The Hill News

The sub-prime mortgage crisis, which occurred when people could no longer borrow and home prices stopped increasing, caused a disaster that brought the world financial system to its knees. What had been a wonderful carriage for the neglected sector of the American housing market turned into a pumpkin that left the whole American economy stranded in a debt it can barely hope to repay.

Few people, including most politicians and business leaders, predicted that the trouble in the sub-prime market would spill over into the global economy. But that’s just what happened. In fact, it brought the world financial system to its knees. When the music stopped, it stopped so abruptly that people barely knew what hit them. One day they were living a life of outsize largesse in relation to their income and wealth. The very next, many had lost their jobs and were facing immediate foreclosure.

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