The Great Recession Of 2008 - 1814 Words

Greed: Its Role in Subprime Lending and the Recession of 2008 The great recession of 2008 affected everyone around the world. The great Recession is considered the second worst economic crisis in American history, behind the Great Depression. The Recession of 2008 was caused by two major faults: the use of subprime lending and changes in banking culture leaning towards self interest within the banking industry. There is no doubt that subprime lending was a major cause of the Recession. It was a tactic used by investment banks in order to get more money from unsuspecting homeowners. However, lenders found out that most of the people who were qualified to have a mortgage already had one. In turn, the lenders had to lower their credit criteria for people to take out a loan on a house. This is how the term subprime lending came to be in the financial world. As a result of subprime lending, the investors were able to make millions off of these mortgages. People who qualified for a subprime mortgage usually had a credit score below that of 620. To make the subprime mortgage deal more customer friendly, the lending banks decided to have the people who qualified for these mortgages didn’t have to have a down payment. Normally, the down payment would be as much as 20%, but this made it easier for people to get mortgages without having to worry about how much money they needed at the beginning of their purchase. â€Å" Many American homeowners bought houses they could not afford,Show MoreRelatedThe Great Recession Of 20081123 Words   |  5 Pages The Great Recession of 2008 Debra Turner ECON 102 Professor, Shahrokh American Public University September 26, 2015 â€Æ' The Great Recession of 2008 Recession is a significant decline in real GDP, real income, employment, industrial production, and wholesale/retail sales, which last more than a few months. (Economic recession, n.d.) Further, a recession typically begins after a peak in the economy and ends at the trough, however, â€Å"the start and end dates are determined by the Business Cycle DatingRead MoreThe Great Recession Of 20081691 Words   |  7 PagesStefanos Lazaridis Professor Demiray Economics 200 October 18, 2015 Great Recession of 2008 The Great Recession in 2008 led to a huge crisis in the United States economy. This recession almost led to the entire collapse of the United States economy due to the constant unstable changes in legislation, regulation, along with the changes in fiscal and monetary policies. Furthermore, many economists believe that the increase of excess monetary and government irresponsibility led to the overall crisisRead MoreThe Great Recession Of 20081388 Words   |  6 Pages The great recession of 2008 affected everyone around the world. The great Recession is considered the second worst economic crisis in American history, behind the Great Depression. The Recession of 2008 was caused by two major faults: the use of subprime lending and changes in banking culture leaning towards self interest within the banking industry. There is no doubt that subprime lending was a major cause of the Recession. It was a tactic used by investment banks in order to get more moneyRead MoreThe Great Recession of 20082062 Words   |  9 PagesAbstract A recession is full-proof sign of declined activity within the economic environment. Many economists generally define the attributes of a recession are two consecutive quarters with declining GDP. Many factors contribute to an economys fall into a recession, but the major cause argued is inflation. As individuals or even businesses try to cut costs and spending this causes GDP to decline, unemployment rate can rise due to less spending which can be one of the combined factors whenRead MoreThe Great Recession Of 2008-91850 Words   |  8 PagesThe Great Recession of 2008-9 was the deepest and longest capitalist economic slump since the Great Depression of 1929-32. The recent financial crisis is known as the â€Å"Great Recession† of 2008-9. Its downturn was sparked by the collapse of the US housing market. In 2006, the prices of home began to rise and the banks began to encourage potential homebuyers to take out larger loans. There were lower interest rates at the time, an d this seemed like a good idea for most individuals who were searchingRead MoreThe Great Recession in the year 20081063 Words   |  5 PagesRecession 16Specifically, Freund (2009) defines global downturns as years when world real GDP growth is (1) below 2 percent, (2) more than 1.5 percentage points below the previous five-year average, and (3) at its minimum relative to the previous two years and the following two years. 1975, 1982, 1991, 2001, and 2008 Freund (2009) describes the evolution of world trade following four previous global downturns. She finds that the size of the decline in world trade during these episodes is Read MoreThe Great Depression of 1929 vs. the Great Recession of 20082799 Words   |  12 PagesThe Great Depression of 1929 Vs. The Great Recession of 2008 In America there have been great economic struggles and triumphs. The many great leaders of this country have foraged, failed, and overcome some very difficult times. Comparing the Great Depression of 1929 and the Great Recession of 2008 has revealed similarities that by learning from our mistakes in 1929 could have prevented the latest recession. I will discuss the causes of the Great Depression and the Great Recession, and what policiesRead MoreThe Great Recession Of 2008 Was A Worldwide Economic Downturn1673 Words   |  7 PagesThe Great Recession of 2008 was a worldwide economic downturn that impacted the global economy. Economists consider the economic decline as one of the most damaging recessions that occurred since the Great Depression of 1930’s. Several documentations and research regarding the recession have been made to make a better understanding of the economic downturn in 2008 as well as the global economy as a whole. The book used as reference in this essay, the Diary Of A Very Bad Year: Confessions of an AnonymousRead MoreGreat Recession 2008 Economic Crisis, emerged in recent months of 2008 and many countries of the2500 Words   |  10 PagesGreat Recession 2008 Economic Crisis, emerged in recent months of 2008 and many countries of the world are adversely affecting economic development. Especially in this crisis compared with 1929 World Economic Crisis in September 2008 has become visible. The market value of real property in the United States losing one and kept it as a result of the increase in personal bankruptcies even though it is believed that triggered the crisis. Causes Throughout the 2000s, especially in oil and all commoditiesRead MoreFiscal and Monetary Policy Before During and After the â€Å"Great Recession† of 2008594 Words   |  3 PagesOne of the most interesting facets of The Great Recession of 2008 is that it didn’t really begin in 2008. The fiscal and monetary policy that prompted what we know now as the Great Recession of 2008 really began in 2006 and 2007. What was happening then and why did it take so long for the nation to feel the recession? The answers to those questions explain a great deal about how the Federal Reserve Bank operates and how the different ideologies of economics affect our nation (Sumner, 2011). In