GGRA02H3 Lecture Notes - Lecture 8: Jobless Recovery, Bloor Street, Neoliberalism
Document Summary
Security issuers had to sell to pay people who purchased assets, but sales drove prices down further. Major us and uk investment banks were going bankrupt and us and uk governments provided massive bailouts to rescue the banks but not the homeowners. Mortgage-backed securities were also insured in case the asset had not produced the expected returns, which further generalized risk but also the fallout, because not only did big financial organizations fail but also insurance companies. American insurance group required a bailout of billion dollars! Millions of people lost their homes and/or owed substantially more than what their houses were worth. The financial system was crippled by the credit-crunch. Debt of all sorts (state, corporate and personal) continued to soar and rates of unemployment remained stubbornly high (the jobless recovery). Emphasis on state austerity driven by the same financial and credit-rating agencies that created the crisis.
