Hey there! Sign in to join this conversationNew here? Join for free
    • Thread Starter
    Offline

    0
    ReputationRep:
    could someone please explain how the recession began in REALLY simple terms? I will rep them- please!!!! and quote me!!!!!!!!!PLEASE!!
    Offline

    7
    ReputationRep:
    collision of an Asteroid with the Earth
    Offline

    2
    ReputationRep:
    (Original post by c0nfus3d)
    could someone please explain how the recession began in REALLY simple terms? I will rep them- please!!!! and quote me!!!!!!!!!PLEASE!!
    American banks lent too much money to people who couldn't pay it back. When foreclosure was made, the collateral wasn't enough so the banks lost a lot of money. This affected the world's stock markets and punched a British economy that relied too much on the banks. The banks couldn't afford to lend businesses the big money they needed, so jobs went under threat. Credit needed for buying stuff could not be obtained by people so the sellers of various things struggled to make money. The economy slowed down to a halt.

    I think.
    Offline

    0
    ReputationRep:
    (Original post by c0nfus3d)
    could someone please explain how the recession began in REALLY simple terms? I will rep them- please!!!! and quote me!!!!!!!!!PLEASE!!
    In you sig what do you mean by results day has gone?:confused:
    • Thread Starter
    Offline

    0
    ReputationRep:
    (Original post by Joseph90)
    American banks lent too much money to people who couldn't pay it back. When foreclosure was made, the collateral wasn't enough so the banks lost a lot of money. This affected the world's stock markets and punched a British economy that relied too much on the banks. The banks couldn't afford to lend businesses the big money they needed, so jobs went under threat. Credit needed for buying stuff could not be obtained by people so the sellers of various things struggled to make money. The economy slowed down to a halt.

    I think.
    Were Lehman brothers responsible for the whole thing? well mainly?
    • Thread Starter
    Offline

    0
    ReputationRep:
    (Original post by Gr8)
    In you sig what do you mean by results day has gone?:confused:
    my gcse results day 2008
    • Thread Starter
    Offline

    0
    ReputationRep:
    bump*

    Were Lehman brothers responsible for the whole thing? well mainly?
    Offline

    2
    ReputationRep:
    (Original post by c0nfus3d)
    Were Lehman brothers responsible for the whole thing? well mainly?
    They were all responsible to some extent, Lehman Brothers and Citigroup included. They all lost loads of money, and Lehman brothers were affected the worst so really payed the price for it.
    Offline

    1
    ReputationRep:
    (Original post by jbanjeet)
    collision of an Asteroid with the Earth
    Don't worry, Harry S. Stamper will save us!
    • Thread Starter
    Offline

    0
    ReputationRep:
    (Original post by Joseph90)
    They were all responsible to some extent, Lehman Brothers and Citigroup included. They all lost loads of money, and Lehman brothers were affected the worst so really payed the price for it.
    so did it affect world economies?
    did it affect different markets?
    like the credit and housing?
    are all markets linked somehow?
    • Thread Starter
    Offline

    0
    ReputationRep:
    pity bump*
    Offline

    2
    ReputationRep:
    (Original post by c0nfus3d)
    so did it affect world economies?
    did it affect different markets?
    like the credit and housing?
    are all markets linked somehow?
    Yes, yes, yes and yes.

    All markets are linked by the banks and the stock market.

    The world economy is so connected at the moment that something small like house prices in Japan can indirectly effect the interest rates on mortgages in the UK.
    Offline

    15
    ReputationRep:
    No, the Fed under Greenspan was responsible.
    • Thread Starter
    Offline

    0
    ReputationRep:
    (Original post by Joseph90)
    Yes, yes, yes and yes.

    All markets are linked by the banks and the stock market.

    The world economy is so connected at the moment that something small like house prices in Japan can indirectly effect the interest rates on mortgages in the UK.
    thanks i'll give you rep
    Offline

    15
    ReputationRep:
    central banks
    Offline

    2
    ReputationRep:
    (Original post by c0nfus3d)
    could someone please explain how the recession began in REALLY simple terms? I will rep them- please!!!! and quote me!!!!!!!!!PLEASE!!
    It began because of greed people in power exploiting the economy for they own personal gain.

    Could have wrote more in detail but i'm going on u tube to see some videos
    • Thread Starter
    Offline

    0
    ReputationRep:
    (Original post by geeksandtherest)
    It began because of greed people in power exploiting the economy for they own personal gain.

    Could have wrote more in detail but i'm going on u tube to see some videos
    understood
    • PS Helper
    Offline

    14
    ReputationRep:
    PS Helper
    I put the blame on:

    Banks and mortgage lenders encouraging the build up and growth of a housing bubble, which was bound to burst at some point. This is because house prices had risen to unsustainable levels in relation to income, encouraged by the new mortgage products that encouraged 'sub-prime' mortgages. For example Northern Rock offered a 125% mortgage, and mortgages were availiable worth higher and higher multiples of incomes. This built up the bubble.

    Correct me if I'm wrong, but it was worries about inflation that meant interest rates were raised. This lead to higher costs for mortgage payers, and a large rise in defaults that lead to the bubble bursting and thus houses prices and banks crashing.
    Offline

    3
    ReputationRep:
    You might find this video useful: http://www.crisisofcredit.com/
    Offline

    1
    ReputationRep:
    (Original post by keepoffthelawn)
    You might find this video useful: http://www.crisisofcredit.com/
    absolutely helped me... it is very useful for students like me who's doing economics on my own (not offeres at my school).. I hope there are other economics videos like this..
 
 
 
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • Poll
    What's your favourite Christmas sweets?
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

    Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

    Quick reply
    Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.