Posted AT 8:34 PM EDT on 10/08/07
How easy terms lead to hard times
The promise of cheap loans to high-risk American borrowers was always too good to stay true. Now the effects of the inevitable defaults on those loans, which have spilled across global securities and financial markets, have triggered an investor stampede away from the faintest whiff of risk. Central banks, which abetted the crisis with extremely low interest rates from 2003 to early 2006, are now injecting cash into their strained financial systems to provide stability.
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