Did Mr Krabs Cause the 2008 Financial Crisis? скачать в хорошем качестве

Did Mr Krabs Cause the 2008 Financial Crisis?

Mr Krabs is the real villain behind the 2008 Financial Crisis... Let me know what economics content you would like to see next in the comments. For those interested, a full explanation of the 2008 Financial Crisis can be found below: What Actually Caused the 2008 Financial Crisis (Real Explanation) Subprime Mortgages Banks issued large numbers of subprime mortgages to borrowers with poor credit and unstable incomes. These loans often had low introductory interest rates that later reset to much higher payments, making default likely. Mortgage-Backed Securities (MBS) Instead of keeping these risky loans, banks bundled them together into mortgage-backed securities and sold them to investors. This allowed lenders to pass the risk onto others while continuing to issue more loans. Ratings Agency Failures Many of these securities were rated as extremely safe (AAA) by credit rating agencies, despite being backed by risky mortgages. Investors relied heavily on these ratings and underestimated the true risk. Excessive Leverage Financial institutions borrowed heavily to invest in these securities. When housing prices stopped rising and borrowers began defaulting, losses were massively amplified due to leverage. Collapse As defaults increased, the value of mortgage-backed securities collapsed. Banks stopped trusting each other, credit markets froze, and major institutions like Lehman Brothers failed, triggering a global financial panic. Government Intervention To prevent total collapse, governments and central banks stepped in with bailouts, emergency lending, and stimulus programs — saving the financial system, but often at the expense of public trust.