Today’s Recession Foretold by The Great Depression facts

The Great Depression facts uncover similarities between recessions and depressions

Today we see a market that is becoming globalized since the inception of online trading. With traders
being able to buy stocks in the many different markets we also see similar fluctuations in all markets.
As an example we have been hit with the trouble of the EU banking crisis as well as the bankruptcy
of countries such as Greece and Spain. These factors have affected the entire EU banking system and
therefore affected global growth forecasts. The market has been a wild ride since the drop in the fourth
quarter of 2001 and especially the drop of the fourth quarter of 2008. The great depression facts
show us more similarities to the market of then and now. The *great depression facts* show a bubble of
credit building to the point where it lost its footing and became just unstable enough for all the creditors
to call in their debts. We read of “Black Tuesday” in which we were hit with a plunge in the stock market
that would send shockwaves through the economy and trigger the start of the great depression.

A look at what contributes to a recession or depression

Great depression facts tell us of an economy that struggled not only to employ individuals but find the
bottom of the economy in order to start the re-building of markets. What we noticed that in the prior
months before September 2008 we got to watch as many Americans were able to purchase homes that
were financially out of their grasp and would send their debt-to-income ratios soaring. Many individuals
went with adjustable rate mortgages and interest only mortgages in hopes and the speculation that
their already overly inflated home values would continue to rise. The community reinvestment act that
President Jimmy Carter signed during his administration used tax dollars to help low income families
purchase homes. This law was loosely enforced and under the radar until President Bill Clinton added
addendums to the bill which sent it into overdrive. Mortgage companies recognized the leniency of
the reinvestment act and started to house families in new homes that were out of financial reach in
a standard scenario. With several types of adjustable type loans offered to families when then saw a
massive rate climbs in defaulted loans which the hit lenders and secondary lenders and put a halt to
lending and the building of new homes which then cased builders to default on their loans and then
began a chain reaction. This coupled with state and federal deficits as well as global economic problems
caused a ripple effect that would become shockwaves in the eyes of investors of the national economy.

Great Depression facts show us that history can repeat itself

This is a simplified version of many of the contributing factors that caused the recession of 2008.
According to Great Depression facts we can see similarities between in the fact that a bubble of
credit had ballooned up causing a “can’t lose” mentality among investors as well as individuals. *Great
Depression facts* state that traders were using credit to buy stocks which is similar to builders building
solely on credit which is not uncommon but these individuals became aggressive and were fully
extended with no savings what so ever in the hopes of making that much more income. If you would like
to learn more about Great Depression Facts then click on our other articles to learn more.

Great Depression Facts

Some Basic Great Depression Facts

 

Before you dwell into the subject of the Great Depression, you need to know about some basic Great Depression facts which can help you in understanding this crisis which gripped the world in 1929. In a nutshell, this is regarded as the worst economic crisis which the world has seen till date and it went on from 1929 to the late 1930s. Read full article »