Financial Crisis of 2008 Analysis

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In 2008, the US experienced the traumatic chaos of a financial downturn, whose effects rippled throughout Europe and Asia. Many economists consider it the worst crisis since the Great Depression, and its alarming results are still seen today, a long six years later. Truly, the recession’s daunting size and formidable wake have left no one untouched and can only beg the question: could it have been prevented? The causes are manifold, but can be found substantially rooted in illogical investments and greedy schemes. Before any of the risky moneymaking endeavors, investors traditionally would have gone to the US Federal Reserve to buy treasury bills, a safe and profitable investment. Later, when interest rates were lowered to only 1% in order to supposedly keep the economy strong, this created a rather unprofitable investment for investors, who then started to look for other ways of making a profit. Banks, on the other hand, were now able to borrow money from the Federal Reserve for an interest rate of only 1%, and there was an abundance of cheap credit. The major banks on Wall St. th...

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