Foreign agencies among investors providing $24B in capital infusion
Bert Hill, The Ottawa Citizen; with files from Citizen News ServicesPublished: Wednesday, January 16, 2008
The bill for the global credit crunch rose by almost $24 billion yesterday as the largest U.S. bank, a major Canadian bank and a big U.S. investment house announced new charges or cash infusions.
The financial upheaval, which started with U.S. homebuyers getting bigger mortgages than they could afford and investment bankers getting rich after they sliced-and-diced the mortgage securities into ultimately worthless investments, shows no signs of an easy resolution.
The mess likely won't plunge the world into recession because central banks are chopping interest rates.
The parade of senior bank executives getting fired, the decline of the U.S. dollar and the surge in gold will continue, but won't stop the huge growth of developing economies in China and India.
However, the consequences for average people in terms of slower economic growth, higher loan costs and weaker job creation could be significant, compared to the strong growth of recent years.
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