Ali Velshi | Bio
CNN Senior Business Correspondent
How does this credit freeze affect you?
If you are invested right now, understand that the market can make up 777 points in a matter of days.
That's not your concern, don't overreact to this.
But let me explain to you the credit markets – because that is where the problem is.
You have major investors, and I mean major: countries, sovereign wealth funds, pension funds, hedge funds and then you have banks. They send money between each other.
The most direct relationship between you, this bailout and the credit markets is that banks loan you money: auto loans, student loans, home loans, and that's already a problem, that's frozen.
Now – you're trying to sell your house because maybe you're being foreclosed on? Well, those same banks loan other people money, including someone who might have bid on your house. You want to go to contract, but they can't get that loan, and that's the 2nd way this affects you.
The third way – these banks and these major investors loan money to corporations. It is very standard for corporations to borrow money on a short term basis to meet their operating expenses – including salary. Well that affects you right now: if a company can't meet those payments that means that you may not get your salary, or you may get laid off.
These are just three simple ways in which this credit freeze, this credit crisis affects you.
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