The Credit Crunch fallout

Panel 1
The Credit Crunch fallout
What it means for us
So what happened
Bear Stearns flags problems

Panel 2
Debt spiral started
Revaluations, recapitalizations
Falling share prices, collapses
NZ rates up 1% over late 2007


Panel 3
Then Bear Stearns collapsed
Fed bails out Fannie, Freddie
Fed lets Lehman fail
Fed rescues AIG today

Panel 4
So where to from here
The credit crunch is not over
Foreign interest rates higher
Economic growth slower

Panel 5
Mortgage rates back at 8.8%
But would have fallen more
Net cost around 70 bps
$30/wk on $200k mortgage

Panel 6
RBNZ to cut OCR 50bps in Oct
But mortgages may be stuck
Net effects is rates 1% higher
Than would have been the case
About $40 a week

Panel 7
But what about the economy
Will this be a depression? No
Extended recession instead
Banks more robust
Trading systems freer
More flexible exchange rates




Panel 8
Falling asset prices
House prices down further
Recession lasting into 2009

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[1enzeder]

Gareth Morgan has also come up with 30% for drop in house prices.

[cybersphere]

right, inflation is high and factories are closing.

[georgewtwat]

Bernard, at one point HBOS was down 56%! ( my boss made 4 million bucks in 5 mins going short that trade!!)

[bellpawt]

pretty hard to do that after seeing tania`s naughty love tips on your fav`s

[mikeLeo2]

keep your hands still, numb nuts.

[bellpawt]

china could crack next ,,,it`s not all milk`n honey there ...

[loganandjoseph]

What about Northern Rock and Indy Mac next to go is WaMu. as for the band aid on Freddie, Fannie and AIG they have only bought time, their debts are eating them alive.

Bernard as for your words "sophisticated banking system" do you really think this mess is sophisticated, come on tell us who paid you off !