American economic meltdown - The U.S. Recession
The video Inside the Meltdown shows the immediate responses of various institutions as a result of the American economic meltdown of 2008. The meltdown occurred as a result of the Great Recession which was beginning to take form at this time. An economic recession is a state of negative GDP growth. The global recession of 2009 started in December 2007 and ended around the middle of 2009. The following paragraph will address the questions, what went wrong? How did it happen? and who is responsible?
What went wrong?
The U.S. Recession, which occurred between the years 2007 and 2008, was the worst since the Great Recession of 1930. It resulted to a loss of 8.7 million jobs between the years 2008 and 2010. The unemployment rate in America rose from 4.7% to 10% between 2007 and 2009. Numerous companies many of which were banks and mortgage companies also got hit hard for instance; Bear Sterns' stocks dropped from 171$ to 57$ per share which consequently led to bankruptcy. At that time, America also witnessed the collapse of giant companies like Fannie Mac and Freddie Mac. Between late 2007 and December 2008, U.S. GDP dropped by 2.2 points, which would not recover until late 2009 (Roberts 15).
[...] The bursting of the housing bubble resulted in the credit crisis, which was the major cause of the American economic meltdown of 2007-2009. Many of the home-owners foreclosed, resulting to massive losses for the banks from which they had borrowed (Roberts 109). Who is responsible? The homeowners during the 2006 housing bubble are primarily to blame for the recession due to their exuberant and irrational spending. Their actions resulted in the collapse of many banks to which they had been customers. [...]
[...] Results of the American economic meltdown of 2008 as per the video "Inside the Meltdown" Introduction The video “Inside the Meltdown” shows the immediate responses of various institutions as a result of the American economic meltdown of 2008. The meltdown occurred as a result of the Great Recession which was beginning to take form at this time. An economic recession is a state of negative GDP growth. The global recession of 2009 started in December 2007 and ended around the middle of 2009. [...]
[...] Many thought that the US Recession could never affect some financial markets, like those in Asia. Such people were in for a rude shock as the Bombay Stock Exchange, and the Brazil Bo Vespa index fell by 7.4 and 6.6 percent respectively. Responsibilities of management, corporate governance and the agency theory Corporate governance holds the responsibilities of planning, controlling and coordinating the company's policies and the workforce (Tricker, 34). The agency theory is a problem-solving statement that suggests motivating of a party to act to the advantage of another rather than considering its own interests in an issue (Kurkarni, 13). [...]
[...] A suitable way of enabling this is by freezing mortgage rates. There should also be better strategies set-up to predict any oncoming financial downfalls. What are the positive or negative financial market consequences? As a result of the recession in US in 2008, stock markets fell with the highest margin since 2002. Many Asian and European markets plummeted by as much as 4 percent, at the time with Dow Jones Industrial Average going to an all-time-low of a drop in just one day. [...]
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