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What actually caused the recession? watch

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    I'm curious.
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    Those damn bankers.
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    Recklessness and lack of regulations.

    Don't worry it'll go back up.

    And then down.

    You get me brah?
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    bankers =/
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    In essence it was a lot of people borrowing a lot of money that they could not afford to pay back. The main banks basically lent money extremely irresponsibly.
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    Gordon Brown selling over half of the UK's gold reserves at the lowest price they'd been for decades.
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    TSR Support Team
    (Original post by TheCount.)
    I'm curious.
    Basically, the banks lent money to people who couldn't afford it.

    When these people then couldn't pay the money back the banks lost a lot of money and went bust, but as everyone's mortgages etc rely on banks governments had to bail them out and the cost of borrowing drastically rose and everyone was poorer.
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    Robert Peston
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    Everyone is listing symptoms but not the underlying causes
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    Lots of different things. The banks, the mortgage instigators, the rating agencies, the government, the public, all share some of the blame.

    That and the fact that this is a natural part of business cycles. The difference is that we dealt with this one worse than we usually do, because Labour had "put an end to boom and bust". :rolleyes:
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    The bankers let us delude ourselves on credit, now they're pulling in the fishing net, they're taking it back.
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    Surely the people are to blame for this as well? If it wasn't for them going in for Loans they in some cases knew they would never pay back the situation simply wouldn't be as bad as it is.

    The simple answer is that it was a combination of terrible deregulation worldwide. If America deregulated a certain extent giving them a massive advantage on the market the rest of the world followed in order to keep up for example.

    Recessions are not caused by government policy, they are caused by the world markets its the extent they cause us to suffer and the speed we get out of them that governments can effect. They are inevitable they have been a fact of life in the modern world over the last couple hundred years and will continue to be so.
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    Artificially low interest rates which encouraged bankers to overlend, the artificial expansion of credit. Government policy of expanding home ownership to the poor, look into the community reinvestment act for example. Bankers knowing they'd be bailed out if they failed, again encouraging overlending.

    It can really all be explained by the Austrian school of economics.
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    According to David Cameron, Labour. ¬¬
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    Bankers
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    Recessions will happen regardless of a specific situation. So long as we have capitalism we will experience peaks and troughs - troughs being recession.

    In the case of this recession, there are several significant factors though. The ease and availability of credit. The nature of how banks operated - they were effectively guaranteed wealth regardless of profits - in other words, governments made mistakes by guaranteeing to bail them out if that goes wrong - that simply erodes responsibility.
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    Bankers ****ed up big time, and we had to pay the price.

    Ironically, hundreds of bankers are still being paid stupid amounts of money and nothing is being done about it.
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    (Original post by TheCount.)
    I'm curious.
    The wbankers
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    Ultimately, the US housing market. US banks were giving out mortgages to people with no capital and no income. Herp derp.
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    http://en.wikipedia.org/wiki/Global_...crisis_of_2008
 
 
 
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