Financial Crisis of 2008-2009 the Perfect Storm

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RUNNING HEAD: A PERFECT STORM The Financial Crisis of 2008-2009: A Perfect Storm The 2008-2009 financial crises has and still is affecting millions of Americans and is one of the hottest topics in the Presidential campaigns. In the last few years we have seen several major financial institutions be absorbed by other financial institutions, receive government bailouts, or outright fold. So what caused the financial crisis of 2008-2009? It is my opinion that it actually was a perfect storm that had been brewing for years. There are several culprits to blame for the Economic Crisis of 2008-2009: Democrats and Republicans in Congress, the Federal Reserve, a fervent home-lending industry, banks, President Bill Clinton and President Bush’s administrations. The above root causes of the 2008-2009 economic crisis and the policies implemented by our current team of “Avengers”, responsible for rescuing the U.S. Economy from the recession, have results that have yet to be seen. What is a recession? A recession can be defined as “A period of general economic decline: typically defined as a decline in GDP (Gross Domestic Product) for two or more consecutive quarters.” ( IVW ) A recession is typically accompanied by a drop in the stock market, an increase in unemployment, and a decline in the housing market. This is exactly what happened. But why did it happen? There are many narratives and reports in regard to the causes of the financial crisis of 2008-2009. The only answer to how and why the economic downfall happened is that in 2007, the housing bubble burst, leading to a high rate of defaults on subprime mortgages. Exposure to bad mortgages caused Bear Starns to fail in March of 2008, leading to a banking crisis later in the fall A PERFECT STORM of the same year. The Government made a decision not to rescue Lehman Brothers from default in September
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