Ashford ECO 406: Week 1 – Dq 3 – Financial Crisis
1st Posting Due by Day 3. Financial Crisis. Read Mike Patton’s article, “Why the Next Financial Crisis Could Be Worse Than 2008.” Based on the information presented in the article, discuss the following: a. What caused the 2007-2009 financial crisis? b. What could possibly cause the next financial crisis? c. Do you agree with the author? Why or why not? Respond to at least two of your classmates’ posts.
The 2008 to 2009 financial crisis was caused because the banks were heavily in debt. They were not in a position to save them and ended up freezing their operations. This was because of heavy lending and with limited or no capital coming in for the bank. Banks fell in this situation because, the government had pressurized them to lend to people who wanted to buy homes. This tricky situation made the banks unable to withstand…