How Bad Companies and Predatory Lending Weaken the United States

Jeannine Aversa, AP Economics Writer said on March 20, 2005 “if foreign investors were to lose some of their appetite in accumulating dollar-denominated assets at the current rapid rate and unload their holdings, the prices of U.S. stocks and bonds could plunge. And, interest rates — including those for mortgages — could soar. The economy could slow and the nation’s vibrant housing market could lose its shine. Japan, followed by China and then Britain are the biggest holders of Treasury securities.”

According to watchdog organization Household – HSBC Watch, companies like Enron and Worldcom shake the confidence of investors. “Predatory lending undermines the fabric of the United States because it reduces disposable income and interrupts the supply and demand cycle” the group said. “See HSBC Finance Corporation, as an example, where borrowers are faced with balances that never go down. Instead of paying off their loans, the borrowers are ill prepared for high gasoline prices and high home heating costs.”