Financial Crisis 2008
Following a period of economic boom, a financial bubble—global in scope—has now burst. The extent of this problem has been so severe that some of the world’s largest financial institutions have collapsed. Others have been bought out by their competition at low prices and in other cases, the governments of the wealthiest nations in the world have resorted to extensive bail-out and rescue packages for the remaining large banks and financial institutions.
Some of the bail-outs have also led to charges of hypocrisy due to the apparent "socializing of the costs while privatizing the profits." Furthermore, the institutions being rescued are typically the ones got the world into this trouble in the first place. For smaller businesses and poorer people, such options for bail out and rescue are rarely available when they find themselves in crisis. There is the argument that when the larger banks show signs of crisis, it is not just the wealthy that will suffer, but potentially everyone because of the ripple effect that problems at the top could have throughout the entire economy.
This problem could have been averted (in theory) as people had been pointing to these issues for decades. However, during boom, very few want to hear such pessimism. Does this crisis spell an end to the careless forms of banking and finance and will it herald a better economic age, or are we just doomed to keep forgetting history and repeat these mistakes in the future?
Following a period of economic boom, a financial bubble—global in scope—has now burst.
A collapse of the US sub-prime mortgage market and the reversal of the housing boom in other industrialized economies have had a ripple effect around the world. Furthermore, other weaknesses in the global financial system have surfaced. Some financial products and instruments have become so complex and twisted, that as things start to unravel, trust in the whole system started to fail.
John Bird, John Fortune, Subprime Crisis,...
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