Stormy weather
Source:Editor's Blog
Like the Atlantic weather that has dampened the British Isles this month, an ill wind brought in changeable financial conditions from America that blew all round the world. It also gave currency to a silly euphemism – ‘sub prime’ – for the risky practice of lending money to people who really can’t be expected to pay it back, on the assumption that their collateral will rise.
It has been having the opposite effect. House values in America, and to a lesser extent in the UK and elsewhere, have been in real danger of crashing, and that in its turn generated fears of a global recession. This appears to have been averted for the time being by the Fed’s cash injections and rate cuts and similar measures elsewhere. Despite general economic growth, this problem won’t go away though, and I expect to see aftershocks over the autumn. Meanwhile, it’s still raining here!
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