CNBC has done up a very nice website showing in chronological order the story behind America’s economic collapse, highlighting key players and events.
It explains clearly in layman’s language the circumstances leading to the subprime crisis, including videos of some breaking news and interviews that occurred.
There’s even a documentary produced called “House of Cards” that gives you different views of the event from the perspectives of house owners, lenders, bankers and government officials. I have embedded the documentary below.
As I re-read the story, I can’t help but wonder whether the recent exuberance in our property market will mirror some of the events in the US later on.
Low interests rate have made property suddenly appear to be more affordable, but as most of the housing loans nowadays are tied to SIBOR, property owners might be in for a shock when SIBOR starts to go up.
Rising property prices ultimately has to be supported by a rising level of income. It cannot go up indefinitely if income is stagnant or even decreasing. There is a limit to the amount of external demand.