The Global Financial Crisis 0f 2008

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The Global Financial Crisis of 2008-2008: The Role of Greed, Fear, and Oligarchs

The global financial crisis of 2008-2009 is considered to be worst financial crisis since the Great Depression of the 1930s. Large financial institutions collapsed, banks received bailouts by the government, and stock markets plummeted as well. In result, people were being denied loans. The housing market became a problem because of financial issues and many people were unable to continue to pay their mortgages which resulted in evictions and foreclosures. Sellers’ homes’ remained on the market and were unable to be sold. There was an extreme amount of supply, but not enough demand. Major businesses also failed, and millions of people lost their
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Mortgage-backed securities and credit default swaps (CDS) were two types of derivatives that became noticeable during the housing boom. CDS were contracts that were similar to insurance policies which were typically for municipal bonds, corporate debt and mortgage securities that assured people that they would offer coverage for certain securities in the event of default. For this reason, CDS was extremely popular. The close ties between Washington and Wall Street contributed to the financial crisis as well. There were enormous financial contributions from Wall Street to the political campaigns for constituents which contributed to this relationship. As far as “influx” of new money, as the US banking regulations was easing, other countries were experiencing a boom and looking for somewhere to invest. So who is to be blamed for this financial crisis and the problem with the housing market? Was it the government? Was it the banks? Was it Politicians? The blame was a global discussion during this time. Amongst others playing a role included:
• mortgage lenders
• credit rating agencies
• insurance companies
• regulators
• governments sponsored entities
• investors
• homeowners
Many also believed that those working in the
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