Thursday, February 28, 2013

financial crisis



The emergence of the global financial crisis that was experienced between the periods of 2007-8, was extremely crucial and the adverse effects were felt across the global divide. According to the studies conducted, the global financial crisis has been identified as the one of the worst critical events that American economy and the other global economies have experienced signified the advent of the great depression. Over the period, the consideration of the various sectors of the economy has shown that the sectors arte interrelated and they depend on one another and this has enhanced realization of improved GDP. However, the consideration of the global financial crisis was immense because it reduced the performance of all the sectors of the economy. Analysts have stated that the housing sector of the economy was the leading cause of the credit crisis because the factors involved in the formation of the crisis has been attributed to the extents of escalations of the housing prices. Concerns raised by***** have been beneficial in expressing the causes of the crisis. Upon this realization, the government of the United States initiated ideal corrective measures with the aim of restoring the performance of the economy but the measures employed were not significant to enhance establishment of increased performance.  Finally, the existing financial institutions have been identified as some of the leading institutions that are responsible for the causes of the financial crisis. The reports compiled by ****** has stated by th4 leading financial institutions sort to maximize their returns by investing tin the purchase of the homes with the hope of selling during the periods of high prices. In reality, this incentive is ideal for business but it resulted in the establishment of uncertainties in the market thereby leading to the establishment of decline in the performance of the houses and the market. In a bid to illustrate the lessons learnt from the global financial crisis, it is extremely crucial to consider the causes and some of the effects of the financial crisis.
Origin of the global financial crisis
Over the period, economists around the globe have always stated that the advents of economic performance is characterized by attributes of cycles that depicts booms and busts and normally, the seeds of  subprime meltdown are shown during the unusual time. The economy of the United States has continued to experience the significant effects fluctuations because of the variations caused by the factors like the terrorist attacks, dotcom bubbles and the reigning account scandals.  The leading cause of the problem has been stated to be the Federal Reserve because they lowered the rates of interests and this attribute resulted in the increase of liquidity. One aspect that characterizes this is that there was more money in the economy because it was easily accessible to everybody including the jobless with no assets. Analysis conducted across the subprime borrowers was that they all had the passion of owning their ideal houses and they ventured in the purchase of homes and this aspect significantly increased the prices of the houses. The federal government further lowered the interest from 1.75% to 1% which was marked as the lowest interest rates in the record of 45 years. The lowering of the rates had adverse effects because it encouraged the citizens to go for more loans in the banks and this resulted in further increase in the prices of the home prices. The signals of the crisis were realized in the economy because the home owners defaulted in the payment of the loans and the lenders had to resort to the other aspects of aspects of payment. The records have shown that the attributes of home ownership reached a whooping 70% in 2004 and the demand for the house was falling significantly. The fall in the houses resulted in a 40% decline in the US construction index and both new home owners and the subprime borrowers were all experiencing ideal problems. The subprime lenders were forces to close down due to bankruptcy because the borrowers defaulted in payment and the lenders could not regain their payments. The fall in the house prices was an extremely crucial event because it had adverse effects in the economy, the leading financial institutions had the opportunity of making purchases of the existing houses at lower prices with the hope of selling at higher prices but the financial crisis continued to reign thereby plunging the economy into serious financial problems.


The emergence of the global financial crisis that was experienced between the periods of 2007-8, was extremely crucial and the adverse effects were felt across the global divide. According to the studies conducted, the global financial crisis has been identified as the one of the worst critical events that American economy and the other global economies have experienced signified the advent of the great depression. Over the period, the consideration of the various sectors of the economy has shown that the sectors arte interrelated and they depend on one another and this has enhanced realization of improved GDP. However, the consideration of the global financial crisis was immense because it reduced the performance of all the sectors of the economy. Analysts have stated that the housing sector of the economy was the leading cause of the credit crisis because the factors involved in the formation of the crisis has been attributed to the extents of escalations of the housing prices. Concerns raised by***** have been beneficial in expressing the causes of the crisis. Upon this realization, the government of the United States initiated ideal corrective measures with the aim of restoring the performance of the economy but the measures employed were not significant to enhance establishment of increased performance.  Finally, the existing financial institutions have been identified as some of the leading institutions that are responsible for the causes of the financial crisis. The reports compiled by ****** has stated by th4 leading financial institutions sort to maximize their returns by investing tin the purchase of the homes with the hope of selling during the periods of high prices. In reality, this incentive is ideal for business but it resulted in the establishment of uncertainties in the market thereby leading to the establishment of decline in the performance of the houses and the market. In a bid to illustrate the lessons learnt from the global financial crisis, it is extremely crucial to consider the causes and some of the effects of the financial crisis.
Origin of the global financial crisis
Over the period, economists around the globe have always stated that the advents of economic performance is characterized by attributes of cycles that depicts booms and busts and normally, the seeds of  subprime meltdown are shown during the unusual time. The economy of the United States has continued to experience the significant effects fluctuations because of the variations caused by the factors like the terrorist attacks, dotcom bubbles and the reigning account scandals.  The leading cause of the problem has been stated to be the Federal Reserve because they lowered the rates of interests and this attribute resulted in the increase of liquidity. One aspect that characterizes this is that there was more money in the economy because it was easily accessible to everybody including the jobless with no assets. Analysis conducted across the subprime borrowers was that they all had the passion of owning their ideal houses and they ventured in the purchase of homes and this aspect significantly increased the prices of the houses. The federal government further lowered the interest from 1.75% to 1% which was marked as the lowest interest rates in the record of 45 years. The lowering of the rates had adverse effects because it encouraged the citizens to go for more loans in the banks and this resulted in further increase in the prices of the home prices. The signals of the crisis were realized in the economy because the home owners defaulted in the payment of the loans and the lenders had to resort to the other aspects of aspects of payment. The records have shown that the attributes of home ownership reached a whooping 70% in 2004 and the demand for the house was falling significantly. The fall in the houses resulted in a 40% decline in the US construction index and both new home owners and the subprime borrowers were all experiencing ideal problems. The subprime lenders were forces to close down due to bankruptcy because the borrowers defaulted in payment and the lenders could not regain their payments. The fall in the house prices was an extremely crucial event because it had adverse effects in the economy, the leading financial institutions had the opportunity of making purchases of the existing houses at lower prices with the hope of selling at higher prices but the financial crisis continued to reign thereby plunging the economy into serious financial problems.