1. Interest Rates
2. Houseing Market
People who probable should not have been getting loans were getting them and they were using them to buy houses. When the interest rates were moved back up to counter the inflation that was happening (a whole other issue) those people realized they could no longer afford their mortgage. At the same time, housing prices fell and they suddenly owed more on their mortgage than they did on their houses which led to a wave of foreclosures across the country. Situations like this led to unpaid loans, a drop of capital within banks, and therefore internal collapse with in the banks themselves.
4. This major problem with such a large market combined with other factors which eventually led to what we know as the Great Recession.
5. People started to notice things were not quite right.
6. Major companies file for bankruptcy
7. Panic ensued
8. Luckily many people did not stay down forever
9. Companies had to find innovative ways to cut costs and make more revenue that still remain in place today.
10. Downsizing, Budget cuts, Less perks, Restructuring, Innovation
I think it is safe to say that almost every American was effected in some way by these efforts within their company that were put in place to something conserve capital.
11. However, every Office fan knows Micheal Scott was not a fan
12. After a few years the economy began to reset itself. But how?
It is hard to say for sure at what was the leading factor in the economic recovery. As cuts and restructuring took place within companies, it did so on a larger scale within our country as well. Bank rescues, cut backs on interest rates, attempts to erase deficits, stimulus plans, the list goes on. As these started to take effect, banks stabilized and jobs were created. As jobs were created people started spending money again and as they did, business got stronger which led to renewed trust in the system.Some of the more technical were bank rescues, cut backs on interest rates, attempts to erase deficits.