Share
Explore BrainMass

Mortgage Meltdown

Hi,

I need help understanding what the effects the housing crash in the USA had on:
- money
- financial markets
- financial institutions
- financial laws and regulations

Please just don't leave one little sentence describing each one. Thanks.

If you cite a source please link to it, thanks.

Solution Preview

Hi,

I need help understanding what the effects the housing crash in the USA had on:
- money
The money market is the financial institution and dealers in the money or credit that interact to borrow or lend. Usually the borrowing is up to thirteen months. The trading in the money market is carried out in short term financial institutions. Now when the housing crash happened in the USA the housing prices declined precipitously. The prices of the houses the borrowers held became less than the outstanding debts they had. In other words, the borrowers did not pay and the houses were auctioned. Each of these actions had a depression effect on the money markets(1). The banks and other financers were reluctant to lend and the borrowers did not want to borrow. As the housing prices keep on falling the money market trades become less. The demand for borrowing by money market participants goes down precipitously. as the demand for credit becomes less, participants borrow less. Even large corporations involved in housing industry that had the ability to issue commercial paper cannot do so. The falling prices of housing made them lose their assets and credit (2).
form another perspective, money ...

Solution Summary

This answer provides you an excellent discussion on Mortgage Meltdown

$2.19