Economic Depression
We are now in a recession - officially. Infact, it appears to be so deep, some people are calling it a depression! Gordon Brown's Government are borrowing to try to relieve the crisis, printing more money and praising themselves for their economic prowess.
The financial and economic experts didn't see any of this coming, the banks lost trust in each other, and changed their lending criteria almost overnight. The banking system is not allowed to collapse, but the industry has not faired well. The US banking system, where the financial crisis is said to have started, did almost collapse with the big names of Lehman Brothers, Beare Stern and the mortgage giants - Freddie Mac and Fannie Mae. The short selling of stock and hedge fund fraud further decayed the market.
In the UK, Northern Rock, who had been lending irresponsibly hit the buffers and were nationalised. Many of the bosses who created the problem, got bonuses and golden handshakes