Well D’Uh. The lack of lending to people and companies that are perfectly able to pay back the loan has been slowing the world economy for three years.
People cannot refinance mortgages even if they have the assets and monthly income to service the debt. They are locked into higher payments because of rules at the Banks or Fannie and Freddie or because of how the loan was split up. Not being able to refinance has no relationship to whether they would be able to service the new loan because they are being locked into a higher payment.
This means that money that could be used for new investments or financial activity is left in stasis. It is like financial musical chairs where no one can change chairs. The music does not start up again and the money is not allowed to move to more efficient places and projects.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.