The 2008 collapse is a big topic in United States, and reasons that cause the collapse actually, there are a lot for reasons. The first reason is financial crisis. The second reason is banking collapse. The third reason is subprime mortgage crisis. The fourth reason is the fall of the market crisis.

The first reason is financial collapse. In 2008 financial crisis is affecting millions of Americans and is one of the most topics in the Presidential campaigns. Financial crisis is the lowest interest rates created an incentive for banks, hedge funds and other investors to hunt for riskier assets that offered higher returns. They also made it profitable for such outfits to borrow and use the extra cash to amplify their investments, on the assumption that the returns would exceed the cost of rent to owned. The low volatility of the Great Moderation increased the temptation to “leverage” in this way. If short-term interest rates are low but unstable, investors will hesitate before leveraging their bets. But if rates appear stable, investors will take the risk of borrowing in the money markets to buy longer-dated, higher-yielding securities. The financial institutions, nonetheless, qualified such borrowers some money because by now they have learned how to shift the credit