described by writers such as Nouriel Roubini.7 Here three integrated vicious circles are
proposed, labelled “foreclosures”, “negative equity” and “housing surplus”. These vicious
circles or self-reinforcing downward spirals were created by the behaviour and practices of
participant groups, including government departments, investment banks, rating agencies,
lenders, brokers, borrowers and house builders. The circles are presented as diagrams and
provide a very simplistic representation of reality. Their content is not intended to be exhaustive
and they do not illustrate the strength of influence of one event on another.