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
So the poor condition of the agriculture sector also leads to the instability of the economy. 3. Crash of the Wall Street: A major reason of the great depression was the crash of the stock market. The stock market was making huge profits and people not only the rich class but the middle class also started investing their money in the stock market. People were taking loans from the bank and were investing them in the stock market.
It devastated not only in the U.S economy and but worldwide. Before the crash, the stock market experienced an all-time high that the Dow Jones Industrial Average reached a record high 381.2. By November, it plummets to as a low 199 and with this low, it caused stocks to lose value about 90 percent. In lieu of the crash of this created a great depression, and it was the longest and most severe depression every experienced by the industrialized Western world. “The fundamental changes impacted the economic institutions in example, banks and macroeconomic policy and economic theory” .
In 1929, America underwent an economic crisis. It was the longest and most severe depression of the industrialized western world. This was known as the Great Depression. The cause of this tragic event was partially caused by buying stock in credit. Banks handed out loans to people but when the stock market crashed, they couldn’t pay back the loan.
During a period of tough competition between mortgage lenders for revenue and market share, and when the supply of creditworthy borrowers was limited, mortgage lenders relaxed underwriting standards and originated riskier mortgages to less creditworthy borrowers.  In the view of some analysts, the relatively conservative government-sponsored enterprises (GSEs) policed mortgage originators and maintained relatively high underwriting standards prior to 2003. However, as market power shifted from securitizers to originators and as intense competition from private securitizers undermined GSE power, mortgage standards declined and risky loans proliferated.  The worst loans were originated in 2004–2007, the years of the most intense competition
This ratio rose to 4.0 in 2004, and 4.6 in 2006 (CSI). This upward trend shows the trust being gained from the american people in the housing\ market. People felt confident that they could afford an expensive house because they were lured in with low adjustable interest rates, that then increased to an outrages rate in a few years. As more and more subprime mortgage owners defaulted on the payments it trapped those in adjustable mortgage rates. With interest rates rising it caused many to default on their payments or take out a second mortgage with they couldn’t afford.
Obamacare and medicare should be repealed. Being fined for not paying for an insurance you can not afford because of the obamacare and affordable care act is wrong in many ways and just another way that obamacare knocks our nation down one step at a time. It has made taxes of those in the middle class and upper class rise and cost more money for the insurance provided to the people after taking away their original insurance plans. Obamacare is not free insurance it is costing the people in the nation hurting those who have to pay more just to support the lower class
Edward McClelland believes the American Dream is on hold because the middle class is shrinking and it’s not from capitalism, but from the failing government. It seems like Presidents Nixon, Carter, and Reagan were actually hurting the middle class whether it be from Nixon’s answer to inflation, Carter’s leverage against unions, or Reagan’s low prices of employment or even the firing of workers on strike. In 1982, when Ronald Reagan was in office, the unemployment rate was at a rate of 10.8 percent. This high percentage rate shows no hope for the middle class to get back on their feet. To help get a better picture of what it looked like, McClelland compared the declining of workers in unions and the middle class income, and says that they fit on the same axis.
The pressure to address the UK`s housing crisis grows ever stronger with number of radical solution being put forward to ease the strain. One of the solution to free up family housing by offering elderly people tax breaks to move into smaller homes. More than half of over 65s fall in this category which result in hoarding housing. There is some argument that people have work hard to buy their own home, so they lived whatever size that pleasing them. They said that government should give tax incentives to elderly people to downsize and make sure there is suitable homes for elderly.
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