Credit Crunch Crisis

By now most have heard of the mortgage failures rippling throughout housing markets, with both domestic and worldwide effects.

One can argue that it is the duty of the homeowner to ensure a logical and reasonable mortgage when purchasing real estate. Many live beyond their means, or choose adjustable rate mortgages which often become dangerous in times of rising interest rates. "Too much house" can be tempting for those starting out, likewise for those who have worked for a long time to save up for a down payment.

However credit companies have themselves to blame as well, issuing too much credit to large segments of populations that may not be able to weather tougher economic labor or market periods. Some companies have fallen to the foreclosure explosion, thus filing for bankruptcy.

Companies and consumers alike must choose for themselves the smartest and most reasonable path in terms of issuing/obtaining credit, not only for their own lives but also for the security of our economy in general. Central to this would be scaling back on extravagant lifestyles via a refocusing of morals, but also smarter housing programs to ensure that the credit pinch does not keep those worthy of receiving credit from obtaining their own homes. Central banks can bail out the markets in the short term, but our society must rethink its position on real estate as investment and status tools.