In order to understand the current economic crisis we have to look back at the changes which happened in credit markets over the last 10 years. Slowly but surely the rules of "Prudential Lending' were thrown out the window and ultimately forgotten in an ever increasing spiral of lending money that didnt ever really exist.
So how did this come about? It all started with the invention of sub prime or ( as it is known in Australia) non- conforming lending. It has become increasing apparent to me that many of my friends dont really understand what this is, everyone has become used to the term " sub prime crash' and how it stared the collapse of the worlds economic markets, but what the hell are the papers talking about?
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