Section 2B - Financial Crisis of 2008(1)

Section 2B - Financial Crisis of 2008(1) - Section 2B...

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1 Section 2B Financial Crisis of 2008
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2 Overview Key events of the economic crisis The four causes of the economic crisis 3 lessons we should learn from economic crisis
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3 Key Events of the Economic Crisis This economic downturn was characterized by: The boom and bust of the housing market Rising default and foreclosure rates Sharp downturn in the stock market Soaring energy prices
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4 Boom and bust of the housing market
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5 Mortgage Default Rates
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6 Foreclosure Rates
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7 Sharp downturn in the Stock Market
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8 What caused the economic crisis of 2008? 1. Regulations that lowered mortgage lending standards 2. Prolonged low interest rate policy of the Fed during 2002-2004 3. Increased debt to capital ratio of lending institutions 4. High and growing debt to income ratio of American households
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9 1. Regulations Lowered Lending Standards A. Government Sponsored Enterprises (GSE’s): Fannie Mae and Freddie Mac B. Department of Housing and Urban Development (HUD) required them to
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This note was uploaded on 04/02/2012 for the course ECON 2000 taught by Professor Joabcorey during the Spring '12 term at Florida State College.

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Section 2B - Financial Crisis of 2008(1) - Section 2B...

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