Four Corners - Mortgage Meltdown
In August 2007 an unfamiliar expression appeared in the Australia media. A "subprime mortgage crisis" was unfolding in the United States. Homeowners across America were defaulting on loan payments and economists warned of major financial fallout occurring anywhere from Paris to Beijing to Melbourne. But why should a foreclosure in Cleveland affect a hedge fund in Sydney? As Four Corners reports, Australia is at risk of a virulent economic virus thanks to financial globalisation where everything is interconnected through a sophisticated form of pass the parcel.
Reporter Paul Barry explains how the subprime market was created through a unique set of circumstances beginning with the fallout from September 11. The program reveals how predatory lenders were unregulated and often unscrupulous, targeting people they knew couldn't pay.
A 'market correction' is a nice economic expression that goes nowhere near capturing the heartbreaking human cost of this financial disaster. This year and the next more than two million American families will lose their homes. US economists are warning that the worst may still be to come. They are even talking about the "R" word: recession.
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