Tuesday, May 18, 2010
Economic Drop in 2008
The "recession" that began in 2008 started because investors lost faith in mortgage-backed securities, so there was a reduction the capacity of loans by banks. This most likely made people lose their jobs, so they couldn't pay for investments in mortgage-backed securities, making banks able to loan out less, and the cycle will continue for this and many other factors unless something is done. I am mostly sure something has been done, because that was 2 years ago, and our economy is back on track now.