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