2007-08 Recession

The recession of 2007-2009 played a great roll in how many companies in the United

The 2008 financial crisis and the recession that followed were the most severe the United States ever had. The 2008 financial crisis must be discuss as well as what the government did during the recession which led to the slow recovery. First, there are three major types of financial crisis: banking, debt and currency however there is no universal definition of a financial crisis. The 2008 financial crisis was a banking crisis, it actually started in 2007. Many experts on financial crisis have defined a banking crisis as “severe stress on the financial system, such as runs on financial institutions or large-scale government assistance to the financial sector” (Sanders 11). The reason for the 2008 financial crisis and the recession which followed started wat before experts realize there were issues in the financial sector. The government must intervene in a financial crisis to avert disruption of the

One thing that Charles Wheelan explains is how a recession occurs. Recessions occur when prices rise and when people borrow more money than they spend. Those things ultimately lead to people buying and spending less when they should really be spending more. When people notice that the economy is going south they stop spending as much money because they are afraid,even though one way to fix the economy is to spend more money. The main cause of the 2007 recession was the housing boom. Because of the housing boom people were buying bigger and better houses, but that didn 't mean that they could actually afford the full mortgage, they could only afford the small down payment. When houses kept getting foreclosed due to people 's inability to pay their mortgage, banks became less willing to make new loans. Even people who had didn

The recession of 2008 is also called the ‘Great Recession’, said to have begun in December 2007, and took a turn for the worse in September 2008, and it was a severe economic problem expanded globally. This recession affected the world economy, and is said to have been the worst financial disaster since the Great Depression. The decline in the Dow Jones this time was -53.8%. Since the official start of the recession in December 2007, and through June 2010 there have been about 2.3 million homes foreclosed in the United States. In 2012, the state with the most foreclosures in January alone was California, with 51,584 houses being repossessed. Unemployment during this collapse was 8.5%, and continued to increase to about 10% as of 2010. People’s reaction to this recession was a huge decrease in spending and borrowing from banks, but an increase in saving.

This financial crisis and bursting of the US housing bubble prompted a wider recession. Due to the credit crunch, there was less available credit for consumers and businesses. There also began to be restrictions on lending- since banks went bankrupt there was a reduction in bank’s lending in the first place and bank lending went down to just over $10 billion.

At the end of 2007 when the Great Recession began, GDP and employment took a drastic plunge. This was an

Similarly, the Great Recession was due to consumer spending cutbacks and a drop in demand for the establishment of new housing. In the two decades previous to 2008, the American growth rate was very high. Their household needs also became very high, which made demand increase. Spending was at a high. However personal income was decreased. The consumers then had to borrow money from the banks. This gave the consumers debt. So, when the house prices rose, banks stopped loaning money to people and the people decreased their spending. This happened because the people were not able to pay the banks back. People also cut back on buying or making new houses, so household demand dropped. Many say that this decrease caused the Great Recession. Housing was one of the main subjects that many believe, caused the Great Recession. “Subprime” mortgage availability and low interest

Since the Great Depression of the 1930s, the United States of America has experienced many recession. The most recent of these recessions began December of 2007 and lasted till about January of 2009. Within the time period, the United States lost approximately 8 trillion dollars when the housing market collapsed causing chaos in the financial market led to a collapse in business investments. As consumer spending and business investments declined, it led to the loss of 8.4 million jobs which then caused major employment contraction doubling the unemployment rate from 5% to 10%. Fear began spreading among fellow Americans as their job and financial security was hanging from a small threat, which led to a drastic decrease in consumer spending.

Problems for home owners with good credit surfaced in mid-2007, causing the U.S.'s largest mortgage lender, Countrywide Financial, to warn that a recovery in the housing sector was not expected to occur at least until 2009 because home prices were falling "almost like never before, with the exception of the Great Depression." Most economists agree that the primary cause of the current recession was the credit crisis arising from the bursting of the housing bubble. Why did the housing bubble occur and why did its bursting cause such a severe and widespread recession?

The “Great Recession of 2008" hit The United States and the rest of the world with a force not seen since the Great Depression less than a century ago. December of 2007 saw an unemployment rate of 5.7% as the economy was rolling forward on the back of the high-profiled housing market funded by aggressive loans to consumers with sub-par credit. (National Bureau of Economic Research) This created a proverbial “House of Cards” that fell apart that same month and over the course of two years; the unemployment rate would nearly double as The United States would lose over 8 million jobs according the National Bureau of Economics. The cause of The Great Recession can’t simply be quantified to just one person, agency or company. However, in the broad

A recession is full-proof sign of declined activity within the economic environment. Many economists generally define the attributes of a recession are two consecutive quarters with declining GDP. Many factors contribute to an economy's fall into a recession, but the major cause argued is inflation. As individuals or even businesses try to cut costs and spending this causes GDP to decline, unemployment rate can rise due to less spending which can be one of the combined factors when an economy falls into a recession. Inflation is the general rise in prices of goods and services over a period of time. Inflation can happen for reasons such as higher energy and production costs and that includes governmental debt.

The Great Recession inflicted abundant harm in the U.S. and global economy; 8.7 million jobs vanished (Center on Budget), 9.3 million Americans lost their homes (Kusisto), and the U.S. GDP fell below what the economy was capable to produce (Center on Budget). The financial crisis was unforeseen by millions and few predicted that the market would enter a recession. Due to the impact that the recession had, several studies have been conducted in order to determine what caused the recession and if it could have been prevented. Government intervention played a key role in the crisis by providing the bailout money that saved those “Too Big to Fail” institutions. Due to the amount of money invested in the bailout and the damage that the financial crisis had on the U.S. population, “Too Big to Fail Banks”, and financial regulation are two of the biggest focuses of the presidential candidates. Politicians might assure voters that change will occur, but is it to late for change to be efficient, are the financial institutions making the same mistakes that led to the financial crisis?

A variety of events led to the event that would be known as the Great Recession. Blame is shifted around between the large Wall street banks, the federal government giving loans with very low to zero interest rate, and investors desperately wanting something to invest in. The large Wall street banks are to blame the most, as everything leads back to them. The origin starts of the recession starts earlier, in the late 90’s and early 2000’s.

Later the same day, the Bank of America announced that it would be purchasing Merrill Lynch.

During the great recession era that began in late-2007 and lasted until mid-2009, the labor market took a major loss. The reasons that caused the labor market to plummet during this time frame were due to unemployment, a decrease in income and lack of education. Despite the efforts from the government to help as much as possible, the labor market had taken the worst hit and was at its lowest since the last three decades. It is important for everyone to understand what a weak labor market can result in. In this paper, I will discuss these findings and what impact they had on the labor market to weaken it to such a low point.