Ann Pettifor

Is the lending bubble bursting?

Are the rumbles that started in Florida and the West Coast housing market last year, and that culminated in HSBC’s recent announcement of losses in its sub-prime lending business, turning into the earthquake many of us have long predicted?…Judging from wild swings in both stock and currency markets yesterday and today, reality seems finally to be dawning on those that have so casually dismissed the build-up of debts – safe and risky; short and long-term…US investment numbers plummeted in January…but still commentators dismiss the stark reality…trusting that the US consumer’s apparently endless appetite for borrowing and going to lead to even more borrowing and spending i.e. an even bigger lending and consumption bubble to burst… this way finance sector players are like turkeys voting for Christmas……………

In August, 2006 I warned in my Guardian post
that the housing slump of the suburbs of Miami and Los Angeles posed a bigger threat to western economies, than the carnage then taking place in the suburbs of Beirut….the blog attracted some pretty offensive comments from City dealers….hope they’re keeping their cool today.


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