Problems in the US mortgage sector precipitated fears of a global stock market meltdown. The European Central Bank and the US Federal Bank started pumping cash into the money markets as institutions bailed out of risky investments. The FTSE 100 dropped by 3.7 per cent on Friday, wiping almost £56bn off the value of London's leading firms.

 

The sub prime mortgage market is in meltdown in the US, that is mortgages given to the low paid people, who can no longer repay them, so many have defaulted that some of the lenders have folded as well. Like a domino effect this could affect all of us as banks now invest in markets worldwide.

 

You may think who cares about the FTSE 100 big companies, but if they suffer we could all suffer.

 

Could this trigger a global recession that affects us all?

 

well its effected me as ive had to cash in my isa to finance a car, the recent fall has taken off several hundered pounds off its value.

 

the markets do go up and down though, so unless you are relying upon interest payments, or like me are cashing in market related savings, then sit tight. the prices will recover.

 

with the floods and foot n mouth effecting food prices, unstable markets will only add to our living costs... i expect a rise in inflation.

Swings and roundabouts, anyone investing in the stock market for a quick killing is wasting their time shares are a long term investment and the stock market will bounce back it always does