How do they justify this outrage to the taxpayers who are keeping the company afloat?
The Housing Market Crash of was the cause of the financial crisis. This nearly caused the U. There are a number of things we can look at to determine how the housing bubble occurred and what happened to cause the bubble to collapse.
The Housing Bubble The housing market experienced modest but steady growth from the period of to When the stock market crashed inthere was a shift in dollars going away from the stock market into housing. To further fuel the housing bubble there was plenty of cheap money available for new loans in the wake of the economic recession.
The federal reserve and banks praised the housing market for helping to create wealth and provide a secured asset that people could borrow money to help the economy grow. There was a lot of financial innovation at the time which included all sorts of new lending types such as interest adjustable loans, interest-only loans and zero down loans.
As people saw housing prices going up, they were stepping over each other to buy to get in on the action. Some were flipping homes in an effort to take advantage of market conditions.
With each loan, banks would quickly securitize the loan and pass the risk off to someone else. Rating agencies put AAA ratings on these loans that made them highly desirable to foreign investors and pension funds.
The Beginning of the Crash The housing market peaked somewhere in We were beginning to see some of the early signs of trouble when some types of subprime loans started to go into default.
Once the credit markets froze in summerthings began to deteriorate rapidly. Subprime credit stopped completely and interest rates for credit for other types of borrowing including corporate loans as well as consumer loans rose dramatically. Timeline of Events for February: Freddie Mac announced that they were no longer buying the riskiest subprime.
Subprime lender New Century Financial Corporation files for bankruptcy. Bear Stearns announced a loan of 3.
The stock market hit a new all-high over 14, On July 31, Bear Stearns liquidates two of its mortgage-back security hedge funds August: A worldwide credit crunch had begun and there were no subprime loans available.
Subprime lender American Home Mortgage files for bankruptcy. This marked the start of the housing market crash September: The Libor rate rises to its highest level since December ofat 6.
The stock market finishes the year at 13, Timeline of Events for January Bank of America acquired Countrywide financial for 4. Countrywide had a total of 1. Bear Stearns on the verge of bankruptcy signs a merger agreement with J.
The markets had its final day above 13, closing at Oct 07, · "This (bailout) was a direct result of the mistakes made by Mr. Cassano," Waxman said, blaming him for putting AIG in a situation where it had a $60 billion debt without the money to pay it.
Sep 21, · Startups news from the, including the latest news, articles, quotes, blog posts, photos, video and more. Mar 17, · Our government is % to blame for purposefully building in into the bailout that executive bonuses can continue as normal.
Period. AIG is bound by contract law of the United States to provide the bonuses. Racist board games. Wardrobe malfunctions. Oprah-induced chicken riots. The past decade had several memorable corporate PR disasters. The folks at Fineman PR have been chronicling the worst. The 16 Players To Blame For The AIG Fiasco.
Gregory White. Dahlgren was involved in the PR strategy for the Fed during its bailout of AIG and aimed to keep as much information secret as possible. Blame for the Bailout-AIG Case Solution,Blame for the Bailout-AIG Case Analysis, Blame for the Bailout-AIG Case Study Solution, What is the main problem of the company and why is it taking place?
The major problem is fraud at the independent place in the departments as well as at th.