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causes of the credit crisis explained Comments Off on causes of the credit crisis explained

image by Tracy O (flickr)
Whether you are trying to buy your first house, looking for a new job, or simply paying the bills, just about everyone is feeling some effects of the “credit crisis”. Most of the news coverage seems to be focusing around the consequences of the slow economy on consumers and while many people know that sub-prime mortgages are the cause, it’s not always apparent why subprime mortgages are to blame for the economic downturn. The radio show This American Life recently teamed up with NPR’s business correspondent Adam Davidson and devoted an entire episode to the cause of the current credit crisis. For those who don’t want to spend an hour listening to the show (although I highly recommend it), here is a quick sum-up: it all boils down to irresponsibility from both lenders and borrowers.