Great Recession

World map showing real GDP growth rates for 2009; countries in brown were in a recession.
A bank run at a branch of the Northern Rock bank in Brighton, England, on September 14, 2007, amid speculation of problems, prior to its 2008 nationalisation.
U.S. residential and non-residential investment fell relative to GDP during the crisis
U.S. households and financial businesses significantly increased borrowing (leverage) in the years leading up to the crisis
US household debt relative to disposable income and GDP.
U.S. Changes in Household Debt as a percentage of GDP for 1989–2016. Homeowners paying down debt for 2009–2012 was a headwind to the recovery. Economist Carmen Reinhart explained that this behavior tends to slow recoveries from financial crises relative to typical recessions.
Housing price appreciation in selected countries, 2002–2008
Securitization markets were impaired during the crisis.
Several major U.S. economic variables had recovered from the 2007–2009 Subprime mortgage crisis and Great Recession by the 2013–2014 time period.
U.S. Real GDP – Contributions to Percent Change by Component 2007–2009
Public Debt to GDP Ratio for Selected European Countries – 2008 to 2011. Source Data: Eurostat
Relationship between fiscal tightening (austerity) in Eurozone countries with their GDP growth rate, 2008–2012
Slovenian anarchist anti-fascist protest due to the great recession.
Sydney's financial district at night. Throughout the Great Recession, the Australian economy remained resilient and stable.
The anti-austerity movement in Spain, May 2011
Federal Reserve Holdings of Treasury and Mortgage-Backed Securities
Bank bailouts in the United Kingdom and in the United States in proportion to their GDPs.

Period of marked general decline, i.e. a recession, observed in national economies globally that occurred between 2007 and 2009.

- Great Recession
World map showing real GDP growth rates for 2009; countries in brown were in a recession.

43 related topics

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U.S. Securities and Exchange Commission

Independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929.

Independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929.

Joseph P. Kennedy Sr, the inaugural Chairman of the SEC
U.S. Securities and Exchange Commission headquarters in Washington, D.C., near Union Station

According to former SEC employee and whistleblower Darcy Flynn, also reported by Taibbi, the agency routinely destroyed thousands of documents related to preliminary investigations of alleged crimes committed by Deutsche Bank, Goldman Sachs, Lehman Brothers, SAC Capital, and other financial companies involved in the Great Recession that the SEC was supposed to have been regulating.

American Enterprise Institute marker

American Enterprise Institute

Center-right Washington, D.C.–based think tank that researches government, politics, economics, and social welfare.

Center-right Washington, D.C.–based think tank that researches government, politics, economics, and social welfare.

American Enterprise Institute marker
Vice President Dick Cheney delivers his remarks on the war on terror, arguing against a withdrawal from Iraq, during a speech on November 21, 2005, at the American Enterprise Institute. Michael Rubin is on the right in the front row.

Arthur C. Brooks succeeded him as president at the start of the Late-2000s recession.

Jan Brueghel the Younger's A Satire of Tulip Mania (ca. 1640)

Economic bubble

Situation in which asset prices are much higher than the underlying fundamentals can reasonably justify.

Situation in which asset prices are much higher than the underlying fundamentals can reasonably justify.

Jan Brueghel the Younger's A Satire of Tulip Mania (ca. 1640)
A card from the South Sea Bubble
CAPE based on data from economist Robert Shiller's website, as of 8/4/2015. The 26.45 measure was 93rd percentile, meaning 93% of the time investors paid less for stocks overall relative to earnings.
Bitcoin price gain/loss 2011,2013

Examples include the Roaring Twenties stock market bubble (which caused the Great Depression) and the United States housing bubble (which caused the Great Recession).

If the reference bond performs without default, the protection buyer pays quarterly payments to the seller until maturity

Credit default swap

Financial swap agreement that the seller of the CDS will compensate the buyer in the event of a debt default (by the debtor) or other credit event.

Financial swap agreement that the seller of the CDS will compensate the buyer in the event of a debt default (by the debtor) or other credit event.

If the reference bond performs without default, the protection buyer pays quarterly payments to the seller until maturity
If the reference bond defaults, the protection seller pays par value of the bond to the buyer, and the buyer transfers ownership of the bond to the seller
Composition of the United States 15.5 trillion US dollar CDS market at the end of 2008 Q2. Green tints show Prime asset CDSs, reddish tints show sub-prime asset CDSs. Numbers followed by "Y" indicate years until maturity.
Proportion of CDSs nominals (lower left) held by United States banks compared to all derivatives, in 2008Q2. The black disc represents the 2008 public debt.
Sovereign credit default swap prices of selected European countries (2010-2011). The left axis is basis points, or 100ths of a percent; a level of 1,000 means it costs $1 million per year to protect $10 million of debt for five years.

The European sovereign debt crisis resulted from a combination of complex factors, including the globalisation of finance; easy credit conditions during the 2002–2008 period that encouraged high-risk lending and borrowing practices; the 2007–2012 global financial crisis; international trade imbalances; real-estate bubbles that have since burst; the 2008–2012 global recession; fiscal policy choices related to government revenues and expenses; and approaches used by nations to bail out troubled banking industries and private bondholders, assuming private debt burdens or socialising losses.

