Financial literacy is particularly low among those who have taken out sub prime mortgages. The intermediaries exploited this financial illiteracy. Securitization The second ingredient is the pace of financial innovation during the last ten years and the securitization that it produced. Today it is easy to "liquefy" a portfolio of illiquid credits (typically a combination of bank loans or mortgages) so they can be packaged into investor portfolios...
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Today it is easy to "liquefy" a portfolio of illiquid credits (typically a combination of bank loans or mortgages) so they can be packaged into investor portfolios. Any bank with distressed loans has used this technique to securitize its own credits. Low interest rates The third factor was the monetary policy of low interest rates – introduced in response to the post-9/11 recession and the collapse of the new economy “bubble” – injected an enormous amount of liquidity into the global monetary system...
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China Moves To Tighten The Money Supply The government worried that if the economy keeps growing as quickly as it is going then it may cause a crash. According to the article, china has a very high savings rate, and many people are looking in ways of using their money to work for them...	2 / 372
Growth of Chinese Economy It's growth should be seen as an opportunity to strengthen and uphold the world's economy. With the aid of Asian countries the commerce of the world may finally balance out and help sustain American consumerism...	1 / 263
East Asian Crisis In The Econo Japan's economy is burdened by $300 billion in bad bank loans and a recession. Chinese banks may carry bad banks loans of up to $1 trillion. The banks lend 66% of China's investment capital to state-run industries that only produce 12% of China's industrial output (Manning 2)...	3 / 687
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