Credit Crunch

So the Credit Crunch is affecting banks, business and everything in between. So how will this affect you? Well, Christmas is coming (yes, only about 2 1/2 months) but the crunch has caused well over 20,000 people to be fired when Lloyds and HBOS merged. And this is just the bare minimum. Just a couple of days ago 2 more companies fell, both doing baby products. Even more jobs were lost. This loss of jobs will mean that some Christmas shopping will be cut short. Well, that makes the crunch not sound very fun when your Christmas present pile gets cut short.

Secondly you will probably been told to cycle to places or walk to the shop. Hey it’s good exercise and it also saves money. People aren’t changing habits for the environment. People are changing for money. Also people are turning off the lights and changing entertainment methods (Books for TV) just for money.

So the crunch is terrible for money, but at least its doing some good for the environment. But bad outweighs good, and bail outs are happening everywhere. I might be young but i have a savings account with Bradford and Bingley, which recently lost its hats. And that is just one. The list just keeps growing. Chances are that by the time I get home tonight another bank or savings account will of bit the dust.

So how did it start. Probably well before you were born, as it has been happening for quite a while. One thing is how the American banks had been giving out money without checking if the person had a steady income. And not everyone has. All this means that people aren’t repaying what they owe, and the banks suffer. The other main thing is how we in Britain took advantage of the house price rise. As there was a 3 year deal allowing you to pay less of your mortgage for the 1st 3 years, but you have to keep that mortgage for 6 years or pay a penalty. But since the house prices were going up people would sell there house at the end of the 3rd year. the price rise was so high that they could pay the penalty and still make a profit. This caused the stock price to fall.

THE NEXT DAY

Some good news has happened! Rather than the total collapse expected a huge amount of bail outs have helped the markets back to there feet! There have been no major collapses and things are looking up!