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/biz/ - Business & Finance

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1118700 No.1118700 [Reply] [Original]

hey /biz/, can someone please explain to me the great worldwide recession and financial collapse of 2008/2009 that the world is still recovering from 6-7 years later, also can you guys please help me out and explain to me and teach me in general how business and economics works..... especially today in the 21st century globalized world

>> No.1118702

>>1118700
>globalized world
Kek. You do realize th....
Nevermind f a m. Enjoy yourself.

>> No.1118715

OK at an extremely basic level, the banks were too generous with home loans, lending money to people who were never able to afford the repayments

This caused the price of houses to rise because more people were buying homes, basic supply and demand

Then, when the people who couldn't afford the repayments started going bankrupt, the banks were in possession of all these houses that they had loaned hundreds of thousands of dollars on, which in reality were only worth a fraction of that

basically:

>bank loans bum $300k to buy an overpriced house
>bum stops paying, bank repossesses home
>home worth only $100k after the bubble burst
>bank lost shitloads of money
>repeated like a million times

There's more to it than that, a lot of greedy wall street guys made the problem worse with complicated financial instruments, but I'm guessing that's over your head at this point

>> No.1118940

>>1118715
>a lot of greedy wall street guys made the problem worse with complicated financial instruments,
The only reason the banks were handing out mortgages with risk to default is BECAUSE of mortgage-backed securities. They're the crux of the whole thing.

>> No.1118954

>>1118700
>the world is still recovering from 6-7 years later,
Huh? The markets recovered by 2012 or so. Credit returned to normal by 2012-2013. Housing prices haven't returned to 2008 level, but have normalized and are rising. Unemployment has been falling for years.

The world isn't burning. Stop watching Fox News.

>> No.1119020

>>1118940
>The only reason the banks were handing out mortgages with risk to default is BECAUSE of mortgage-backed securities. They're the crux of the whole thing.

ehhhh, the Taxpayer Relief Act of 1997 was a big cause too. You can' really say there was 1 cause.

>Unemployment has been falling for years

Yeah, but unemployment still hasnt reached pre recession levels, and median income is still way down.

The definition of "recovery" depends on your position in life, and looking only at markets is extremely myopic.

>> No.1119091

>>1118700
>financial collapse of 2008/2009 that the world is still recovering from 6-7 years later,

kek

we're in a worst position now than we were in 2008. there was no recovery.

>> No.1119958

>>1119091
So whats gonna happen? WW3 hopefully?

>> No.1119964

>>1119958
the only thing wars do is accelerate countries debt and that eventually leads to economic collapse, making money worthless. So that isn't a good thing.

>> No.1119967

>>1119964
So Im being denied even the nuclear war now?

Fuck, why live.

So what will happen just more boring unemployment?

>> No.1119974

>>1119967
well if you give up on living, make sure to have kids first so they can deal with your genetic material