Financial Crisis : A Global Crisis Essay

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Overview: The 2008 financial crisis is notably one of the worst financial disasters in American history. It began with a large financial bubble, in which many investment, real estate, and insurance companies made millions. When the bubble burst, stock markets fell, these companies collapsed, and economies of supposedly strong nations were brought to their knees. Not only did the financial crisis severely affect the economy of the United States, but the international markets as well. At the time of the burst, many international stock markets fell, making this US financial crisis become a global financial crisis. A global recession took place, and the US national debt doubled. Unemployment rose by ten percent. While the peak of the crisis was during the years of 2007 and 2008, the drastic effect on the economy the crisis caused is still recovering.
There are several factors that contributed to the initial beginning of the 2008 financial crisis. Before the crisis, there was a giant increase in real estate. As buying real estate became increasingly popular in the marketplace, many real estate agencies and mortgage companies wanted to be sure they could share in the profits. Mortgage loans became increasingly popular, so lenders began to hand out massive amounts of loans to keep the demand for real estate strong and broaden home ownership in America. To better serve the demand for real estate (or so they thought), lenders began selling subprime mortgage loans. Subprime

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