Effect of globalization and property market

2008 July 21

tags: Economic, Globalization, United Nations, United States, US

by saoandco

I am trying to understand in what way a failure in the mortgage or the home financing system in America affects my life and other people in this region and the people thousands kilometers from the US.

From what I know through reading blogs and other reliable sources is that most of mortgages were expanded to people who couldn’t afford them. That means the banks were giving and loaning away the money to the citizen of America who were actually broke. Why did they do that?

Are they doing for the sake of helping the American having the American dreams, and helping others elsewhere to dream to be an American? Or, are they doing it for the sake of selling the latter to the international market? Anyone with access to securitized investments under globalization of the world market can get hurt when unfamiliar trade and rules suffice.

This is an irrational behavior. And surely it isn’t going well with the US, as she’s one of the countries in the world that preach good public governance and uphold basic human right.

How come the regulatory bodies in the US had failed to recognize potential risks arising from this unmistakable problem? When other important matter involving other nations the US regulatory bodies can move fast and make a quick assessment, such as the assessment on the weapon of mass destruction in Iraq.

I can understand a property market crash. That’s when the supply exceeds demand, and then the market follows. This is something different, that is the disposable income of the people is at stake.

I believe all securitization products in the global finance of the international market should be scrutinized and a kind of policing on the ethical practice be established. By globalization, member nations’ livelihood should be improved. There are a lot of improvements relating to bond, equity, hedge fund, and similar global financing tools in the era of globalization that need real clarification. We have learned from past mistakes on many tough issues and surely we can learn something new from this experience.

I believe someone, somewhere out there is doing something to address this issue. Any idea?