Look at Video on Demand - Recent Programs - "Mortgage Meltdown"
Mortgage Meltdown
Reporter: Paul Barry
Broadcast: 13/10/2008
"The crisis is just beginning" ... "We're nowhere near the end."... "I don't think anybody anywhere in the world is going to be immune." – from 'Mortgage Meltdown', Four Corners September 17, 2007.
At the time, the words from this Four Corners program may have seemed like another all-too-gloomy, glass-half-empty prediction – but just over a year later they've turned out to be on the money.
With stocks in a tailspin, credit crunched, currencies ricocheting, and confidence ebbing in the face of a looming international recession, no one knows when or how this crisis will end. Where did it start? That's another matter.
Much of the current panic stems from by America's so-called sub-prime lending crisis that began surfacing in the USA in the middle of last year. It was the gluttonous climax to a big credit binge. Banks and brokers gave risky, often high interest, loans to unready borrowers who began defaulting on a massive scale. In August last year, Paul Barry went to America's mortgage belt to report on the emerging sub-prime issue for Four Corners. He found streets lined with empty houses, dying gardens and demolition notices. One real estate agent described to him the criteria for getting a loan: "Ha, breathe - fog on a mirror!"
Barry explained how, in the 21st century's interconnected capital markets, the sub-prime risk might turn into a game of Russian roulette, with no one really knowing who's holding the bad debt. His report warned of a possible US recession, pointing out that $900 billion of sub-prime loans would soon re-set to higher interest rates with inevitably more defaults.
A year on, the USA and many other countries are reeling. As Australians worry about how deeply they will be affected and ponder the lessons that might be drawn, Four Corners replays Paul Barry's "Mortgage Meltdown", with a new introduction, as a timely reflection on the makings of this unfolding crisis. Four Corners – at 8.30 pm Monday 13 October and about 11.35 pm Tuesday 14 October on ABC1; also at 8 am Tuesday on ABC2.
Original Mortgage Meltdown program page
View the original Mortgage Meltdown program page which includes extended interviews and additional resources. Video on Demand
You can now watch Paul Barry's report "Mortgage Meltdown", plus his 1994 report "Money Madness", online. Program Transcript
Read the program transcript from Paul Barry's "Mortgage Meltdown", broadcast 13 October 2008.
Further Resources
View an updated list of articles, reports and multimedia, related to Paul Barry's Mortgage Meltdown. First Broadcast 17 September 2007.