GGRA02H3 Study Guide - Final Guide: Tongues Untied, Financialization, Securitization
Document Summary
Extension of massive loans from china, and asia to untied states. Financialization of the global economy and crisis displacement and management. The economy becomes increasingly defined by acute booms and busts driven intense speculative investments and financial crises. The rise of the real estate bubble. The prime in subprime does not refer to the interest rate; it refers to the borrowers. A subprime mortgage is subprime because the person borrowing it is subprime, i. e. , less than preferable. mann. Because the borrowers and the borrowing conditions are subprime, the interest rates are extremely superprime, super-duper-prime. mann. Normal mortgages" typically includes a sizable down payment and a five year fixed interest rate. Subprime mortgages" typically include a very small down payment, if any, and a lower teaser rate" which is then adjusted upwards after two years. Meant to attract marginal buyers/borrowers but has more often than not led to bankruptcies as borrowers cannot meat escalated payments.
