
Originally Posted by
miyay
based on what i heard and read: its coz the americans have more debts than they could pay for in a lifetime. one of those debts are subprime mortgages. then the wise guys in the financial district sold the aggregate subprime mortgages bad assets to investors disguising them as A+ investments. some mideast sheiks invested in those and when the investments stinked as garbage does, sheiks have to pull out. to recover their loss, they increased the oil prices in 2008. the financial investors like lehman, aig, citigroup had their investments downgraded and lehman have to fold. credit froze. stock markets panicked, shares went down, investors lose money. confidence went down. demand for commodities are forecasted to go down coz who wants to spend on these troubled times? if demand is projected to go down, manufacturing slows and people are retrenched. when people are retrenched, less purchasing power, demand slows, more retrenchments. vicious cycle. gloomy 2009...