What was the 2008 financial crisis? The 2008 financial crisis was one of the most important events in history, which took place at the beginning of the 21st century.
The 2008 crisis stemmed from the numerous bankruptcies of North American and European financial institutions. Such bodies were part of a complex world financial system.
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It can be said that the trigger for the 2008 crisis was the explosion of housing bubble in the United States. It meant a collapse in the world system of profit-driven economic speculation.
It is important to emphasize that this crisis has similarities with the Great Depression of 1929, however, was less impactful.
In 2001, the government of U.S began granting a large number of low-interest credits, as well as encouraging financial loans.
This action made the North American population start investing in real estate as a way of obtaining profit, as the individual bought a house with the aim of reselling it at a high price in relation to the purchase. The name used to refer to this movement is
As a result, the value of homes skyrocketed. With many people buying real estate, the mortgage market intensified and loans were granted (to buy more houses) with the individual's own property as collateral.
Thus, several companies bought mortgages from banks and traded them as common commodities. The companies that became best known in this field were Freddie Mac and Fannie Mae.
Such companies bought the mortgage debts of the banks in order to profit from them through negotiations or the payment of these debts.
This movement made the real estate market a lucrative business. Houses were built, as well as credits were offered to people from the most varied social classes, which did not allow any type of guarantee of payment.
Therefore, there was a devaluation of real estate (because of the large amount), reducing profits and promoting defaults on mortgage payments.
In 2007 and especially 2008, property values dropped dramatically. At that moment, countless companies and banks went bankrupt, causing a collapse in the economy of the United States and Europe.
This whole context intimidated the market with banks making credit and loans difficult. In this way, the investment capacity of companies dropped sharply. Next, some consequences of the 2008 financial crisis:
The bankruptcy of Lehman Brothers brought the crisis to a head, as more bonds and debt were devalued. Stocks, as well as investments, plummeted.
Even as the US government struggled to revive the economy, it spread and reached Europe two years later. Therefore, it began euro crisis.
Several countries on the European continent were indebted and without ways to combat the crisis. The countries that most felt its impact were: Spain, Greece, Italy It is Portugal.
They had to take on large loans from the International Monetary Fund (IMF), World Bank and European Union that required spending cuts, such as:
Such measures generated more economic stagnation which resulted in the revolt of the population that responded with protests, mainly in 2012.
It was the developed countries and the dependent underdeveloped countries that most felt the effects of the 2008 financial crisis.
countries like Brazil, China It is Russia, called “emerging economies”, felt less intensely due to the reserve funds they maintained and the investments they made.
Such countries have increased the offer of employment as well as consumption by the population. In this way, their economies experienced a dynamization.
Only in 2014 will Brazil feel the effects of this crisis, but on a smaller scale than those felt by the United States and Europe.
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