Describe how the credit crisis may have adversely affected many people beyond homeowners and mortgage companies....

Describe how the credit crisis may have adversely affected many people beyond homeowners and mortgage companies. Do you believe the impact of the credit crisis is still being felt today? Why or why not?

Solutions

Expert Solution

The credit crisis always have a long term impact in the economy. It is not just about the mortgage and the homeowners who were hit in the great depression.

The credit crisis hit a gambit of Companies who were involved in any type of credit creation .It can be said to have insurance companies and Investment bankers and different types of banks who were merged in order to be saved.

It left a lot of people getting unemployment and demand completely evaporated which created a fear and panic in economy.Economy is an interrelated web of financial activities so many of the people who invested their life savings into some equity funds , lost a chunck of it. The money supply got soaked up and there wasn't much liquidity.

It's effect can be felt even today as the Main structural problem was not corrected, it was deferred for future. It can be seen through the the unemployment data in recent economic choas . The funds Who lost their money in previous depression didn't even recover enough to pay enough to the fundowners .So the impact can be said to be long lasting.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

The credit or financial crisis 2007-2008 started in the U.S. Many people in the U.S. have...

The credit or financial crisis 2007-2008 started in the U.S. Many people in the U.S. have got mortgages and later they couldn't pay back. These mortgage defaults caused many mortgage lending banks and companies to lose significantly and go bankrupt. As a result the housing prices started to fall causing a negative wealth effect and fall in consumer spending. The crisis was spread almost all of the countries in the world later. Why and how other countries were affected by...

Many critics argue that greed in the mortgage markets caused the credit crisis. Yet many market...

Many critics argue that greed in the mortgage markets caused the credit crisis. Yet many market advocates suggest that greed is good, as the thirst for profits by firms that participate in mortgage markets allows for economic growth. Write a short essay on how regulations can allow for greed while also ensuring proper transparency in the mortgage markets so that another credit crisis does not occur

Many critics argue that greed in the mortgage markets caused the credit crisis. Yet, many market...

Many critics argue that greed in the mortgage markets caused the credit crisis. Yet, many market advocates suggest that greed is good, as the thirst for profits by firms that participate in mortgage markets allows for economic growth. Write a short essay on how regulations can allow for greed while also ensuring proper transparency in the mortgage markets so that another credit crisis does not occur.

Describe the various reasons that caused the power crisis in California and how it affected America?...

Describe the various reasons that caused the power crisis in California and how it affected America? Discuss; deregulation, what that meant and how Eron's exploited it, outrageous prices on utilities, and 32 billion plus on California books

Discuss Opioid Crisis and how it started? How many people are using it? What are some...

Discuss Opioid Crisis and how it started? How many people are using it? What are some statistics?

Because of the coronavirus crisis, many people have lost jobs and young students are not able...

Because of the coronavirus crisis, many people have lost jobs and young students are not able to find jobs. The government of Canada has stepped in to help people in this kind of situation with regular payments called emergency benefits. Are these payments also acting as incentives for people make decisions to help reduce the spread of coronavirus? Explain.

Using the full spectrum of segmentation variables, describe how these companies( in Dominica) may have initially...

Using the full spectrum of segmentation variables, describe how these companies( in Dominica) may have initially segmented and targeted their respective Markets. (Which variables did they use to segment their market?) 1. L'Express Des Îles 2. KFC 3. Astaphans 4. Beauty Wise 5. Going Places

Is it easy or difficult to receive an ‘AAA’ credit rating? How many companies receive a...

Is it easy or difficult to receive an ‘AAA’ credit rating? How many companies receive a AAA credit rating in 2016 and 2017? (You can google to find the companies)

2. Explain how the Asian crisis would have affected the returns to a European firm investing...

2. Explain how the Asian crisis would have affected the returns to a European firm investing in the Asian stock markets as a means of international diversification. Illustrate with suitable example.

Evaluate how and why Australian banks’ credit risk exposure may be affected by the current COVID-19...

Evaluate how and why Australian banks’ credit risk exposure may be affected by the current COVID-19 pandemic in the foreseeable future. Comment on whether you believe Australian banks have the resilience to weather this challenging episode and why or why not. Your answers should be relevant to banks’ credit risk. (400 words)

Subjects