You’ve no doubt heard about the American sub-prime mortgage crisis, its impact on the American and global economies, and the dreary outlook for 2008. I’m certainly not the sharpest tack on the cork board when it comes to global finance, so I didn’t have a particularly cogent picture of the crisis.
“People went to the bank and got a loan on the increase in the price of their home. They went out and spent all that money,” he explains. “Price of the home went up again, they went back to the bank and got another loan. They went out again and spent that money on cars and jewellery and furniture – whatever they wanted.”
With the help of the banks, Mr Carrigan says, people in Stockton “spent their house”.
It’s not the most fascinating subject in the world, but it’s having an impact on markets in every corner of the globe.