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Financial Crisis Of 2008: The Most Serious Recession In The United States

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FINANCIAL CRISIS 2008

Abstract
In 2008, the United States experienced a major financial crisis which led to the most serious recession since the Great Depression of the 1930s. In only a short time, the US stock market plummeted, liquidity dried up, successful companies laid off employees by the thousands. Moreover, housing crisis deepened, banks and hedge funds that invested big in subprime mortgages were left with worthless assets as foreclosures rise. Both the financial crisis and the downturn in the U.S. economy mentioned above spread to many foreign nations, resulting in a global recession and contributing to the European sovereign-debt crisis.
This study will explore the crisis to see how it played a significant role in the failure …show more content…

As the consequences of subprime mortgage crisis, the subprime mortgage lender was fallen first.
February 8th, 2007: HSBC announced that bad debt rate of 2006 increased 20% so in compare with forecast because of United States housing bubble. For many people, this was the first time they heard about “subprime lending”.
April 2nd, 2007: Subprime mortgage lender New Century Financial files for bankruptcy-court protection.
The crisis continued to destroy more subprime mortgage lender in summer and autumn of 2007 and spread wider in the financial system. There are more and more escape efforts from financial group were recorded and announced by media.
July 31th, 2007: Investment bank Bear Stearns liquidates two hedge funds that invested in risky securities backed by subprime mortgage loans.
August 9th, 2007: The biggest bank of France, BNP Paribas SA halted withdrawals from three investment funds because it could not “fairly” value their holdings after U.S. subprime mortgage losses roiled credit …show more content…

On social problems
The financial crisis that hit the world economy in 2008-2009 has transformed the lives of many individuals and families, even in advanced countries, where millions of people fell, or are at risk of falling, into poverty and exclusion. For most regions and income groups in developing countries, progress to meet the Millennium Development Goals by 2015 has slowed and income distribution has worsened for a number of countries.
Besides, the downturn in economic activity took effect on employment. The U.S. unemployment rate increased to 10.1% by October 2009, the highest rate since 1983 and roughly twice the pre-crisis rate. The average hours per work week declined to 33, the lowest level since the government began collecting the data in 1964. In Ireland and Spain, unemployment also rose significantly in 2008, as a result of a sharp fall in house building leading to major job losses in the sector. This led to the trend for their labors to go oversea to seek the new jobs and widened the wealth gap between the economic class at the very top and everyone else beneath

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