Although there has not been a consensus on an exact causation —due to its global nature—there has

The financial crisis from2007 to 2008 is considered the worst financial crisis since the Great Depression of the 1920s and destroyed the U.S. economy severely. It led the housing prices fell 31.8%, the unemployment rate rose a peak of 10% in the United States. Especially the subprime market, began defaulting on their mortgage. Housing industry had collapsed. This crisis was not an accident, it caused by varies of factors. The unregulated securitization system, the US government deregulation, poor monetary policies, the irresponsibility of 3 rating agencies, the massed shadow banking system and so on. From my view, the unregulated private label mortgages securitization is the main contribute factor which led the global financial crisis in 2008.

Beginning in August 2007, cracks in the economic system led to the United States’ second worst economic and financial crisis in history. The biggest crisis of all being the Great Depression. Stock markets crashed and banks lost hundreds of billions of dollars. The economy plummeted and suffered traumatic loss. After two years of hardship, the recession ended in 2009. This time period, now being called the Great Recession, is still to this day taking an effect on our economy. A financial crisis is when information flows in financial markets experience a particularly large disruption, with the result that financial frictions increase sharply and financial markets stop functioning (Mishkin, 2015). Several factors can cause a financial crisis

This paper was written to examine the causes of the financial crisis and Great Recession which can be materially tied back to decisions made in the 1970s and set the state for the crisis to occur. The paper invites the consideration of the key drivers that led to the subprime crisis that occurred long before 2007 and the result of a series of Acts that were ratified and the subsequent reforms that came about from these Acts. The Act that fanned the fire was the Community Reinvestment Act, which addressed a civil rights issue and a credit lending tendency to shun people of certain socioeconomic classes. Under the Act, various reforms made it fundamentally easier for people to purchase large capital assets no matter what their background

The financial crisis of 2008 turned the world upside down. It is said to be the worst financial situation for the United States since the Great Depression in the 1930’s. Millions of people all over the country lost their jobs, retirement funds, and even houses. After all this chaos and distress, the United States government still bailed out the banks that were supposedly ‘too big to fail’. There were many things that attributed to the big banks going under. Some of the factors that caused these banks to crash were high risk transactions, a very complex financial market, and even the lack of regulation throughout the industry (DeGrace). Although these played a large role in the

During the financial crisis of 2007-2008, the U.S. economy experienced one of the most difficult effects of a recession since the Great Depression. In reviewing the causes of both economic downfalls, it can be seen that there were several factors in common that helped cause the recession for each era.

The Economic Crash of 2008 in the United States was caused by subprime mortgages, and the housing market crash, and could’ve been prevented or minimalized by many people within the economy taking precautionary actions.

In the year of 2007 Americans were plagued with a recession that negatively impacted the US economy and it’s citizens. Economic activity slowed down, a downturn in the business cycle occurred, and the amounts of goods and services produced were reduced (Census). Many individuals will take their own opinion on this crisis, and the root cause. The truth is, there are many causes of the 2007 recession: the actions of the banks and their consistent lends on mortgages, the actions of humans and their inability to save and invest, and the unresponsiveness of higher authorities all contributed to this mess in several ways (Thomas, Bill). However, the main causes of the financial crisis are due to the optimism of experts, investor and human behavior, and the theory of evolution.

In 2007, the housing bubble burst, the main contributor was due to the correction of the Fed Fund interest rates. When interest rates began to increase the home sales decreased, the housing price crashed- meaning that the value of the homes spiral to all time low. The mortgages on millions of homes became worth more that home itself, this cause many homeowners to default of payments and foreclosure roused at an alarming rate. With the massive defaults devastating the markets it undermined Wall Street’s financial instruments and forced some of the countries’ largest corporations into a tail spent of chaos. The mortgage crisis was officially formed like a tornado leaving a path of destruction.

The mortgage meltdown is the period where the real estate market noticed a steep increase in home foreclosures that led to a period of insanity in 2007. This meltdown was the driving factor behind the economic recession that burdened the United States’ economy in 2008-2009. To begin, the housing bubble popped. The housing bubble was the highly overvalued real estate market. The burst of this bubble, which led to the financial crisis, was a correction to the overvalued real estate market. The real estate market, like any market, is subject to the basic law of Economics: supply and demand. It began with subprime lending all over the United States that showed a jump in demand or shift in the demand curve to the right. Subprime lending is where banks grant mortgages to individuals with poor credit history. In time, the individuals defaulted of their loans or failed to make payments.

The housing market crash, which broke out in the United States in 2007, was caused by high risk subprime mortgages. The subprime mortgage crisis resulted in a sudden reduction in money and credit availability from banks and other lending institutions, which was referred to as a “credit crunch.” The “credit crunch” and its effect spread across the United States and further on to other countries across the world. The “credit crunch” caused a collapse in the housing markets, stock markets and major financial institutions across the globe.

The economic and financial crisis of 2008/2009 can be attributed to many things. The main reason for the crisis can be attributed to the housing industry and the mortgages associated. When individuals borrow hundreds of thousands of dollars from the

The global credit crunch of 2007-2008 had a rippling effect on economies worldwide and was considered by many economists to be the worst financial crisis since the Great Depression of the 1930s. The crisis was mainly caused by the increased use of high risk, complex financial products (mainly subprime mortgages) to give

A combination of factors in the early 2000 's caused the perfect economic storm to trigger the worst recession the United States had experienced since the Great Depression of the 1930 's. The "housing bubble" and subsequent burst left homeowners owing more on their mortgages than the property was worth and fueled the financial crisis of 2007-2009. Many economists label the housing bubble as the single largest contributing factor to the financial crisis. Caused by low-interest rates, relaxed standards on lending and the misguided belief that prices and the value of homes would continue to rise, the US economy is still recovering from the effects of the housing bubble.

According to (Malpass, 2010) one the main reasons that caused the crisis is a Housing Market in US. Between 1997 and 2006, average house price has increased by 122%. In the end of 2001, national home price average median was ranged from 2.6 to 3.2 times median income per household. Proportional ration has grown to 4.0 in the beginning of 2004 and 4.6 in 2006. This has resulted to housing bubble “A run-up in housing prices fueled by demand, speculation and the belief that recent history is an infallible forecast of the future.” (Investopedia, 2014). Many householders started to refinance their estates at lower interest rate, or even taking second mortgages. In the middle of 2008, housing prices had been declined by 20% comparing to their 2006 peak. Easy loans and trend of house

In September and October 2008, the US suffered a severe financial dislocation that saw a number of large financial institutions collapse. Although this shock was of particular note, it is best understood as the culmination of a credit crunch that had begun in the summer of 2006 and continued into 2007. The US housing market is seen by many as the root cause of the financial crisis. Since the late 1990s, house prices grew rapidly in response to a number of contributing factors including persistently low interest rates, over-generous lending and speculation. The bursting of the housing bubble, in addition to simultaneous crashes in other asset bubbles, triggered the credit crisis.