10-year minus 3-month US Treasury Yields

Federal funds rate

[[File:FFR treasuries.webp|thumb|375px|right|

[[File:FFR treasuries.webp|thumb|375px|right|

10-year minus 3-month US Treasury Yields
Inflation (blue) compared to federal funds rate (red)
Federal funds rate vs unemployment rate
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Between December 2008 and December 2015 the target rate remained at 0.00–0.25%, the lowest rate in the Federal Reserve's history, as a reaction to the Financial crisis of 2007–2008 and its aftermath.

Bear Stearns

Bear Stearns' former offices at 383 Madison Avenue

The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase.

Australia

Sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands.

Sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands.

Aboriginal rock art in the Kimberley region of Western Australia
Landing of James Cook at Botany Bay on 29 April 1770 to claim Australia's eastern half for Great Britain
Tasmania's Port Arthur penal settlement is one of eleven UNESCO World Heritage-listed Australian Convict Sites
The Big Picture, a painting by Tom Roberts, depicts the opening of the first Australian Parliament in 1901
The 1942 Bombing of Darwin, the first of over 100 Japanese air raids on Australia during World War II
Postwar migrants from Europe arriving in Australia in 1954
Topographic map of Australia. Dark green represents the lowest elevation and dark brown the highest
Heron Island, a coral cay in the southern Great Barrier Reef
Uluru in the semi-arid region of Central Australia
Basic geological regions of Australia, by age.
Köppen climate types of Australia.
The koala and the eucalyptus form an iconic Australian pair.
Parliament House, Canberra
A map of Australia's states and territories
Diplomatic missions of Australia
HMAS Canberra, a Canberra class landing helicopter dock, and HMAS Arunta, an Anzac-class frigate, sailing in formation
Australian energy resources and major export ports map
The Boddington Gold Mine in Western Australia is the nation's largest open cut mine.
Australia has one of the world's most highly urbanised populations with the majority living in metropolitan cities on the coast, such as Gold Coast, Queensland.
Australian residents by country of birth, 2016 census
Five Australian universities rank in the top 50 of the QS World University Rankings, including the Australian National University (19th).
The Royal Exhibition Building in Melbourne was the first building in Australia to be listed as a UNESCO World Heritage Site in 2004.
Sidney Nolan's Snake mural (1970), held at the Museum of Old and New Art in Hobart, Tasmania, is inspired by the Aboriginal creation myth of the Rainbow Serpent, as well as desert flowers in bloom after a drought.
Actor playing the bushranger Ned Kelly in The Story of the Kelly Gang (1906), the world's first feature-length narrative film
The meringue-based pavlova is generally eaten at Christmas time.
The Melbourne Cricket Ground is strongly associated with the history and development of cricket and Australian rules football, Australia's two most popular spectator sports.

Australia was the only advanced economy not to experience a recession due to the global financial downturn in 2008–2009.

Headquarters of AIG, an insurance company rescued by the United States government during the subprime mortgage crisis

Too big to fail

Theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system, and that they therefore must be supported by governments when they face potential failure.

Theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system, and that they therefore must be supported by governments when they face potential failure.

Headquarters of AIG, an insurance company rescued by the United States government during the subprime mortgage crisis
Assets of largest U.S. banks per FY2012 Annual Reports
Percentage of banking assets held by largest five U.S. banks, 1997–2011
A man at Occupy Wall Street protesting institutions deemed too big to fail
The leverage ratio, measured as debt divided by equity, for investment bank Goldman Sachs from 2003–2012. The lower the ratio, the greater the ability of the firm to withstand losses.

As of April 30, 2014, Serageldin remains the "only Wall Street executive prosecuted as a result of the financial crisis" that triggered the Great Recession.

Debt deflation

Theory that recessions and depressions are due to the overall level of debt rising in real value because of deflation, causing people to default on their consumer loans and mortgages.

Theory that recessions and depressions are due to the overall level of debt rising in real value because of deflation, causing people to default on their consumer loans and mortgages.

There was a renewal of interest in debt deflation in academia in the 1980s and 1990s, and a further renewal of interest in debt deflation due to the financial crisis of 2007–2010 and the ensuing Great Recession.

The G20 in Washington, D.C.

2008 G20 Washington summit

The 2008 G20 Washington Summit on Financial Markets and the World Economy took place on November 14–15, 2008, in Washington, D.C., United States.

The 2008 G20 Washington Summit on Financial Markets and the World Economy took place on November 14–15, 2008, in Washington, D.C., United States.

The G20 in Washington, D.C.
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G20 leaders and delegates attend the Summit on Financial Markets and the World Economy Saturday at the National Building Museum in Washington, D.C. on November 15, 2008.
Working sessions of the G20 heads of states and governments.
President Bush and the other summit leaders at a working dinner in the East Wing of the White House.

In connection with the G7 finance ministers on October 11, 2008, United States President George W. Bush stated that the next meeting of the G20 would be important in finding solutions to the economic crisis.