U.s. And Global Economy

1905 Words Jul 20th, 2015 8 Pages
In 2008 the U.S. and global economy confronted one of the worst crisis in the history. These financial crisis were considered the worst since the great depression in 1930’s. Several events took a place early in 2007 which led to the economy crash, such as, the massive decrease in home prices in the United States after it was significantly high. This decline in home mortgage market expanded rapidly causing massive crisis in the whole United States financial sector (Bullard, Neely, and Wheelock 2-4). Those crisis had dangerous effects on the stock banking industry, insurance firms, and Fannie Mae and Freddie Mac, the two most important enterprises commissioned by the government to assist mortgage lending, and some other mortgage lenders and financial service organizations. Those crisis generated a decline in banks and financial associations trust of others, believing that they will never get paid back. They simply stopped offering loans to people who needed money to buy a house or start a business, which created a massive decline in the home mortgage market and the whole financial sector of the United States (Havemann 1) There are number of issues which are believed to be the reason behind the home mortgage market crisis that occurred in 2008. Firstly the “housing bubble”, the home mortgage market problem which our economy is suffering from right now. It started with the “bursting” of the U.S. housing bubble which started in 2001 and reached its highest in 2005. The…
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