Bear Stearns' effect on world

Raw Story

When we hear of turmoil in world financial markets, it can be difficult to understand how so much chaos can result from a relatively small number of defaults on individual home mortgages. Paul Solman, the business and economics correspondent for PBS's NewsHour, undertook to explain how those modest defaults could escalate to the point where they "now threaten the entire world financial system."rnrnSolman began by noting that "the money you borrow to buy your home no longer comes from the local bank. It comes from investors from all over the world."