The Great Recession

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A variety of events led to the event that would be known as the Great Recession. Blame is shifted around between the large Wall street banks, the federal government giving loans with very low to zero interest rate, and investors desperately wanting something to invest in. The large Wall street banks are to blame the most, as everything leads back to them. The origin starts of the recession starts earlier, in the late 90’s and early 2000’s. After the dot com bubble burst and the September 11th terrorist attacks, Federal Reserve chairman Alan Greenspan lowered the interest rates on treasury bill to only one percent in an attempt to stabilize the minor recession that happened shortly after 9/11. This drove away investors who traditionally invested in the treasury bills. What this did cause though, is it became very easy for the Wall street investment banks to take tons of cheap credit. This is where the housing market comes in. The price of housing was seen as always rising. Potential home owners would save for a down payment, then contact a mortgage broker. The mortgage broker would then put the potential home buyer with a mortgage lender, giving the mortgage broker a commission. Now, the mortgage lender need liquidity to be able to keep giving out the mortgages. Lucky for them, investment bankers are there to buy the mortgages, giving the mortgage lender the liquidity to loan to more home buyers, giving the mortgage brokers more commissions, and putting people in more

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