I found this bit of analysis very interesting.
But neither Greece nor the Northern Rock sub-prime borrowers were simply victims. They weren’t just pushed into borrowing. They were also pulled.
Big, private financial institutions were facing bankruptcy, and needed to lend risky loans to generate higher returns and avoid insolvency.
By 2001, when Greece joined the euro, the globalised financial system was already facing the threat of insolvency and systemic collapse. After a series of financial crises in Asia, and the Russian default of 1998, the dotcom asset bubble exploded in 2001, precipitating a near-death experience for both Wall Street and the City of London.
Bankers perched precariously on an unstable global Ponzi scheme, and needed to earn higher returns fast to balance losses elsewhere – and avoid systemic failure.
Sub-prime borrowers were quick, risky, but easy targets that paid higher rates of interest, generating higher returns.
I hadn’t seen a link between the dot-com bubble and the housing bubble before as essentially a necessary continuation of the same ponzi scam….
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