The Economic Crisis ( 2008-2009 )

In 2008, the American economy broke down. Known as the Global Financial Crisis, this is widely considered to be the worst financial crisis since the 1930’s when the stock market crashed and the Great Depression hit.

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

The financial crisis of 2007-2009 resulted from a variety of external factors and market incentives, in combination with the housing price bubble in the United States. When high levels of bank and consumer leverage appeared, rising consumption caused increasingly risky lending, shown in the laxity in the standard of securities ' screening and riskier mortgages. As a consequence, the high default rate of these risky subprime mortgages incurred the burst of the housing bubble and increased defaults. Finally, liquidity rapidly shrank in the United States, giving rise to the financial crisis which later spread worldwide (Thakor, 2015). However, in the beginning of the era in which this chain of events took place, deregulation was widely practiced, as the regulations and restrictions of the economic and business markets were regarded as barriers to further development (Orhangazi, 2014). Expanded deregulation primarily influenced the factors leading to the crisis. The aim of this paper is to discuss whether or not deregulation was the main underlying reason for the 2007/08 financial crisis. I will argue that deregulation was the underlying cause due to the fact that the most important origins of the crisis — the explosion of financial innovation, leverage, securitisation, shadow banking and human greed — were based on deregulation. My argument is presented in three stages. The first section examines deregulation policies which resulted in the expansion of financial innovation and

The 2008 financial crisis had multiple causes but the most outstanding to me is the passing of the Gramm–Leach–Bliley Act. This act repealed Glass – Steagall which removed the safeguards that came between commercial and investment banks. It destroyed regulation between the two and gave unprecedented “innovation” which allowed millions of Americans to purchase homes they couldn’t really afford. This created the American housing bubble that eventually popped do to citizens being unable to pay for their new homes. The intial burst of the housing bubble resulted in the foreclosure of 860,000 homes in 2008. Another entity at fault for the recession would be the credit rating companies. They provided the means to the consumers to take out mortgages

The financial crisis that happened during 2007-09 was considered the worst financial crisis in the world since the great depression in the 1930s. It leads to a series of banking failures and also prolonged recession, which have affected millions of Americans and paralyzed the whole financial system. Although it was happened a long time ago, the side effects are still having implications for the economy now. This has become an enormously common topic among economists, hence it plays an extremely important role in the economy. There are many questions that were asked about the financial crisis, one of the most common question that dragged attention was ’’How did the government (Federal Reserve) contributed to the financial crisis?’’

The financial crisis that put our economy on a downhill rocky road is known as the Great Recession of 2008. The U.S. Governments resolution to one the biggest panics was revolved around multiple bailout and fiscal measures. The fight to pull our weakening economy out of a dark hole left the American people with hope of advancing what gets thrown their way. The many bailout programs implemented by the U.S. Government can only hold the economy together for so long until were up to our knees in debt.

Firstly, we learned that the most significant cause of the Great Recession was the collapse of an unstable housing market. “The Great Recession began with the bursting of an 8 trillion dollar housing bubble. The resulting loss of wealth led to sharp cutbacks in consumer spending. This…

The market is a very fluid situation and this is becoming more and more apparent in the past ten years with the Great Recession from 2007-2009. Therefore, businesses are operating in an economy where the competition is high and the potential for failure has become significant. Those two aspects have been and should be on the forefront of every organizations mind. Companies should have a strong focus on examining and evaluating not only their financial standings, but the other competitors in their market in order to boost sales and continue on the path to maturity. If a company is successful in reaching this goal they will have the ability to hold the competitive edge on their rivals. Major organizations such as Home Depot and Lowes are placing more focus on increasing that edge, while contending with others in their pool, overall to increase, gain, and retain a piece of the devoted consumer.

Over a decade into the War on Terror, the U.S. has largely succeeded in its attempts to destabilize Al-Qaeda and eliminate its leaders. In the writing Manhunt by Jonathan H. Cody, he states that these accomplishments didn’t come without a price; in fact the cost was enormous, and our nations decisions on how to finance it have profoundly damaged the U.S. economy. The US economic crisis can all be traced back to 9/11. In Catherine New’s article Then and Now she compared the US economy today to the economy in 2001 before the attacks. The results are astonishing; the average price of gas per gallon has increased by over $2, the median sales price per house has increased by over $50,000, the poverty rate has increased by 3%, the unemployment rate has increased by 4%, and the public debt has increased by trillions of dollars (New)! These facts show how devastating the attack was and the extent at which it changed the US. Since 9/11 we have ramped up our national investments, concerns, and spendings. The 9/11 attacks had both immediate and long-term economic impacts, most of which continue to this day. The stock market closed for four trading days after the attacks, which was the first time this has happened since the Great Depression! The attacks caused the Dow to drop more than 600 points, the 2001 recession to deepen, and according to Asad AbuKhalil’s book Bin Laden, Islam, and America 's New "war on Terrorism” also led to one of the biggest government spending programs in U.S.

How could this happen? What were the reasons for the accelerated failure of the financial market, bankruptcy of major financial institutions and massive loss of jobs in USA? How could regulated organizations that drive the finance wealth of this country collapse and cause an aggressive recession that left many Americans without homes, jobs and in with an uncertain future? How

The economic crash of 2008 was a difficult time for all of the people around us. This situation has impacted our country and what is around even to this day. It was a tough time for a lot of families and big businesses. This stock market crash was one of the worst the United States had ever had. Even to this day we are still trying to repair it what went down. Like the employment of jobs, the cost of our products, and homes that were taken away from families. The economic crash came from nowhere and it was a shock fro mainly families, especially the middle and low income families. This took many homes away from them and the job eventually leaving them with nothing. This had also hurt many foreign countries on their way, did trade and their investments. Many housing companies going down with this and also the way banks were running. Why and how did this all happen? This is one of the biggest economic crash in the United States that is still in the process of being repaired.

The financial crisis of 2008 was one of the largest financial meltdown rivaling the Great

2008 Global Financial Crisis was followed by the crash of the U.S. subprime mortgage security market. To illustrate the subprime mortgage security market with an example, considered the bank have only 100 dollars, and the bank lend this money to person A on an insets rate of 8% for him to buy a house without having his pledge. However, the bank want to lower the risk and have another 100 dollars to spend. So the bank sell person B a 100 dollars security bond that has a 5% interest rate. In other words, person B would has a security because even if the bank don’t have any money in the future, the bank still can pay back person B with the debt of person A. Therefore, the bank have another 100 dollars to lend to another person to repeat the cycle.

The outbreak of 2007-2009 financial crisis and its devastating impact on the economy left no room for further implementation of conventional monetary policy. Once the zero lower bound had been reached, as well as the connection between official interest rates and market rates was lost, it was obvious to policymakers that they were in front of an exceptional situation, and in an analogy to what Hippocrates claimed about remedies, this situation called for exceptional measures that could support the functioning of financial markets.

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