Things started getting worst as a consequence of Recession .
A good number of Americans, European and Asian banks had to write down billions of dollars in holdings. In fact, few banks filed for bankruptcy and that includes name like Lehman Brothers. It was biggest ever bankruptcy case in US history. More than 81 companies have filed for bankruptcy in USA.
it was recently that GM has filed up bankruptcy in USA. Just to think what would be main cause of this recession. Are we responsible for this huge traumatic effect!
YES we are much responsible for the present situation, want to know the reason, lets move on to the next paragraph.
While 2008 was the year of crisis, the origins of this crisis go back to the middle of 2007 when evidence that homeowners who had borrowed to finance the property they purchased had begun defaulting on their debt. Soon it became clear that too many people with limited or poor creditworthiness had been induced to borrow large sums by banks eager to exploit the large amounts of liquidity and the low level of interest rates in the system.
An unsustainable proportion of defaults seemed inevitable. What was disconcerting in the events that followed was systemic crisis that soon bankrupted a host of mortgage finance companies, banks, investment banks and insurance companies, including big players like Bear Sterns, Lehman Brothers and AIG.
The crisis had a number of consequences in the developed countries. It made households whose homes were now worth much less more cautious in their spending and borrowing behaviour, resulting in a collapse of consumption spending.
It made banks and financial institutions hit by default more cautious in their lending, resulting in a credit crunch that bankrupted businesses. It resulted in a collapse in the value of the assets held by banks and financial institutions, pushing them into insolvency.
Your Sanjay :)
