August 10, 2007

Global stock markets have suffered heavy losses in recent days

Global stock markets have suffered heavy losses in recent days, affecting businesses and individual investors alike. Billions have been wiped off shares owned by individuals and institutions such as pension funds. Central banks across the world have injected large amounts into the markets to try and stabilize the situation.
Are we surprised? We live in a debt ridden society in which people borrow much more than they can afford to pay back and the lenders just loan them even more at ridiculous interest rates. If you lend to people who can't afford to repay or have previously not repaid, at stupid interest rates that clearly no-one can realistically afford, how is anyone surprised they don't pay?

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