ipl-logo

2008 Financial Crisis Summary

1350 Words6 Pages

After the disastrous events of the 2008 Financial Crisis and all subsequent scandals that have rocked the banking sector, the economic impacts have affected the world. Skyrocketing debts, rising unemployment, currency devaluation and businesses filing bankruptcy were some of the effects of the recession. In our modern capitalist society that is integrated through Globalisation, such financial calamities have been detrimental, causing long-lasting turmoil across boundaries. Despite this, the global financial market is no stranger to such economic recessions. With the Great Depression in the late 1920s to the Asian Financial Crisis in the 1990s, the issues with addressing such financial problems has been put into the spotlight. There has been …show more content…

From America’s involvement in the 2003 invasion of Iraq to the government’s lowering of interest rates. Stiglitz also discusses about the scale of the disaster in 2008 and critiques the solutions that the American governments under Bush and Obama have carried out in order to respond to the problem. Moreover, Freefall highlights the malpractices caused by the banks in lending mortgages and loan policies which have jeopardised clients and consumers. Stiglitz’s book mentions the aftermath of the crisis and the continued fragility of the international markets from the unaddressed flaws of the financial sector. With that being said, Freefall highlights Joseph Stiglitz's perspective on what should have been done by both the government and the banking firms in order to prevent a reoccurrence of another Wall Street collapse. It serves to provide an economic analysis and insights for potential legislators, economists and other stakeholders in the financial …show more content…

Stiglitz’s opinions on the ludicrous TARP bailouts and austerity packages have signified governmental flaws in protecting the interests of the 1 per cent. It has changed my perspectives on Laissez-faire Capitalism. Prior to reading this book, I believed that government should refrain from interfering with business activities in order to maintain economic growth and prosperity as a Capitalist society. However, the lack of control and regulations by the state can allow wealthy institutions such as banks to accumulate large sums of debt. Although economic growth and prosperity is necessary for the development of the state, there must be measures and policies to ensure that debt and austerity remains sustainable, mitigating any possibility of a widespread recession. Nevertheless, Capitalism, Globalisation and the role of large-scale private sector firms remain integral to the development of any state. Even if the possibility of an economic recession is inevitable in a capitalist world, the current system has provided jobs and opportunities for millions of people. Other economic systems such as Communism have failed to uplift people out of poverty. With that in mind, Capitalism can be regulated and reformed in order to prevent another Lehman Brothers-style collapse. But, such regulations should maintain freedom of enterprise and

Show More
Related
1123 Words | 5 Pages

In All the Presidents' Bankers, Nomi Prins argues that the associations between the leaders of the largest banks and the presidents of the last century influenced economic policy in the U.S. and other countries. The presidents and the bankers worked together to make the U.S. the most powerful nation in the world. However, the bankers wanted power and profit without regard to the harm they caused people in the U.S and other countries. Although Prins’ commentary is biased, her arguments are well-supported and based on extensive research. Prins’ book is well-organized chronologically by time periods in history and presidents.

Read More
340 Words | 2 Pages

There has

Read More
878 Words | 4 Pages

The timing of these failures, the bank’s lack of dealing with them effectively, and the brevity of the Stock Market Crash caused the economy to suffer

Read More
267 Words | 2 Pages

The External Forces that impact on the Organisation External forces are depending on Globalisation, Convergence, technology change, Value of the Dollar, Interest Rates, Political Climate and Economic Climate. Our various factors, including, but not limited to: • Changes and the effect of, laws, regulations, taxation or accounting standards or practices and government policy • the stability of Australian and international financial systems and disruptions to financial markets and any losses • market volatility of uncertain conditions in funding, equity and asset markets • adverse asset, credit or capital market conditions and changes to our credit ratings • levels of inflation, interest rates, exchange rates and market and monetary fluctuations •

Read More
1005 Words | 5 Pages

The forty-six billion the Fed gave to lenders was two-hundred times more than the daily average. The quick infusion of cash was a far cry from normal Fed operations. On the day of the 9-11 attack, the S&P 500 dropped 4.9% and continued to go down causing markets to crash in less than a weak. The Federal Reserve’s quick and decisive action, however, helped the markets return to normal in just over 19 days. This action helped keep the U.S economy stable and prevent an economic

Read More
645 Words | 3 Pages

The Alchemists – Three Central Bankers and A World on Fire is a book written by Neil Irwin, a senior economic correspondent at New York Times. The book attempts to describe how the financial crisis of 2008 emerged and the manner in which chiefs of three major central bankers of the world – Ben Bernanke of Federal Reserve, Mervyn King of Bank of England and Jean-Claude Trichet of ECB handled it using every tool at their disposal. The book in its initial phase explains the evolvement of central banks and their role in shaping the world economy. Some real insights into world’s oldest central banks with logical analysis show the intense research put in by the author.

