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Posted in 2008, Finance & Insurance | 0 comments

Defaulting Homeowners

No. 1 Defaulting Homeowners: The United States Economy

After banks handed out billions in sub-prime mortgages for homes people could not afford, millions of families “quit” being homeowners. As a result, the global economy entered its worst crisis since at least the Great Depression, perhaps forever. Financial institutions recorded massive losses, and at least 100 mortgage corporations were shut down, sold, or suspended business. Major financial institutions, including Bear Stearns, AIG, Lehman Brothers, Wachovia, and Washington Mutual were rescued by the government or acquired for a hearty show tune. Due to reckless bank speculation, the government issued a previously incomprehensible $700 billion economic bailout, with results that are still unclear to anyone. Banks are not lending, people are not spending, and Wall Street needs mending.