Sub-prime chrisis

We all know about the sub-prime scandal that romed the newspappers, But how did this really effect the economi?, well i tell you how.

When federal reserve (FED) still had Alan Greenspan as chairman, The Borowing rate was extremly low. Actualy Alan told people to borrow money! Becosue of the good rates, and he keept the rates low. and then we had all these banks that borrowd was lending out money in big piles to people. The banks and credit institutes did move to the resbonsibilitys to other banks and other instuments issuers, so no one could really guarante anything. Then one day they started to raise the rights becouse of inflation and other issues. people that had floating loanes and had dept's to there knees was getting into deep water. and now the banks and alot of people have loset alot of money, the FED are bailin out the banks, they are taking the rates down trough there is a heavy inflation....why diden't U.S. se this coming ?? God people are losing there homes!! And now the goverment have a plan so people can wait to pay back, this can be ahrd becouse the american economi seams to have stagerd, we are on the top of the higekonjunktion.