HIST 011 Lecture Notes - Lecture 71: Troubled Asset Relief Program, Joe Biden, Sarah Palin
Document Summary
The great recession the housing boom of 2002-2007 was fueled by risky subprime mortgages and people who wanted to flip houses to make a profit. Wall street packaged this into securitization or a variety of complex investments due to high risk loans. Prices started to dip and everything collapsed. Resulted in credit liquidity crisis because banks lacked funds or were too scared to make loans to businesses and consumers, preventing day to day economic movement. With the falling economy, gas prices rose to over per gallon. Stock market fell over 40% and led to a rising rate of unemployment. 2008- government tried a billion stimulus package and took critical financial institutions such as quasi-governmental mortgage companies, fannie mae, September 2008- bankruptcy of the lehman brothers bank led to panic in the financial industry. Forced the bush administration to ask for additional money to help banks across the u. s. restore credit.
