Hist Lecture 1 - Lecture 1 The Great Crash Following the...

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Lecture 1: The Great CrashFollowing the Great Depression, laws and regulations were put in placeProsperity followed after WW2 into the 90’s/2000’sUnder the Clinton era, deregulation began, continued into Bush eraLarry Summers was Clinton’s Treasurer, and an advocate of deregulationThe crisis hit just as George Bush was about to leave officeHenry Paulson was the CEO of Goldman Sachs, and was named Secretary of the Treasury in July 2006He became the face of the Govs response to the Crisis because Bush did nothingBear Sterns collapses in March 2008, JP Morgan buys them for cheap, all orchestrated by Henry PaulsonHenry Paulson had to intervene because if Bear Sterns was left alone to fail, eventually all of Wall Street could collapses as well, which a politician cannot allowLecture 2: Merrill Lynch is forced to sell themselves to Bank of AmericaLehman Brothers files for bankruptcy, largest in American history ($600 billion)AIG is given $182 billion in a bailout by the governmentPaulson proposes a comprehensive response to rescue the investment banks and Wall Street, the Emergency Economic Stabilization Act oTroubled Asset Relief Program (TARP)Paulson would use the $700 billion to buy up the toxic investments that Wall Street firms had on their booksAfter failing the first time, the House passes Paulson’s requestObama’s first term agenda is somewhat sidetracked by the financial crisis he inherits, so he appoints an economic team to help with the response

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