Failure of banks: The American banks at that time were small institution and they were relying on their own resources. When the stock market crashed many depositors went to the banks to take their money but the banks had fewer reserves to give to the depositors so they had to sell their asset. Moreover, the banks stopped giving more credits which ultimately led to low circulation of money in the economy. This damaged the economy
(Johnston, 2015). However, countries that suffered a lot were concerned that if they do not devalue their currency it is impossible to get out of economic crisis. To address this issue, two institutions were established which were international monetary fund and the international bank for reconstruction and development. They were responsible for lending money to countries that face difficulties in reviving their economy and attracting financing g from other sources as well as supporting the growth of less developed and impoverished countries for recovering respectively. At last, the Bretton woods system did not survive because there is overvalue of the US dollar but it created a global
Wars and battles are not fought without each side facing consequences, no matter who is victorious. Countless lives are lost, towns demolished, and what hit America the hardest were the financial issues. In order to fund the war, and to keep the states at ease, wealthy citizens were issued bonds by officials to obtain their precious metals (Financial Crisis). Unfortunately these funds were not limitless, and states then had to use paper money to finance the war. This, however, did not work out for America in the long run.
The crisis was specifically characterized by accumulating debt levels and extremely high structural deficits of the government. Unfortunately, the Great Recession left a weakened banking sector that has already recorded huge capital losses. The strong relationship between the survival of many Europeans government and their financial stability prompted the government to bail out banks that were badly affected by the Great Recession (Obstfeld et al 2009, 480-486). Thus, the banking sector is obviously in a very weak condition to intervene in the
A risky investment if the homeowners were unable to repay the mortgage. This proved to be the case when the US economy and housing market crashed in 2008 and Lehman Brothers had billions of dollars invested in the subprime mortgage market and homeowners had no money to repay the
France was severely in debt at that time, banks couldn’t give people who needed money because they didn’t have any to give, even with the high taxes. With the Privileged Estates system, the rich who could afford to pay the taxes didn’t
Ethiopian were not able to take or buy home due to low literacy rate and educational system. People have some economic problems in their life. Another main causes are disagreement with family, separation from relatives and irregular pattern of urban growth to big cities. People migrate to big cities, capital because of these places have better condition that other areas. There is no information about currently helping of Ethiopian government to homeless people, as previous services were ineffective and its failed, but some individuals try to help homeless people.
Firstly and most importantly, in 2010, it incurred a substantial loss from operations with net income totalling 86 billion dollars. Going concern in the long run will be effected • Due to it’s extreme debt it has incurred, coupled with its inability to pay said debt back anytime soon, the company will not be able to pursue any of their expansion plans, thus leaving the company at a severe competitive disadvantage. If the company cannot find a solution to their financial situation very soon, it will then be forced to declare bankruptcy. • Its CEO, Dov Charney. is the brains behind American Apparel’s controversial, yet effective brand campaigns, his behaviour outside of the realm of company decision making has put his company in a very negative light on more than one occasion.
Long time ago, the farmer were mistreated on the economic level. It was hard for them because they weren’t given bank loans very easily because of prejudice. They complained for the department of agriculture but they didn’t listen to them. Quoting from investor’s business daily: Before the mortgage crisis, attorney General Janet Reno accused banks of racism for failing to market mortgages to poor minorities with weak credit. Fear prosecution set off a stampede of risky inner-city lending that led, in part, to today’s record home foreclosures.