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TED Video About The 2007-2008 Financial Crisis

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Many times, I have listened different speeches from my professors that have touched the topic about the 2007-2008 financial crisis, but I never fully understood how and why it happened. After watching the TED video that Dr. Daigle posted and some extra research I got a better idea about the recession and believe that now I am more knowledgeable on this topic. The Great Recession in 2008 began with the bursting of an 8 trillion-dollar housing bubble. As a result, the loss of wealth led to reductions in consumer spending. The financial market chaos, together with the consumption loss had triggered the bubble and had led to the collapse in the business investment. The consumer spending and business investment issues led to a massive job loss, which made the …show more content…

In 2008 and 2009, the U.S. labor market lost 8.4 million jobs, or 6.1% of all payroll employment. This was the most dramatic employment contraction (by far) of any recession since the Great Depression. By comparison, in the deep recession during the 80s, job loss was 3.1%, or only about half as severe (The State of Working America). The green light example in the video really helped me realize how people were tempted to get loans during the 2001-2003 years and as a normal person I believe I would have taken a bigger loan and bought a bigger house, since the interest rate was as low as 1%. Mr. Wesbury, the speaker in the video, made a very good comparison with the crisis during the late 70s and early 80s. The problem back in the early 70s was again the low interest rate and how people were buying and spending more than they could afford. Additionally, many individuals had been investing in the oil

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Keeping interest rate low caused the economy to overheat and inflation to sky rocketed out of control. The video talked about the Fed-Treasury Accord of 1951. This act allowed the Federal Reserve to operate independent from the government so it can set the right interest rate. That way it can access economic stability. Since 1951 the Fed has been independent from political pressure

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The Great Depression occurred after the stock market crash in 1929, but lasted for years after, until 1940. One reason the crash occurred was because banks were failing. Banks were lending out money to anyone even if those people did not have good credit. Another reason was that productivity of products were high, but the demand for those products decreased. Since people were not buying, companies were losing money, which led to lay-offs.

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When the stock market crashed, wealthy people had all their saved money wiped. People couldn’t really take loans out because they were in debt owing money to the bank. After banks shut down, then local stores, factories, and restaurants all shut down. This then escalated into unemployment. Over 600% of citizens were unemployed and had no income.

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The companies kept pushing higher prices than what their products were really worth. This lead to the stock market crash. This meant workers were fired, wages cut, and business went out of business. After the stock market crashed, Americans lost trust in their banks to hold their

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1331 Words | 6 Pages

This dark time in history began with the collapse of the stock market in October of 1929. Wall Street became unstable and in turn wiped out millions of investors, which caused the United States to fall into the longest and deepest economic crisis in its history. Although the stock market crash of 1929 started the chain of events, other events also fueled its decline. First, firms in America earned record profits during the 1920s and reinvested much of those funds into expansion. By 1929, companies had expanded to the “bubble point”.

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Many industries had also begun overproducing their goods and selling them at a loss. This led to the stock market crashing in 1929. The market will drop almost 90% over the next six months. Everyone rushed to withdraw their money from the banks in fear of losing it. Unfortunately, the banks didn’t have the money, and this caused even more panic.

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This time period was painful. The collapse in the monetary base controlled by the Federal government during the recession was the largest in United States history (Murphy). People were forced out of their jobs all across the face of the nation. Companies fell apart because they could no longer support their workers and the items they were producing. Thousands of farms and companies disappeared.

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587 Words | 3 Pages

During this time, the economy was in really bad shape. Unemployment was at an all time high which made it hard for people to pay back the loans they took out. People were losing their homes forcing them to reside out of their vehicles, if they had one, or on the streets. Because it was hard for some to pay

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However, speaking of major economic events, the Great Recession shared some similarities with its long-lost brother. Happening quite recent as in 2007 the Great Recession was one of the biggest economic downturns experienced since the Depression. Its root cause is thought to be the housing market crash however many different opinions flood this topic. During this time of the recession lasting from 2007-2009 Americans were greatly affected the biggest challenge was unemployment as it from 5% In 2007 to 10% in 2009. However, with a new president in office the recession was turned around in a timely manner.

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154 Words | 1 Pages

The crisis began when mortgage defaults began a substantial and unexpected increase, triggering a chain reaction throughout the entire financial sector. Due to houses never lose value also the real estate is local anywhere, so prices could never decline across the country. Therefore, people buy loans from

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573 Words | 3 Pages

This was caused by the American stock market crash in 1929. This caused banks to close down, people’s savings to wipe out and also resulted in a high level of unemployment. This was caused by a sudden stop in consumerist tendencies. This was devastating because the suppliers had expected the same amount of demand and therefore had continued mass production of goods. This devastating collapse in the economy was a historical event and could be seen all over the world.

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The rise of interest in stocks combined with the hefty weight of numerous new investors had caused a break in the banks, in effect causing a nationwide crash in the stock

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The novelty of the internet and the promise of a brighter future that you could not only be a part of, but profit from if you picked the right, bright new company to throw money at fooled many into losing their savings in stocks whose values plummeted, taking jobs and entire companies with them. Regardless of when exactly it started, Greenspan's identification of a climate of "irrational exuberance" was astute. However, Galbraith and Hale suggest that however far-sighted those in certain federal positions may have been in the run-up to the crisis, the US government did far too little to prepare for it. Government policies may in fact have worsened the situation

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Industry rose fast, people have job, either be soldiers or workers, or entrepreneurs. Then, after this crisis, it came with another one, which happened in 2008, basically this crisis has a lot of things similar with the Great Depression. I still remembered that year when the highest unemployment ratio went very high, business and companies failed, bankrupt, insurance companies closed because they

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852 Words | 4 Pages

The 2008 economic crash is something that almost all Americans had never experienced, and its impact was felt by all citizens of the United States. America hadn’t struggled this severely to keep itself afloat since the 1930s Great Depression. Although the crash happened after his death, Milton Friedman advanced his ideas to the public about how over regulation was one of the great causes of this market crash. He would still admit that there was other factors leading to the minor depression (like how easy it was for almost anyone to get a mortgage). He agreed mostly with other conservative economists that the government’s looming presence in the nation's economy caused the financial crisis.

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