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2008 Financial Crisis Passed Essay

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Has the 2008 Financial Crisis Passed?
The question of whether or not the 2008 financial crisis has actually passed is a worthwhile one, and has been a topic of discussion for economists since 2008. The debate is based on the fact that while there are those analysts who state that the crisis ended completely and the world healed, there are others who hold that the crisis has yet to pass completely. Better yet, some of the analysts insist that the financial crisis signs and symptoms may have been relieved, but the real problem is not gone yet, and that it could be repeated once again. In spite of the two sides of the debate, there appears to be a consensus that the financial meltdown that was witnessed in 2008 is almost certainly …show more content…

Since 2010, the US economy has been growing by at least 1.5% each year. During the 2008 financial crisis, the GDP experienced a negative growth. In addition, while the unemployment levels has risen during the financial crisis, they have since returned to the pre-crisis levels, suggesting that the financial crisis may have passed, although the “disease” may have yet to be cured completely. Moreover, according to Matthews (2016), homeowners’ equity has grown to become higher than the rates recorded in the pre-crisis period of 2007, with financial analysts estimating that the homeowners’ real estate equity will continue to improve going forward. This reflects positive performance of the economy, which could not be said of the 2008 financial crunch. Lastly about the 2008 economic crunch, the household debt to the net disposable income ratio has continued to decrease, which implies that the general economic conditions are favorable (Solomon, 2014). In the Middle East and North African countries, the 2008 crisis was marked by a reduction in oil prices, drastic reduction in GDP, and the failure of large banks (Reinikka, 2010). However, in the post-2009 period, the economies have experienced a rebound effects, experiencing positive economic growth, with oil prices improving and GDP generally growing. The ripple effects of the financial crunch, such as the reduction of foreign direct investment also appeared to change positively, with expectations that an upward growth will be expected going forward (Reinikka,

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Taking on the task of managing the U.S economy is a very tedious task and should not be taken lightly. Nevertheless, our country has been tried many of times throughout its short lifespan, and we can learn from previous mistakes to help us get ready for any future financial problems. Increased government spending to fight recessions The protagonist opinion in the text, reviews the contrasting views between the recent recession of 2008-2009 and the 1930's "Great Depression", (Mankiw, 2015).

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economy’s recovery. Of course, there will always be criticisms regarding what took place, such as we still do not have a balanced budget, but I have to be happy that we also do not have the abysmal economic indicators we had in 2008. We did see an increase in our national debt. . It is currently at 17,941,406,575,143.38 (US Department of the Treasury, 2014), but I see this as a necessary evil for having to stimulate the economy and save some of those troubled institutions. And as far as the Feds focusing too much on financial institutions and banks and bailing out financial institutions rather than letting private market economy prevail, or “directing funds to the best-managed, most creditworthy borrowers” (Miller, 2012, p. 330), I think the failure and ruin of some of those institutions would have shaken up the US public confidence far worse and perhaps contributed to even more of a crisis.

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In the aftermath regulations such as the Dodd-Frank Act have been enacted to help identify signs of financial crisis, but regulation cannot eliminate financial crisis. The bull market for stocks continues, but at some point a correction will happen, how will the U.S. economy respond, that is the question that economists will continue to try and answer. References: Guynn, R.D., (2010, November 20). Financial panic of 2008 and financial regulatory reform. Retrieved from https://corpgov.law.harvard.edu/2010/11/20/the-financial-panic-of-2008-and-financial-regulatory-reform/ Minshkin, F.S., & Eakins, S.G. (2015).

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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.

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When was the start of the recent financial crises? Fitzpatrick IV and Thompson (2011) asserted that “many observers point to the summer of 2007 as the starting date for the financial crisis that would bring down most of the U.S. investment banking industry” (p. 1). However, there are many conditions that led up to the crisis, including housing policies and interest rates. Besides banks, government, homebuyers, and rating agencies had a role in the financial crisis, which led to the federal government actions to pass the Dodd-Frank Act to solve and avoid another crisis in the future.

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This is shown through countless home foreclosures as well as the expunction of small and big businesses. Unfortunately, 2008 isn’t that far in the past. A common phrase says that it is easier to ruin a grade in a class than to improve a grade. The same goes for the economy, it can crash over night but will take years to recover. The way we fix what we have now is by not make mistakes from the past.

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Since the Great Depression of 1929-30, the economy faced another biggest turmoil or what is being called as the worst financial crisis in 2008. The indications for the arrival of such crisis began in January 2008 when there was news of drastic fall in the profits of the Citigroup banking. It had a great impact over the New York Stock Exchange at that time. Followed the incidence, there was a series of declaration of a number of American and European banks. All these banks and financial institutions declared massive losses in their 2007 end of the year results.

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