Financial crisis in America still ongoing by Corina Ciubotaru

The ongoing financial crisis in America isn't looking like it's going to end soon. Lately, the Federal Reserve has been pumping billions of dollars in the system, but nothing seems to please spooked out investors. All of the indexes have been falling recently and this has caused concern even on foreign markets. The Dow is down by 2.10 percent, the Nasdaq fell 2.37 percent, while Standard & Poor's fell 2.35 percent. Indexes like Nikkei in Japan, DAX in Germany and CAC-40 have also been falling, and the BNP Paribas bank in France has closed some funds in connection to the American market. The crisis started when home loans became too big for people to pay so banks were left without any money. The Fed didn't come into action from the beginning so the crisis worsened up to the point where they had to cut in half the interest rate required for banks to take loans. Now, reports from companies analyzing the housing market give bad news to homebuilders and prices on homes have also fallen dramatically. This situation comes in a moment when unemployment rate is finally lowering and median income per family is reaching over $48,000, after rise in the economy for the last five years. Fed officials will meet in September to decide on what needs to be done to get the country out of this mess. Capitalism needs credit to function, money used in companies have to come from the people willing to invest, so the American economy will have to rely on loans to recover, and measures are being taken to ensure these loans become available once again.

related story: http://news.yahoo.com/s/ap/20070828/ap_on_bi_st_ma_re/wall_street;_ylt=AmoWh8lxBZz_WUCoKhXzV0ys0NUE

by Corina Ciubotaru for PocketNews (http://pocketnews.tv)

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