How Banks Went Broke : A Look Into The Financial Crisis Of 2007-2008

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Lawrence Humes Page 1
Mr. Donnellan
Period 1
How Banks Went Broke: A Look Into the Financial Crisis of 2007-2008
At first, nobody foresaw what was about to happen to the economy. The economy at first was at a state of peace and unity. People were taking loans and purchasing houses and these houses were increasing in value. The banks were giving out loans to the people to purchase the houses and earning money on the interest of those loans. That is when people began to notice the advantages of what could be taken from this economic situation. With a new method of earning money quickly and easily, it is no surprise that everybody began to try and use the same methods. Soon enough, the Financial Crisis of 2007-2008 was born into reality. But the real question is, what were the main causes of the 2007-2008 financial collapse? People saw the advantages of this situation. People began to buy houses for their lowest possible prices with their always approved mortgages and would eventually sell them at their high price. The economy at the time has an abundance of house buyers and the value of the houses were consistently increasing. With that price increasing, there was almost guaranteed profit. But this method of making money was almost too easy. Many people caught glimpse of the chance to strike it rich through this reselling of houses methods. In a blink of an eye, everybody was
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