A crisis is any event that is, or
expected to lead to, an unstable and dangerous situation affecting an
individual, group, community or whole society. Crises are deemed to be negative
changes in the security, economic, political, societal or environmental affairs,
especially when they occur, with little or no warning.
The crisis in subprime and a financial
crisis which broke out at the end of 2006 in the United States and that had
serious consequences, still evolving, on the economic world, especially in developed
countries, and for this reason it is considered by many to be the worst
economic crisis since the time of the great depression in 1929.
The subprime crisis started when
the mortgage bubble; a run-up in housing
prices fueled by demand, speculation and the belief that recent history is an
infallible forecast of the future. Housing bubbles usually start with an
increase in demand, in the face of limited supply which takes a relatively long
period of time to replenish and increase. Speculators enter the market,
believing that profits can be made through short term buying and selling. This
further drives demand. At some point, demand decreases, at the same time supply
increases, resulting in a sharp drop in prices this caused the bubble to burst.
After the mortgage
bubble problem in the 14th of September 2008 one of the world’s most
powerful banks closed because involved in this mortgage scandal the “Lehman
Brothers”; after being turned down by any support from the US state. This
bankrupt caused a dominoes effect causing many banks after “Lehman Brothers” to
fail.
The recession hit
hard nearly all the stock markets all over the world collapsed and stocks
became devalued. The world has been mired in a recession ever since.
Foreclosures have gone through the roof, and the resulting unemployment and
inflation have hit the lower and middle class people the hardest.
The Global crisis
enriched many multinationals like McDonalds because the demand for fast food
was higher because of the less money, jobs and opportunities.
Governments have to
make plans to end this crisis that is getting worst and worst and that is
affecting people the entire world.
RispondiEliminaDon't know how to solve the white problem...
Yeah, I'm not sure why the background changed! I wouldn't worry about it too much, though. If the problem persists on your next post, we'll explore it a bit more.
EliminaInteresting how the crisis affected companies like McDonald's!
RispondiEliminaI agree with Franco's points of discussion. As a matter of fact, I really find it difficult to understand how even the major companies fell into crisis. In addition, I believe that this crisis will actually end in not more than 2 years, as Italy's premier Mario Monti explained in his interview held in Milan two weeks ago to the journalists of "Il Messaggero", (famous Italian newspaper).
RispondiEliminaB.P.
The current financial crisis is the worst the world has seen since the Great Depression of the 1930s. It affected a lot of companies even McDonald's. Now people are concerned will this crisis last for long? In my opinion, this can last a few years if people don't have the economic awareness.
RispondiElimina