Busted: Bankers and The Global Economy

January 21, 2008

Fed Dims Outlook for January 2008

Filed under: banking, federal reserve, government, money — Tags: , , , , , , , , — digitaleconomy @ 8:01 am

“Since late last summer, financial markets in the United States and in a number of other industrialized countries have been under considerable strain. Heightened investor concerns about the credit quality of mortgages, especially subprime mortgages with adjustable interest rates, triggered the financial turmoil. Notably, as the rising rate of delinquencies of subprime mortgages threatened to impose losses on holders of even highly rated securities, investors were led to question the reliability of the credit ratings for a range of financial products, including structured credit products and various special-purpose vehicles. As investors lost confidence in their ability to value complex financial products, they became increasingly unwilling to hold such instruments. As a result, flows of credit through these vehicles have contracted significantly.”
~ Fed Chairman Ben S. Bernanke on January 17, 2008

The Economic Outlook (Before the Committee on the Budget, U.S. House of Representatives)


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