United States Economic Financial Crisis - 1639 Words

Throughout the years, different events occurred and influenced the global economy positively or negatively. For example, the oil crisis in the ‘70s negatively affected the economy just as bad as the Gulf War did in 1990. On the other side, the end of other wars had a positive effect on the economy, for example World War 2, which boosted the stock market and ended the Great Depression. When multiple negative effects occur at the same time, or when crises last for a long time allowing other negative effects to surface, crises tend to last longer and prevent a pick-up in growth. The current economic-financial crisis was indeed caused by the simultaneous occurrence of events in different parts of the world that all had a negative effect. These events are subtly different and therefore it is common that only one event is held responsible for the crisis. In reality, the world economy became critical due to the mix of four major events: 1) the unrestrained greed of financiers in the U.S. and U.K., which transformed bad mortgages into toxic financial assets 2) the habit of getting deeply indebted in the U.S. and U.K., 3) the excessive liquidity in Europe, 4) the real estate bubble in the U.S. and some European countries (Thomas, 2011) At the beginning of the financial collapse in the United States, many commentators, among which was the President of the Federal Reserve, hastily affirmed that the situation would only affect the United States and at most, the UK, where the banks,Show MoreRelatedWhat Is A Financial Crisis?1671 Words   |  7 PagesWhat is a financ ial crisis? 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With decades of industrialization, populatio n growth and surging economies, the Western World mainly the United States and Canada, becameRead MoreThe 2008 Financial Crisis Essay1326 Words   |  6 Pagesintroduction The 2008 financial crisis led to a sharp increase in mortgage foreclosures primarily subprime leading to a collapse in several mortgage lenders. Recurrent foreclosures and the harms of subprime mortgages were caused by loose lending practices, housing bubble, low interest rates and extreme risk taking (Zandi, 2008). Additionally, expert analysis on the 2008 financial crisis assert that the cause was also due to erroneous monetary policy moves and poor housing policies. The federal governmentRead MoreThe Financial Crisis Of 20071646 Words   |  7 PagesThe most recent financial crisis of 2007 was felt throughout the world, and brought about huge economic consequences that are still being felt to this day. 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This was in line with government campaigns for equitable housing of US citizensRead MoreChina And China Case Study1578 Words   |  7 PagesDiscrepancies, some of the distinctions in the information on the US imports from the PRC and Chinese fares to the US are explained by the changes in sending out costs from China and import costs in the US for products transported directly from one state to the other. Part of these differences is associated with the transfer of property during the delivery, which leads to a price premium when the owner changes (Xu, 2012). The publication of official statistics on the US trade is often accompanied byRead MoreThe World Experienced A Tremendous Financial Crisis Essay1131 Words   |  5 Pagestremendous financial crisis which rooted from the U.S housing market; moreover, it is considered by many economists as one of the worst recession since the Great Depression in 1930s. After posing a huge effect on the U.S economy, the financial crisis expanded to Europe and the rest of the world. It brought governments down, ruined economies, crumble financial corporations and impoverish individual lives. For example, the financial crisis has resulted in the collapse of massive financial institutions