The central banks are pumping massive amounts of money into the financial markets. The shares continue to slide.
The US mortgage crisis is now drastically impacting banks and financial markets. For many observers, a “real estate bubble” is bursting in the USA, caused by cheap mortgage loans with houses that are becoming increasingly expensive. Since mortgage rates have turned and numerous US homeowners who no longer have credit ratings are no longer paying their installments, bank loans have become lazy. The Mittelstandsbank IKB was the first German institute to get into the “subprime” swirl.
Crisis On Wall Street: The Week That Shook The World
Investors have lost confidence in the stock market and are fleeing fixed-income securities. The financial crisis, triggered by the difficulties in the United States with mortgages to customers with low credit ratings, has reached a new high. At first, Düsseldorf’s IKB was almost bankrupt with ailing subprime loans. Now the banks suspect each other of previously unknown risks. Large banks such as WestLB and SachsenLB are also suspected of this. The industry distrusts. The bottleneck on the money market is a vote of no confidence that the institutions issue to each other.