep 2008

Credit Crunch latest news

The two big stories of the day span the Atlantic as both are about Government intervention in the financial markets. In the UK, the Government has agreed to nationalise Bradford & Bingley, one of the many former building societies who re-invented themselves as a bank. This adds to the Governments growing portfolio of financial houses along with Northern Rock. Financial commentators believe that the three institutions most exposed to the credit crunch have now been secured ie:
  • Northen Rock
  • HBOS
  • Bradford and Bingley
The debate still rages whether financial instituions who have made critical errors of judgement should be saved or whether they should take the consequences of their actions by going bust like in any other industry.

The same attitude has been adopted in the 'States with the belief that throwing $700bn at the problem will magically restore consumer and market confidence - for what it's worth, I think this is the biggest gamble the world has ever seen, and I don't like the odds one bit.
In actual fact neither of these deals (the US rescue package and the Bradford & Bingley) has been totally worked out, but apart from the niceties, the deals will certainly go ahead. Good to see at least the financial fat cats will have their outrageous bonuses capped, but I would like to see some of these people falling on their sword and admitting their own incompetance for allowing this crisis to come about. In fact this should be part of the deal - anyone with executive powers in any financial house that benefits from the public purse should be forcibly removed from their leather-clad offices before a cent is released.

Related posts:
Government Intervention
CBI predicts 'shallow' recession
25% house price drop expected
Fanny&Freddie are nationalised

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