hustlenomics - Panaro1 John Panaro Gordon Rule 3/4 Mr...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Panaro1 John Panaro Gordon Rule 3/4 Mr Mossadeghi/ Macro Economics December 1st 2008 The Credit Crisis Banks are only useful and operational as long as they can issue loans and make enough on those investments to run their own operations and pay back those who deposited money with them in the first place. America's banks and economy are in great turmoil due to lending credit with nothing being payed back in return. Even America's larger banks and brokerage firms such as J.P. Morgan and Merill Lynch are suffering. The credit crisis that began in the summer of 2007 as a seemingly localized event, expanded over the year to impact the lives of many individuals, not just in the United States where it began, but internationally as well. A continuous stream of news headlines sensationalizing the rise in residential foreclosure rates, the drop in house prices, the contraction of residential credit and even the collapse and failure of several large and distinguished financial institutions, most notably Lehman Brothers, all testify to the severity of the crisis. The world economy has been growing at a rate that far exceeds the population and income growth rates. The reason is simple: We’ve figured out new ways to leverage debt so we can buy more. From a personal standpoint, I think we all understand that the more you put on the credit card, the more “stuff” you can buy. The more stuff you buy, the better the overall economy
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/02/2010 for the course ECO ECO2001 taught by Professor Calhoun during the Spring '08 term at FSU.

Page1 / 4

hustlenomics - Panaro1 John Panaro Gordon Rule 3/4 Mr...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online