Economy Education Markets Stocks

Financial Crisis Breakdown Part Three: The Government’s Response

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As the economy was collapsing and capital markets froze, the U.S. government had to take action to revitalize the economy and reduce the panic sweeping across the nation. The Fed and U.S. government’s main priority was to prevent the economy from absorbing even more damage through the use of aggressive monetary policy. Troubled Asset Relief […]

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Economy Education

Financial Crisis Breakdown Part Two: The Collapse of the Market

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After the introduction of subprime mortgage-backed securities, investors were throwing their money into the U.S. housing market and housing prices began to rise. The newly relaxed lending regulations and low interest rates drove housing prices higher, making the MBS and CDO seem like even better investments. They figured that even if the borrower defaulted on […]

Economy Education

Financial Crisis Breakdown Part One: Securitization of Mortgages

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From 2007-2009, the United States witnessed its biggest economic crash since the Great Depression. The Great Recession left 8.8 million people without jobs, shooting unemployment up to 10% and leaving about 10 million Americans without homes. The stock market crashed with the DOW dropping around 7,000 points or 54% in a span of 18 months. […]