Read More
2317 Words | 10 Pages

Abstract In the United States, there have been several events that have shaped the way that our economy is currently functioning. Events such as the Great Depression in 1929 and the more recent Great Recession of 2008 have led to financial stress on large, important industries. In these difficult economic times, executive officers and policy makers must make difficult decisions about how to combat this financial stress. In particular, the banking industry in the 20’s and 30’s and the automotive industry in 2008 were struggling to stay afloat.

Read More
850 Words | 4 Pages

The 2008-2009 Financial Crisis The 2008-2009 financial crisis was the worst financial crisis since World War 2, it had threatened the total collapse of large financial institutions all around the world, which in return was prevented by the bailout of banks by national governments. Despite this stock markets had still

Read More
438 Words | 2 Pages

The biggest enemy to the end of the financial crisis and the beginning of an economic recovery is Treasury Secretary Henry Paulson himself. Lets forget for a minute that the decision by Paulson and Bernanke to let Lehman Brothers fail was the precipitating event leading to credit markets freezing up and the first round of financial panic. Since then, the two have been working diligently to correct this collosal mistake. But separating actions from words, we see that words are in fact much more potent. Since the end of September, every time Henry Paulson has opened his month, the Dow has dropped on average 196 points.

Read More
679 Words | 3 Pages

Time magazine They were left with nothing less The Great Depression 1929 and the Financial Crisis 2008 there was nothing but the loss due to the poor decisions made by the Government. This put families through misery as many families were struggling living on the streets, poor and homeless. The Government allowed their citizens to take out loans which they wouldn’t be able to pay out in the upcoming months.

Read More
1453 Words | 6 Pages

When thinking of the 2008 economic crisis, the first thing that comes to mind is the housing market bubble. There are many factors that come into play regarding why the housing market crashed. Historically, real-estate was always a solid and stable investment. But with the development of the complex packaging of mortgages, a bubble was created through lenient credit agencies with little government regulation, as well as fraudulent deceptive practices by mortgage brokers, leading to a crash in the global economy.

Read More
1119 Words | 5 Pages

The great debate between a hands off, or laissez faire, and regulated capitalism has been occurring since even before the Industrial Revolution of the late 19th and early 20th Centuries. Major corruptions lean more towards the laissez faire economic policies because there are fewer restrictions. This might be beneficial for them, but for small town companies trying to pay bills and make profits. monopolies are a worrisome thought, especially when the larger companies are wishing to expand put them out of business. Regulated capitalism is a form of hands-on policy with the government including more strict codes for the industry.

Read More
1154 Words | 5 Pages

It’s a wonder that people missed the exaggerated warnings that were shoved right to them, yet it seemed that would turn a blind eye to them ALL. On March 25, 1929 there was a “mini” crash that if thought about, would make them immediately, think “Hey, maybe this should be looked into, just in case.” But none of them did, which led to even more financial ruin. Even trusted financial advisors, the people the government themselves hired, gave warnings, yet society “ran” on – like running in the street, waiting to get hit, and they were hit badly. After the long and enormous stock-market- crash, it seemed as if the market continued to crash, getting worse every time.

Read More
1782 Words | 8 Pages

Since financial regulators were failing repeatedly at overseeing the market, this “encouraged mortgage brokers and subprime lenders to manipulate lower-income people into commitments for mortgages they clearly could never afford (1099).” People were manipulated with adjustable rate mortgages because they had teaser rates, which were low interest rates in the beginning, but they would eventually skyrocket. This jump in the interest rate is very risky normally, let alone for people who can barely afford their house to begin with. Neal then divulges into the misguided regulation that “lay at the heart of the crisis (1101).” Despite there being a large number of incentives for capitalists, which were the bankers, or the government, which were the regulators, to participate in risky activities, Neal argues that “the ignorance of the uncertainty surrounding any future venture is ultimately the more powerful explanation of how and why both regulators and capitalists led us into the crisis (1101).”

Read More
1195 Words | 5 Pages

Financial meltdowns are affecting almost all of us how often will each of us go through a ‘crisis’ in our lifetime?” The answer is: many times. We need to have effective ways of thriving even during the tougher times we need solutions and practical day-to-day tools to help us sail thru the crisis which cannot be not negativity, whining and complaining,. As the turmoil in the economy and financial markets continues, golf teaches us to be calm, and patient to face this seemingly difficult situation, these real life experiences of the game help us to face reality when it knocks at our door, hence no doubt it is said the Many a corporate executives engage in this game for better business understanding.

Read More

More about 2008 Financial Crisis Summary

Related Topics

Open Document