The most important and far-reaching event of the lives of everyone in the 2008 Financial Crisis. Just as the World Wars have affected the whole World, same as the result of this crisis. This financial crisis had created a great depression in the economy.
It is believed that it began when the Lehman Brothers went bankrupt and the empire fell off. A few other firms failed too. Other things that became part of this were loans, low income and more expenditure of the people, etc.
The Human Cost
The human cost is never discussed when told about the financial crisis. People lost most of their income in the time of recession. People in the world also committed suicides due to this crisis. The number of industries also deteriorated as many of them got closed because it could just generate very little income for themselves and more expenditure. There arose a cycle of conflict and annoyance.
Effect on American Politics
The major impact of the financial crisis has been seen in American Politics. The elections that have been fought after the crisis have been on the cleanout philosophy. This recession ruined all the savings of the people in a moment as the financial greed aroused in the world.
Unrest of 10 years
The 2008 crisis has affected so much that to bring back things is really tough. The wealth of the market has been lost leading the global economy into recession everywhere which is too hard to be recovered. This has also resulted in the social and political unrest in the world. In developed countries like France,U.K, U.S.A it has been claimed that it needs tough solutions to recover from the losses.
Existence of Lehman Brothers
The flame of recession blew out when the news of Bankruptcy of Lehman Brothers came out in the media. This gave an idea to everyone that it was not a minor hustle but a major one. Now the investors lost their interest in the market and withdrew their invested funds in order to safeguard themselves. The part of the company that was not in the working position went in the hands of the Barclays and the holding company existed to clear the claims of the investors. Finally, it settled all the claims except a few cheques of their employees.
Big Banks grew Bigger
The big banks of the world grew bigger and flourished that they cannot fail easily. Nowadays banking has proved to be a very strong industry than it was before. In the situation of recession a few strong banks can never fail like Bank of America, Hdfc.
Connection of Clinton
The game of politics never ends be it crisis or recession or any pandemic. It was certain to involve politics in between this crisis be it the presidential elections going on or the war. The American government was surely criticized for this recession. The commercial banks were told to deal with the securities because the funds of the investors were affecting the market risk.
One-tenth part of the global GDP is the Derivative Market
The financial instruments that gain or lose money be it gold that the seller or the buyer doesn’t hold is the derivative. The derivatives are needed to run the economy and promote cash flow. The problem aroused in poor regulation during the period of recession in mortgaging or investing funds in this market. Nowadays derivatives more diverse as one can replace or make the new one out of the previous one. One has the platform to buy and sell derivatives on almost everything.