Summary
Innumerable times the flag had been waved to draw attention to structural problems in consumption as the main driver of the US economy and how it had increased to become more a function of indebtedness - fuelled by high house prices - than of disposable income. The list is long and stretches from blue-blood Wall Street institutions like Bear Stearns to large retailers such as Freddie Mac and Fannie Mae, the two huge US mortgage finance companies, and AIG, the world's largest insurer.
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Extract
Panic, Blame and Crash Avoidance
tHE CRISIS CAME AS NO SURPRISE. AS EARLY AS 2004 it became clear where the imbalances were and where, soon or later, adjustments needed to come to narrow the gap between the large current account deficits of some developed economies,...
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