The Rude Facts of Sub Prime Crisis
Banks and importantly, the Treasury has realized the grave situation. So much so that the Bush government announced a $700 Million bailout package deal. But consider the root cause of the sub prime crisis, and you would find that the problems have been far underlying.
- How can banks invest in risky assets? ' The problem really is with banks investing in risky assets. We can still blame couple of other reasons for the fallout, but you would find that responsible entities like banks had a major role to play in this.
- ARM Products ' If a set of products had to be blamed for the sub prime defaults, it has to be ARM Products. These products used to be the blue-eyed products for customers, and shockingly, even for banks. Did you believe that as of now, these products still find favor amongst people, and shockingly, banks have not learnt their lessons?
- We, the people ' This is a mistake most of us made. When we started receiving foreclosure notices, we feared, and tried to escape the problem. We were okay with our homes getting confiscated, and our credit being tarnished, but we wished to run away from the whole deal, and yet wait for a better tomorrow.
And at the end of the day, we stand up with conviction and say that the banks and the federal authorities have to be blamed. Yes, they have their share of blame, but isn't it our moral responsibility to honor our financial commitments. By doing things like speaking to the financial institutions, we could have prevented a part of the damage, if not entirely.
It is not too late even now. If we do not wish that USA's economy plunges deeper, let us join hands and promise that we will, in all circumstances, honor our financial commitments.
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