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Why Did The Stock Market Crash Of 2008

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The stock market crash in 2008 will go down in the history of the United States forever, the DOW Jones fell 777.68 points in intraday trading. With those exponential numbers, the United States has never dealt with a rapid drop like that in history before. Some may say that the numbers plunged down due to Congress rejecting the bank bailout bill, but overall the crash had been building for quite some time.
The DOW hit its pre-recession peak by closing out at 14,164.43 on October 2007. Subsequently it dropped more than 50%, closing out 6,594.44 in March 2009. The only other time the stock market has felt this much devastation was during the Great Depression. In the Great Depression, the market declined a whopping 90%. Although the Great Depression’s numbers are on a much larger scale it also took 3 years to crumple. The 2008 crash only took a few days. By following the timeline, it shows exactly how the market had gotten abolished so quickly.
2007 …show more content…

In November 2006, the Commerce Department declared that October’s new home permits went down 28% from last year. Businesses had put these numbers off to the side in certainty that it would not affect the booming markets and profits. Nevertheless, as home prices fell, they provoked subprime mortgages. By August 2007, the Federal Reserve identified that the banks did not have enough liquidity to function. The Federal Reserve slowly began to add back liquidity to the banks, in hope to balance things out. Quickly as October 2007 approached, economists and businesses warned about the overuse of collateralized debt obligations and other

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